A group of leading multilateral development banks (MDBs) have estimated to make $170 billion, approximately R3 trillion, in collective climate financing contributions in response to Loss and Damage for low- and middle-income countries through 2030.
This comes as the 29th 2024 United Nations Conference of the Parties (COP29) in Baku, Azerbaijan, yesterday heard that the Fund for Responding to Loss and Damage was now ready to accept contributions after the signing of key documents and is now expected to start financing projects in 2025.
Loss and damage has been a key priority in the COP29 Presidency’s plan to enhance ambition and enable action.
The Fund will serve as a lifeline by providing critical and urgent support for those impacted by the devastating consequences of climate change. Africa receives only 3-4% of global climate finance despite accounting for nine of the world’s 10 most vulnerable countries to climate change.
COP29 President Mukhtar Babayev said his office worked intensively with the Fund Board and the World Bank, alongside donor countries, to complete the preparations to operationalize the Fund.
“This progress will allow us to finally turn pledges into real support. That means that funding will be able to flow in 2025. We must deliver what the world expects, including climate financing that is several multiples beyond existing arrangements, adequate to the scale and urgency of the problem,” Babayev said.
“But our work is not done. Now, the Fund needs to identify projects to get support flowing. All countries that have pledged money must complete their contribution agreements. And we need more pledges so we can meet the urgent needs of climate change victims.”
For low- and middle-income countries, the annual collective climate financing contributions from the group of MDBs is set to cumulatively reach $120bn by 2030, including $42bn for adaptation.
The MDBs also aim to mobilise $65bn annually from the private sector.
For high-income countries, this annual collective climate financing is projected to reach $50bn, including $7bn for adaption, and the MDBs aim to mobilise $65bn from the private sector.
The estimates encompass lenders including the Asian Development Bank (ADB), the World Bank Group, the African Development Bank (AfDB), the Asian Infrastructure Investment Bank (AIIB), the Council of Europe Development Bank (CEB), the European Bank for Reconstruction and Development (EBRD), the European Investment Bank (EIB), the Inter-American Development Bank Group (IDB), the Islamic Development Bank (IsDB) and New Development Bank.
United Nations Secretary-General António Guterres said the creation of the Loss and Damage Fund was a victory for developing countries, for multilateralism, and for justice, but its initial capitalization of $700 million did not come close to righting the wrong inflicted on the vulnerable.
“$700 million is roughly the annual earnings of the world’s ten best-paid footballers. It does not even account for a quarter of the damage in Viet Nam caused by Hurricane Yagi in September. We must get serious about the level of finance required. I urge countries to commit new finance to the Fund. And to write checks to match,” he said.
“On climate finance, the world must pay up, or humanity will pay the price. Climate finance is not charity, it’s an investment. Climate action is not optional, it’s an imperative. Both are indispensable: to a liveable world for all humanity, and a prosperous future for every nation on earth.”
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