A report released on Monday, June 23, 2025, by Oil Change International and 17 other civil society organisations, including Climate Action Network International and 350.org, exposes the failure of the current approach to financing a transition away from fossil fuels, posing a grave threat to global efforts to combat the climate crisis.
The report, titled “Private Fantasies, Public Realities: Why private finance isn’t delivering an energy transition and the case for public sector leadership”, analyses a new decade-long dataset on blended finance, a key energy finance tool that rich countries and international institutions like the World Bank, International Energy Agency, and International Monetary Fund, promote. It finds that every public dollar of this concessional (subsidised) money is bringing in 4-7 times less private investment than anticipated.
These unrealistic assumptions about blended finance are a key driver behind massive shortfalls in energy transition finance in the Global South, said the CSOs, adding that Global North countries and China are getting the biggest share of just energy transition finance, with the remaining 69% of the world’s population receiving just 15% of finance in 2023–2024.
Meanwhile, the report shows that, in every region, even in the Global North and China, critical sectors like public transit, universal energy access, 100% renewable-ready electricity grids, and fair fossil fuel phase-out programmes are dangerously behind.
An analysis of the last 15 years of major international energy finance pledges and policies finds that the core problem is that governments are relying too heavily on weak financial incentives to attract private finance to green projects. Looking across some of the strongest examples of financing for a just energy transition, the report finds a much wider policy toolkit in use including regulating private banks, sector-wide subsidies, building community- and publicly owned projects directly, and setting fair policies for industry to follow.
But the report also warns that amidst the worst-ever global debt crisis and unfair financing rules, these options are out of reach for many of the most climate-vulnerable countries.
The report is being released right as Global South-led diplomatic pushes for fair climate finance and debt workout rules are coming to a fore in Bonn, Germany at the midyear climate negotiations and in Seville, Spain ahead of the once-in-a-decade United Nations Financing for Development conference (FfD4).
Bronwen Tucker, Global Public Finance lead at Oil Change International, said: “A just energy transition is dramatically more affordable than continued fossil fuel dependence. But unfortunately, affordable doesn’t mean ‘attractive to banks and hedge funds’. It is clear from the data that private investors are not fit to lead the way to the fossil free future we need, and that governments must step in.
“To start with, we need the rich countries who are most responsible for the crisis, and have an outsized say in global financial rules, to stop pushing dodgy models on the rest of the world and start taking accountability. That means paying up their fair share of public, grant-based climate finance and cancelling unfair debts so that every country can transition.”
Shereen Talaat, Director, MenaFem Movement for Economic, Ecological Justice and Development, said: “This report confirms what communities across the Global South have been saying for years: the private finance-first model is failing us. It doesn’t serve people, it serves profit. Women and marginalised communities carry the heaviest costs – through unpaid care work, lost livelihoods, and exposure to climate disasters – while rich governments continue to push failed models. A just transition must be public-led, rooted in care, and funded through grants, not debt. At FfD4 and beyond, we demand climate finance that repairs harm, not deepens inequality.”