Baku: A group of leading multilateral development banks (MDBs) shared an estimate of their annual collective financing for low-and-middle-income countries on Wednesday, the first day of the COP29 in Baku, Azerbaijan.
The annual collective climate financing contributions are set to reach $120 billion by 2030, including $42 billion for adaptation. The banks also aim to mobilise $65 billion annually from the private sector.
The financing is projected to reach $50 billion, including $7 billion for adaption, for high-income countries where the private sector is expected to contribute $65 billion.
The consortium of global financial institutions includes 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.
They have exceeded their 2025 climate finance projections set in 2019, with a 25 per cent increase in direct climate finance and mobilisation for climate efforts doubling over the past year.
The estimates were presented during a high-level meeting in Baku chaired by COP29 president Mukhtar Babayev. He was joined by the heads of states as well as senior executives from the lenders and other major financial organisations, including the International Monetary Fund (IMF).
Enabling action, one of the key pillars of the COP29 presidency’s plan involves putting in place the financing necessity to support urgent climate action.
"Every contribution is welcome, but there is still a clear gap between where are we and where we need to be. We are working closely with the shareholders of international financial institutions at COP29 as we seek to build the foundations of a fair and ambitious new climate finance goal," Babyev said.
"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. As a presidency, we are committed to ensuring that party and non-party stakeholders have spaces available to discuss and progress such means of implementation," he added.
Loss and Damage Fund To Operate From 2025
Throughout the year, the COP29 presidency has been supporting the full operationalisation of the fund for responding to loss and damage so that it can begin disbursing the much-needed and long-awaited funds as soon as possible.
The fund is now ready to accept contributions after the signing of key documents. A ceremony on the second day of COP29 celebrated the signing of the trustee agreement and the secretariat hosting agreement between the board of the fund for responding to loss and damage and the World Bank, as well as the host country agreement between the fund board and its host country--the Philippines. With this important milestone reached, the fund is now expected to start financing projects in 2025.
Sweden also pledged approximately $19 million, subject to government approval. This brings the total pledged funding to more than $720 million. The COP29 presidency thanked Sweden for answering the call to action and continues to urge further pledges to the fund to better meet the needs of communities on the frontlines of climate change.
A new high-level annual dialogue on coordination and complementarity for funding arrangements responding to loss and damage was unveiled on Wednesday that will bring together stakeholders from within and outside the UNFCCC process.
Messages from World Leaders
The first day of the World Leaders Climate Action Summit began with an address by Azerbaijan President Ilham Aliyev. "As the president of COP29, Azerbaijan will do its best to find common understanding between developed and developing countries, between Global South and Global North," he said.
Additionally, 80 heads of states, governments and vice presidents participated in the summit which aims to build consensus and momentum around Azerbaijan’s plan to enhance ambition, enable action and demonstrate to all stakeholders a clear political will to deliver.
Leaders addressed the need to raise ambition for mitigation and adaptation through Nationally Determined Contributions (NDCs), National Adaptation Plans (NAPs), and long-term low-emission development strategies (LT-LEDS), enabling action with the New Collective Quantified Goal on Climate (NCQG), and other means of implementation and support.
Other prominent leaders who delivered speeches included UN secretary general Antonio Guterres, Maimunah Mohd Sharif (executive director of the UN Human Settlements Programme), Turkish president Recep Tayyip Erdogan, Marshal Islands president Hilda Heine, Barbados PM Mia Amor Mottley, Ghana president Nana Addo Dankwa Akufo-Addo, Polish president Andrzej Duda, Belarusian president Aleksandr Lukashenko, European Council president Charles Michel, UK PM Keir Starmer, Hungarian PM Viktor Orban and Serbian president Aleksandar Vucic.
Tackling climate change impacts on agriculture and food and water security
In other significant developments during the day, the US, China, and Azerbaijan convened a summit to accelerate action to cut methane emissions and other non-Co2 greenhouse gases. The summit focused on key actions to reduce near-term warming and keep a goal of limiting global average temperature rise within 1.5 degrees celsius.
Babayev, minister of agriculture and Azerbaijani government officials met with the director general of the Food and Agriculture Organization(FAO), a UN body. During the session, a letter of intent was signed between the Government of Azerbaijan and the FAO to formalise the partnership, capacity building and knowledge-sharing efforts. The agreement builds on the COP29 presidency’s action agenda initiative Baku Harmoniya Climate Initiative for Farmers to address the impacts of climate change on agriculture and food and water security.
The presidency also hosted the COP-IEA leader segment. In partnership with the IEA, it shared five key opportunities on Tuesday for COP29 to demonstrate positive progress on energy goals identified in the global stocktake.
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