Multilateral banks’ climate financing hit $125bn – AfDB

Multilateral development banks, including the African Development Bank, have reported that their combined financing for climate action reached a record $125bn in 2023.

In a statement issued on Monday, AfDB said the findings were from the Joint Multilateral Development Banks report for 2023.

This report precedes the 29th Session of the Conference of the Parties to the United Nations Climate Change Conference, scheduled for November 2024 in Baku, Azerbaijan, which aims to enhance global climate financing and establish a new collective target.

According to the report, MDBs allocated $125bn, with $74.7bn directed toward low- and middle-income economies. Of this amount, 67 per cent, approximately $50bn, was dedicated to climate mitigation efforts, which involve actions to reduce, avoid, limit, or sequester greenhouse gas emissions.

Meanwhile, 33 per cent ($24.7bn) was allocated for climate adaptation, focusing on activities that lessen the risks and vulnerabilities associated with climate change and enhance climate resilience.

The statement further highlighted that of the $74.7bn allocated to low- and middle-income countries, $28.5bn about 38 per cent was mobilised from the private sector.

The report stated the urgent need for climate adaptation finance in climate-vulnerable, low-income countries, noting that while recent efforts have been positive, they still fall short of what is necessary.

The  Director for Climate Change and Green Growth of the African Development Bank, Anthony Nyong, said, “The bank has significantly increased its climate finance from nine per cent in 2016 to 55 per cent in 2023.

“In 2023, AfDB mobilised $5.8bn, marking the highest amount in its history, and continued to address the critical adaptation finance needs of its regional member countries.”

Nyong mentioned that approximately 53 per cent of the bank’s climate financing in 2023 was directed toward adaptation, underscoring its commitment to closing the adaptation finance gap.

“This notable increase, largely drawn from the bank’s internal statutory funds, reflects AfDB’s dedication to fostering growth and enhancing climate change outcomes, ultimately promoting resilience and sustainable development across Africa,” he stated.

The Joint Report on Multilateral Development Banks’ Climate Finance is an annual publication that includes climate financing figures from various MDBs, detailing the methodologies used to track this funding.