IsDB and MDBs Unveil $120B Climate Finance Target at COP29

The Islamic Development Bank (IsDB), alongside nine other multilateral development banks (MDBs), issued a joint statement at the 29th session of the Conference of the Parties (COP29) to the United Nations Framework Convention on Climate Change in Baku, outlining ambitious new climate finance targets. The statement, released on November 13, 2024, details a collective commitment to significantly increase funding for climate action, particularly for low- and middle-income countries, marking a pivotal moment in global climate finance coordination.

Context and Background

The joint statement was released during COP29 in Baku, a critical forum for international climate negotiations. The participating MDBs include the African Development Bank, Asian Development Bank, Asian Infrastructure Investment Bank, Council of Europe Development Bank, European Bank for Reconstruction and Development, European Investment Bank, Inter-American Development Bank, New Development Bank, and World Bank Group. This unified front underscores a growing recognition among development financiers of the urgent need to scale up climate investments, aligning with global goals set under the Paris Agreement.

Key Details

The MDBs estimate that by 2030, their collective annual climate financing for low- and middle-income countries will reach $120 billion, including $42 billion specifically allocated for adaptation. Additionally, they aim to mobilize $65 billion from the private sector. For high-income countries, the annual collective climate financing is projected at $50 billion, with $7 billion for adaptation and an additional $65 billion expected from private sector mobilization. The banks have already exceeded their 2025 climate finance targets set in 2019, achieving a 25% increase in direct climate finance and doubling climate mobilization efforts over the past year.

Implications and Impact

This coordinated effort is expected to enhance the effectiveness of climate finance globally. The MDBs introduced a common results-measurement method featuring new indicators and a shared framework to link global progress in climate mitigation and adaptation with their activities’ outcomes. By reaffirming support for enhanced cooperation among host countries, banks, donors, and the private sector, the statement aims to set a new collective climate finance goal at COP29, accelerating the transition to sustainable economies worldwide.

Vision 2030 Alignment

This initiative aligns closely with Saudi Arabia’s Vision 2030, which prioritizes environmental sustainability and economic diversification. The Kingdom, through institutions like the Islamic Development Bank, is demonstrating its commitment to addressing climate change while fostering international cooperation and private sector engagement, supporting its goals of becoming a global hub for green innovation and sustainable development.

20 Questions

Q1. What is the main announcement made by the IsDB and MDBs at COP29?

A1. They issued a joint statement outlining collective climate finance targets, including $120 billion annually for low- and middle-income countries by 2030, with a focus on adaptation and private sector mobilization.

Q2. Which banks participated in the joint statement?

A2. The banks include the Islamic Development Bank, African Development Bank, Asian Development Bank, Asian Infrastructure Investment Bank, Council of Europe Development Bank, European Bank for Reconstruction and Development, European Investment Bank, Inter-American Development Bank, New Development Bank, and World Bank Group.

Q3. What is the estimated collective climate financing for low- and middle-income countries by 2030?

A3. The MDBs estimate their collective annual climate financing for low- and middle-income countries will reach $120 billion by 2030, including $42 billion for adaptation.

Q4. How much private sector mobilization is targeted for low- and middle-income countries?

A4. The banks aim to mobilize $65 billion from the private sector for low- and middle-income countries by 2030.

Q5. What are the climate financing projections for high-income countries?

A5. For high-income countries, the annual collective climate financing is projected to reach $50 billion by 2030, including $7 billion for adaptation.

Q6. How much private sector mobilization is expected from high-income countries?

A6. An additional $65 billion is expected from private sector mobilization in high-income countries.

Q7. Have the MDBs achieved their previous climate finance targets?

A7. Yes, the MDBs have already exceeded their ambitious climate finance targets set for 2025 in 2019, achieving a 25% increase in direct climate finance and doubling climate mobilization efforts.

Q8. What new measurement method did the MDBs introduce?

A8. The banks introduced a common results-measurement method featuring new indicators and a shared framework to link global progress in climate mitigation and adaptation with their activities’ outcomes.

Q9. Why is this joint statement significant for COP29?

A9. It sets a new collective climate finance goal, enhancing collaboration among countries, banks, and the private sector to address urgent climate action needs.

Q10. How does the IsDB contribute to climate finance?

A10. As a multilateral development bank, the IsDB collaborates with other MDBs to scale up climate financing, supporting sustainable development and green projects in member countries.

Q11. What is the role of the private sector in these climate finance targets?

A11. The private sector is expected to contribute significantly, with $65 billion targeted for mobilization in both low- and middle-income and high-income countries.

Q12. How does this initiative align with Saudi Arabia’s Vision 2030?

A12. It supports Vision 2030’s focus on environmental sustainability and economic diversification, positioning the Kingdom as a leader in green finance and international cooperation.

Q13. What is the adaptation finance target for low- and middle-income countries?

A13. The adaptation finance target is $42 billion annually by 2030 for low- and middle-income countries.

Q14. When was the joint statement released?

A14. The joint statement was released on November 13, 2024, during COP29 in Baku.

Q15. What is the collective climate finance target for all MDBs by 2030?

A15. The collective target is $120 billion for low- and middle-income countries and $50 billion for high-income countries, totaling $170 billion annually.

Q16. How do the MDBs plan to ensure the quality of climate financing?

A16. They introduced a common results-measurement method with new indicators and a shared framework to link outcomes with global climate goals.

Q17. What was the previous 2025 target for MDB climate finance?

A17. The 2025 target was set in 2019 and has already been exceeded, with a 25% increase in direct climate finance and doubled mobilization efforts.

Q18. Which countries are the primary beneficiaries of the increased climate finance?

A18. Low- and middle-income countries are the primary beneficiaries, with $120 billion targeted, including specific funds for adaptation.

Q19. How does this statement support global climate goals?

A19. It aims to set a new collective climate finance goal at COP29, accelerating progress toward the Paris Agreement and sustainable development.

Q20. What is the significance of including adaptation in the finance targets?

A20. Including adaptation ensures that vulnerable countries receive support to cope with climate impacts, addressing both mitigation and resilience needs.

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