Enhancing MDB-NDB Cooperation: Understanding Climate Finance Flows and Paris Alignment

The report analyzes the limited scale of climate-related on-lending from multilateral development banks (MDBs) to national development banks (NDBs) and the divergence in their approaches to Paris alignment. It identifies operational frictions, such as currency risks and capacity gaps, and recommends strengthening collaboration through concessional support, clarified mandates, and shared institutional expertise.

• Climate cooperation between MDBs and NDBs is limited, with a sample of climate-related financial flows in emerging and developing economies between 2015 and 2022 identifying only 52 direct transactions totaling USD 7 billion.
• Operational challenges hinder increased on-lending, including currency risks, domestic currency lending, general risk appetite, institutional capacity, expertise, and macroeconomic political economy and governance risks.
• MDBs and NDBs differ in their progress toward Paris alignment; NDBs show more variability in climate finance targets and policies for financial intermediary financing, and are less likely to have dedicated climate change strategies, adaptation goals, or energy sector policies compared to MDBs.

APA

Climate Policy Initiative (2023). Enhancing MDB-NDB Cooperation: Understanding Climate Finance Flows and Paris Alignment. https://www.climatepolicyinitiative.org/publication/enhancing-mdb-ndb-cooperation-understanding-climate-finance-flows-and-paris-alignment/

Chicago

Climate Policy Initiative. Enhancing MDB-NDB Cooperation: Understanding Climate Finance Flows and Paris Alignment. 2023. https://www.climatepolicyinitiative.org/publication/enhancing-mdb-ndb-cooperation-understanding-climate-finance-flows-and-paris-alignment/.

Wikipedia

{{cite report |author=Climate Policy Initiative |title=Enhancing MDB-NDB Cooperation: Understanding Climate Finance Flows and Paris Alignment |date=4 December 2023 |url=https://www.climatepolicyinitiative.org/publication/enhancing-mdb-ndb-cooperation-understanding-climate-finance-flows-and-paris-alignment/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{climatepolicyinitiative2023enhancing, author = {{Climate Policy Initiative}}, title = {{Enhancing MDB-NDB Cooperation: Understanding Climate Finance Flows and Paris Alignment}}, institution = {Climate Policy Initiative}, year = {2023}, month = dec, url = {https://www.climatepolicyinitiative.org/publication/enhancing-mdb-ndb-cooperation-understanding-climate-finance-flows-and-paris-alignment/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }