Climate financing by MDBs rises to a 7-year high of $35.2bn

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DHAKA, June 14, 2018 (BSS) – Climate financing by the world’s six largest
multilateral development banks (MDBs) rose to a seven-year high of $35.2
billion in 2017, up 28 percent from the previous year.

The MDBs’ latest joint report on climate financing said $27.9 billion, or
79 percent of the 2017 total, was devoted to climate mitigation projects that
aim to reduce harmful emissions and slow down global warming, said a ADB
media release received here today.

The remaining 21 percent, or $7.4 billion, of financing for emerging and
developing nations was invested in climate adaptation projects that help
economies deal with the effects of climate change such as unusual levels of
rain, worsening droughts, and extreme weather events.

In 2016, climate financing from the MDBs had totaled $27.4 billion.

The latest MDB climate finance figures are detailed in the 2017 Joint
Report on Multilateral Development Banks’ Climate Finance, combining data
from the African Development Bank, the Asian Development Bank, the European
Bank for Reconstruction and Development, the European Investment Bank, the
Inter-American Development Bank Group and the World Bank Group (World Bank,
IFC, and MIGA). These banks account for the vast majority of multilateral
development finance. In October 2017, the Islamic Development Bank joined the
MDB climate finance tracking groups, and its climate finance figures will be
included in reports from 2018 onwards.

Climate funds such as the Climate Investment Funds (CIF), the Global
Environment Facility (GEF) Trust Fund, the Global Energy Efficiency and
Renewable Energy Fund (GEEREF), the European Union’s funds for Climate
Action, the Green Climate Fund (GCF), and others have also played an
important role in boosting MDB climate finance. As well as the $35.2 billion
of multilateral development finance, the same adaptation and mitigation
projects attracted an additional $51.7 billion from other sources of
financing last year.

Of the 2017 total, 81 percent was provided as loans. Other types of
financial instruments included policy-based lending, grants, guarantees,
equity, and lines of credit.

Latin America, Sub-Saharan Africa, and East Asia and the Pacific were the
three major developing regions receiving the funds. The report contains a
breakdown of climate finance by country.

The sharp increase came in response to the ever more pressing challenge of
climate change. Calls to galvanize climate finance were at the heart of
events such as the One Planet Summit in Paris in December 2017, 2 years after
the historic Paris Agreement was adopted. Multilateral banks began publishing
their climate investment in developing countries and emerging economies
jointly in 2011, and in 2015, MDBs and the International Development Finance
Club agreed joint principles for tracking climate adaptation and mitigation
finance.

Climate finance addresses the specific financial flows for climate change
mitigation and adaptation activities. These activities contribute to make MDB
finance flows consistent with a pathway towards low greenhouse gas emissions
and climate-resilient development, in line with the Paris Agreement. The MDBs
are currently working on the development of more specific approaches to
reporting their activities and how they are aligned with the objectives of
the Paris Agreement.

“ADB’s climate investments reached $4.5 billion last year, a 21 percent
increase from 2016 and in line with our climate finance commitment to reach
$6 billion by 2020. ADB will continue to deepen its collaboration with other
MDBs while employing consistent and rigorous methodologies to track climate
finance,” said ADB Vice-President for Knowledge Management and Sustainable
Development Bambang Susantono.

“ADB acknowledges the critical role of external funding and has accessed
$265 million in concessional financing from the Green Climate Fund to date.
It also continues to establish innovative financing facilities, such as the
Asia Pacific Climate Finance Fund, which supports financial risk management
products that can help unlock financing for climate investments in clean
technologies and that build resilience to climate risks,” he added.

 

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