Multilateral development banks (MDBs), which together provided record levels of dedicated finance in 2021 to support the green transition, have issued a forward-looking joint statement at the COP27 global climate summit in Sharm El Sheikh.
Despite today’s challenging environment, the MDBs affirmed their commitment to expand their support to countries seeking finance to mitigate climate change and adapt to a warming planet. Multilateral banks also vowed to address the challenges of sustainable development, climate change and biodiversity loss in an integrated way.
“Across continents, climate change is having increasingly severe environmental, social and economic impacts, posing a significant and urgent challenge to development and the achievement of the SDGs (United Nations Sustainable Development Goals by 2030). The current global context of multiple shocks, elevated risks and stretched public resources are exacerbating the challenge, particularly for developing countries,” the MDB statement said.
The statement indicated that maintaining true momentum on climate action requires all parties involved—governments, MDBs and partners across society—to work together on impactful programs and projects, appropriate public policies and significantly increasing funding from multiple sources:
“Recognizing the interconnected challenges of sustainable development, climate change and nature loss, MDBs have committed to address these challenges in an integrated manner, maximizing co-benefits while minimizing trade-offs, notably by continuing to address the direct and indirect drivers of nature and biodiversity loss,” the joint statement said.
MDBs have committed to expand support for countries and other clients to integrate climate mitigation and adaptation into their overall economic planning, from Long Term Strategies and Nationally Determined Contributions to sectoral and subsectoral transition pathways; formulating policies to spur systemic change; defining investment plans and mobilizing financing sources.
The MDBs, which are working with an increasing number of countries, regions and cities to develop programs addressing climate mitigation, climate resilience and adaptation and “nature-positive” needs, will prioritize:
- Implementing Paris Alignment approaches.
- Mainstreaming Just Transition efforts to ensure the green transition gives opportunity to all.
- Boosting adaptation finance, especially to low-income countries, small island developing states and disadvantaged populations.
- Supporting efforts on nature, developing on 2021’s Joint Statement on Nature, People and Planet.
- Increasing concessional finance.
- Scaling up private sector mobilization.
- Voluntary cooperative approaches, through which MDBs support the development of instruments for, say, the monetization of adaptation benefits or verified emissions reductions.
The MDBs, major providers of and conduits for climate finance globally, met their collective expectation for 2025, made in 2019, on raising finance volumes, as their Joint MDB Climate Finance Report 2021 showed.
Out of their total climate finance last year, USD51 billion went to low- and middle-income countries, of which USD33 billion (65 percent) was for mitigation and USD18 billion (35 percent) for adaptation; USD31 billion went to high-income countries, of which 95 percent was for mitigation and 5 percent for adaptation. A further USD41 billion of private finance was mobilized globally. The MDBs have also worked together on a range of topics, such as Paris Alignment approaches and updating their adaptation finance tracking methodology.
MDBs working together for the annual Joint MDB Climate Finance Report include the African Development Bank, Asian Development Bank, Asian Infrastructure Investment Bank, Council of Europe Development Bank, European Bank for Reconstruction and Development, European Investment Bank, Inter-American Development Bank, Islamic Development Bank, New Development Bank, and the World Bank Group.
About AIIB
The Asian Infrastructure Investment Bank (AIIB) is a multilateral development bank whose mission is financing the Infrastructure for Tomorrow—infrastructure with sustainability at its core. We began operations in Beijing in January 2016 and have since grown to 105 approved members worldwide. We are capitalized at USD100 billion and Triple-A-rated by the major international credit rating agencies. Collaborating with partners, AIIB meets clients’ needs by unlocking new capital and investing in infrastructure that is green, technology-enabled and promotes regional connectivity.
