COP 29: Development Banks Pledge $120 Billion Boost for Climate Financing

Development banks under the aegis of Multilateral Development Banks (MDBs) have at the ongoing COP 29 in Baku, Azerbaijan pledged the sum of $ 120 billion to support climate financing in low- and middle-income countries yearly from now up until 2030.

The ongoing COP 29 is seen as the most consequential climate change conference in history due to the issue of policy implementation and climate financing being at the forefront of discussions in light of recent global climate challenges.

Multilateral Development Bank

The Multilateral Development Bank (MDB) is made up of different regional and international development banks including the African Development Bank Group, the Asian Development Bank, the Asian Infrastructure Investment Bank, the Council of Europe Development Bank, the European Bank for Reconstruction and Development, the European Investment Bank, the Inter-American Development Bank, the Islamic Development Bank, the New Development Bank, and the World Bank Group.

These banks are at the forefront of efforts to help poorer nations cut emissions and adapt to the fallout from climate change which has become increasingly necessary in the face of global warming and other environmental hazards witnessed on a larger than ever scale in recent years.

MDBs have significantly exceeded their ambitious 2025 climate finance projections set in 2019, over the past year with the body overseeing a 25% increase in direct climate finance and mobilization for climate efforts which has doubled over the past year.

Key Elements of Latest MDB Financing

Under the latest annual $120billion financing pledge put forward  by Multilateral Development Banks, the body has set out USD 42 billion for climate adaptation in low- and middle-income countries, with the body aiming to mobilize USD 65 billion from the private sector.

In high-income countries, the annual collective climate financing is projected to reach USD 50 billion, including USD 7 billion for adaptation.

in a statement issued by the MDBs at the ongoing COP 29, the financing is part of the body’s efforts to drive transformative change across the world.

The statement reads “As emphasized by the Group of Heads of MDBs in the recent Viewpoint Note: MDBs Working as a System for Impact and Scale, we MDBs are focused on amplifying our catalytic effect by enhancing the results and impact of our financing, deepening engagement with countries through platforms, supporting clients’ climate ambitions, and increasing private sector mobilization.

““Rallying to the call for urgent climate action, MDBs recognize the central importance of establishing a New Collective Quantified Goal on Climate Finance (NCQG) at COP 29 in Baku. A robust and ambitious NCQG is essential for achieving the goals of the Paris Agreement, and we urge Parties to reach a strong conclusion on this objective,” the statement said.

Significance of Funding

At the beginning of COP 29, UN Climate Change Executive Secretary Simon Stiell revealed that a key issue to be discussed and resolved at the conference was the issue of climate financing noting that “Climate Finance is not Charity” and as such can’t be ignored due to the importance of climate change issues.

The financial commitment by the MDBs therefore represent a good starting point for rallying funds for the purpose of addressing climate change challenges globally.

 

 

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