ASIATODAY.ID, JAKARTA — Asia’s push toward a low-carbon and climate-resilient economy is gaining momentum as multilateral development banks (MDBs) delivered a record US$163 billion in climate finance in 2025, supporting sustainable infrastructure, renewable energy, and climate adaptation projects.
The record financing underscores the growing role of Asia and emerging economies in the global climate transition, as governments seek to maintain economic growth while addressing rising climate risks.
According to the 2025 Joint Summary Report on Multilateral Development Banks’ Climate Finance, MDB climate finance for low- and middle-income countries reached US$103 billion in 2025, an increase of 21% from the previous year.
The funding is expected to support critical sectors across developing regions, including Asia, where demand is rising for clean energy investment, resilient cities, sustainable transportation, and climate-smart infrastructure.
Green Infrastructure Becomes Asia’s Growth Priority
Asia remains one of the world’s fastest-growing regions, but it also faces increasing exposure to climate-related challenges, including extreme weather events, rising sea levels, and pressure on energy systems.
MDB financing has become a key instrument in helping countries expand renewable energy capacity, modernise infrastructure, and mobilise private investment for sustainable development.
Of the total climate finance committed to low- and middle-income economies in 2025, US$68 billion was allocated for climate mitigation, supporting efforts to reduce emissions through clean energy and low-carbon technologies.
Meanwhile, US$35 billion was directed toward climate adaptation, including investments aimed at strengthening resilience in communities, agriculture, water management, and urban systems.
MDBs also helped mobilise US$35 billion in private sector financing in developing economies, highlighting the importance of public-private partnerships in scaling up climate investment.
AIIB Expands Role in Sustainable Infrastructure
The Asian Infrastructure Investment Bank (AIIB) is among the MDBs playing a growing role in financing sustainable infrastructure across Asia and other emerging markets.
Established in 2016, AIIB now has 111 approved members worldwide, US$100 billion in authorised capital, and an AAA credit rating from major international rating agencies.
Through its “Infrastructure for Tomorrow” agenda, AIIB supports investments in renewable energy, connectivity, urban development, and resilient infrastructure designed to support long-term economic growth.
MDBs Remain on Track for 2030 Climate Targets
The latest climate finance figures show that MDBs are advancing toward their collective targets announced at the COP29 climate summit in Baku in 2024.
By 2030, MDBs aim to provide US$120 billion annually in climate finance for low- and middle-income countries, including US$42 billion for adaptation, while mobilising an additional US$65 billion annually from private capital.
For high-income economies, MDBs have projected US$50 billion annually in climate finance by 2030, alongside additional private investment mobilisation.
Transparency to Support Future Investment
MDBs are also strengthening transparency through the launch of the pilot MDB Climate Finance Dashboard in April 2026.
The digital platform provides more detailed climate finance data, enabling governments, investors, and development partners to better track funding flows and assess the impact of climate-related investments.
Greater transparency is expected to help attract more private capital into sustainable projects, particularly in emerging Asian markets where infrastructure needs remain significant.
Asia’s Sustainable Growth Challenge
The expansion of climate finance reflects a broader transformation in Asia’s economic development model, where sustainability is becoming increasingly linked with competitiveness and long-term growth.
As countries across the region accelerate industrial transformation and infrastructure development, access to climate financing will be critical in building economies that are not only productive but also resilient to future environmental challenges. (AT Network)
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