About $51 billion was committed by multilateral development banks’ (MDBs) finance towards addressing climate change in low- and middle-income countries in 2021.
Financing to address climate changes committed by major multilateral development banks rose in 2021 with over $19 billion committed to adaptation finance, according to the recently published Joint Report on Multilateral Development Banks’ Climate Finance.
The report tracks the progress of MDBs in relation to their finance targets such as those announced at COP21 and the greater ambition pledged for the post-2020 period.
The report finds that total financing commitment by MDBs to low-income and middle income economies in 2021 sat at $50.666 billion. This surpassed the annual expectations of $50bn set in 2019 at the UN Secretary General’s Climate Action Summit in New York.
Of the $50.666bn committed to climate action committed to low-income and middle-income economies, $47.24bn was from the MDBs’ own account and $3.426bn from external resources that were channelled through the banks. Mitigation finance committed to low- and middle-income economies totalled $33.055bn, or 65 per cent while adaptation finance totalled $17.611bn (35%).
The 2019 goals projected a collective total of $50bn for low- and middle-income economies and at least $65bn of finance globally, with an estimated doubling of adaptation finance to $18bn and private mobilisation of $40bn.
The report also records a notable increase in adaptation finance to more than $19bn in 2021, again beating expectations. A total of $19.187bn was committed to climate adaptation finance, with $17.611bn (92%), committed to low- and middle- income economies. This surpassed the expected collective delivery of increasing adaptation finance to $18bn.
Kevin Kariuki, Vice President of Power, Energy, Climate and Green Growth at the African Development Bank, said that as MDBs, they have steadily grown the amount, and access to money aimed at climate adaptation and mitigation over the last decade, demonstrating the potential of multilateralism in tackling global threats. “However, this is not near enough, and efforts to ramp-up the quantum of, and rate of access to, global climate finance, especially adaptation finance, in developing countries are necessary.”
“This is why we have established flagship programmes such as the $25bn African Adaptation Acceleration Program and the $20bn Desert-to-Power, to accelerate climate action, while safeguarding the wellbeing of our people and nature,” said Kariuki.
This edition of the report presents the multilateral development banks’ finance commitments data in two different chapters, with data for low- and middle-income economies and that for high-income economies presented separately.
The African Development Bank’s contribution to financing that addresses climate change in 2021 stands at $2.49bn or 41 per cent of all bank investment approvals. Of this amount, the proportion of climate adaptation grew to 67 per cent, which shows the bank’s commitment to supporting its regional member countries build adaptive capacity and climate resilience.
The 2021 multilateral development bank report combines data from the African Development Bank, the Asian Development Bank, the Asian Infrastructure Investment Bank, the European Bank for Reconstruction and Development, the European Investment Bank, the Inter-American Development Bank Group, the Islamic Development Bank and the World Bank Group.