BAKU - The Asian Development Bank will increase its climate-related lending by up to $7.2 billion after the United States and Japan agreed to underwrite risk for some existing loans, an ADB executive said, marking the first ever sovereign guarantees for climate finance.
The U.S. election victory last week of Donald Trump, who has vowed to remove the United States from the Paris Agreement on climate, has overshadowed the start of the Baku talks, adding pressure on Europe and China to help get a strong result, negotiators said last week. An ADB spokesperson declined to comment on whether the deals, which were finalised last week, would be affected by the incoming Trump administration.
It has also been sharing its experience with the World Bank, Inter-American Development Bank and European Investment Bank as part of broader, collaborative efforts to scale up climate-related lending.While the deals mark the first use of sovereign guarantees for climate finance, they have previously been used to fund other areas of lending such as education.
As climate change increases the threat of extreme weather and disaster worldwide, developing countries are forecast to need more than $2 trillion a year by 2030 to transition to clean energy and prepare for the conditions of a warmer planet.