The Manufacturing Mandate for Climate Finance: why the next phase of climate finance is industrial

You cannot run tomorrow’s economy on yesterday’s power grid. The challenge is clear: we must upgrade and expand global infrastructure systems to meet the needs of a rapidly changing, decarbonizing economy. But the deeper challenge is not only to build more power, transmission, and digital infrastructure; it is to build faster, cheaper, and at scale. That means the manufacturing of climate finance itself. 

In addition to electrification of transport and industry, growing urbanization, and rising cooling needs, artificial intelligence is driving a surge in global energy demand. Data centers and AI could quadruple electricity use by 2040, requiring around $4 trillion in annual investment across power systems, grids, and data infrastructure, according to the IEA. But while AI is helping create the need for new grids, it can also run the “factory” that helps pay for them. Today’s AI tools can generate loan contracts in minutes, assess risks globally, and adapt deals to local rules automatically. This means AI can “manufacture” climate finance, creating repeatable, standardized financial products, templates, data systems, and governance frameworks that allow capital to flow with the same efficiency as manufactured goods. 

Today, a solar project in Kenya can take 18 months to structure with bespoke term sheets, country-specific risk models, and one-off legal frameworks. A templated approach with proven documentation, standardized covenants, and transparent data could reduce that to six months while lowering costs and attracting institutional capital at scale.

From mobilization to manufacturing

For years, climate finance has been measured by how much capital could be pledged or announced. But pledges don’t build grids, pipelines, or desalination plants.
The next generation of climate finance must be built around manufacturing scale, the disciplined replication of what works. That means moving from bespoke, one-off deals to standardized structures investors can trust; creating transparent data systems so pricing becomes evidence based rather than memory based; and establishing predictable governance that reduces execution risk and narrows spreads. 

When a solar portfolio in Kenya can be underwritten as confidently as one in Morocco, with comparable documentation and de-risking, climate assets will trade like mainstream structured income, attracting commercial capital at speed.

A coordination failure, not a capital crisis

Global investment isn’t scarce. Energy investment reached $3.3 trillion in 2024, yet less than one-sixth flowed to emerging markets where demand is greatest, according to the World Bank. This is not a liquidity crisis; it is a coordination failure; capital exists, but the structures for it to flow where it’s most needed do not.

Each transaction is treated as a prototype, with unique term sheets and risk models, resulting in slower execution, higher spreads, and chronic under-delivery. Industrializing climate finance means creating factories of capital, repeatable platforms that turn project preparation into production lines.

What Standardization Looks Like in Practice

We already have models. The European Investment Bank’s standardized project bonds, launched in 2012, reduced financing costs for infrastructure by 10-20% through common documentation and credit enhancement. The IFC’s Managed Co-Lending Portfolio Program pools smaller investors into standardized structures, mobilizing billions in commercial capital alongside development finance.
Several initiatives point the way forward. The UAE’s ALTÉRRA platform, a $30 billion catalytic vehicle designed to mobilize $250 billion by 2030, offers a model for blended finance at scale, pooling risk, templating contracts, and accelerating projects from concept to portfolio. The Africa Green Investment Initiative (AGII) applies similar logic regionally.

In Europe, the EU Taxonomy for Sustainable Activities provides standardized definitions that allow green bonds to trade with price discovery and liquidity. And the Climate Bonds Initiative has certified over $500 billion in standardized green bonds globally, demonstrating investor appetite for transparent, repeatable structures.

This factory model can extend beyond energy. Water infrastructure faces similar gaps; The UN Water Conference 2026, co-hosted by the UAE and Senegal, presents an opportunity to apply these same standardization lessons to make climate finance for water infrastructure  as scalable and data-driven as the technologies it supports.

Making standardization work

Standardization must balance efficiency and flexibility. Templates should adapt to different contexts while remaining comparable globally. Interoperability is key. Baseline frameworks, common data requirements, risk-sharing principles, and transparent pricing allow investors to assess risk across jurisdictions while respecting local context.

This must also span financial architectures. Islamic finance, with $50 billion in green sukuk, still requires custom sharia compliance review. Pre-certified sukuk frameworks could unlock far greater capital for climate infrastructure. Similarly, transition finance for decarbonizing energy systems requires templated approaches that commercial banks can deploy quickly.

Commercial banks are vital distribution channels for “manufactured finance.” Offering standardized climate products with clear risk profiles and regulatory treatment transforms them from deal arrangers into market makers, scaling deployment through their branch networks and correspondent relationships. 

From advocacy to execution

The future of climate finance depends on shifting from commitments to deployment, and the breakthrough will come when climate assets are priced by evidence, based on recovery rates, capacity factors, and repayment histories, not perception or political cycles. AI-enabled platforms can now aggregate this data in real time, benchmark risk across jurisdictions, and provide the transparency that institutional investors require.

Open data, predictable governance, and stable policy are the raw materials of trust. And trust at scale is what converts trillions in dormant capital into deployed infrastructure.

The first wave of climate finance has mobilized capital, the next must be about manufacturing it: designing, replicating, and scaling financial structures the way industry scales production. Treating every transaction as bespoke only slows deployment, raises costs, and limits impact. After all, the transition is too urgent to advance one deal at a time, when we now have the tools to accelerate climate finance at scale.