We assume that multilateral development banks are playing an important role in providing climate finance to important initiatives, but it takes some evidence to show us exactly what is happening globally. The International Institute for Sustainable Development writes about a recent report that documents developments in 2015.
2015 Climate Finance by MDBs at US$25 Billion
In 2015, six multilateral development banks (MDBs) jointly committed more than US$25 billion in climate finance. According to the ‘2015 Joint Report on Multilateral Development Banks’ Climate Finance,’ in addition, a total of US$55.7 billion were committed in co-finance, raising the total to US$80.8 billion. The sum committed in 2015 by the six MDBs represents an 11% drop compared to climate financing commitments in 2014, at US$28.3 billion, but is above 2013 levels (US$23.8 billion). The 2014 report (published in 2015) did not include data for co-financing.
The report includes a common tracking approach for climate co-financing, which the MDBs describe as “a significant step forward in making the reporting of climate finance flows more robust and transparent.” The methodology to track climate co-financing seeks to estimate resources invested by public and private external parties alongside MDBs for climate mitigation and adaptation projects. The MDBs have also sought to improve the harmonization of reporting on greenhouse gas (GHG) emissions and on the use of proceeds from green bonds.
In 2015, the MDBs committed US$20.1 billion to financing for mitigation activities, including in the areas renewable energy (30% of mitigation finance), lower-carbon transport (26%) and energy efficiency (14%). A total of US$5 billion was committed to adaptation measures, including water and wastewater systems (27% of adaptation finance), energy, transport and related infrastructure (24%) and crop and food production (18%).
In terms of regions, Central Asia and Europe outside the EU received 20% of total financing, followed by South Asia (19%), Latin America and the Caribbean (15%), East Asia and the Pacific (14%), the EU (13%), Sub-Saharan Africa (9%) and the Middle East and North Africa (9%).
In terms of instrument type, 75% (18.9 billion) of total climate finance by the MDBs were committed through loans, followed by policy-based loan or budget support (5%), grants (6%) and guarantees (6%).
The joint annual report, fifth in its series, was prepared by 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 (IDB) and the World Bank Group.
The report is available here.