According to a joint report released today by the Multilateral Development Banks (MDBs), MDB climate finance hit a new high in 2022. The news coincides with the World Bank Group and International Monetary Fund Annual Meetings in Marrakesh, Morocco, where one of the main agenda topics is scaling up public climate finance, particularly for low- and middle-income economies.
Low- and middle-income economies accounted for US$ 60.7 billion of the US$ 60.7 billion in MDB climate finance in 2022; US$ 38.0 billion, or 63% of the total, went towards financing climate change mitigation, while US$ 22.7 billion, or 37%, went towards financing climate change adaptation. A total of US$ 16.9 billion in private capital had been raised.
MDBs are exceeding their own 2025 climate finance targets, which they set during the UN Secretary General’s Climate Action Summit in 2019, for the second year in a row thanks to the record 2022 climate funding volumes. This included providing at least US$ 65 billion in climate finance globally, with an anticipated doubling of adaptation money to US$ 18 billion; delivering an estimated US$ 50 billion in climate finance for low- and middle-income economies; and mobilising US$ 40 billion from the private sector. The MDB 2022 climate finance for low- and middle-income economies has increased by 46% (2019, US$ 41.5 billion) and the worldwide MDB climate finance by 62% (2019, US$ 61.6 billion) in comparison to 2019 volumes.
We are happy to report that, for the second year in a succession, low- and middle-income economies have exceeded the US$ 50 billion target. The fight against climate change has taken centre stage on MDBs’ agendas in light of the current climate disasters. Through the provision of both mitigation and adaptation finance, as well as the ability to catalyse a significant amount of private sector financing, the EBRD’s operating model—three quarters private sector and one quarter public sector—allows us to engage closely with a wide range of actors in the financial and real sectors, according to Harry Boyd-Carpenter, Managing Director for Climate Strategy and Delivery at the EBRD.
The EBRD’s own climate finance for low- and middle-income economies increased to US$ 4.3 billion in 2022 from US$ 3.9 billion in 2019, and US$ 2.5 billion from US$ 1.1 billion in 2019 for high-income economies. The overall amount of climate finance provided by the EBRD for 2022 grew by 35% from 2019 to US$ 6.8 billion. The EBRD raised $10 billion in private funding for climate change.
Leading source of climate funding, the EBRD has completely aligned its operations with the mitigation and adaptation goals of the Paris Agreement as of January 1, 2023, having already fulfilled a commitment to make at least half of its investments green by that date. The Bank has a unique position in the operations of because of its mandate to promote private sector development.
An annual coordinated effort to publish the climate finance data for MDBs together with a detailed explanation of the tracking methodology is known as the Joint Report on MDBs Climate Finance. With regard to MDB joint climate financing targets, such as those declared at the UN Climate Change conference COP21 and the more ambitious pledges for the 2021–2025 term, this joint report is meant to monitor progress.
The climate finance of the Council of Europe Development Bank and the New Development Bank is completely included in the MDB reporting this year’s report, making it the first time that the aggregated data reported includes the climate finance of all ten MDBs. Global climate finance increased to US$ 98 billion in even without the two MDBs participating in the reporting.
Data from the African Development Bank (AfDB), Asian Development Bank (ADB), Asian Infrastructure Investment Bank (AIIB), Council of Europe Development Bank (CEB), European Bank for Reconstruction and Development (EBRD), European Investment Bank (EIB), Inter-American Development Bank Group (IDBG), Islamic Development Bank (IsDB), New Development Bank (NDB), and World Bank (WB) are combined in the 2022 multilateral development bank report, which is coordinated by the EIB.