Annual climate financing for low, middle and high income countries to reach $170b by 2030, MDBs estimate

A group of leading multilateral development banks (MDBs) shared an estimate of their annual collective financing of US$ 170 billion for low, middle, and high-income countries at the World Leaders Climate Action Summit at COP29 in Baku, Azerbaijan.

For low- and middle-income countries, the annual collective climate financing contributions from the group of MDBs is set to cumulatively reach $120 billion by 2030, including $42 billion for adaptation, they estimated on Tuesday.

The MDBs also aim to mobilise $65 billion annually from the private sector. For high-income countries, this annual collective climate financing is projected to reach $50 billion, including $7 billion for adaption.

The estimates encompass lenders including the Asian Development Bank (ADB), the World Bank Group, the African Development Bank (AfDB), the Asian Infrastructure Investment Bank (AIIB), the Council of Europe Development Bank (CEB), the European Bank for Reconstruction and Development (EBRD), the European Investment Bank (EIB), the Inter-American Development Bank Group (IDB), the Islamic Development Bank (IsDB) and New Development Bank.

MDBs have exceeded their 2025 climate finance projections set in 2019, with a 25 per cent increase in direct climate finance and mobilisation for climate efforts doubling over the past year.

The estimates were presented during a high-level meeting in Baku hosted by COP29 President Mukhtar Babayev. He was joined by Heads of State and Governments as well as senior executives from the lenders and other major financial organisations, including the International Monetary Fund (IMF).

One of the key pillars of the COP29 Presidency’s plan – enabling action – involves putting in place the financing necessary to support urgent climate action. Commenting on the estimates, COP29 President Mukhtar Babayev said: “Every contribution is welcome, but there is still a clear gap between where we are and where we need to be. We are working closely with the shareholders of international financial institutions at COP29 as we seek to build the foundations of a fair and ambitious new climate finance goal.”

He continued: “We must deliver what the world expects, including climate financing that is several multiples beyond existing arrangements, adequate to the scale and urgency of the problem. As a Presidency, we are committed to ensuring that Party and non-Party stakeholders have spaces available to discuss and progress such means of implementation.”

Fully Operationalising the Fund for Responding to Loss and Damage

Throughout the year, the COP29 Presidency has been supporting the full operationalisation of the Fund for responding to Loss and Damage so that it can begin disbursing much-needed and long-awaited funds as soon as possible.

The Fund is now ready to accept contributions after the signing of key documents. A ceremony on the second day of COP29 in Baku celebrated the signing of the Trustee Agreement and the Secretariat Hosting Agreement between the Board of the Fund for responding to Loss and Damage and the World Bank, as well as the Host Country Agreement between the Fund Board and the Fund Board’s host country, the Republic of the Philippines. With this important milestone reached, the Fund is now expected to start financing projects in 2025.

At Tuesday’s event, Sweden also pledged approximately $19 million to the Fund, subject to government approval. This brings the total pledged funding to more than $720 million. The COP29 Presidency thanked Sweden for answering the call to action and continues to urge further pledges to the Fund to better meet the needs of communities on the frontlines of climate change.

The COP29 Presidency also launched Tuesday a new high-level annual dialogue on coordination and complementarity for funding arrangements responding to loss and damage that will bring together stakeholders from within and outside of the UNFCCC process.

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