National Development Financial Institutions (NDFIs) are crucial for mobilizing the required financing, including from private sources, to reach countries’ climate and environmental (C&E) objectives. Funding needed to achieve countries’ C&E goals is in the trillions of dollars. At the same time, many countries  are also facing significant fiscal and economic constraints. Low￾income and middle-income countries (LICs and MICs), other than China, need an estimated US$783 billion per year in additional investments for climate action through 2030 (World Bank 2023). NDFIs have the scale to play an essential role in mobilizing the required financing from public and private sources toward C&E goals.NDFIs are well positioned to overcome market barriers associated with green investments and catalyze private-sector financing. NDFIs, when adequately managed, can address market failures and create new markets. Compared to private investors, NDFIs have a stronger appetite for financing long-term, high-risk investments and can thus overcome market barriers associated with green investments, such as long payback periods and high perceived project risk. NDFIs have the tools to support private capital mobilization through de-risking instruments and blended financing. Moreover, NDFIs can enable private capital mobilization by supporting the generation of a green project pipeline and through demonstration transactions that stimulate market creation. Given the limited capacity of governments to scale up C&E financing owing to current fiscal conditions, NDFIs’ role in mobilizing private financing will be critical to closing the C&E financing gaps.