Key facts
- Multilateral development banks committed a record $162.5 billion in climate financing in the past year.
- Developing economies received nearly $103 billion of this climate financing.
- The World Bank abandoned its goal to devote 45% of its annual financing to climate change projects.
- MDBs are committed to providing at least $120 billion annually to low- and middle-income countries by 2030.
- The World Bank provided almost half of the climate funding to developing countries last year.
Multilateral development banks (MDBs) collectively committed a record $162.5 billion in climate financing last year, with a significant portion directed towards developing economies, according to a report by the European Investment Bank (EIB).
The EIB's findings indicate that these institutions are on track to meet climate finance targets set at the COP29 summit, which include providing at least $120 billion annually to low- and middle-income countries by 2030. EIB Vice-President Ambroise Fayolle expressed optimism about reaching these goals, highlighting a 21% jump in funding to poorer nations last year.
However, concerns have been raised about the feasibility of these targets following the World Bank's recent decision to abandon its goal of dedicating 45% of its annual financing to climate change projects. The World Bank, which has historically provided nearly half of the climate funding to developing countries, faced pressure from the Trump administration to scrap this target, adopted during the Biden presidency. The bank stated its shift was to focus on lending outcomes rather than input goals.
Despite the World Bank's pullback, experts like Danny Scull from E3G still anticipate the $120 billion annual target for low- and middle-income countries will be met. He noted, however, that achieving a more ambitious target of around $180 billion annually would necessitate continued innovation from MDBs and their shareholders. Climate finance to low- and middle-income countries has doubled in the past five years, with mitigation projects accounting for $68 billion and adaptation finance reaching $35 billion last year. Lending to high-income nations also saw a substantial increase.