Multilateral development banks committed a record $162.5 billion in climate financing in 2025, according to the 2025 Joint Summary Report on Multilateral Development Banks' Climate Finance, published by the European Investment Bank on behalf of 10 of the world's largest development banks (Reuters, ADB). It is the strongest year on record for MDB climate lending — and it lands just weeks after the World Bank quietly abandoned its own headline climate target.
The headline numbers are genuinely striking. Climate finance to low- and middle-income countries rose 21% year-on-year to an all-time high of $103 billion, more than double the $51.6 billion recorded just five years ago. Financing to high-income economies rose to almost $60 billion, mobilising a further $80 billion in private capital alongside it. Of the total, $68 billion went to mitigation projects and $35 billion to adaptation — the kind of resilience-building finance that has historically lagged behind emissions-reduction spending.
EIB Vice-President Ambroise Fayolle called the results proof that "multilateral development banks are delivering at scale and accelerating support where it is most needed," and said last year's 21% jump in funding to poorer countries had been "really impressive." He added that when he looks at the trajectory, "I am very optimistic about reaching the 2030 target" — that target being at least $120 billion a year to low- and middle-income countries, agreed at COP29 in Baku in 2024.
But the report lands alongside a complication that Fayolle pointedly declined to comment on directly: last month, the World Bank — under pressure from the Trump administration — abandoned its own goal of directing 45% of annual financing to climate-related projects, a target set under the Biden administration in 2023. The bank says it will now focus on lending outcomes rather than input goals. That matters more than a single institution's internal target-setting exercise might suggest: the World Bank alone provided almost half of the $102.6 billion in climate funding that reached developing countries last year, and has done so consistently for five years running.
Not everyone is worried about the knock-on effect. Danny Scull of the climate think tank E3G said he still expects the sector to hit the $120 billion 2030 goal despite the World Bank's downshift, though he noted that reaching what he called a "true" adequate target — closer to $180 billion a year — will require "continued innovation from MDBs and their shareholders." Turkey's climate minister, whose country hosts COP31 this November, has separately estimated developing countries need close to $1 trillion to meet their climate targets in full — a reminder of how far even a record year still falls short of what's actually required.
For anyone tracking blended finance, green bond issuance, or sovereign climate risk, this is one to watch closely heading into COP31: the collective MDB system is scaling up exactly as its single largest historical contributor pulls back, and whether the rest of the system can absorb that gap will shape climate finance flows for the rest of the decade.
Sources: Reuters, Asian Development Bank, DevelopmentAid