top of page

December 18, 2023

Study Report

Still Bankrolling Climate Change: How MDBs Support Fossil Gas through Financial Intermediary Investments

Still Bankrolling Climate Change: How MDBs Support Fossil Gas through Financial Intermediary Investments

Multilateral Development Banks (MDBs) as public finance institutions, must do their part to address climate change by raising their financing and aligning their investments with the Paris Agreement goal of keeping warming within 1.5 degrees Celsius. Between 2017 and 2023, MDBs, including the Asian Development Bank (ADB), the Asian Infrastructure Investment Bank (AIIB), and the International Finance Corporation (IFC) took steps to align their investments with the Paris Agreement. During the 2017 One Planet Summit in Paris, MDBs jointly committed to align their financial flows with the Paris Agreement. Six years later, the MDBs adopted the Joint MDB Methodological Principles for Assessment of Paris Agreement Alignment. However, MDBs are still dragging their feet towards genuine Paris Alignment by continuing to fund mid- and downstream fossil gas projects, and failing to be more transparent in their financial intermediary lending, which has become another channel for public finance to leak into fossil fuels, including coal. This briefing paper will explain why and how financial intermediary lending leads to funding fossil fuel projects, focusing on fossil gas projects. It then proposes a set of recommendations for the MDBs to genuinely align their investments with the Paris Agreement.

bottom of page