Multilateral Development Banks underline commitment to boost climate finance
The world’s premier multilateral development banks (MDBs) have underlined their commitment to continue the current pace of financial support and other measures for countries to achieve ambitious climate outcomes.
MDBs estimate that by 2030, their annual collective climate financing for low- and middle-income countries will reach $120 billion, including $42 billion for adaptation. These banks aim to mobilize as much as $65 billion from the private sector.
For high-income countries, this annual collective climate financing is projected to reach $50 billion, including $7 billion for adaptation.
MDBs significantly exceeded their ambitious 2025 climate finance projections set in 2019, with a 25 per cent increase in direct climate finance and mobilization for climate efforts doubling over the past year.
These MDBs issued a joint statement at the COP29 in Baku, Azerbaijan, recently released the Common Approach to Measuring Climate Results: Update on Indicators. The common approach, issued in April, is the first shared framework to define, measure, and link global progress on climate mitigation and adaptation with the climate results of MDB activities.
One of the key deliverables of COP29 is to increase global climate finance and to reach agreement on the new collective quantified goal on climate finance.
“While the scale of MDBs’ financial commitments is essential, MDBs’ most significant impact comes from our ability to drive transformative change,” said an official statement said. “As emphasized by the Group of Heads of MDBs in the recent Viewpoint Note: MDBs Working as a System for Impact and Scale, we MDBs are focused on amplifying our catalytic effect by enhancing the results and impact of our financing, deepening engagement with countries through platforms, supporting clients’ climate ambitions, and increasing private sector mobilization.”
“Rallying to the call for urgent climate action, MDBs recognize the central importance of establishing a New Collective Quantified Goal on Climate Finance (NCQG) at COP29 in Baku. A robust and ambitious NCQG is essential for achieving the goals of the Paris Agreement, and we urge Parties to reach a strong conclusion on this objective,” the statement added.
The MDBs are African Development Bank Group, Asian Development Bank, Asian Infrastructure Investment Bank, Council of Europe Development Bank, European Bank for Reconstruction and Development, European Investment Bank, Inter-American Development Bank, the Islamic Development Bank, New Development Bank, and the World Bank Group.
According to an official statement from the ADB, MDBs recently announced that their global climate finance reached a record high of $125 billion in 2023. The combined total last year from institutions, including the Asian Development Bank, is more than double the amount provided in 2019, when MDBs announced their ambition to increase climate finance levels over time at the United Nations Secretary General’s Climate Action Summit.
“We welcome the fact that MDBs provided record climate finance last year—every dollar of which makes a difference in helping to cut carbon emissions or preparing people and infrastructure for the worst impacts of climate change, much of which we must recognize is already baked in,” said ADB Director General for Sustainable Development and Climate Change Bruno Carrasco. “There remains a large financing gap and ADB will continue to work closely with other MDBs—and in its own right—to get as much financing as possible to our developing member countries.”
Last year, $74.7 billion of MDB climate finance was directed toward low- and middle-income economies. Of this sum, 67 per cent, or $50 billion, went to climate change mitigation and $24.7 billion, or 33 per cet, for climate change adaptation. The amount of mobilized private finance for this group of countries stood at $28.5 billion.
In 2023, $50.3 billion was allocated for high-income economies. Of this amount, $47.3 billion, or 94 per cent, was for climate change mitigation and the remaining $3 billion, or 6 per cent, went to climate change adaptation. The amount of mobilized private finance for high-income countries stood at $72.7 billion.
