Editor’s note: This guest post is sponsored by JPMorganChase.

Capital is not the only constraint in sustainable finance. Credible, investable pipelines, as well as plain vanilla structures that can be replicated and scaled, are equally essential.

Across emerging markets and developing countries, governments and companies have no shortage of plans to expand access to energy, modernize infrastructure, improve food systems and broaden financial inclusion. Investors, for their part, have signaled strong interest in backing solutions that both generate financial returns and produce real-world outcomes. Yet too often, these two realities fail to meet in the market. Transactions stall on perceived risk, adequate risk-return profiles, limited tenors or bespoke structures that required a large number of players bringing in different sources of capital to make a project work.

In my work at J.P. Morgan’s Development Finance & Advisory group, I see the solutions as practical rather than philosophical. Mobilization is a discipline: structuring risk so institutional capital can participate, partnering with multilaterals and development institutions to de-risk what markets can’t price efficiently, and improving impact transparency so investors can underwrite outcomes with confidence.

De-risking can be market making

When investors say they cannot allocate to certain markets, it’s often less about a lack of interest than a mismatch between mandate constraints and risk profiles. Political risk, currency convertibility, regulatory constraints or simply the absence of long-dated liquidity can make otherwise strong credits difficult to finance on commercial terms.

This is where guarantees, political risk insurance and blended structures can be catalytic. Used well, they do not “subsidize” weak projects but can help viable issuers and strategies clear the hurdles that keep capital on the sidelines. Development finance institutions, export credit agencies and multilaterals bring unique risk-bearing capacity that can complement private markets, especially when the objective is to crowd in, not crowd out, commercial capital.

When done in a well-structured manner, the results are tangible: lower barriers to entry for new investors, a wider investor base and longer tenors, with clear impact in climate transition, resilient infrastructure and inclusive growth. 

Impact needs trust — and trust needs credible disclosure

Risk mitigation alone, however, will not unlock the financing needed for countries to achieve developmental objectives. The market also needs better and more standardized information. In particular, impact-focused investors want confidence that a company’s disclosures and data are robust and decision-useful. At the same time, we cannot ask issuers, particularly those in emerging markets, to produce ever more bespoke reporting required by different lenders. 

That’s why the industry-led Impact Disclosure Guidance was created by a group of more than 80 stakeholders to help corporate and sovereign issuers produce a Sustainable Development Impact Disclosure, or SDID, and bring greater impact transparency to financial markets. 

SDIDs are designed to be entity-level but context-specific, impact-oriented and forward-looking. In practice, they allow issuers to disclose how a strategy is intended to address the development gaps where it operates, set targets for intended outcomes, and commit to monitoring and reporting on progress. Importantly, this is distinct from familiar sustainability instruments: It is not use-of-proceeds, it does not change a bond’s coupon, and it is meant to travel with the issuer’s broader balance sheet rather than a single labeled tranche.

This shift matters. If investors can diligence entity-level development intent with greater confidence, the investable universe expands beyond ring-fenced projects. Over time, this can support a more durable market with issuers gaining a reason to disclose and investors gaining a clearer basis to allocate.

Transactions are where frameworks become real

These ideas are not theoretical. We see them take shape in replicable transactions across regions and sectors. 

In Asia, Muangthai Capital’s $335 million bond to support financial inclusion projects in Thailand show that capital markets can advance national development strategies and expand access to finance – when structuring and disclosure are aligned with investor needs.

In Africa, AXIAN Telecom’s $600 million bond to expand inclusive digital connectivity paired with an SDID is a useful example of how entity-level disclosure can sit alongside capital markets execution, broadening the pool of investors able to engage with an issuer’s development strategy.

And in Latin America, Arauco’s $2.2 billion financing package — also backed by Finnvera, IFC and IDB Invest — to boost sustainable pulp production in Brazil illustrates how large-scale industrial investment can be structured to advance next-generation efficiency while job creation and supporting local economic benefits.

These transactions are just a few examples of how our Development Finance & Advisory business supports our clients and helps advance our efforts to create sustainable economic growth as part of our $2.5 trillion Sustainable Development Target. 

Built on repeatability and buoyed by scale

The market is evolving quickly. Investors are becoming more demanding about well-structured transactions and empirical evidence. That is healthy. It pushes the ecosystem toward rigor.

Taken together, we also see a broader shift in the market towards active partnership with the multilateral development banks and a growing cadence of activity across instruments. Across anchor investments, co-lending, guaranteed facilities and trade finance programs, we’re seeing rising demand for structures that bring private capital into emerging-market priorities. This demand is being reinforced by two shifts: governments’ increased focus on infrastructure and supply-chain strengthening, and multilateral development banks sharpening their mobilization agenda and building teams that can partner effectively with the private sector across products — from insurance to private equity.

The next wave of sustainable finance will not be driven by donor-driven objectives or one-off bespoke solutions. It will be driven by repeatable structures, partnerships that allocate risk efficiently, and standardized, forward-looking impact disclosure that reduces diligence friction.

Ultimately, mobilizing capital for sustainable growth in emerging markets and development economies will become mainstream when its market infrastructure is simple, standardized and structured to scale. 

Faheen Allibhoy is global head of Development Finance & Advisory at J.P. Morgan, where she and her team serve multilateral and bilateral development banks and partner with development finance institutions on transactions globally, including providing impact advisory services to corporate and sovereign clients. For more information, visit: https://www.jpmorgan.com/investment-banking/development-finance-and-advisory.

Guest posts on ImpactAlpha represent the opinions of their authors and do not necessarily reflect the views of ImpactAlpha.