Climate finance committed by major multilateral development banks (MDBs) reached $66-billion in 2020, with 58%, or $38-billion, of that committed to low- and middle-income economies, the 2020 Joint Report on MBD Climate Finance, shows.

Nearly $50-billion, or 76%, of total MDB climate finance in 2020 was associated with climate change mitigation investments that aim to reduce harmful greenhouse-gas emissions and slow down global warming. Of this, 50% went to low- and middle-income economies.

More than $16-billion, or 24%, of climate change adaptation finance was invested in adaptation efforts to help countries build resilience to the mounting impacts of climate change, including worsening droughts and more extreme weather events, from flooding to rising sea levels.

Of this, 83% was directed at low- and middle-income economies, development finance institution the African Development Bank (AfDB) says.

Accelerating the transition to low-carbon and climate-resilient economies through climate finance is a key element of the MDBs’ effort to align their activities with the objectives of the 2015 Paris Agreement to keep global warming well below 2 °C above pre-industrial levels. In the past six years, the MDBs have jointly committed $257-billion in climate finance, of which $186-billion was directed at low- and middle-income economies.

The annual report is a key indicator of the progress MDBs are making in accelerating the delivery of climate finance, for which demand is expected to continue growing over time. This year’s report marks the end of the reporting period tracking individual climate finance pledges since 2015; for most, 2021 will mark the start of a new increase in ambition, the AfDB says.

Of the 2020 total of $66-billion, $63-billion came from the MDBs’ own accounts with almost $3-billion from external resources channelled through and managed by MDBs. These included the Climate Investment Funds, Green Climate Fund and climate-related funds under the Global Environment Facility, European Union blending facilities and others.

The 2020 financing helped play a key role in supporting countries to embed green and climate-focused solutions as part of their recoveries from the impact of Covid-19.

While these programmes affected MDBs’ normal lending operations and thus the delivery of their climate finance targets, seeing the total commitments for low- and middle-income countries dip from 2019’s $41.5-billion, the 2020 report says interventions and support from the MDBs laid a solid foundation for building back better for a greener, more resilient, post-Covid-19 future.

The total climate co-finance committed during 2020 alongside MDB resources was $85-billion. MDB climate finance and climate co-finance totalled more than $151-billion. The amount of private direct mobilisation stood at $5.9-billion.