Devt Banks Deliver Record Climate Finance of Close to $61bn for Low,  Middle-income Economies

Climate finance by Multilateral Development Banks (MDBs) for low-income and middle-income economies reached a new record of $60.7 billion in 2022, up 46 percent compared to 2019 volumes, a new joint report by the MDBs has found.

Of the amount, $38.0 billion, or 63 per cent, went into climate change mitigation finance, and $22.7 billion or 37 per cent, supported climate change adaptation. Mobilised private finance stood at $16.9 billion, the report said.

The announcement was made in Marrakesh, Morocco, where delegates met for the World Bank Group and International Monetary Fund Annual Meetings, where scaling up public climate finance, particularly for low and middle-income economies, ranked high on the agenda.

According to the report, in 2022, MDBs allocated $38.8 billion to high-income economies.

“Of this, $36.3 billion, or 94 per cent, was for climate change mitigation finance and $2.5 billion or six per cent, went into climate change adaptation finance. The amount of mobilised private finance stood at $51.9 billion.

“With the record 2022 climate finance volumes, multilateral development banks have, for the second year in a row, exceeded the 2025 climate finance targets they set themselves at the UN Secretary General’s Climate Action Summit in 2019.

“This included delivering a cumulative $50 billion in climate finance for low-income and middle-income economies, at least $65 billion globally, with an expected doubling in adaptation finance to $18 billion; and private mobilisation of $40 billion.

Compared to 2019 volumes, MDB 2022 climate finance for low and middle-income countries increased by 46 per cent ($41.5 billion) and global climate finance by 62 per cent ($61.6 billion),” it added.

It cited example of the African Development Bank’s climate finance investments that increased from $2.1 billion in 2020, to $2.4 billion in 2021 and $3.6 billion in 2022. The Bank’s allocation was almost entirely channelled to low-income and middle-income economies.

The Bank Group’s Director for Climate Change and Green Growth Department, Anthony Nyong, said the institution recognises the urgency to mobilise climate finance at scale to address climate impacts and harness climate opportunities on the continent.

He said: “As shown in the report, external climate funds, including Climate Investment Fund, Global Environment Facility and Green Climate Fund, continue to be the main source of co-financing. More is needed from the private sector.

“The African Development Bank is committed to rallying domestic and global partners to de-risk private capital to unblock the needed trillions of climate finance for Africa.”