Gray zones of green finance: the Canada Infrastructure Bank and the limits of derisking decarbonization

Abstract State-led decarbonization efforts increasingly rely on a derisking approach, where public resources absorb investment risk and create “bankable” green projects to mobilize private capital. Yet, growing research highlights significant challenges in putting derisking into practice. I examine the Canada Infrastructure Bank (CIB) to assess how derisking shapes low-carbon infrastructure development. Drawing on document analysis and a review of its partners’ financial structures, I find that the CIB has struggled to mobilize investment at scale despite adopting a derisking strategy. Moreover, several of its partnerships involve firms connected to offshore tax havens, raising concerns about the redirection of public resources toward private gain. These dynamics call into questions the bank’s capacity to support Canada’s decarbonization goals. More broadly, the study contributes to research on the structural limits of derisking by showing how reliance on green finance can undermine decarbonization efforts, reproduce global inequalities, and shift climate policy away from public accountability.