By Faridat Salifu
Multilateral Development Banks (MDBs) significantly increased their efforts to mobilize climate finance, particularly in low- and middle-income economies between 2022 and 2023.
According to a recent comprehensive report compiling data from various MDBs including the African Development Bank (AfDB), the European Bank for Reconstruction and Development (EBRD), the European Investment Bank (EIB), and the Inter-American Development Bank (IDB), a total of $60.7 billion was allocated for climate finance to support developing countries.
This amount represents a 46% increase in climate finance compared to the volumes in 2019.
Globally, the total financing for climate-related initiatives nearly reached $100 billion in 2022, up from $82 billion in 2021. Sub-Saharan African countries received a substantial portion of this funding, amounting to $16.3 billion.
However, developing countries in Europe secured over $36 billion in climate finance. Notably, of the $60.7 billion disbursed for low- and middle-income economies, $38 billion (63%) was allocated to climate change mitigation, while 37% was directed towards funding for climate change adaptation.
The allocated funding for climate change mitigation focused on key areas such as the development of low CO2-emitting transport, agriculture, agroforestry, and energy sectors.
Meanwhile, a significant portion of $22.7 billion was earmarked for climate change adaptation, including initiatives related to water and sanitation, manufacturing, and coastal infrastructure for nations vulnerable to flooding and rising sea levels.
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Furthermore, external climate funds, specifically the Climate Investment Fund (CIF), the Global Environment Facility (GEF), and the Green Climate Fund (GCF), continued to serve as the primary source of co-financing for these climate initiatives.
The Director for Climate Change and Green Growth at the AfDB, Anthony Nyong, emphasized the need for increased private sector involvement in global climate finance.
Nyong asserted the commitment of the African Development Bank to collaborate with both national and international partners to mitigate the risks associated with private capital and unlock the substantial resources required to combat climate change in Africa.
Highlighting the private sector’s increased contribution to global climate finance, it was revealed that in 2022, the private sector was responsible for mobilizing $69 billion, a notable increase from the $41 billion mobilized in 2021.
Additionally, the AfDB significantly raised its climate financing to $3.6 billion in 2022, up from $2.5 billion in 2021.
The bank aimed to prioritize the needs of vulnerable communities and enhance climate resilience, with a particular focus on agriculture, energy infrastructure, and water resource management.
In summary, 2022 saw a marked increase in climate finance mobilization from multilateral development banks and the private sector, signaling a growing commitment to addressing the challenges of climate change.
These efforts are crucial to support developing countries in their climate change mitigation and adaptation endeavors, contributing to global sustainable development and resilience.
