Integration for greater impact
Eighth Comprehensive evaluation of the GEF
The GEF has made steady progress in private sector engagement, particularly through the 2020 PSES, which established a dual approach of market transformation and NGIs. Market transformation has been pursued through policies, standards, capacity building, and value chain initiatives that influence production, demand, and finance; NGIs have been used to mobilize capital, de-risk innovation, and test new financial mechanisms. Grants remain central for enabling conditions and early-stage innovation, but NGIs have demonstrated strong catalytic potential, with high leverage ratios and expanding use beyond climate change into biodiversity, chemicals and waste, and integrated programs.
The effectiveness of private sector engagement has been uneven. Many interventions were designed as discrete activities—such as farmer training, awareness raising for financial institutions, or firm-level investments—rather than as part of a broader strategy for systemic transformation. Barriers include insufficient enabling conditions, weak or unclear business cases for sustainability, short project cycles, continued access to conventional finance without environmental, social, and governance (ESG) requirements, and limited regulatory enforcement in key sectors and geographies. Engagement in LDCs and SIDS has been especially constrained by fragile financial systems and capacity gaps.
Achieving transformational change requires moving beyond pilots and embedding private sector engagement systematically across programming. This means strengthening the balance between market transformation and NGIs, aligning project design with private sector risk return expectations, and generating pipelines of investment-ready projects. By tailoring approaches to different country market contexts and combining policy reform, standards, and capacity building with concessional, risk-bearing finance, the GEF can maximize its catalytic role and better position itself as a platform for innovation, risk-taking, and transformational change.
Sources: GEF Portal and GEF IEO Annual Performance Report (APR) 2026 data set, which includes completed projects for which terminal evaluations were independently validated through June 2025.
Note: Data exclude parent projects, projects with less than $0.5 million of GEF financing, enabling activities with less than $2 million of GEF financing, and projects from the Small Grants Programme. Closed projects refer to all projects closed as of June 30, 2025. The GEF IEO accepts validated ratings from some Agencies; however, their validation cycles may not align with the GEF IEO’s reporting cycle, which can lead to some projects with available terminal evaluations lacking validated ratings within the same reporting period; thus, validated ratings here are from the APR data set only.