(AfDB ) - Climate financing by seven of the world’s largest multilateral development banks (MDBs) totalled $61.6 billion in 2019, of which $41.5 billion (67%) was in low- and middle-income economies, according to the 2019 Joint Report on Multilateral Development Banks’ Climate Finance.

The study expands the scope of reporting for the first time to all countries with multilateral development bank operations. It now provides data on MDB climate finance commitments beyond those directed solely at developing and emerging economies, but with the focus remaining on low- and middle-income countries.

This year the report combines data from the African Development Bank, the Asian Development Bank (ADB), the European Bank for Reconstruction and Development (EBRD), the European Investment Bank (EIB), the Inter-American Development Bank Group (IDB Group), the World Bank Group (WBG) and – for the first time – the Islamic Development Bank (IsDB), which joined the working group in October 2017. In 2019, the Asian Infrastructure Investment Bank (AIIB) also joined MDB working groups, and its data is presented separately within the current report.

The 2019 report shows that $46.6 billion, or 76% of total financing for the year, was devoted to climate change mitigation investments that aim to reduce harmful greenhouse gas emissions and slow down global warming. Of this, 59% went to low- and middle-income economies.

The remaining $15 billion, or 24%, was invested in adaptation efforts to help countries build resilience to the mounting impacts of climate change, including worsening droughts, extreme flooding and rising sea levels. Ninety-three percent of this finance was directed at low- and middle-income economies.

Additional climate funds channelled through MDBs, 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, and the Green Climate Fund (GCF), play an important role in boosting MDB climate financing.

In 2019, the MDBs report a further $102.7 billion in net climate co-finance – investments from the public and private sector – taking the total of climate activity financed in the year to $164.3 billion.

The MDBs have reported on climate finance since 2011, based on a jointly developed methodology for climate finance tracking.

The 2019 edition of the Joint Report on MDBs’ Climate Finance is published in the midst of the COVID-19 pandemic, which has caused significant social and economic disruption, temporarily reducing global carbon emissions to 2006 levels.

Dr. Anthony Nyong, Director of Climate Change and Green Growth at the African Development Bank, noted: “Our investments that contribute to the goals of the Paris Agreement continue to grow. The climate finance provided by the Bank increased from $3.2 in 2018 to $3.5 billion in 2019 – representing 35% of total project approvals worth $10.2 billion.” The largest climate finance investments were made in the energy, agriculture and transport sectors.

Importantly, the Bank exceeded its target of achieving parity between adaptation and mitigation finance by allocating 55% of its climate finance resources to adaptation and 45% to mitigation, whereas globally more than 70% of climate finance is allocated to mitigation. More global efforts are needed to build climate change resilience and adaptation in Africa.

“As African economies face the devastating impacts of the COVID-19 pandemic, slacking action or redirecting financial resources from climate change will further compound these impacts in a diverse and complex manner,” Dr. Nyong cautioned.

Link to full report

Link to infographic