Business Forum • 20 September, 2024 at 12:57 PM
Multilateral development banks (MDBs) announced today that their global climate finance reached a record high of $125 billion in 2023. The combined total last year from institutions, including the European Investment Bank, is more than double the amount provided in 2019, when MDBs announced their ambition to increase climate volumes over time at the United Nations Secretary General's Climate Action Summit.
Last year, $74.7 billion of MDB climate finance were for low- and middle-income economies. Of this sum, 67% – or $50 billion – went to climate change mitigation and $24.7 billion, or 33%, for climate change adaptation. The amount of mobilised private finance for this group of countries stood at $28.5 billion.
High-income economies
In 2023, $50.3 billion were allocated for high-income economies. Of this amount, $47.3 billion, or 94%, were for climate change mitigation and the remaining $3 billion or 6% were for climate change adaptation. The amount of mobilised private finance for high-income countries stood at $72.7 billion.
Climate finance in focus at COP29
Today's announcement comes in the run-up to the 29th session of the Conference of the Parties (COP 29) to the United Nations Climate Change Conference that will be held in Baku, Azerbaijan in November 2024. One of the key deliverables of COP29 is to increase global climate finance and reach agreement on the new collective quantified goal on climate finance.
EIB Vice-President Ambroise Fayolle said: “Nearly halfway into the critical decade, we must continue to work hard if we are to keep the Paris Agreement goal of limiting global warming to 1.5ºC within reach. Since 2019, multilateral development banks have increased their collective climate financing year on year, exceeding our joint targets. In addition, we are strengthening our cooperation to maximise impact for people and the planet through coordinated country-level support for a just transition away from fossil fuels and more work on adaptation and disaster risk management. Ahead of COP29, today's announcement of $125 billion in climate finance sends the strong message that the MDB system is delivering and that the global community can count on MDBs, including the EIB, to accelerate global climate action.”
The EIB delivered record volumes of $42.1 billion of climate finance in high-income economies and $4 billion for low- and middle-income economies through its specialised development arm, EIB Global. The EIB mobilised global private finance of $53 billion.
Transparent joint reporting on climate finance
The Joint Report on Multilateral Development Banks' Climate Finance is an annual collaboration to publish MDBs' climate finance figures, together with a clear explanation of the methodologies for tracking this finance. The joint report, along with the banks' independent publication of their own climate finance statistics, is intended to monitor progress in relation to their joint climate finance objectives such as those announced at COP21 and the greater ambition pledged for the post-2020 period.
The 2023 multilateral development bank report, coordinated and prepared for publishing by the European Investment Bank (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 EIB, the Inter-American Development Bank (IDB), the Islamic Development Bank (IsDB), the New Development Bank (NDB) and the World Bank Group (WBG).
The European Investment Bank (EIB) is the long-term lending institution of the European Union owned by its Member States. It is active in more than 160 countries and makes long-term finance available for sound investment in order to contribute towards EU policy goals.
- In 2019, the EIB's updated Energy Lending Policy was adopted to end financing to any unabated fossil fuels energy projects, including natural gas, the first MDB to do so.
- In 2021, the EIB became the first MDB to align its financial activities with the Paris Agreement.
- Through its Climate Bank Roadmap the EIB Group aims to support €1 trillion of investment in climate action and environmental sustainability through the critical decade, 2021-2030.
- With a commitment to increase investment in climate action and environmental sustainability to more than 50% of the EIB's annual lending by 2025 – last year that was exceeded with 60%.
EIB Global is the EIB Group's specialised arm dedicated to increasing the impact of international partnerships and development finance.