Finance

A Protracted US–Iran War Could Strain Climate Finance From Wealthy Countries to Developing Nations – Inside Climate News

Published

1 month ago

April 17, 2026

A Protracted US–Iran War Could Strain Climate Finance From Wealthy Countries to Developing Nations – Inside Climate News

WASHINGTON, D.C.—The ongoing war in Iran is casting a long shadow over the climate finance commitments countries agreed to in 2024, experts warned, as surging oil prices and rising defense budgets put further pressure on the limited pot of money developing nations are counting on to stave off worsening impacts from a warming planet.

The World Bank and the International Monetary Fund’s annual spring meetings are underway in the capital this week, with a focus on a coordinated global response to a world economy under pressure from slower growth and rising debt, exacerbating global inequities.

The U.S. war in Iran adds new supply-chain challenges. In a press briefing Tuesday, the IMF slashed its growth forecast to 3.1 percent for the year, down from 3.3 percent in January, with global inflation rising to 4.4 percent.

“Our severe scenario assumes that energy supply disruptions extend into next year, with greater macro instability. Global growth falls to 2 percent this year and next, while inflation exceeds 6 percent,” said Pierre‑Olivier Gourinchas, the IMF’s director of research.

The blunt assessment has caused a scramble to determine what financial support the institution can offer to member states. And it has raised fresh questions about climate-finance obligations, already under strain from donor-country budget cuts and the United States jettisoning global climate commitments under the second Trump administration. One of President Donald Trump’s first actions back in office last year was ordering the U.S. to withdraw from the Paris climate agreement.

Since the COVID-19 pandemic, wealthier countries that promised climate finance have experienced widening fiscal deficits and rising debt, the Organisation for Economic Co-operation and Development found in its latest assessment. As a result, aid from donor countries has already declined sharply—dropping almost 25 percent in 2025 compared to 2024. Even before the Iran conflict began, that was projected to drop further this year.

COP29, the global climate conference held in late 2024 in Baku, Azerbaijan, set a commitment of $300 billion per year by 2035, with a broader goal of reaching $1.3 trillion annually from public and private sources. Called the New Collective Quantified Goal (NCQG), the arrangement replaced the previous $100 billion-a-year commitment that wealthy nations had met belatedly in 2022, two years after the deadline.

Developing nations widely criticized the $300 billion figure as grossly inadequate, given the scale of the climate crisis. These countries are among the least responsible for the pollution driving that crisis and among the hardest hit by its effects.

The Iran war has triggered a new set of worries as top economists and experts weigh potential impact and likely mitigation strategies.

“Even before the Iran conflict, reaching the NCQG target would have been difficult, particularly with the U.S. withdrawing from the Paris Agreement. The war worsens the outlook,” said Gautam Jain, senior research scholar at the Center on Global Energy Policy at Columbia University.

Plumes of smoke rise over the oil depot tanks hit by overnight attacks on March 8 in Tehran, Iran. Credit: Kaveh Kazemi/Getty Images

He said sustained disruption of the Strait of Hormuz would exacerbate the problem and the effects would weigh on the global economy. As a result, aid budgets would decline and the political pushback to external spending would increase.

The conflict is “pushing energy security to the forefront of government agendas,” Jain said. That will likely strengthen incentives to deploy more renewables and other forms of domestic clean energy, but the war’s economic convulsions could cut both ways for the energy transition.

“In low-income countries, the transition could be significantly delayed, given limited fiscal capacity to absorb sustained energy price shocks,” Jain said.

One of the main priorities for the World Bank during the meetings in Washington is to develop a new Climate Change Action Plan to replace the one expiring in June. “In the current geopolitical context, progress on this front looks quite unlikely,” Jain said.

Jon Sward, environment project manager at the Bretton Woods Project, which monitors World Bank and IMF policies, said countries that used to fund climate finance are now choosing to spend that money on other priorities.

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The Gulf crisis exposed the fragility of a global economic system tethered to fossil fuel extraction and use, Sward noted. For countries dependent on fossil fuel imports, “this is yet another price shock, and quickly diversifying to renewables is certainly an option that many countries are looking at,” he said in an email.

He said that although multilateral institutions such as the World Bank and the IMF have begun to assess the conflict’s fallout, it is not yet clear what their response will be or how the World Bank’s climate finance would be affected.

“All of this points to the need for more serious discussions on pausing debt repayments for affected countries and the mobilisation of non-debt creating forms of finance, in order to address the multiple, overlapping shocks facing countries in the Global South, in particular,” he said in his email.

Experts said that rising security and defense expenditures were also cutting into an already limited pot of money badly needed by developing countries struggling to cope with climate challenges.

“The system was already too fragile given that the U.S. leads all the major multilateral development banks … and has disavowed these targets,” said Kevin Gallagher, director of the Global Development Policy Center at Boston University. On top of that, he said, U.S. threats to abandon NATO’s European countries incentivizes them to prioritize defense budgets over climate finance.

He said developing countries are already under pressure to cough up climate funding on their own. The current conflict could make that nearly impossible.

“This year was supposed to be putting together a roadmap to take the $300 billion annual target to the agreed upon $1.3 trillion. This is likely to be abandoned unless new donors such as [the] UAE, China and others step in to fill the gap left from the West,” Gallagher said in an email.

The crisis in the Persian Gulf makes the loudest case for renewables, he said. “The energy security argument from this conflict is to diversify from fossil fuels. The Dutch took that cue after the Middle East oil shock of the 1970s to build the world’s best wind turbines, and China did after Middle East conflicts in this century. Fossil fuels are now a bad bet on security, economic and climate grounds. The writing is on the wall.”

Gallagher said the World Bank should accelerate solar and wind technology programs across the world. “If the Fund and the Bank don’t rise to this occasion,” he said, “not only is the global economy and climate at stake, but so is the legitimacy of these institutions.”

Gaia Larsen, a climate finance expert at the World Resources Institute, said it’s too early to know whether stronger interest in energy independence through renewables is translating into shifts in investment. But “if we’re trying to think about long-term peace and long-term access to energy, then renewables are really increasing in prominence,” she said.

About This Story

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Aman Azhar is a Washington, D.C.-based journalist who covers environmental justice for Inside Climate News with focus on Baltimore-Maryland area. He has previously worked as a broadcast journalist and multimedia producer for the BBC World Service, VOA News and other international news organizations, reporting from London, Islamabad, the United Arab Emirates and New York. He holds a graduate degree in Anthropology of Media from University of London’s School of Oriental and African Studies (SOAS) and an MA in Political Science from the University of the Punjab, and is the recipient of the Chevening scholarship from the UK government and an academic scholarship for graduate studies from the Australian government.

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Finance

Evoke Entertainment Closes $35 Million Production Financing Facility Backed By Major Private Credit Fund

Published

54 minutes ago

May 29, 2026

Press Room

Evoke Entertainment Closes Million Production Financing Facility Backed By Major Private Credit Fund

EXCLUSIVE: Evoke Entertainment has closed a senior secured production financing facility of up to $35 million backed by a multi-billion-dollar private credit fund.

While we verified the deal with the lender, they spoke with Deadline on the condition of anonymity, per company policy. The revolving production facility is designed to support Evoke’s expanding slate of independent features, television movies, streaming films, and series — significantly increasing the company’s already high-volume production output across major studios, networks, and streaming platforms.

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Structured around contracted revenue streams, distribution agreements, tax incentives, and the value of Evoke’s existing library and historical production performance, the facility provides the company with flexible, scalable production financing across multiple genres and platforms. Evoke’s lender comes to the partnership with extensive experience in structured finance, asset-backed lending, and entertainment-related investments.

The deal was spearheaded by Evoke Entertainment CEO Stan Spry, who told us, “This financing marks a transformative moment for Evoke. The backing of a major institutional private credit partner gives us the ability to substantially scale our production operations while continuing to focus on commercially driven, cost-efficient content for the global marketplace.”

The first projects to be financed under Evoke’s facility include a large slate of TV and streaming movies including a Christmas film for Hallmark, a survival thriller for Lifetime, alongside the independent feature films Suburban Kings, Homesick, and Bali Hai.

Founded in 2011, and formerly known as Cartel Entertainment, Evoke Entertainment is a full-service management, production, and finance company that produces more than 20 films and series annually across major platforms including Netflix, Hallmark, Lifetime, Tubi, NBC/Peacock, AMC, and Great American Media. Notable past projects include Creepshow (AMC), Day of the Dead (Syfy), Twelve Forever (Netflix), and the upcoming Breaking Bear for Tubi, to name a few.

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Finance

Livestock Methane in India: Aligning Livelihoods, Systems, and Finance – CPI

Published

13 hours ago

May 29, 2026

Press Room

Livestock Methane in India: Aligning Livelihoods, Systems, and Finance – CPI

Background

India is home to the world’s largest livestock population of 536.76 million, which produces 25% of the world’s milk¹. This increase in livestock population leads to increased methane emissions, primarily from enteric fermentation and manure management. As a result, livestock contributes to 58% (BUR 4, 2020) of India’s agricultural methane footprint. However, unlike crop-based emissions, livestock methane is diffuse, biologically driven, and more complex to measure and manage, making it less visible within existing climate finance frameworks.

Current research and policy discussions indicate that while technical mitigation solutions exist through feed improvements and manure management, evidence of their effectiveness in maintaining dairy productivity, animal health, and protecting farmers’ incomes is scattered. This leads to heightened risk perceptions among dairy producers when considering methane mitigation measures. Furthermore, even where the evidence is compelling, the fragmentation of dairy producers precludes their aggregation. Additionally, there is a lack of robust, affordable, and scalable monitoring, reporting, and verification (MRV) systems at the grassroots level. These barriers prevent the development of a clear, scalable, and financeable pipeline of livestock methane abatement in India.

The Government of India has actively supported dairy development and livestock health through various schemes and programs introduced by the Department of Animal Husbandry and Dairying. At the same time, livestock systems in India are deeply embedded within rural livelihoods and socio-economic structures, making the sector a critical component of rural resilience. Consequently, interventions must be context-aware and farmer-centric, with a strong focus on livelihood security and alignment with local values and practices.

With this background, CPI is organizing a roundtable to explore how livestock methane can transition from a technically understood challenge to actionable opportunities on the ground, including both animal feed and manure management. The forum would bring together dairy producer organizations, nodal agencies, think tanks, ecosystem enablers, and financial institutions. It will deliberate upon possible projectized solutions and accompanying financing mechanisms that could be scaled up to address the twin objectives of methane abatement and farmers’ income security.

Finance

Efficient Capital Markets Can Unlock Africa’s Domestic Savings

Published

3 days ago

May 27, 2026

Press Room

By Samira Mensah, Head of Analytics & Research Africa, S&P Global Ratings

Efficient capital markets can transform Africa’s limited domestic financial assets into investments that spur economic growth. By connecting institutional investors, pension funds and foreign investors, capital markets enhance economic development by increasing the availability of funding for long-term projects.

Efficient domestic capital markets can not only address governments’ significant funding gaps but can also ensure that critical infrastructure developments—such as transportation, energy and telecommunications—are adequately financed, ultimately driving economic growth and employment. Supported by transparent and comparable risk frameworks, efficient domestic capital markets can build confidence among domestic and foreign investors and enhance resilience during periods of global risk aversion.

In our view, African capital markets currently lack two key building blocks.

In our view, African capital markets currently lack two key building blocks. Firstly, with limited exceptions, regulatory frameworks generally lag the International Organization of Securities Commissions’ (IOSCO’s) global standards, which cover listing standards on securities exchanges, development of digital market infrastructure and improvements in the timeliness and transparency of regulatory disclosures of issuers’ financial results, including environmental, social and governance (ESG) factors and green-finance taxonomies.

Some countries, such as South Africa, Kenya, Morocco and Mauritius, are more advanced than others. The misalignment of regulatory frameworks with international norms stems from the gap between adoption and implementation through legislation, which deters international and local investment.

Secondly, the absence of standardized risk assessments leads to information gaps and limits investor participation in primary and secondary bond markets. Credit benchmarks—such as sovereign-yield curves, credit ratings and market-implied risk measures—can help in this regard. They distill complex financial, macroeconomic and institutional information into consistent and comparable signals.

As such, these benchmarks provide a standardized framework for assessing creditworthiness, supporting consistent credit analysis and facilitating decision-making based on transparent and comparable data. They are relevant to investment vehicles with specific investment mandates and may influence the availability of capital, which is crucial for infrastructure projects.

Capital markets can spur economic growth

Capital markets can play a central role in turning domestic savings into productive investments. This is particularly the case in Africa, where development needs are high and incomes are rising from a low base. Additionally, innovative financial technologies, such as fintech platforms, attract more small savings—including money sent home by migrants—that can also fund investments. However, mobilizing domestic savings for investments in local economies remains a significant challenge because many transactions are in cash and outside the financial system.

According to the Africa Finance Corporation (AFC), African sovereign-wealth funds, pension funds, insurers, central banks and commercial banks hold an estimated US$4 trillion in financial assets, representing 130 percent of Africa’s gross domestic product (GDP) in 2025. Long-term institutional capital accounts for $1.1 trillion of the $4 trillion, while African sovereign-wealth funds manage only about $145 billion in assets under management (AUM)—less than 1 percent of global sovereign-wealth funds’ AUM.

Although banking assets comprise the majority of financial assets, they are typically short-term, and banks rely on customer deposits to fund lending activities. This underscores the mismatch between banks’ short-term funding profiles and the economy’s long-term financing needs, particularly in underdeveloped financial systems.

South Africa holds the largest share of Africa’s financial assets, followed by Egypt and Nigeria. South Africa contributes 20-25 percent to Africa’s financial assets. This reflects the country’s outsized role within the continent’s savings pools, its large and mature pension system and its highly developed banking sector. We estimate that the South African banking sector’s assets amount to nearly 100 percent of GDP, while nonbank financial institutions—including pension and insurance funds—account for close to 120 percent of GDP.

Smaller economies that are important regional financial hubs—such as Morocco, Mauritius and Kenya—also play a meaningful role. Aggregate financial assets represent 80 percent to more than 200 percent of these economies’ respective GDPs. Yet a significant portion of this capital does not flow into long-term productive investments.

In several countries, the economic effects of financial assets are muted because large shares are either invested in government securities or placed offshore. For example, the bank-sovereign nexus remains particularly high in Egypt and Kenya, where government securities account for 30-60 percent of banking assets. This contributes to crowding out private investments and increases fiscal-financial linkages. Pension funds are further constrained by specific investment mandates. We understand that only 5 percent of their assets are allocated to alternative investments.

Capital allocation rules could channel domestic savings into real sectors

Regulations across various jurisdictions permit pension funds and sovereign-wealth funds to invest abroad, albeit to varying degrees. For instance, South Africa, which holds the largest share of the continent’s institutional savings, allows its pension funds to invest up to 45 percent offshore, while Nigeria’s regulatory framework limits pension funds’ aggregate offshore exposure to 20-25 percent.

While this facilitates diversification, it also means that a significant portion of domestic savings is invested in fixed-income securities outside Africa, thereby curbing the potential for local economic development. Similarly, when African sovereign-wealth funds invest internationally, their portfolios tend to be diversified away from African assets, further diluting the potential developmental benefits of domestic savings.

Intra-African investment remains limited

However, existing cross-border banking and investment activity points to significant untapped potential. Pan-African banks are important for regional financial connectivity, but their cross-border activities are limited by risk-return considerations, leaving significant potential for greater mobilization of long-term investment. These banking groups’ networks facilitate payments, trade settlement and sovereign financing, but remain only partially leveraged for long-term investment mobilization.

For example, Moroccan banking groups have built extensive footprints across francophone West and Central Africa but their assets outside Morocco account for less than 10 percent of their consolidated assets. Although Nigerian and Kenyan banks support trade finance and corporate lending across regional trade corridors, their home markets hold the lion’s share of their consolidated assets.

Cross-border institutional capital flows remain modest. Pension funds and insurers largely invest domestically—often in government securities—or allocate savings offshore. This reflects regulatory fragmentation, currency risks, shallow capital markets and limited regional investment-vehicle opportunities. Joint investments in infrastructure, productive sectors and regional value chains remain low.

The African Continental Free Trade Area (AfCFTA) aims at deepening financial integration. By seeking to expand intra-African trade and regional value chains, the AfCFTA aims to increase demand for cross-border financing, risk-sharing and long-term capital. This, however, will require more regional capital-market integrations, harmonized regulations and co-investment platforms that pool African savings.

Leveraging existing pan-African banking networks, regional bond markets, infrastructure funds and blended-finance vehicles could redirect Africa’s capital toward continental growth. This could, in turn, reduce reliance on external financing and strengthen the links between domestic savings and productive investments under the AfCFTA framework.

The catalytic role of MLIs in capital mobilization

Multilateral lending institutions (MLIs) can mobilize long-term funding, provide credit enhancement and support the introduction of new financing structures. To improve capital efficiency and preserve lending capacity, several MLIs have increasingly used balance-sheet optimization tools in recent years, including portfolio risk-sharing and originate-to-distribute-type arrangements.

More broadly, MLIs’ engagement extends beyond direct financing to include policy support, institutional and capacity-building development and infrastructure. These measures may support longer-term improvements in market functioning and economic integration.

Afreximbank’s (African Export–Import Bank’s) push to implement the Pan-African Payment and Settlement System (PAPSS) aims to accelerate regional trade integration under the AfCFTA. The PAPSS seeks to facilitate cross-border settlements in local currencies and reduce trade costs, while the Africa Trade Gateway plans to ease cross-border trade and payment flows. The benefits of these platforms for intraregional trade and transaction costs will likely emerge gradually.

Even so, structural constraints remain. In particular, the limited availability of first-loss concessional capital and uneven risk appetite in the private sector continue to constrain the scale and pace at which blended-finance solutions can be deployed. Although MLIs’ continent-wide initiatives could support the gradual expansion of public-private partnerships and risk-sharing structures, their effectiveness will likely depend on sustained policy support, transaction standardization and stable macro-financial conditions.

Strengthening Africa’s capital markets

We believe the development of capital markets is crucial for the growth of African economies and their private sectors.

We believe the development of capital markets is crucial for the growth of African economies and their private sectors. Unlocking Africa’s abundant funding potential would benefit from establishing effective regulatory regimes that encourage listings without overburdening issuers. Strengthening capital markets by facilitating both debt and equity raisings and listings can broaden market access and deepen market liquidity.

Excluding South Africa, capital markets across Africa remain fragmented and shallow. The Johannesburg Stock Exchange (JSE), the largest African stock exchange by market capitalization, has a total market capitalization of South African rand (ZAR) 24.6 trillion (about US$1.5 trillion)—more than three times South Africa’s GDP. It ranks among the top 20 stock exchanges worldwide.

In contrast, other exchanges are more modest, as their private sectors’ funding profiles rely primarily on bank loans rather than accessing capital markets. Countries such as Nigeria, Egypt, Côte d’Ivoire, Kenya and Morocco have significant domestic financing sources, but these often come at high costs.

Governments largely define these domestic bond markets because they are the largest issuers, and commercial banks are the primary buyers of government bonds. South Africa has the most liquid and diverse bond market, but government securities dominate local-currency issuances (270 percent of GDP).

Countries such as South Africa and Nigeria have introduced reforms to unlock nonbank domestic capital, notably through pension-fund reforms that allow greater capital allocation to alternative assets. Other reforms aim to develop new financing platforms, facilitate green financing and set benchmarks for how capital markets can price climate and infrastructure-related risks.

In 2022, the African Development Bank (AfDB) issued its inaugural local-currency ZAR200-million green bond, which was listed on the JSE. The JSE is advancing sustainability-linked financial instruments and improving ESG disclosures, aligning African capital markets with global best practices.

In 2026, the JSE launched its nature platform and listed Africa’s first nature-linked performance-based bond—a ZAR2.5-billion issuance by FirstRand Bank, one of the country’s top banks. In 2025, the Rwanda Stock Exchange (RSE) launched its Green Exchange Window (GEW), supported by the Luxembourg Stock Exchange (LuxSE).

Collectively, these labeled debt instruments can act as catalysts for blended-finance structures, mobilizing more private capital.

Governments play a vital role in equalizing access to information and developing deep, transparent sovereign-bond markets. Well-established government-bond yield curves in these markets serve as important pricing benchmarks for corporates and the wider economy. This enhances investor confidence and facilitates more informed investment decisions. Ongoing efforts by governments to increase transparency, provide timely information disclosures and maintain robust regulatory oversight will maximize the benefits of sovereign-bond markets.

Clear and credible credit signals further enhance pricing transparency, enabling investors to better assess risk and return. Greater confidence in valuations supports active participation, improves secondary-market liquidity and strengthens price discovery. Over time, this creates a virtuous cycle—whereby increased participation reinforces market efficiency and resilience, ultimately supporting sustainable economic growth in Africa.

Despite structural shortcomings, domestic investors have increasingly stepped in to meet financing needs. Infrastructure projects are now more often financed through domestic local-currency capital markets and financial institutions, including development-finance institutions. We believe that Africa’s economic integration will be intrinsically linked to more developed domestic capital markets.

ABOUT THE AUTHOR

Samira Mensah is Managing Director, Research & Analytics Africa, and Country Head for South Africa at S&P Global Ratings, based in Johannesburg. She leads thought leadership and market outreach initiatives across Africa, with a particular focus on African credit markets and Islamic finance. A frequent speaker at industry conferences and contributor to research publications, Samira recently presented at The Africa We Build Summit in Nairobi.