Development banks' climate funding hits record, but World Bank pullback looms

By Marc Jones and Simon Jessop LONDON, July 13 (Reuters) - Multilateral development banks committed a record $162.5 billion in climate financing last year, a report by the EU's lending arm showed on

By Marc Jones and Simon Jessop LONDON, July 13 (Reuters) - Multilateral development banks committed a record $162.5 billion in climate financing last year, a report by the EU's lending arm showed on Monday, but targets for poorer nations could be at risk after the World Bank's decision last month to abandon key goals. Annual figures on the combined amount of climate financing provided by 10 of the world's biggest development banks showed they supplied a record $162.5 billion in 2025, almost $103 billion of which went to developing economies.

The European Investment Bank, which published the report, said it indicated MDBs were "on track" to meet climate finance targets announced at the COP29 U.N. climate change summit in Baku in 2024. At that meeting, the lenders committed to providing at least $120 billion in annual climate finance to low- and middle-income countries by 2030, alongside $50 billion a year for high-income economies. "These results show that multilateral development banks are delivering at scale and accelerating support where it is most needed," EIB Vice-President Ambroise Fayolle said.

WORLD BANK DECISION LOOMS Observers, however, have questioned whether those key targets might be at risk following last month's decision by the World Bank to abandon its goal to devote 45% of its annual financing to projects related to climate change. The bank, which had been under pressure from the Trump administration to scrap the climate lending target adopted during Joe Biden's presidency in 2023, said its shift was to focus on lending outcomes rather than input goals. Monday's report showed the World Bank's importance to the 2030 target.

It provided almost half of the $102.6 billion of climate funding that went to developing countries last year and has done so for the last five years. The World Bank did not immediately comment on Monday's report but the EIB's Fayolle backed the targets. "I will not comment on a specific institution, but what I can say is when I look at the figures I am very optimistic about reaching the 2030 target," he told Reuters, adding that last year's 21% jump in funding to poorer countries had been "really impressive".

CLIMATE COMMITMENTS Climate finance provided by multilateral development banks (MDBs) to low- and middle-income countries has doubled over the past five years, rising from $51.6 billion in 2021. Monday's figures showed that mitigation projects, including renewable energy and emissions-reduction initiatives, accounted for $68 billion in 2025. Adaptation finance, aimed at helping countries cope with increasingly severe climate impacts, jumped 31% to $35 billion.