The world’s largest multilateral development banks (MDBs) have announced an ambitious goal at the COP29 talks in Azerbaijan: to raise $120 billion annually for developing nations by 2030 to combat climate change, Bloomberg reports.
This pledge underscores the MDBs’ commitment to playing a pivotal role in mobilizing funds to help poorer countries reduce emissions and adapt to the escalating impacts of climate change.
However, the figure, though significant, falls short of the trillions of dollars developing countries say they need to effectively address the climate crisis. The MDBs have emphasized that their ability to further scale up climate finance hinges on their country shareholders increasing their contributions.
The $120 billion target represents a substantial increase compared to the $75 billion raised in 2023 and $60.9 billion raised in 2022 by the MDBs. The group is expected to play a key role in both disbursing public finance and attracting private capital to support the global green transition.
Negotiations at COP29 are currently centered around replacing the existing $100 billion per year target for climate finance with a new, more ambitious “New Collective Quantified Goal.” Proposals for this new goal range up to $2 trillion per year.
In 2022, the MDBs mobilized approximately $58 billion in public and private climate finance, representing about 50% of total climate finance according to the OECD, which tracks progress against the $100 billion target. It’s important to note that the OECD figures only account for funds attributable to developed nations, unlike the MDB figures, which include contributions from developing country shareholders.
In addition to the $120 billion pledge, the MDBs estimate that they will mobilize an additional $65 billion in climate finance from the private sector for developing countries by the end of the decade.
This joint declaration was signed by 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 Islamic Development Bank, and the New Development Bank.
