Climate finance by Multilateral Development Banks increases to seven-year high

By
Maxwell Awumah, GNA

Hohoe (V/R), June 20, GNA – Climate financing
by the world’s six largest Multilateral Development Banks (MDBs) rose to a
seven-year high of $35.2 billion in 2017, up 28 per cent on the previous year.

The MDBs’ latest joint report on climate
financing said $27.9 billion, or 79 per cent of the 2017 total was devoted to
climate mitigation projects that aim to reduce harmful emissions and slow down
global warming.

The remaining 21 per cent, or $7.4 billion, of
financing for emerging and developing nations was invested in climate
adaptation projects that help economies deal with the effects of climate change
such as unusual levels of rain, worsening droughts and extreme weather events.

In 2016 climate financing from the MDBs had
reached $27.4 billion.

The latest MDB climate finance figures are
detailed in the 2017 Joint Report on Multilateral Development Banks’ Climate
Finance of the World Bank, available to the Ghana News Agency.

It combined data from the African Development
Bank, the Asian Development Bank, the European Bank for Reconstruction and
Development, the European Investment Bank, the Inter-American Development Bank
Group and the World Bank Group (World Bank, IFC and MIGA).

These banks account for the vast majority of
multilateral development finance.

The report said in October 2017 the Islamic
Development Bank joined the MDB climate finance tracking groups, and its
climate finance figures will be included in joint reports from 2018 onwards.

Climate funds 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, the Green Climate Fund (GCF) and others have also
played an important role in boosting MDB climate finance.

As well as the $35.2 billion of multilateral
development finance, the same adaptation and mitigation projects attracted an
additional $51.7 billion from other sources of financing last year.

It said of the 2017 total, 81 per cent was
provided as loans. Other types of financial instruments included policy-based
lending, grants, guarantees, equity and lines of credit.

Sub-Saharan Africa, Latin America and East
Asia and the Pacific were the three major developing regions receiving the
funds.

It said the sharp increase came in response to
the ever more pressing challenge of climate change. Calls to galvanise climate
finance were at the heart of events such as the ‘One Planet Summit’ in Paris in
December 2017, two years after the historic Paris Agreement was adopted.

Multilateral banks began publishing their
climate investment in developing countries and emerging economies jointly in
2011, and in 2015 MDBs and the International Development Finance Club agreed
joint principles for tracking climate adaptation and mitigation finance.

Climate finance addresses the specific
financial flows for climate change mitigation and adaptation activities. These
activities contribute to make MDB finance flows consistent with a pathway
towards low greenhouse gas emissions and climate-resilient development, in line
with the Paris Agreement.

The MDBs are currently working on the
development of more specific approaches to reporting their activities and how
they are aligned with the objectives of the Paris Agreement.

John Roome, World Bank Senior Director for
Climate Change, said “For the World Bank Group, 2017 was a record-setting
year on climate finance as a result of a deliberate effort over the past few
years to mainstream climate considerations into our operations. This upward
trend is continuing.”

“The Multilateral Development Banks are also
playing a key role in leveraging private sector finance which will be critical
to meeting the objectives of the Paris Agreement. Last year alone, the WBG
crowded in $8.6 billion in private financing for climate change, which is up 27
per cent from 2016.”

GNA

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