Developing states benefit from US$61bn multi-lateral climate finance package
THE world’s largest multi-lateral development banks have disbursed a combined US$61,6 billion towards global climate change mitigation with 67 percent of the funding being accessed by low and middle-income countries.
Zimbabwe is one of the low-income economies that has adversely been affected by the effects of climate change with key economic sectors feeling the heat.
Such detrimental effects of climate change include erratic or poor rainfall pattern, which threaten food security and agro-processing industrial sectors. The 2019 Joint Report on Multi-lateral Development Banks (MDBs) has reported on climate finance since 2011, based on a jointly developed methodology for climate finance tracking.
“Climate financing by seven of the world’s largest multi-lateral development banks (MDBs) totalled US$61,6 billion in 2019, of which US$41,5 billion was in low and middle-income economies,” said the African Development Bank (AfDB).
The bank is among the seven MDBs that have contributed to climate financing that also include the Asian Development Bank, European Bank for Reconstruction and Development, the European Investment Bank, Inter-American Development Bank Group, World Bank Group and — for the first time — the Islamic Development Bank, which joined the working group in October 2017.
Last year, the Asian Infrastructure Investment Bank (AIIB) also joined MDB working groups, and its data is presented separately in the current report. Additional climate funds channelled 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 2019, the MDBs reported a further $102,7 billion in net climate co-finance, investments from the public and private sector, taking the total of climate activity financed in the year to $164,3 billion.
The 2019 edition of the Joint Report on MDBs’ Climate Finance is published in the midst of the Covid19 pandemic, which has caused significant social and economic disruption, temporarily reducing global carbon emissions to 2006 levels.
AfDB director of climate change and green growth Dr Anthony Nyong has said: “The climate finance provided by the bank increased from US$3,2 billion in 2018 to US$3,5 billion in 2019 — representing 35 percent of total project approvals worth $10,2 billion.”
The largest climate finance investments were made in the energy, agriculture and transport sectors. More global efforts are needed to build climate change resilience and adaptation in Africa. “As African economies face the devastating impacts of the Covid-19 pandemic, slacking action or redirecting financial resources from climate change will further compound these impacts in a diverse and complex manner,” said Dr Nyong.