ENHANCING MDB–NDB COOPERATION

The report finds limited existing climate cooperation between MDBs and NDBs and highlights a divergence in their progress toward Paris alignment. While MDBs generally have more standardized climate targets and energy policies, NDBs show greater variability and often align their goals with national determined contributions (NDCs). The authors identify operational barriers to on-lending, such as currency risks and institutional capacity gaps, and recommend optimizing operating models, clarifying climate mandates, and sharing expertise to scale global climate investment.

• Research into financial flows between 2015 and 2022 indicates that climate cooperation between MDBs and NDBs is limited, with a sample identifying 55 total transactions, 52 of which were MDB financing to NDBs and three being co-financing arrangements.
• Most climate-related MDB-to-NDB finance lacks a specific sectoral focus, typically supporting general green investment, infrastructure, or disaster recovery; however, energy systems is the largest recipient among those with a determinable sector.
• MDBs and NDBs exhibit different levels of progress regarding Paris alignment. MDBs typically have prevalent climate financing targets and accounting definitions, whereas NDBs show considerable variance in these areas, though many align with their countries' nationally determined contributions (NDCs).
• There is a significant gap in energy policy: four of six sampled MDBs have dedicated energy sector policies and coal exclusion policies, while no sampled NDB had a clear energy-specific policy, though some evaluate fossil fuel financing against NDCs.
• Several operational challenges hinder greater on-lending from MDBs to NDBs, including currency risks, domestic currency lending, general risk appetite, institutional capacity, and governance risks.

APA

Ahlgren, V., Sabogal, L., Chin, N., Bagnera, E., & Pinko, N. (2023). ENHANCING MDB–NDB COOPERATION. Climate Policy Initiative. https://www.climatepolicyinitiative.org/wp-content/uploads/2023/12/CPI-E3G-Report-Summary-Enhancing-MDB-NDB-cooperation.pdf

Chicago

Ahlgren, Viktor, Laura Sabogal, Neil Chin, Elena Bagnera, and Nicole Pinko. ENHANCING MDB–NDB COOPERATION. Climate Policy Initiative, 2023. https://www.climatepolicyinitiative.org/wp-content/uploads/2023/12/CPI-E3G-Report-Summary-Enhancing-MDB-NDB-cooperation.pdf.

Wikipedia

{{cite report |last1=Ahlgren |first1=Viktor |last2=Sabogal |first2=Laura |last3=Chin |first3=Neil |last4=Bagnera |first4=Elena |last5=Pinko |first5=Nicole |title=ENHANCING MDB–NDB COOPERATION |publisher=Climate Policy Initiative |date=December 2023 |url=https://www.climatepolicyinitiative.org/wp-content/uploads/2023/12/CPI-E3G-Report-Summary-Enhancing-MDB-NDB-cooperation.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{ahlgren2023enhancing, author = {Ahlgren, Viktor and Sabogal, Laura and Chin, Neil and Bagnera, Elena and Pinko, Nicole}, title = {{ENHANCING MDB–NDB COOPERATION}}, institution = {Climate Policy Initiative}, year = {2023}, month = dec, url = {https://www.climatepolicyinitiative.org/wp-content/uploads/2023/12/CPI-E3G-Report-Summary-Enhancing-MDB-NDB-cooperation.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }