MDBs’ Climate Finance for Developing Countries Rose to US$ 38 Billion, Joint Report Shows
Of this amount, the World Bank Group accounts for more than half; and over two-thirds of climate adaptation finance
The 2020 Joint Report on Multilateral Development Banks’ Climate Finance, published on June 30, showed that climate finance to low- and middle-income economies committed by major multilateral development banks (MDBs) rose to US$ 38 billion. In addition to this, $28 billion was committed to high income countries by MDBs focused on developed countries.
The World Bank Group accounts for more than half of this climate finance for developing countries; and over two-thirds of climate adaptation finance. Over the last five years, the World Bank Group delivered over $83 billion in climate finance, including a record $21.4 billion in 2020. Results included over 48 GW in low-carbon and renewable energy to help businesses and communities thrive, as well as support to countries to mitigate disaster risks, building resilience in people, infrastructure and economies.
Through its new Climate Change Action Plan 2021-25, the World Bank Group (WBG) will broaden efforts from investing in “green” projects to helping countries fully integrate their climate and development goals. The WBG will identify and prioritize action on the most impactful mitigation and adaptation opportunities. The WBG will also align its financial flows with the goals of the Paris Agreement and support countries to reduce emissions and strengthen their resilience to climate risks.
The total climate co-finance committed during 2020 alongside MDB resources was US$ 85 billion. Together, MDB climate finance and climate co-finance totalled more than US$ 151 billion. The amount of private direct mobilization stood at US$ 5.9 billion.
“The MDBs will continue to improve their tracking and reporting of climate finance in the context of their commitments to ensure consistent financial flows to the countries’ long-term, low-carbon and climate-resilient development pathways, as established in … the Paris Agreement,” says the 2020 report, which is the 10th in the series.
The 2020 financing helped play a key role in supporting countries to embed green and climate-focused solutions as part of their recoveries from the impact of COVID-19. While these pandemic-related investments affected MDBs’ normal lending operations and thus potentially the delivery of individual climate finance targets, the 2020 report says interventions and support from the MDBs laid a solid foundation for “building back better” for a greener, more resilient, post-Covid-19 future.
The 2020 MDB report, coordinated by the EBRD, combines data from the African Development Bank (AfDB), the Asian Development Bank (ADB), the Asian Infrastructure Investment Bank (AIIB), the European Bank for Reconstruction and Development (EBRD), the European Investment Bank (EIB), the Inter-American Development Bank Group (IDBG), the Islamic Development Bank (IsDB) and the World Bank Group (WBG). AIIB data is fully incorporated for the first time. As part of the MDBs’ ambition to extend and enhance climate finance reporting, the 2020 report also summarises information on climate finance tracking from the New Development Bank (NDB), presented separately from the joint figures and not yet included in the MDB climate finance total.