Climate & development finance
Multilateral Development Bank (MDB)
Definition
A multilateral development bank is an international financial institution created by agreement among multiple sovereign states to provide loans, guarantees, equity and grants for economic development. Major MDBs include the World Bank Group, the African, Asian, Inter-American and Islamic Development Banks, the EBRD, EIB, AIIB, NDB and CEB. MDBs report climate finance jointly each year under harmonised methodologies.
References
MDB membership list, harmonised climate finance reporting, co-finance definitions
Overview
What it means
MDBs lend at favourable terms, leverage private capital through co-finance, and set safeguards and standards that shape practice far beyond their portfolios. Their shareholders' direction determines how far mandates extend to climate and nature.
How it is used
Countries borrow for infrastructure, health, education and climate projects; MDB climate finance commitments are tracked annually and form a core channel of the $100-billion-plus international climate finance landscape; reform debates (the "MDB evolution agenda") push for bigger, greener balance sheets.
Why it matters
MDBs are the largest public source of development and climate finance; their reform is seen as essential to funding the transition in low- and middle-income economies.