MDBs increase climate financing to $27.4bn

Total contributions from the six largest multilaterals grew by $2.3bn last year, driven by the Paris Agreement.

Multilateral development banks increased contributions to climate-friendly projects in 2016, with financing from the six largest MDBs rising to $27.4 billion from $25.1 billion in 2015.

The World Bank Group led the way with $11.5 billion of climate financing, which includes both projects that help mitigate climate change and those that limit vulnerability caused by it.

The biggest year-on-year jumps came from the Asian Development Bank (from $2.9 billion to $4.4 billion) and the Inter-American Development Bank Group ($1.7 billion to $2.7 billion). The European Bank for Reconstruction and Development and WBG had a slight uptick, while financing from the European Investment Bank and the African Development Bank fell slightly.

Overall, total climate financing from the six groups was the second highest since the MDBs began tracking the figure in 2011. The groups pointed to the Paris Climate Agreement reached in December 2015 as a driver of the increase in climate-related investment.

Nearly $6.2 billion, or 29 percent of the groups’ $21.2 billion dedicated to mitigation, went towards renewable energy projects. Around $4.7 billion was put into transportation projects. Regionally, south Asia saw the highest total, with $5.6 billion of climate financing, while sub-Saharan Africa received the lowest total with just under $1.9 billion.

Most of the financing – around 73 percent – went to investment loans. Co-financing committed alongside the MDBs totalled $37.9 billion, including $15.7 billion in private sector capital.