Development banks' climate funding at all-time high in 2018

BRUSSELS (Reuters) - Climate projects won record financing from the world’s big development banks last year, with funds committed up 60% since the 2015 Paris climate accord to curb global warming emissions, a report published on Thursday said.

FILE PHOTO: Smoke billows from a chimney at a combined-cycle gas turbine power plant in Drogenbos, near Brussels, Belgium January 30, 2019. REUTERS/Yves Herman

The financing from six multilateral development banks to boost projects addressing climate risks and cutting emissions reached $43.1 billion (34 billion pounds) in developing countries and emerging economies last year, up 22% from the previous year and accounting for almost 30% of the banks’ total operations.

Some of the financed projects included the installation of flood barriers at affordable rural housing programme sites at risk of flooding and support for policy actions, such as the acceleration and increase of a country’s renewable energy plan.

The joint report was released by the African Development Bank (AfDB), the Asian Development Bank (ADB), the European Bank for Reconstruction and Development (EBRD), the European Investment Bank (EIB), the Inter-American Development Bank Group (IDBG) and the World Bank Group (WBG).

The banks have committed nearly $237 billion in climate finance for developing and emerging economies since 2011, when they began joint reporting.

The banks announced a joint framework in 2018 to align their work with the Paris agreement, which aims to keep the global temperature rise as close to 1.5 degrees Celsius as possible.

The bulk of the banks’ climate financing last year was aimed at reducing greenhouse gas emissions and slowing global warming, with over $30 billion invested.

Almost $13 billion was also invested in efforts to adapt to the effects of climate change, including worsening droughts, flooding, more extreme weather events and rising sea levels.

Additionally, the banks reported $68.1 billion in net climate co-finance, or investments from the public and private sector.

Climate activists have called for development banks to divest from any investment linked to burning to fossil fuels.

Advocacy groups have campaigned against the EIB, the World Bank and EBRD’s financing of two new pipelines to pump gas from Central Asia to Europe, the Trans-Adriatic Pipeline and Trans-Anatolian Natural Gas Pipeline.

The EIB committed $5.7 billion in climate finance in 2018 for developing countries and emerging economies, second after the World Bank Group, which committed $21.3 billion, according to the report.

The EIB’s total climate financing amounted to over $19 billion last year.

“This increase sends the important signal that the MDBs and the EIB stand ready to respond to the challenges posed by climate change,” Emma Navarro, the EIB’s head of climate action and environment, said in a statement.

The World Bank announced in 2017 it would no longer finance upstream oil and gas projects after this year, apart from certain gas projects in the poorest countries in exceptional circumstances.

Reporting by Daphne Psaledakis; Editing by Alissa de Carbonnel and Catherine Evans