Multilateral Banks Pledge $120 Billion for Climate Finance at COP29

People walk through the COP29 U.N. Climate Summit in Baku, Azerbaijan, on Nov. 13, 2024. AP Photo/Rafiq Maqbool

The world’s top multilateral banks want to increase climate finance to low- and middle-income countries to $120 billion a year by 2030.

The group of multilateral development banks (MDBs), including the World Bank, European Investment Bank, Asian Development Bank, and others, announced the sum on Nov. 12 in the latest round of global climate talks in Baku, Azerbaijan.

“While the scale of MDBs’ financial commitments is essential, MDBs’ most significant impact comes from our ability to drive transformative change,” the group said in a joint statement.

Climate Finance

High on the agenda at COP 29 is the deal to provide up to $1 trillion in annual climate finance for developing countries. U.N. Climate Change Executive Secretary Simon Stiell has urged leaders to “reform the global financial system.”

The United Nations says climate finance refers to local, national, or transnational financing—drawn from public, private, and alternative sources of financing—that seeks to support mitigation and adaptation actions that will address the climate.

MDBs provide financial support to developing countries to help them strengthen economic management, reduce poverty, and, increasingly, advance climate action.

The group said the funding is meant to attract more private financing, by lowering the risk associated with climate-linked investments.

“Provision of climate finance at scale also depends on increased MDB internal resources; a larger pool of grant and concessional funds to support enhanced policy dialogue, finance public goods and mobilize private finance; and additional capital to unlock more MDB financing,” it said.

Nadia Calvino, president of the European Investment Bank, said she wanted to fund “major breakthrough technologies.”

“As the financial arm of the European Union, and one of the world’s largest multilateral development banks, the EIB Group is stepping up to the plate with concrete solutions,” she said in a statement on Nov 11.

She said the bank “will finance the major breakthrough technologies that will make the difference in tackling climate change.”

‘Bureaucratic Nightmare’

Despite ambitious funding goals, a critic argued that the EU’s own climate finance plans relied heavily on central planning, which he said was unlikely to deliver real economic transformation.

Richard Schenk, a research fellow and net-zero spokesman at the think tank MCC Brussels, told The Epoch Times he was skeptical about the EU’s broader plans to finance the green transition.

“Much of it is actually supposed to come from the European Investment Bank, which is supposedly ready to finance everything climate-related,” Schenk said.

He noted that the EU plans to invest 1 trillion euros ($1.05 trillion) in climate-related projects in the EU by 2030.

“But the reality is that even if these numbers were true, they would not be enough to transform the economy into a net-zero economy at all, and they are aware of this. This is why they are coming up with more and more ideas to get more and more money,” he said.

“The EU has already created a taxonomy directive that classifies economic activities into green and non-green activities.

“For example, if a company is producing hydrogen, then it has preferential access to bank loans at a lower interest rate.

“They allocate resources to these companies, and they are basically meddling directly with the production factors of companies. So this is very, very central-planning-like. But at the same time, this is precisely why this scale doesn’t work—it’s so bureaucratic.

“When you think about this, many companies are actually engaged in both green and non-green activities, so how do you separate it? [...] It’s a bureaucratic nightmare.”

The Epoch Times contacted the EU Commission for comment but received no replies by publication time.

Reuters contributed to this report.