We set out our findings from the Transition Finance Pilot examining barriers to scaling finance for climate solutions.
The Transition Finance Pilot was a market engagement exercise led by the FCA and supported by the Prudential Regulation Authority (PRA) and the Green Finance Institute (GFI). It was announced as part of the Financial Services Growth and Competitiveness Strategy (PDF)[4] in July 2025.
The findings we set out in this paper were informed by a review of published literature and a wide programme of engagement. Over several months, we engaged with more than 45 market participants across 2 main categories:
- Capital providers across the project lifecycle, including venture capital, private equity, banks, institutional investors, and public finance institutions.
- Climate solutions companies and project developers at all stages of development, from early-stage spinouts and start-ups through to commercially mature businesses.
What we found
We found a set of system-level challenges that affect how efficiently capital is matched to opportunity.
We identified 3 main challenges:
- Some climate solutions struggle to reach a commercial maturity sufficient to attract private capital.
- Capital is not always well-matched to opportunity, despite strong appetite.
- Information and capacity gaps create frictions.
Next steps
We are sharing our findings with UK and international stakeholders to inform policy development and market coordination. We will continue to advance our broader sustainable finance work to strengthen market integrity, transparency and trust, including supporting the development of industry-led transition metrics through the Climate Financial Risk Forum[5].
We are also exploring how our regulatory framework can better support small and medium-sized enterprise (SME) access to finance.
