In 2019, seven of the world’s largest multilateral development banks (MDBs) provided $61.6 billion (~₹4.6 trillion) in climate financing, out of which $41.5 billion (~₹3.09 trillion) was offered to low-income and medium-income economies.
The findings were revealed in the ‘2019 Joint Report on Multilateral Development Banks’ Climate Finance.’ Out of the $61.6 billion (~₹4.6 trillion), $58.4 billion (~₹4.4 trillion) was from the MDBs’ account, and $3.1 billion (~₹231.2 billion) was from external resources that were channeled through the banks.
Out of the $41.5 billion (~₹3.08 trillion) of climate finance committed to low-income and middle-income economies, $38.5 billion (~₹2.8 trillion) came from MDBs own account, and $2.9 billion (~₹216.3 billion) was from external resources.
The report focused mainly on low-income and medium-income economies. The report combined data from the African Development Bank (AfDB), the Asian Development Bank (ADB), the European Bank for Reconstruction and Development (EBRD), the European Investment Bank (EIB), the Inter-American Development Bank Group (IDB Group), the World Bank Group (WBG) and the Islamic Development Bank (IsDB).
According to the report, nearly $46.6 billion (~₹3.5 trillion), or 76% of the total financing for the year 2019, was used for climate mitigation, which aims to reduce greenhouse gas emissions and slow down the process of global warming. The remaining $14.9 billion (~₹1.12 trillion) was used to help countries build resilience in tackling the impact of global warming.
Speaking about the investments, Anthony Nyong, director of climate change and green growth at the African Development Bank, said, “Our investments that contribute to the goals of the Paris Agreement continue to grow. The climate finance provided by the bank increased from $3.2 billion (~₹238.7 billion) in 2018 to $3.5 billion (~₹261.08 billion) in 2019 – representing 35% of total project approvals worth $10.2 billion (~₹760.8 billion).”
According to the report, MDBs allocated $6.7 billion (~₹499.8 billion) to least developed economies that are not island states, $786 million (~₹58.6 billion) small island states that are not least developed economies, and $329 million (~₹24.5 billion) to least developed economies and small island states.
In 2019, the MDBs reported a total of $14.9 billion (~₹1.1 trillion) in commitments for climate change adaptation finance, with $13.9 billion (~₹1.04 trillion), or 93%, committed to low-income and middle-income economies.
As per the report, in terms of adaptation finance, the seven MDBs reported a commitment of $13.9 billion (~₹1.04 trillion) from its account and $948 million (~₹70.7 billion) from MDB managed external sources. The adaptation finance refers to the fund that finances projects aimed at helping countries adapt to climate change.
In 2019, the MDBs reported a total of $46.6 billion (~₹3.5 trillion) in financial commitments to the mitigation of climate change, with $27.5 billion (~₹2.05 trillion), or 59%, committed to low-income and middle-income economies.
The MDBs committed investments of $13.6 billion (~₹1.01 trillion) for the transport sector, $11.3 billion (~₹842.9 billion) for the renewable energy sector, $10.3 billion (~₹768.3 billion) for energy efficiency methods, and $2.02 billion (~₹150.7 billion) for low carbon and efficient energy generation among others. The banks also committed $1.7 billion (~₹126.8 billion) for agriculture, aquaculture, forestry, and land use, $1.6 billion (~₹119.4 billion) for waste and wastewater, and $1.4 billion (~₹104.4 billion) for low-carbon technologies.
Earlier, the World Bank had pledged a corpus of $200 billion (~₹14.9 trillion) for climate action over five years. The World Bank has set this corpus to meet climate targets set by it for the period 2021-2025. The new corpus of $200 billion (~₹14.9 trillion) for the period beginning 2021 and ending 2025 is twice the World Bank’s current five-year investments in support for countries to take ambitious climate action.
Previously, Mercom had reported that the Green Climate Fund (GCF) had approved more than $1 billion (~₹74.6 billion) in funding for new projects and programs to help mitigate climate change in developing countries.
Rakesh is a staff reporter at Mercom India. Prior to joining Mercom, he worked in many roles as a business correspondent, assistant editor, senior content writer, and sub-editor with bcfocus.com, CIOReview/Silicon India, Verbinden Communication, and Bangalore Bias. Rakesh holds a Bachelor’s degree in English from Indira Gandhi National Open University (IGNOU). More articles from Rakesh Ranjan.