Global development banks commit record $125B to fight climate change

Multilateral development banks (MDBs) including the African Development Bank announced today that their collective financing for climate action hit a record high of $125 billion in 2023, more than doubling levels in 2019, when MDBs agreed new targets at the United Nations Secretary General’s Climate Action Summit, Report informs referring to the AFDB website.

The announcement of the findings of the Joint Report on Multilateral Development Banks’ Climate Finance comes ahead of the 29th United Nations Climate Change Conference that will be held in Baku, Azerbaijan in November 2024. One of the key expected deliverables of COP29 is an increase in global climate financing and an agreement on a new collective target.

Of the $125 billion, MDBs allocated $74.7 billion to low- and middle-income economies. Sixty-seven percent of this—or $50 billion—went to finance climate mitigation, which refers to actions that reduce, avoid, limit or sequester greenhouse gas emissions, while $24.7 billion, or 33 percent, was directed to climate adaptation. Adaptation finance involves activities and measures aiming at reducing the risks or vulnerabilities posed by climate change, and at increasing climate resilience.

Of the $74.7 billion that went to low- and middle-income countries, $28.5 billion, or roughly 38 percent, was mobilized from the private sector.

Given the need and urgency of climate adaptation finance, particularly in climate-vulnerable low-income countries, these numbers demonstrate positive steps, but remain well below what is required. The African Development Bank projects that Africa’s adaptation financing gap from international sources ranges from $166 billion to $260 billion in 2020 – 2030.