Multilateral development banks (MDBs), which together provided record levels of dedicated finance in 2021 to support the green transition, have affirmed their commitment to expand their support to countries seeking finance to mitigate climate change and adapt to a warming planet. At the 27th UN climate change conference (COP27) that officially kicked off on Sunday, November 6, multilateral development banks also vowed to address the challenges of sustainable development, climate change and biodiversity loss in an integrated way. A multilateral development bank is an international financial institution chartered by two or more countries to encourage economic development. The MDBs working together for the annual Joint MDB Climate Finance Report include the African Development Bank, Asian Development Bank, Asian Infrastructure Investment Bank, Council of Europe Development Bank, European Bank for Reconstruction and Development, European Investment Bank, Inter-American Development Bank, Islamic Development Bank, New Development Bank, and the World Bank Group. “Across continents, climate change is having increasingly severe environmental, social and economic impacts, posing a significant and urgent challenge to development and the achievement of the SDGs [United Nations Sustainable Development Goals by 2030]. The current global context of multiple shocks, elevated risks, and stretched public resources are exacerbating the challenge, particularly for developing countries,” the MDB statement said. Maintaining true momentum on climate action, the statement went on, requires all parties involved – governments, multilateral development banks (MDBs) and partners across society – to work together on impactful programmes and projects, appropriate public policies and significantly increasing funding from multiple sources. “Recognizing the interconnected challenges of sustainable development, climate change and nature loss, MDBs have committed to address these challenges in an integrated manner, maximizing co-benefits while minimizing trade-offs, notably by continuing to address the direct and indirect drivers of nature and biodiversity loss.” The European Investment Bank (EIB) President Werner Hoyer said that the latest United Nations projections that the world is heading for 2.6C global warming are dire and that increasing climate finance is timely. “The year 2021 has been a record for MDB climate finance with $82 billion committed globally, of which 62 percent was channeled to low- and middle-income economies. The joint statement for COP27 shows the full breadth of financial and technical support MDBs commit to provide to countries, cities and companies to plan and deliver impactful projects in the fight against climate change,” Werner said. “As the EU climate bank, the EIB stands ready to work ever more closely together with all the MDBs to deliver on climate action across the world and to ensure a just transition focused on achieving all Sustainable Development Goals.” MDBs have committed to expand support for countries and other clients to integrate climate mitigation and adaptation into their overall economic planning, from Long Term Strategies and Nationally Determined Contributions to sectoral and sub-sectoral transition pathways, formulating policies to spur systemic change, defining investment plans, and mobilising financing sources. Adaptation finance to low income countries The MDBs, which are working with an increasing number of countries, regions and cities to develop programmes addressing climate mitigation, climate resilience and adaptation and “nature-positive” needs, will prioritize implementing Paris Alignment approaches, boosting adaptation finance, especially to low income countries, small island developing states, and disadvantaged populations, increasing concessional finance as well as scaling up private sector mobilization. The MDBs, major providers of and conduits for climate finance globally, met their collective expectation for 2025, made in 2019, on raising finance volumes, as their Joint MDB Climate Finance Report 2021 showed. Out of their total climate finance last year, $51 billion went to low – and middle-income countries, of which $33 billion (65 per cent) was for mitigation and $18 billion (35 per cent) for adaptation; $31 billion went to high-income countries, of which 95 per cent was for mitigation and five per cent for adaptation. A further $41 billion of private finance was mobilised globally. Climate finance committed by major multilateral development banks rose in 2021 with over $19 billion committed to climate change adaptation finance. Total financing commitment by MDBs to low-income and middle income economies in 2021 of $50.666 billion, surpassed the annual expectations of $50 billion set in 2019 at the UN Secretary General’s Climate Action Summit in New York. Of the $50.666 billion of climate finance committed to low-income and middle-income economies, $47.24 billion was from the MDBs’ own account and $3.426 billion from external resources that were channeled through the banks. Mitigation finance committed to low – and middle-income economies totaled $33.055 billion, or 65%, while adaptation finance totaled $17.611 billion, or 35%. The 2019 goals projected a collective total of $50 billion for low- and middle-income economies and at least $65 billion of climate finance globally, with an estimated doubling of adaptation finance to $18 billion and private mobilization of $40 billion.