• Low-income countries captured just 15% of adaptation finance flows between 2019 and 2023
• International adaptation finance averaged $40.1 billion a year over the period
• Loans dominate funding, with middle-income countries as the main beneficiaries

Low-income countries (LICs), which are heavily indebted and lack the capacity to borrow, received only 15% of international climate adaptation finance flows between 2019 and 2023, according to a report published on Wednesday, December 10, 2025, by the Foundation for Studies and Research on International Development (FERDI). Titled International finance for climate change adaptation in the face of developing countries’ needs, the report is based on a database covering adaptation-related funding from international institutions and bilateral donors over the period.

While total adaptation finance averaged $40.1 billion a year, LICs received only $6 billion annually on average. Aid, including grants and concessional loans, amounted to $23.7 billion, or 59.1% of total adaptation resources over the five years. Non-concessional loans reached $15.8 billion, while an average of $0.6 billion came from other instruments such as equity investments and loans with unknown concessionality.

More broadly, international adaptation finance mainly took the form of loans, which accounted for 62% of total flows. This reflects the dominant role of multilateral financial institutions, which provided 64% of overall funding. Trends differed significantly across the three financing categories between 2019 and 2023. Grants averaged $14.6 billion a year and stagnated during the first three years of the period, before rising to $17.7 billion in 2022 and easing to $16.4 billion in 2023.

Concessional loans averaged $9.1 billion per year but showed marked volatility, ranging from $5.1 billion to $12.5 billion. Non-concessional loans followed a steady upward trend, increasing from $13.3 billion in 2019 to $19 billion in 2023. Funding patterns also varied by type of donor. Bilateral aid slightly dominated grants, accounting for 54%, while multilateral finance prevailed for loans, representing 58% of concessional loans and 83% of non-concessional loans.

Middle-income countries were the main beneficiaries of adaptation aid. While all developing country groups received grants, concessional loans were heavily concentrated in lower-middle-income countries, which captured 73% of these flows. Non-concessional loans were split mainly between upper-middle-income countries, with 49%, and lower-middle-income countries, with 46%.

Considering grants and concessional loans together, FERDI noted that climate adaptation aid largely benefited middle-income countries, which received an average of $11.7 billion per year. Low-income countries obtained only $5.6 billion annually on average in funding that could be considered aid.

Geographical distribution also varied by financing instrument. Grant commitments were largely directed to Africa, which received 46%, followed by Asia with 18%. Asia dominated concessional loans, with 46%, and non-concessional loans, with 37%. Latin America mainly benefited from non-concessional loans, while Oceania received funding primarily in the form of grants. Asian countries were the largest beneficiaries overall between 2019 and 2023. India received $2.1 billion annually, followed by Bangladesh, Indonesia, the Philippines, and Pakistan, each with more than $1 billion per year.

Among the top 15 recipients, only three were least developed countries, and four were in sub-Saharan Africa, including just one low-income country, Ethiopia. On a per capita basis, Oceania received the highest adaptation finance flows during the period, averaging $55.5 per year. Latin America and the Caribbean followed at $11.4, ahead of Europe at $10.9 and Africa at $9.7. Developing countries in Asia received an average of just $3 per capita per year.

Walid Kéfi