ADB's Record $10B Climate Finance in 2023
In 2023, the Asian Development Bank (ADB) made history by dedicating a remarkable sum towards climate finance aimed at assisting its developing member countries (DMCs) across Asia and the Pacific in reducing greenhouse gas emissions and adapting to the effects of a warming planet.
Last year, ADB allocated $9.8 billion in climate finance from its own funds, with $5.5 billion earmarked for mitigation efforts and $4.3 billion for adaptation purposes. This marked a significant increase of over 46% compared to its climate financing commitments in 2022.
The bank's commitment to climate adaptation financing in 2023 resulted in a cumulative adaptation financing of over $10.4 billion from 2019 to 2023, surpassing its 2019–2024 target of $9 billion ahead of schedule.
Adaptation financing is crucial for Asia and the Pacific, where the region faces escalating challenges such as extreme heat, droughts, and heavy rains, with current investments in adaptation falling short of requirements.
ADB President Masatsugu Asakawa highlighted the urgent need for action, stating, “Climate change poses a threat to all aspects of development. 2023 witnessed record-high temperatures and devastating climate-related disasters in our region.”
As the leading climate bank for Asia and the Pacific, ADB is deeply committed to assisting its developing members in transitioning their economies away from fossil fuels, advancing along their climate transition pathways, and achieving their net-zero objectives.
Despite being responsible for over half of global carbon dioxide emissions, Asia and the Pacific remains highly susceptible to the impacts of climate change. The region requires an estimated $3.1 trillion annually in energy and transport investments alone to achieve net zero by 2050, representing a 50% increase from current levels.
The bank aims to provide $100 billion in climate financing from its own funds between 2019 and 2030. In 2022, ADB allocated $6.7 billion of climate finance from its own resources, with $4 billion allocated for mitigation efforts and $2.7 billion for adaptation projects.
Climate projects in 2023 included a $400 million policy-based loan to support Bangladesh in implementing its national adaptation plan and pursuing climate-focused development; a $1 billion loan to facilitate the deployment of the Philippines' first large-scale electric bus system in Davao City; and an $18 million grant from the Asian Development Fund (ADF) to enhance the resilience, inclusivity, and sustainability of water supply and sanitation services in the Federated States of Micronesia. The ADF provides grants to lower-income DMCs of ADB to promote poverty reduction and enhance quality of life.