Multilateral Funding in Today’s Climate: Mobilizing Capital for Sustainable Development

Alejandro Morales
Sep 8, 2025
3 min read

In 2024, multilateral development banks (MDBs) collectively provided a record $137 billion in climate finance, marking a 10% increase from the previous year. This surge reflects a global commitment to sustainable development and the pivotal role of MDBs in financing climate-related projects.

1. The Role of Multilateral Development Banks

MDBs play a crucial role in financing projects that promote economic development and environmental sustainability. In fiscal year 2024, the World Bank Group committed $117.5 billion in loans, grants, equity investments, and guarantees to partner countries and private businesses. This includes significant investments in sectors such as renewable energy, infrastructure, and climate resilience.

Similarly, the European Bank for Reconstruction and Development (EBRD) marked a record year with €16.6 billioninvested in 2024, focusing on projects that enhance environmental sustainability and economic development in its regions of operation.

The Inter-American Development Bank (IDB) also demonstrated a strong financial performance, with a net loan portfolio reaching $9.24 billion, reflecting a 14% increase from the previous year.

2. Prioritizing Climate Finance

A significant portion of MDBs' financing is directed towards climate-related initiatives. In 2024, 69% ($58.8 billion) of MDBs' climate finance was allocated to mitigation efforts, such as renewable energy projects, while 31% ($26.3 billion)was dedicated to adaptation initiatives, including infrastructure projects designed to withstand climate impacts.

These investments are crucial for achieving global climate goals and supporting countries in their transition to low-carbon economies.

3. Mobilizing Private Sector Investment

MDBs are instrumental in mobilizing private sector capital for development projects. In 2024, MDBs' climate finance efforts helped drive a 33% rise in private sector funding for climate-related projects, reaching $134 billion. This demonstrates the effectiveness of MDBs in leveraging public funds to attract private investment, thereby amplifying the impact of development financing.

4. Structuring Projects for Success

To effectively access multilateral funding, project developers should focus on:

Aligning with MDBs' priorities, such as climate resilience, renewable energy, and sustainable infrastructure.
Demonstrating the project's impact, including environmental, social, and economic benefits.
Ensuring financial viability, with clear revenue models and risk mitigation strategies.
Engaging stakeholders, including local communities and governments, to ensure broad support and successful implementation.

5. Trends Shaping the Future of Multilateral Funding

Several trends are influencing the landscape of multilateral funding:

Increased focus on climate resilience, with a growing emphasis on projects that help communities adapt to climate change.
Blended finance models, combining concessional funding from MDBs with private sector investment to de-risk projects and attract additional capital.
Digital transformation, with investments in technology and innovation driving economic growth and development.

Conclusion: Strategic Takeaways for Companies

For companies seeking to access multilateral funding:

Understand MDBs' priorities and align projects accordingly.
Develop robust business cases that demonstrate the project's impact and financial viability.
Engage with MDBs early in the project development process to understand funding requirements and opportunities.

By strategically positioning projects to align with MDBs' goals and demonstrating their potential impact, companies can enhance their chances of securing multilateral funding and contributing to sustainable development.