MDBs commit $170bn annually to climate finance

A group of leading Multilateral Development Banks (MDBs) has pledged to provide $170 billion annually in climate finance by 2030, emphasizing transformative impact in combating climate change.

This funding, according to the statement signed by MDBs, will be channelled to both low- and middle-income and high-income countries, with a focus on adaptation and mitigation efforts.

MDBs plan to allocate $120 billion annually to low- and middle-income countries, with $42 billion specifically for adaptation projects.

The high-income nations, will receive $50 billion annually, including $7 billion for adaptation.

Additionally, MDBs aim to mobilize $65 billion per year from private sector partnerships to complement their direct financing efforts.

These commitments mark a significant milestone, with MDBs surpassing their 2025 targets.

Over the past year, they recorded a 25 percent increase in direct financing and doubled private sector mobilization compared to previous benchmarks set in 2019.

MDBs underscored the importance of systemic impact, stating: “Our most significant impact comes from our ability to drive transformative change.”

To achieve this, they pledged to deepen engagement with countries, enhance financing outcomes, and attract more private sector participation.

Central to this vision is the New Collective Quantified Goal on Climate Finance (NCQG), a critical agenda item at COP29. MDBs urged negotiators to finalize an ambitious NCQG, emphasizing its importance for meeting the Paris Agreement’s goals.

To measure and ensure impact, MDBs announced an updated Common Approach to Measuring Climate Results, a framework linking global climate progress to their activities. This initiative aims to enhance accountability and ensure that MDB projects contribute to systemic climate solutions.

MDBs reaffirmed their commitment to partnership through Country Platforms for Climate Action, which bring together host governments, MDBs, donours, and the private sector to implement impactful climate initiatives.

They pledged to expand these platforms to meet demand, working closely with organizations like the International Monetary Fund to foster collaboration.

The joint statement was signed by ten MDBs, including the African Development Bank, Asian Development Bank, European Investment Bank, and the World Bank Group, highlighting a collective effort to tackle climate challenges.

As global leaders gather in Baku, this announcement positions MDBs at the forefront of climate finance, aiming to catalyze transformative change and uphold the commitments of the Paris Agreement.