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MDBs to Expand Support for Countries Seeking Climate-Resilient Sustainable Transition

At COP27, MDBs commit to address the challenges of sustainable development, climate change, and biodiversity loss in an integrated way

The Inter-American Development Bank (IDB) and other multilateral development banks (MDBs), which together provided record levels of financing in 2021 to support the green transition, issued a forward-looking joint statement at the COP27 global climate summit in Sharm El-Sheikh, Egypt.

Despite today’s challenging environment, the MDBs affirmed their commitment to expand support for countries that want financing to mitigate climate change and adapt to a warming planet. The banks also vowed to address the challenges of sustainable development, climate change and biodiversity loss in an integrated way.

“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 . The current global context of multiple shocks, elevated risks, and stretched public resources are exacerbating the challenge, particularly for developing countries,” the MDBs said.

Maintaining true momentum on climate action requires all parties involved – governments, MDBs and partners across society – to work together on impactful programs and projects, appropriate public policies, and to significantly increase 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 banks said in the statement.

MDBs have committed to expand support for countries and other clients to integrate climate mitigation and adaptation into their overall economic planning, which includes everything from Long Term Strategies and Nationally Determined Contributions to sectoral and sub-sectoral transition pathways, the formulation of policies to spur systemic change, and the definition of investment plans and financial mobilization.

The MDBs are working with an increasing number of countries, regions, and cities to develop programs that address climate mitigation, climate resilience, adaptation and “nature-positive” needs. Together, the institutions will prioritize:

  • Implementing Paris Alignment approaches
  • Mainstreaming Just Transition efforts to ensure the green transition offers opportunities to everyone
  • Boosting adaptation finance, especially for low-income countries, small island developing states and disadvantaged populations
  • Supporting efforts on nature, developing on 2021’s Joint Statement on Nature, People and Planet
  • Increasing concessional financing
  • Scaling up private-sector mobilization
  • Voluntary cooperative approaches, through which MDBs support the development of instruments for, say, the monetization of adaptation benefits or verified emissions reductions

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%) was for mitigation and $18 billion (35%) for adaptation; $31 billion went to high-income countries, of which 95% was for mitigation and 5% for adaptation. A further $41 billion of private finance was mobilized globally. The MDBs have also worked together on a range of topics, such as Paris Alignment approaches and updating their adaptation finance tracking methodology.

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, the Inter-American Development Bank, Islamic Development Bank, New Development Bank, and the World Bank Group.

About the IDB

The Inter-American Development Bank is devoted to improving lives. Established in 1959, the IDB is a leading source of long-term financing for economic, social, and institutional development in Latin America and the Caribbean. The IDB also conducts cutting-edge research and provides policy advice, technical assistance and training to public and private sector clients throughout the region. Access our virtual tour.

Contacts

Funez,Angela

Funez,Angela
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