[ad_1]
Some regional development banks are responding to growing pressure to provide climate finance to support the development of green economies in low-income regions. This year, the Asian Development Bank and the Inter-American Development Bank Group both announced major climate investments aimed at expanding renewable energy capacity in developing regions of the world. This is further supported by recent efforts outside the World Bank Group.
Since the first COP climate summit, COP26, was held in Glasgow two years ago, development banks have faced increasing pressure to finance green energy and technology projects in overlooked parts of the world. ing. And at COP28, there were several announcements suggesting that banks have responded to this request. The World Bank Group announced at the summit that it will increase its climate change targets by dedicating 45% of its annual financing to climate-related projects next year. This will provide approximately $9 billion in additional funding for green projects primarily aimed at climate mitigation and adaptation.
In October, the Asian Development Bank (ADB) announced plans to lend an additional $100 billion over the next 10 years. The company expects to lend about $36 billion a year, an increase of 40%. In 2022, ADB financed an estimated $20.5 billion for climate-related development. The bank’s plan to “relax” lending regulations is not expected to affect its AAA credit rating. “We looked at it and found that we could optimize the capital adequacy framework and raise more funds to lend to countries without putting AAA at risk,” said ADB Executive Director Woo Chong Om. said. He added: “The development needs are huge and we need to make sure that funding is ready.”
While ADB’s lending will continue to focus on poverty, it expects to increase its lending to combat climate change. ADB said it wants to become the climate bank for the Asia-Pacific region by increasing spending on mitigation, adaptation, and climate resilience. Significant funding will go toward exploring new climate-related technologies, cleaner transportation and weather-resistant crops. We believe this funding is closely linked to the Bank’s objective of alleviating poverty in the region. To attract more private capital, ADB plans to support the creation of regulatory frameworks in countries in the region to reduce risks and make the investment environment more attractive.
About a month later, the Inter-American Development Bank Group (IDB Group) announced that it would increase funding to Latin America and the Caribbean to $150 billion over the next 10 years. This will allow the bank to triple the amount of financing it had previously planned for climate change projects, putting it on track to meet G20 recommendations. IDB President Ilan Goldfagin said: “We are putting climate and nature action at the heart of the IDB Group. “It means expanding our commitment to global public goods.” By increasing private sector involvement and developing new financial products, such as Amazon, we can mobilize more finance to fight climate change. ”
The IDB is the region’s main source of long-term development finance and is committed to achieving climate change mitigation and adaptation goals. Latin America and the Caribbean are home to the Amazon rainforest, one of the world’s major carbon sinks, and vast green energy resources. With more funding, the region could be propelled into a major green energy and technology hub, reducing the burden of climate change and supporting the global green transition.
Five multinational development banks (MDBs) have now committed to include clauses in their agreements and contracts to suspend debt payments in the event of climate disasters, following pressure from international organizations and governments. Additionally, MDBs recently issued a joint statement expressing their commitment to establishing a common approach to reporting climate results. This will be achieved through national cooperation to harmonize climate indicators. It will also develop programs delivered through the World Bank to help countries develop long-term climate and development strategies and attract private climate finance. “This joint statement from the world’s multilateral development banks makes clear that we hear the call to strengthen and we have the means to deliver,” EIB President Werner Heuer said in a statement. The fact is that we have agreed to further strengthen our cooperation.” Supporting countries and the private sector to accelerate a green and just transition and build resilience. ”
In response to increasing pressure from state governments and other public stakeholders, several development banks have announced increases in climate finance, primarily aimed at climate mitigation and adaptation. The funding is expected to help increase private finance to low-income regions, which can be key to achieving a global green transition. Investment in green energy and technology is also expected to boost economic growth at the national level in several countries around the world.
Written by Felicity Bradstock, Oilprice.com
Other top articles on Oilprice.com:
[ad_2]
Source link
