Climate Finance from Multilateral Banks Reaches $125bn in 2023
The increase marks significant progress in addressing climate change, particularly in high-income countries.
Global climate finance from multilateral development banks surged by 25% in 2023, reaching a record $125 billion, according to a report released on Friday.
The increase marks significant progress in addressing climate change, particularly in high-income countries.
The report revealed that climate finance for high-income economies—classified by the World Bank based on gross national income per capita—rose by 30%, amounting to $50.3 billion.
This includes funding aimed at reducing emissions, promoting renewable energy, and supporting green infrastructure projects.
In contrast, the growth in climate finance for low- and middle-income countries was slower, rising by 23% to $74.7 billion.
While the financial support is crucial, many developing nations remain vulnerable to extreme weather events and face rising debt costs, which limits their ability to invest in climate adaptation and resilience measures.
The report, compiled from data by 10 major institutions, including the World Bank Group and regional development banks from Asia, Africa, Europe, Latin America, the Caribbean, and BRICS nations, underscores the global response to climate challenges.
Ilan Goldfajn, president of the Inter-American Development Bank, praised the overall increase in funding but stressed the urgency of scaling up efforts.
"This is an issue that transcends politics, borders, geography, and income levels. It's a global responsibility," Goldfajn stated, ahead of the United Nations General Assembly and Climate Week in New York this month.
Countries like France ($7.4 billion), Spain ($7 billion), and Italy ($6.7 billion) were among the highest recipients of climate finance from multilateral institutions in 2023, according to the report.
A significant portion of the climate finance was allocated to renewable energy projects and emission reduction initiatives, while comparatively less funding went towards climate adaptation measures.
Of the $125 billion disbursed last year, only $27.7 billion (22%) was directed toward climate adaptation efforts, a slight decrease from the 25% allocated in 2022.
As extreme weather events—such as heatwaves, floods, and rising sea levels—become more frequent and severe, developing countries are calling for increased financial support.
These nations face a double burden of limited financial resources and heightened vulnerability to the impacts of climate change, further complicating their efforts to adapt and protect their populations.
The report's findings highlight the ongoing need for a balanced approach that addresses both mitigation and adaptation, ensuring that vulnerable countries receive the financial backing they need to combat the climate crisis effectively.
