Spending on climate finance by eight of the world’s key multilateral development banks (MDBs) grew to $66 billion in 2020, up from $61.6 billion the year before, according to a new report.
$38 billion — 58% — was allocated to low- and middle-income countries, according to the report, which tracks the annual progress MDBs are making to help accelerate the transition to low-carbon and climate-resilient economies through climate finance.
Released Wednesday, the 2020 Joint Report on Multilateral Development Banks’ Climate Finance found that the total climate co-finance committed alongside MDB resources last year was $85 billion, of which $31.7 billion came from direct funding from private sources.
MDBs are chartered by multiple countries in order to encourage economic development in poorer nations.
The analysis includes 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.
Over the past six years, the MDBs have jointly committed a total of $257 billion in climate finance, of which $186 billion was disbursed to low- and middle-income countries. https://www.adb.org/news/mdbs-climate-finance-hit-66-billion-2020-joint-report-shows
According to the report:
- Nearly $50 billion (76%) of total MDB climate finance in 2020 was committed to investments that aim to reduce greenhouse gas emissions and slow down global warming. Of that figure, 50% went to low- and middle-income economies
- More than $16 billion (24%) was invested in adaptation efforts to help countries build resilience against climate change impacts, including worsening droughts and extreme weather events. 83% of that funding was directed to low- and -middle-income economies.
Last year’s 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,” the report said.
“To solve the climate crisis, we must mobilize trillions of dollars,” European Investment Bank vice president Ambroise Fayolle said in a statement.
The report shows that, despite the COVID-19 pandemic, MDBs provided crucial support to countries worldwide to build back better for a greener future.
Importantly, MDB climate finance helped leverage important funding from other sources, including from the private sector,” Fayolle said. “Despite still much work to do in this area, we saw an important and encouraging step up in our support for climate change adaptation, which in 2020 doubled compared to previous years.”
The increase in global commitments comes as world leaders prepare for the next round of climate talks this November in Scotland, where the issue of financial support for developing economies will be a key agenda item.
Source: Equities News