ENHANCING MDB–NDB COOPERATION

This executive summary from Climate Policy Initiative and E3G examines the cooperation between multilateral development banks (MDBs) and national development banks (NDBs) regarding climate finance in emerging and developing economies. The report identifies limited existing cooperation and a divergence in how these institutions align their operations with the Paris Agreement. It provides recommendations to improve the volume and effectiveness of on-lending through better governance, clarified mandates, and shared institutional capacity.

• Research indicates that climate cooperation between MDBs and NDBs within trackable financial flows is limited, and the two groups follow different paths and progress levels regarding Paris alignment.
• A data sample from 2015–2022 identified 55 transactions involving joint MDB–NDB participation, with 52 cases where the NDB received financing and three cases of co-financing. Most of this finance lacks a specific sectoral focus, typically supporting general green investment, infrastructure, or recovery from economic distress and natural disasters, though energy systems are the largest specific sectoral recipient.
• Several operational challenges hinder greater on-lending, including currency risks, domestic currency lending, institutional capacity, general risk appetite, and governance and macroeconomic political economy risks.
• MDBs generally show more advanced and standardized climate mainstreaming than NDBs. Specifically, all sampled MDBs have prevalent climate financing targets and accounting definitions, whereas sampled NDBs show considerable variance in these areas. Additionally, four of six sampled MDBs have dedicated energy sector policies and coal exclusion policies, while no sampled NDB had a clear energy-specific policy.
• The report identifies three primary factors impacting the volume of climate-related on-lending and Paris alignment: public finance mandates, institutional capacity and expertise, and political economy and governance.

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} }