Multilateral Development Banks: turning the Paris Agreement into reality

Financial support is a critical element when it comes to achieving the world’s climate goals, such as keeping the rise in temperature to well below 2 degrees. For many developing countries, these goals can only be reached with financial support.

Large-scale investments are needed in energy, transportation, and agricultural systems to ensure that countries can meet the needs of their populations without jeopardising climate stability. More importantly, the money must stop flowing to sectors that could exacerbate climate vulnerability such as new apartment towers in flood-prone coastal zones.

Each year, around $150 billion is invested by Multilateral Development Banks (MDBs) in developing countries and emerging economies. This investment plays a vital role in efforts to shift global financing towards sustainable and inclusive projects in Africa.

Between 2011 and 2015, the African Development Bank provided nearly $12 billion in financing projects that generated climate change mitigation and adaptation benefits. The Bank also influences the financial decisions of others by reducing the risks associated with individual investments and steering public and private finance towards activities that guarantee the transition to more climate-resilient economies.

Through policy, technical, and research support, MDBs also help shape the rules that guide public and private investment decisions around the world.

“The MDBs cannot do it alone, and certainly not the African Development Bank, and therefore we have established what we call the African Financial Alliance on Climate Change that brings together every player in the financial sector in Africa to align the investments with the Paris Agreement,” says Dr. Anthony Nyong the Director for Climate Change and Green Growth at the African Development Bank.

Original source: AfDB
Published on 7 December 2018