Climate Finance to Low, Middle Income Countries Hits $51 Billion in 2021

October 19, 2022
climate finance commitments

By Adedapo Adesanya

Climate finance committed by major multilateral development banks (MDBs) rose in 2021 to $51 billion, with over $19 billion committed to climate change adaptation finance.

This was contained in the Joint Report on Multilateral Development Banks’ Climate Finance, which tracks the progress of MDBs in relation to their climate finance targets, such as those announced at COP21 and the greater ambition pledged for the post-2020 period.

The MDBs include African Development Bank (AfDB), the Asian Development Bank, the Asian Infrastructure Investment Bank, the European Bank for Reconstruction and Development, the European Investment Bank, the Inter-American Development Bank Group, the Islamic Development Bank, and the World Bank Group.

The report finds that the total financing commitment by MDBs to low-income and middle-income economies in 2021 of $50.666 billion surpassed the annual expectations of $50 billion set in 2019 at the UN Secretary General’s Climate Action Summit in New York.

At the meeting, it was projected that a collective total of $50 billion was needed for low- and middle-income economies.

It was also noted that at least $65 billion of climate finance was benchmarked globally, with an estimated doubling of adaptation finance to $18 billion and private mobilization of $40 billion.

The report also records a notable increase in adaptation finance to over $19 billion in 2021, again beating expectations.

A total of $19.187 billion was committed to climate change adaptation finance, with $17.6 billion or 92 per cent, committed to low- and middle-income economies, thus surpassing the expected collective delivery of increasing adaptation finance to $18 billion.

Speaking on this, Mr Kevin Kariuki, AfDB’s Vice President of Power, Energy, Climate and Green Growth, commented – “As MDBs, we have steadily grown the amount, and access to climate finance over the last decade, thereby demonstrating the potential of multilateralism in tackling global threats. However, this is not near enough, and efforts to ramp up the quantum of and rate of access to, global climate finance, especially adaptation finance, in developing countries are necessary.”

“This is why we have established flagship programmes such as the $25 billion African Adaptation Acceleration Program and the $20 billion Desert-to-Power, to accelerate climate action, while safeguarding the wellbeing of our people and nature”.

This edition of the report presents the multilateral development banks’ climate finance commitments data in two different chapters, with data for low- and middle-income economies and that for high-income economies presented separately.

The bank’s contribution to climate finance in 2021 stands at $2.49 billion or 41 per cent of all Bank investment approvals. Of this amount, the proportion of climate adaptation grew to 67 per cent, which evidences the bank’s steadfast commitment to supporting its regional member countries to build adaptive capacity and climate resilience.

Adedapo Adesanya

Adedapo Adesanya is a journalist, polymath, and connoisseur of everything art. When he is not writing, he has his nose buried in one of the many books or articles he has bookmarked or simply listening to good music with a bottle of beer or wine. He supports the greatest club in the world, Manchester United F.C.

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