Group of Multilateral Development Banks

The group of multilateral development banks (MDBs) is composed of the African Development Bank (AfDB), the Asian Development Bank (ADB), the Asian Infrastructure Investment Bank (AIIB), the European Bank for Reconstruction and Development (EBRD), the European Investment Bank (EIB), the Inter-American Development Bank Group (IDBG), the Islamic Development Bank (IsDB) and the World Bank Group (WBG).

In 2015, the MDBs and the International Development Finance Club (IDFC)  agreed on a set of Common Principles for finance to mitigate climate change and an initial set of Common Principles for finance to support adaptation to climate change. Their intention was to take a common approach to tracking and, in future, to reporting climate finance.

The MDBs have continued to address the challenges of tracking and enhance their methodologies, including through the ongoing work of a joint MDB climate finance tracking group. For these purposes, the MDB working group has formalised the coordination of two work streams. The first stream covers climate change mitigation, while the second addresses climate change adaptation.

In addition, other working groups have been created on an ad hoc basis to ensure collaboration and coordination around the development of new approaches. Currently, MDBs have a working group on Paris Alignment.

Why it matters 

MDBs climate finance in developping countries represent an important share of the climate finance efforts

In September 2019, at the UN Secretary General’s Climate Action Summit in New York, the MDBs announced their climate action targets for 2025: a collective commitment of climate finance of at least US$ 65 billion, with US$ 50 billion for low-income and middle-income countries; an increase in adaptation finance to US$ 18 billion; and co-financing of US$ 110 billion, including private direct mobilisation of US$ 40 billion.

MDBs and IDFC pioneered voluntary reporting on climate finance and their methodologies have been used as reference for the development of climate finance taxonomies.

The Common Principles for Climate Mitigation Finance Tracking consist of a set of definitions and guidelines and a list of eligible activities that allow for consistent accounting and reporting of financial flows for climate change mitigation finance.

The Common Principles for Climate Change Adaptation Finance Tracking define a process-based approach for tracking adaptation finance.

MDBs and IDFC were among the first groups of institutions committing to align financial flows with the Paris Agreement objectives in 2017

Since then, the MDBs developed an approach based on six building blocks. A joint MDB working group is developing methods and tools to operationalize this effort under each of the building blocks.

Other public development banks have followed suit, committing to align their activities with the objectives of the Paris Agreement in the declaration of the 2020 Finance in Common Summit.

Main areas of work related to climate mainstreaming:

The group of MDBs currently has three active working groups focusing on:

• Mitigation tracking
• Adaptation tracking
• Paris Alignment