By Vanora Bennett
Highlights
- US$ 60.7 billion support climate action in low and middle-income economies, including US$ 22.7 billion for climate change adaptation
- Worldwide MDB climate finance reaches nearly US$ 100 billion, up from US$ 82 billion in 2021
- The amount of mobilised global private finance stands at US$ 69 billion, up from US$ 41 billion in 2021
A joint report by Multilateral Development Banks (MDBs) published today, finds that MDB climate finance reached a new record high in 2022. The announcement comes as delegates meet in Marrakesh, Morocco, for the World Bank Group and International Monetary Fund Annual Meetings, where scaling up public climate finance, in particular for low and middle-income economies, is one of the items on top of the agenda.
Low and middle-income economies
In 2022, US$ 60.7 billion of MDB climate finance was for low-income and middle-income economies, with US$ 38.0 billion, or 63 per cent of this total, for climate change mitigation finance and US$ 22.7 billion, or 37 per cent, for climate change adaptation finance. The amount of mobilised private finance stood at US$ 16.9 billion.
High-income economies
In 2022, US$ 38.8 billion was allocated for high-income economies. Of this total, US$ 36.3 billion, or 94 per cent, was for climate change mitigation finance and US$ 2.5 billion, or 6 per cent, was for climate change adaptation finance. The amount of mobilised private finance stood at US$ 51.9 billion.
Surpassing climate finance targets
With the record 2022 climate finance volumes, MDBs are surpassing for the second year in a row the 2025 climate finance targets they set themselves at the UN Secretary General's Climate Action Summit in 2019. This included delivering an expected collective total of US$ 50 billion climate finance for low-income and middle-income economies, at least US$ 65 billion of climate finance globally, with an expected doubling in adaptation finance to US$ 18 billion; and private mobilisation of US$ 40 billion. Compared to 2019 volumes, MDB 2022 climate finance for low and middle-income economies has increased by 46 per cent (2019, US$ 41.5 billion) and global MDB climate finance by 62 per cent (2019, US$ 61.6 billion).
"We are glad to have surpassed the US$ 50 billion target in low-and middle-income economies for the second year in a row. At this time of climate catastrophes, action against climate change has moved to the front and centre of MDBs' agendas. The EBRD's operating model - three quarters private sector and one quarter public sector - allows us to engage closely with a broad spectrum of actors in financial and real sectors through provision of both mitigation and adaptation finance and to catalyse a significant private sector finance," said the EBRD's Managing Director for Climate Strategy and Delivery, Harry Boyd-Carpenter.
The EBRD's own 2022 climate finance for low and middle-income economies rose to US$ 4.3 billion from US$ 3.9 billion in 2019, and for high-income economies reached US$ 2.5 billion from US$ 1.1 billion in 2019. In total, the EBRD's climate finance for 2022 increased by 35 per cent from 2019 to reach US$ 6.8 billion in 2022. The EBRD's total climate private mobilisation stood at US$10 billion.
A leading climate finance provider, already fulfilling a pledge to make at least half its investments green by 2025, the EBRD has fully aligned its activities since 1 January 2023 with the mitigation and adaptation goals of the Paris Agreement. The Bank's mandate to foster private sector development gives it a special place in the work of MDBs to mobilise the private sector for the enormous investments needed to make the green transition and to bridge the climate investment gap.
Transparent joint reporting on climate finance
The Joint Report on MDBs Climate Finance is an annual collaborative effort to publish MDBs' climate finance figures, together with a clear explanation of the methodologies for tracking this finance as climate finance. This joint report is intended to track progress in relation to MDB joint climate finance targets such as those announced at the UN Climate Change conference COP21 and the greater ambition pledged for the 2021-2025 period.
This year's report brings Council of Europe Development Bank and New Development Bank's climate finance fully into the MDB reporting, so that for the first time, all ten MDBs' climate finance is included in the aggregated data reported. Even without the two MDBs joining the reporting, global climate finance went up to US$ 98 billion in 2022. In addition, this year's report includes a more detailed breakdown of MDB climate finance in least developed countries and small island developing states.
The 2022 multilateral development bank report, coordinated by the EIB, combines data from the African Development Bank (AfDB), the Asian Development Bank (ADB), the Asian Infrastructure Investment Bank (AIIB), the Council of Europe Development Bank (CEB), the European Bank for Reconstruction and Development (EBRD), the European Investment Bank (EIB), the Inter-American Development Bank Group (IDBG), the Islamic Development Bank (IsDB), the New Development Bank (NDB) and the World Bank (WB).
