Development banks agree common approach to measure climate finance

The six large multilateral development banks (MDBs) and the IDFC, a network of national, regional and international development banks, of which CAF, development bank of Latin America is part, have agreed on a common set of principles to track financial commitments that help countries prepare for and build resilience to the impacts of climate change. 

The multilateral banks include the African Development Bank, (AfDB) the Asian Development Bank (ADB), the European Bank for Reconstruction and Development (EBRD), the European Investment Bank (EIB), the Inter-American Development Bank (IDB) and the World Bank Group. 

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"This worldwide cooperation between national and international financial institutions brings a unique value to address the needs of developing countries for a more resilient and sustainable development" - announced Mr. Enrique Garcia, CEO of CAF. "CAF is prepared to do its share and is committed to increase its green finance and focus even more in adaptation measures in the next years" 

The document is aimed at achieving a common understanding of what to count as climate adaptation finance. Knowing how the money is flowing is critical for reaching areas of opportunity and need, because what gets measured gets managed. 

Last month, the MDBs said that they had delivered US$ 5 billion in financing last year to help developing countries and emerging economies adapt to the challenges of climate change. Similarly, IDFC members reported in their last green finance mapping report a contribution of US$ 15.8 billion to adaptation projects in developing countries in 2013.

Nonetheless, IDFC and MDBs agree that increased support for more climate resilient infrastructure, natural ecosystem and other adaptation measures is urgently needed. 

According to the newly agreed common principles document, "the MDBs and IDFC are fully committed to promoting and supporting climate resilient development as an essential element of the sustainability of their investments."  They plan to do this, the document says "by integrating climate resilience and adaption into their investments, operations and initiatives." 

The purpose of the principles is to set out an agreed approach for tracking adaptation finance.  The principles are voluntary and set common definitions and guidelines. The implementation, reporting and quality control are each institution's responsibility. In addition, IDFC and MDBs have committed to further develop their cooperation in the future and will continue to share practices and knowledge on climate finance.