Scaling up climate finance for developing countries

Climate finance provided and mobilised by developed countries for climate action in developing countries reached USD 89.6 billion in 2021. This shows a positive trend, representing close to an 8% increase over 2020, which is significantly higher than the 2.1% average annual growth observed from 2018 to 2020. In 2021, total climate finance provided and mobilised by developed countries for developing countries amounted to USD 89.6 billion, showing a significant 7.6% increase over the previous year. This increase is significantly higher than the 2.1% average annual growth observed from 2018 to 2020. However, this result remained USD 10.4 billion short of the USD 100 billion annual goal, that was to be reached by 2020.

 Public climate finance (bilateral and multilateral) continued to account for the vast majority of the total. It almost doubled between 2013 and 2021 (from USD 38 billion to USD 73.1 billion) and has increased consistently year on year since 2015. Within public climate finance, multilateral public climate finance attributable to developed countries has grown the most since 2013, overtaking bilateral public climate finance from 2019. Climate-related export credits increased by 28% over 2013-21, but their year-on-year volumes remain volatile and their share in the total small.

Mobilised private climate finance amounted to USD 14.4 billion in 2021, thereby returning to its 2019 level after a dip in 2020. This component, however, displays an overall stagnating trend since 2017, despite the significant growth in public climate finance highlighted above.  

There is a pressing need for international providers to significantly scale up their efforts in two key areas: the mobilisation of private finance, and adaptation finance. Adaptation finance is essential to building resilience and private finance from a range of commercial actors in developed and developing countries is critical to closing the financing gap for investments in climate action.

See also: Climate Finance Provided and Mobilised by Developed Countries in 2013-2021.