Major development banks launch $120 billion climate fund for developing nations

The world’s leading Multilateral Development Banks (MDBs) have committed to providing $120 billion in climate financing for developing countries by 2030, as announced in a collective statement made at COP29 in Baku on Tuesday. This initiative is designed to enhance global climate action by aiding both high- and low-income nations in addressing climate challenges.

The MDBs project that by 2030, their annual climate financing for low- and middle-income countries will reach $120 billion, which includes $42 billion earmarked for adaptation efforts. Furthermore, the banks aim to attract an additional $65 billion from private investors, highlighting their focus on engaging the private sector to maximize the impact of these funds.

High-income countries are also included in this financial strategy, with MDBs estimating that annual collective climate financing for these nations will be $50 billion, including $7 billion for adaptation initiatives, while seeking to mobilize another $65 billion from private investments.

The MDBs have already surpassed their initial climate targets set in 2019 for 2025, witnessing a 25% increase in direct climate funding and a doubling of mobilized funds this year alone.

They emphasized that while the scale of their financial commitments is critical, their most substantial influence lies in their ability to foster transformative change. Additionally, the MDBs urged leaders at COP29 to finalize a New Collective Quantified Goal on Climate Finance (NCQG), an essential objective for fulfilling the Paris Agreement.

“A robust and ambitious NCQG is vital for achieving the goals of the Paris Agreement, and we call on Parties to reach a strong conclusion on this matter,” they stated. This announcement was made by prominent MDBs worldwide, including the African Development Bank Group, the Asian Development Bank, the Asian Infrastructure Investment Bank, and the World Bank Group, among others.