Boosting projects that help developing countries cut emissions and address climate risks, climate financing by the world’s six largest multilateral development banks (MDBs) rose to a record high of $43.1 billion in 2018, up more than 22% on the previous year, the European Bank for Reconstruction and Development (EBRD) said in a joint press release on 13 June. The previous year climate finance totalled $35.2 billion.

According to the EBRD, this is also a 60% increase since the adoption of the Paris Agreement in 2015 response to the ever more pressing challenge of climate change, which disproportionately affects the poorest and most vulnerable.“The MDBs are key partners in drawing more private sector investors and large institutional investors into the green finance sector,” EBRD’s Energy Efficiency and Climate Managing Director Josué Tanaka said.

“Green finance is central to what we do at the EBRD. We are well on the way to achieving our goal of 40 per cent of EBRD investments being in the green sector by 2020, as well as mobilising significant amounts of private sector finance to complement our own investments in line with our philosophy of working with the private sector.”

The latest MDB climate finance figures are detailed in the 2018 Joint Report on Multilateral Development Banks’ Climate Finance, which combines 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 (IDBG) and the World Bank Group (WBG). These banks account for the vast majority of multilateral development finance globally. The 2018 report also summarises information on climate finance from the Islamic Development Bank (IsDB), which joined the MDB climate finance tracking groups in October 2017.

The report shows that $30.2 billion, or 70%, of the total financing for 2018 was devoted to climate change mitigation investments that aim to reduce harmful greenhouse gas emissions and slow down global warming.

The remaining $12.9 billion, or 30%, was invested in adaptation efforts to help address mounting impacts of climate change, including worsening droughts and more extreme weather events from extreme flooding to rising sea levels.

Since 2011, when the six MDBs initiated joint reporting, they have committed nearly $237 billion in climate finance for developing and emerging economies. Climate funds channelled to these countries through MDBs, such as the Climate Investment Funds (CIF), the Global Environment Facility (GEF) Trust Fund, the Global Energy Efficiency and Renewable Energy Fund (GEEREF), the European Union’s funds for Climate Action, and the Green Climate Fund (GCF), play an important role in boosting MDB climate financing. In addition, as well as the $43.1 billion of MDB finance in 2018, MDBs report another $68.1 billion in net climate co-finance – investments from the public and private sector – adding up to total climate finance for the year of $111.2 billion.

The regions of Sub-Saharan Africa, Latin America and the Caribbean, and South and East Asia were the top three to invest MDB climate finance. The report also breaks down climate finance by MDB, economy size, sector, type of recipient and type of financial instrument.

MDBs’ provision of climate finance helps to ensure global financial flows are consistent with development with low greenhouse gas emissions and are resilient to climate change, in line with the Paris Agreement’s aim to limit the increase in global temperatures to well below 2°C, pursuing efforts for 1.5°C. The MDBs have reported on climate finance since 2011, based on the jointly developed methodology for climate finance tracking, and in 2015 set their climate targets looking ahead to 2020.

The EBRD is a multilateral bank that promotes the development of the private sector and entrepreneurial initiative in 38 economies across three continents. The Bank is owned by 68 countries as well as the EU and the EIB. Since 2006, the EBRD has committed over €26 billion to projects under its flagship Green Economy Initiative. EBRD investments are aimed at making the economies in its regions competitive, inclusive, well governed, green, resilient and integrated.