The Fourth International Conference on Financing for Development (FfD4), held in Seville in early July 2025, marked a pivotal moment in global development policy. As the first Financing for Development (FfD) summit in over a decade, it came at a time when the foundations of development finance are being tested and reshaped. Amid climate urgency, global economic fragmentation, and increasing debt distress, FfD4 aimed to chart a new course. For energy finance, in particular, this conference might well be an inflection point.
A Turning Point for Development Finance
The importance of FfD4 cannot be overstated. Convened only once every decade, this conference serves as a global checkpoint for how development finance is structured, governed, and mobilised. With the SDGs off-track and a global financing gap in the trillions, FfD4 came with the heavy mandate of reimagining financial cooperation for the decade ahead. The need for profound changes — in mobilising, allocating, and delivering finance — has never been greater.
Seville: A Hot Choice
Set in Seville, Spain, during an unforgiving heatwave, the location of the conference was symbolically resonant. Andalusia, long known as a holiday haven but increasingly avoided by tourists due to the scorching summer heat, is fast becoming one of Europe’s renewable energy powerhouses. Despite the heat, Seville welcomed an extraordinary gathering: 70 heads of state, 15,000 participants, 450 side events, and the launch of 130 initiatives under the Seville Platform for Action. The forward momentum was visible through the coalitions of the willing, and even in side events filled to (and beyond) capacity.
A Rare Consensus — With a Caveat
The conference’s outcome document — the Seville Commitment — was agreed two weeks before the conference began, a rarity in UN negotiations. With near-unanimous support (excluding the United States), the agreement underscored the determination of most countries to move forward collectively despite rising geopolitical tensions: a true commitment to multilateralism. Yet, climate vulnerability and clean energy potential that the hosting city so neatly represented did not find the same recognition in the outcome document. Several countries had presented a clearer signal that climate action and development are most often two sides of the same coin.
But what might make Seville truly distinctive in hindsight is that the implementation of the Seville Commitment began immediately. The Seville Platform for Action will need to show that it is not just a list of promises but that operationalisation happens as first as the initiatives were presented in response to the outcome document. This shift from resolution to implementation signals a new model: coalitions of the willing that can move faster and deliver results in the short term. And, if done well, pave the way for renewed energy for multilateral agreements.
Energy Access: The Litmus Test for FfD
Nowhere is this shift more urgent — or potentially transformative — than in the energy sector. Renewable energy deployment has surged globally, with costs at record lows, especially for solar PV. Yet access to affordable energy finance remains highly uneven. While global investment in low-emission power has nearly doubled in five years, many developing economies — especially in Africa — remain left behind.
This disparity is not due to lack of potential. Africa, for instance, boasts some of the best renewable resources in the world. Yet its energy transition is hampered by prohibitively high costs of capital, driven by perceived and real risks. Country risk premiums in Africa average 8%, with some countries facing rates as high as 23%. Responding to these financial imbalances is the very challenge FfD4 set out to address.
What FfD4 Offers to Accelerate Energy Finance
While the Seville Commitment includes only a single paragraph dedicated specifically to energy finance (§33), its broader financial reform agenda offers a toolkit that can significantly lower the barriers to clean energy investment in emerging and developing economies:
- Green Budgeting and Environmental Taxation: These measures help redirect public finance toward renewables while making fossil fuels less competitive by internalising their environmental costs.
- Empowered Public Development Banks: National and regional development banks, with their local knowledge and reach, are encouraged to work systematically with multilateral institutions and climate funds. These actors with local knowledge are best equipped to finance more fragmented, smaller-scale renewable projects that can rapidly provide energy access.
- Strengthening Domestic Financial Markets: Enabling domestic savings to flow into clean energy projects reduces dependency on foreign capital and mitigates currency risk. Better-developed domestic capital and financial markets increase the availability and sophistication to finance renewable energy projects.
- Local Currency Lending: By encouraging lending in local currencies by creditors, FfD4 seeks to address one of the most significant deterrents to private sector investment in clean energy: currency risk.
- Financial Risk Mitigation Instruments: Guarantees, first-loss provisions, and securitisation mechanisms are highlighted as key to unlocking private investment, an area where multilateral development banks have a critical role to play.
- Reforming Credit Rating Agencies: Acknowledging the concerns over potential biases in credit rating assessments regarding some developing country regions, FfD4 signalled the need to explore reforms, a move that could reduce financing costs across the board.
- Pipeline Development: Without bankable projects, none of the above measures matter. The need for structured project development support is explicitly acknowledged — and will be crucial.
From Promises to Practice: The Real Test
While the commitments on paper matter, FfD4’s most important innovation may be the way it has moved straight into action. The Seville Platform for Action has launched over 130 initiatives, several of which target energy finance directly. Among them:
- SCALED: A new platform to pool and coordinate blended finance. Blended finance has so far underdelivered and overpromised. This platform should help make progress for blended finance to deliver, including through standardisation.
- FxEdge: A facility to hedge foreign exchange risks. The Inter-American Development Bank has piloted this idea with Brazil and is now rolling it out with partners in a larger domain.
- New Country Platforms: Building on experiences of JET-P, Egypt’s Country Platform for the Nexus of Water, Food and Energy, and the Brazilian Ecologic Transformation Plan, a new generation of country-owned platforms is emerging. These will ensure increasing coordination across donors, development banks, and private investors but also ensure that processes are truly country-driven.
- Green Guarantee Group Recommendations: The group has come up with a set of concrete proposals to scale up guarantee mechanisms — an instrument that has been heavily underutilised and could become an essential ingredient for de-risking renewable investments.
Looking Ahead
Whether FfD4 delivers on its promise will only become clear in the years ahead. Some bold reforms – like a UN debt mechanism – did not survive the political process. Others are still in the pipeline. Yet what matters now is implementation.
The stakes are high. For numerous developing countries, the next few years will determine whether they lock into a fossil fuel-dependent development path for the foreseeable future or leapfrog into an electrified, renewable-powered future. FfD4 has laid down the scaffolding for the latter. The test now is whether the funding flows.
Q3 2025 Climate Solutions Magazine
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