Bilateral Finance Institutions and Climate Change: A Mapping of Climate Portfolios

This 2009 research paper by the Stockholm Environment Institute maps the climate change finance portfolios of five institutions: three bilateral finance institutions (AFD, KfW, and JICA) and two multilateral institutions (EIB and NEFCO). The report analyzes the scale, regional and sectoral distribution, and financial instruments used for climate mitigation and adaptation in developing countries, while identifying barriers to effectiveness and opportunities for future coordination among bilateral finance institutions (BFIs).

• In 2008, the three bilateral finance institutions (BFIs)—AFD, JICA, and KfW—disbursed approximately €7,345 million in climate-related finance. When including the European Investment Bank's (EIB) finance directed to non-Annex I countries, the total rose to €8,090 million.
• The majority of climate finance provided by the four institutions is delivered through Official Development Assistance (ODA) channels, accounting for roughly 85% of the total. Mitigation outcomes receive approximately three quarters of the total funding, with a heavy concentration in the energy and transport sectors.
• Geographically, Asia and Oceania receive the largest share of BFI climate finance, accounting for 60% of spending. While mitigation finance follows this pattern, adaptation finance is more distributed, with a relatively larger share directed toward North Africa and the Middle East.
• Adaptation finance is heavily skewed toward the water sector, which accounts for 77% of such funding. This concentration may be due to a lack of clear definitions for adaptation finance in other sectors or a perception that adaptation projects lack commercial viability and require grants.
• BFI finance for mitigation is potentially comparable to or greater than that provided by four major multilateral finance institutions (World Bank, IDB, ADB, and EBRD), which was estimated at around €3-4 billion in 2007.
• BFIs utilize a diverse range of financial instruments to deliver climate finance, including debt, equity, credit lines, and grants. For example, KfW's breakdown is approximately 57% soft loans, 25% equity, and 18% grants.
• Carbon finance, used to purchase emission reduction certificates from CDM and JI markets, is managed separately from ODA and other investment activities. Approximately €900 million has been committed to carbon funds involving the participating institutions.
• The integration of climate risk assessment and 'climate proofing' into general investment activities is still in the early stages for BFIs. Current efforts focus more on assessing carbon footprints and policy risks than on physical climate risks.
• Several barriers hinder BFI climate financing, including a lack of capacity and supportive domestic policies in recipient countries, a shortage of commercially viable adaptation projects, and difficulties in defining and measuring adaptation benefits.

APA

Atteridge, A., Siebert, C. K., Klein, R. J. T., Butler, C., & Tella, P. (2009). Bilateral Finance Institutions and Climate Change: A Mapping of Climate Portfolios. Stockholm Environment Institute. https://www.sei.org/mediamanager/documents/Publications/Climate-mitigation-adaptation/bilateral-finance-institutions-climate-change.pdf

Chicago

Atteridge, Aaron, Clarisse Kehler Siebert, Richard J. T. Klein, Carmen Butler, and Patricia Tella. Bilateral Finance Institutions and Climate Change: A Mapping of Climate Portfolios. Stockholm Environment Institute, 2009. https://www.sei.org/mediamanager/documents/Publications/Climate-mitigation-adaptation/bilateral-finance-institutions-climate-change.pdf.

Wikipedia

{{cite report |last1=Atteridge |first1=Aaron |last2=Siebert |first2=Clarisse Kehler |last3=Klein |first3=Richard J. T. |last4=Butler |first4=Carmen |last5=Tella |first5=Patricia |title=Bilateral Finance Institutions and Climate Change: A Mapping of Climate Portfolios |publisher=Stockholm Environment Institute |date=2009 |url=https://www.sei.org/mediamanager/documents/Publications/Climate-mitigation-adaptation/bilateral-finance-institutions-climate-change.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{atteridge2009bilateral, author = {Atteridge, Aaron and Siebert, Clarisse Kehler and Klein, Richard J. T. and Butler, Carmen and Tella, Patricia}, title = {{Bilateral Finance Institutions and Climate Change: A Mapping of Climate Portfolios}}, institution = {Stockholm Environment Institute}, year = {2009}, url = {https://www.sei.org/mediamanager/documents/Publications/Climate-mitigation-adaptation/bilateral-finance-institutions-climate-change.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }