COP28: Development banks unlock climate finance
Multilateral Development Banks (MDBs) joined together at the COP28 climate summit in Dubai to commit to ambitious climate action and unlock over US$180 billion in climate finance.
The Inter-American Development Bank (IDB) announced at COP28 that it will triple its climate lending to US$150 billion over the next decade. The IDB also announced US$5 billion in additional financing for sustainable development projects in the Amazon, as well as a guarantee programme to expand lending capacity by US$450 million, and US$1 billion equivalent of incentives for countries to meet climate and nature targets through discounts on loans if targets are met.
President of the World Bank Ajay Banga also committed to increase their climate finance target to 45 percent by 2025, which would mean US$40 billion in climate finance annually by 2025, of which US$9 billion per year for next two years is additional. The World Bank also announced US$5 billion to support 100 million people in Africa with clean energy access in the next seven years.
Dr. Sultan bin Ahmed Al Jaber, Minister of Industry and Advanced Technology and COP28 President, said, "Something special is happening in Dubai, the order of magnitude is changing. We have said that climate finance needs to be reformed and Multilateral Development Banks (MDBs) are heeding our call. I'm confident that coming out of COP28 climate finance will be a key pillar of their activities for years to come. We are showing what we can achieve when we are singular focused on delivery."
Emerging and Developing Economies will need more than US$2.4 trillion annually in climate finance by 2030.
"MDBs and the IMF will have to play a key role in the implementation of the Global Climate Finance Framework launched by UAE along with key world leaders. I welcome the good progress that has already been delivered towards the implementation of the principles of this framework. MDBs have already delivered a record of nearly $100 billion in climate finance last year," said Mohamed Hadi Al Hussaini, UAE Minister of State for Financial Affairs.
"During COP28, we have seen some good announcements from MDBs, on more ambitious climate finance targets. These are all good steps, in the right direction. We must now move ahead, with even more momentum and ambition."
Other commitments by MDBs at COP28 include:
* A US$1 billion climate finance commitment by the Islamic Development Bank (IsDB) to support adaptation in conflict affected countries.
* The African Development Bank launched a US$175 million facility for green infrastructure in Africa, as well a US$1 billion facility to provide insurance against climate impacts to over 40 million farmers across Africa.
* The World Bank announced that it will support 15 countries with national programs to slash methane emissions of up to 10 million tons over the next five to seven years from rice production, livestock, and waste.
* The World Bank also announced that it will support certification of carbon credits for forestry in 16 countries, aiming to generate 24 million credits by next year and 125 million in five years.
* At COP28, the UAE also pledged US$200 million for climate resilience in low-income and vulnerable middle-income countries, through the IMF Resilience and Sustainability Trust.
"Better, Bigger, and Bolder MDBs" is a key principle of the COP28 UAE Declaration on a Global Climate Finance Framework launched by the UAE at COP28 World Climate Action Summit on Friday, December 1st. The Declaration is endorsed by India, France, Barbados, Kenya, Ghana, Germany, UK, USA, Senegal, and Colombia. The Declaration calls on international lenders to take ambitious action on climate finance.
(ANI/WAM)