Third, many of their transition projects are only marginally bankable. Regulatory and political risks heighten the likelihood of default, transaction lead times are long, projects require prohibitively large amounts of start-up capital, and there is limited access to expertise in project development and financing. The current model of multilateral bank lending is inadequate to mobilise the capital that countries need for their transition. A good part of multilateral bank lending goes to bankable projects that could well have been financed by private capital. Multilateral banks tend to prioritise projects with lower risks to support their mandates of macroeconomic stability and growth. But in truth, their capital is most needed for riskier projects that are only marginally bankable but can support the transition. What we need is public-private partnership in financing that is synergistic not duplicative. We need to make every dollar of public capital count. We need blended finance. Catalytic and concessional funding from the public sector, multilateral development banks, and philanthropic sources can potentially enhance project bankability and help to crowd in private capital. They can: mitigate a portion of project risks to improve the risk-return profile and attract a broader set of private investors; provide technical assistance at the project design stage to increase the pipeline of investable projects; and facilitate the development of a mature climate blended finance ecosystem in emerging markets and developing economies. Blended finance is not new but we need to scale it up and this requires a collective effort.

Green and transition financing is nowhere near what is required to get to net-zero by 2050. The financial sector can play a key role in catalysing transition towards a low carbon, climate-resilient economy. But we are more than 35% short of the annual investment of $ trillion that would be required to get to net-zero by 2050. The NGFS aims to promote the financial sector as a catalyst for the transition to a net-zero world. Through our diverse membership of 125 central banks and financial regulators from more than 90 advanced, emerging, and developing economies, we are well-positioned to do this. Our work programme is multi-faceted. We are: enhancing supervisory practices on managing climate risks; designing actionable climate scenarios; assessing the implications of climate change for monetary policy; providing guidance for central banks' own net-zero transition; analysing nature-related financial risks; and building skills and capabilities among the NGFS membership Today, I want to talk about two relatively new areas where the NGFS is making a determined push:  transition planning  1/5  BIS - Central bankers' speeches  blended finance  Supporting transition planning To achieve net zero, every economic sector will need to decarbonise. Different sectors will have different transition pathways. In hard-to-abate sectors, the transition could be quite disorderly. Those firms or industries that fail to adequately decarbonise may risk being left with non-viable businesses or stranded assets. To support every sector to decarbonise, financial institutions need to fund activities supporting transition and not just green projects.