The private sector plays an important role in enabling or hindering green growth in developing countries. With increasing emphasis for development co-operation providers to engage private actors, there is a need for a sound understanding of the theory of change and the efficacy of private sector engagement approaches in supporting environment and development outcomes.
This paper contributes to this agenda and helps inform efforts of development assistance provider. It maps the major approaches used to engage the private sector, i.e. to mobilise private climate investment, promote green private sector development and harness the skills and knowledge from private actors, and highlights some challenges and lessons learned. The paper also provides an estimate of climate-related development finance targeting private sector engagement.