Multilateral development banks delivered a stunning surge in climate support last year. They committed a record $162.5 billion. Nearly $103 billion of that flowed to developing economies. The numbers come from a fresh tally released Monday by the European Investment Bank.
But the achievement lands with a shadow. Just weeks earlier the World Bank walked away from a high-profile target. It scrapped its pledge to direct 45% of lending toward climate projects. The move, made under pressure from the Trump administration, has analysts wondering whether the collective momentum can hold.
The Reuters report lays out the tension in sharp relief. Ten major institutions, from the African Development Bank to the New Development Bank, pushed climate finance higher across mitigation and adaptation alike. Mitigation projects drew $67.8 billion. Adaptation spending jumped 31% to $34.8 billion. Those gains helped double support for low- and middle-income countries from $51.6 billion in 2021.
EIB Vice-President Ambroise Fayolle struck an upbeat tone. “These results show that multilateral development banks are delivering at scale and accelerating support where it is most needed,” he said. Fayolle added he felt optimistic about hitting the 2030 goals set at COP29 in Baku. Those goals call for $120 billion a year to developing nations and $50 billion to high-income economies.
The figures put the group on track. Yet the World Bank’s reversal carries weight. It supplied nearly half the $102.6 billion that reached poorer countries in 2025. It had done so consistently for five years running. Observers now question whether others can fill any gap. Danny Scull, an analyst at the environment-focused think tank E3G, told Reuters he still expected the $120 billion floor to be met. He noted, however, that true needs could run closer to $180 billion.
The World Bank’s decision emerged late last month. Officials framed it as a shift from input targets to a focus on measurable lending outcomes. The bank had adopted the 45% goal in 2023 during the Biden administration. Critics see politics at play. A June analysis from Boston University’s Global Development Policy Center urged the opposite path. Authors Rishikesh Ram Bhandary, Marilou Uy and Irene Monasterolo wrote that “the question should not be whether a climate action plan is needed, but how the plan can be improved.” They warned that without an enhanced plan the bank “is likely to fall short of its mandate of ending poverty on a livable planet.”
That paper, published just before the World Bank’s announcement, highlighted real progress under the current Climate Change Action Plan. Climate finance reached $42.6 billion in fiscal 2024, a 10% increase. Country Climate and Development Reports now cover 93 economies. Still, the authors called for bolder steps. They pointed to expert groups urging multilateral banks to triple lending volumes by 2030. The Independent High-Level Expert Group on Climate Finance has said current MDB efforts “fall short of what is needed” in scale, impact and urgency.
Private capital mobilization adds another layer. MDBs drew in an extra $80 billion from private sources for high-income markets and $35 billion for developing ones. The EIB itself accounted for $52 billion in high-income climate finance and $4.6 billion in low- and middle-income commitments. It also helped mobilize $58 billion in private funds globally. Those flows matter. They signal confidence that public commitments can unlock larger sums.
Yet adaptation finance remains the tougher sell. It climbed sharply but still trails mitigation by a wide margin. Developing countries face immediate threats. Floods, droughts and storms hit hardest where fiscal space is tight. The $1 trillion annual need cited by Turkey’s climate minister ahead of COP31 in November underscores the distance left to travel. That figure, referenced in the Reuters coverage, reflects the gap between current pledges and the investment required for nationally determined contributions.
The joint reporting process itself has evolved. Coordinated by the EIB with help from the European Bank for Reconstruction and Development, the latest release marks a step toward greater transparency. A pilot MDB Climate Finance Dashboard launched in April 2026 aims to give stakeholders real-time data. Earlier joint reports, such as the 2023 edition compiled by the same group of banks, showed the institutions already exceeding earlier collective goals of $50 billion annually for low- and middle-income countries. The trend line has been upward for years.
But trends can bend. The World Bank’s pullback comes at a moment when other pressures mount. Debt burdens constrain many emerging markets. Geopolitical tensions complicate capital flows. Aid budgets in wealthy nations face scrutiny. Against that backdrop the record 2025 totals look less like a finish line and more like a baseline that must keep rising.
At COP30 in Brazil last year the banks reaffirmed their commitment to work as a system on climate-smart development. COP31, hosted by Turkey, will test whether words translate into accelerated action. Finance ministers and climate negotiators will gather with the 2030 targets in mind. Success depends on more than one institution. It hinges on the group holding steady even when its largest member steps back.
The data tells two stories at once. One of impressive scale-up. Another of institutional fragility. Multilateral banks have shown they can move money at speed. Whether they sustain that pace without the World Bank’s previous level of ambition remains the open question. Fayolle’s optimism meets Scull’s caution. Both rest on the same set of numbers. How those numbers grow in 2026 and beyond will shape outcomes for billions of people on the front lines of a warming world.
A separate Boston University analysis from late June captured the stakes. It called on the World Bank to refine its financial model, work with shareholders to expand resources, and prioritize concessional finance for the poorest nations. Those steps, the authors argued, would set an example for the entire MDB system. The bank’s recent choice suggests a different direction. The coming months will reveal whether the rest of the group can compensate.
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