Almost $4.6 billion of the World Bank 2012 lending, or twice the 2011 amount, is expected to contribute to adaptation and over $7.1 billion to mitigation. Developing countries want the World Bank to work with them on climate change. Our approach is changing rapidly to keep up with demand on climate financing.
The International Development Association (IDA), the World Bank’s fund for the poorest, saw an impressive growth in climate-related financing. In the 16th Replenishment cycle, climate change is one of its special themes (pdf). Adaptation support in IDA grew to $2.3 billion in 2012 (up 61% from 2011) and to $2.3 billion for mitigation (up 161% from 2011). Over the same period, lending of the International Bank for Reconstruction and Development (IBRD) that contributes to adaptation saw a major increase, rising 158% from 2011 to $2.2 billion, while the share of mitigation financing in IBRD lending remained the same as in 2011 (23%).
There is incredible momentum on the ground, where countries all around the world are implementing climate-resilient and low-emissions development solutions. Responding to this, in 2012, 40% of World Bank lending projects (nearly doubling over the share in 2011) is expected to contribute to climate change adaptation, mitigation or both. Over 2011 and 2012, close to 200 projects could help address climate change.
Two sectors comprise the bulk of support on adaption in 2012– Water, Sanitation and Flood Protection, as well as Agriculture, Fishing and Forestry. With respectively $1.33 billion and $1.32 billion, they account for nearly 60% of adaptation support in 2012. These funds are used in projects that help integrate climate resilience with disaster risk reduction, help cities cope with climate change, or foster social resilience and community driven development.
At $3.22 billion, clean energy continues to account for the largest share of mitigation support in 2012. Energy and Mining is the sector with the largest share of own commitments that contribute to mitigation, and this share is increasing (79% in 2012 up from 71% in 2011).
To scale up resources for climate action, the World Bank is also demonstrating innovative ways to mobilize and leverage finance and markets. Climate finance plays a key role here, providing resources to address risks and build readiness. The World Bank has successfully facilitated access to a menu of climate finance instruments, as seen by growing commitments to projects from the Global Environment Facility as well as the Climate Investment Funds (CIF). In 2012, resources from the CIF for Bank-implemented projects have tripled to $107 million for adaptation and grown ten-fold for mitigation (at $559 million). Readiness support for market instruments (through the Forest Carbon Partnership Facility and the Partnership for Market Readiness) is also increasing, reflecting interests by countries for performance-based solutions for mitigation.