MDBs increase 2016 financing to tackle climate challenge
The world’s six largest multilateral developments banks (MDBs) continued to make a strong contribution to the global climate challenge in 2016, increasing their climate financing in developing countries and emerging economies last year to US$ 27.4 billion from $25 billion in 2015.
Of this total, US$ 21.2 billion or 77 per cent was dedicated to climate mitigation finance, with the remaining 23 per cent devoted to climate adaptation.
Combined with additional co-financing from other investors, the total amount of financed mobilised for climate action reached US$ 65.3 billion last year.
The MDBs have reported jointly on climate finance since 2011. Collectively, the banks have committed over US$ 158 billion in climate finance during the past six years.
The latest MDB climate finance figures are detailed in the 2016 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.
Welcoming the report, Jonathan Taylor, European Investment Bank Vice President responsible for climate action, highlighted that “The European Investment Bank is committed to supporting new climate related investment around the world. This year’s report reflects the EIB’s recognition of the vulnerabilities of developing and emerging economies to climatic uncertainties with its focus on investment outside Europe. Together with other multilateral development banks we are pleased to back investment in transformational projects that cut emissions and address a changing climate. We welcome this opportunity to improve effective measurement of the impact of our shared climate engagement strengthened by the EIB's unique experience of financing schemes across Europe and around the world.”
Broken down by region, the largest share of last year’s MDB climate finance went to South Asia, with 20 per cent, followed by East Asia and the Pacific and non-EU Europe and Central Asia, with 19 and 18 per cent, respectively. The Middle East and North Africa at 9 per cent and Sub-Saharan Africa at 7 per cent received the least climate finance.
The MDBs also reported again on climate finance according to financial instrument. The vast majority of finance, 73 per cent, was provided in the form of investment loans.
The MDBs’ methodologies for climate finance tracking align with the Common Principles for Climate Change Mitigation Finance Tracking, jointly agreed by the MDBs and by the International Development Finance Club (IDFC) and first published in March 2015.
The MDBs and the IDFC agreed on the Common Principles for Climate Adaptation Finance Tracking in July 2015. The MDBs and the IDFC have begun taking the next steps to harmonise their approaches in tracking adaptation finance.
The MDBs are continuing to work to update their joint tracking methodologies for mitigation and adaptation, to support the goals of the Paris Agreement, playing a key role in defining the finance flows consistent with a pathway towards low greenhouse gas emissions and climate resilient development.