Multilateral development banking in a fragmented climate system: shifting priorities in energy finance at the Asian Development Bank

Multilateral development banks (MDBs) are increasingly supporting climate change mitigation efforts. However, little is known about how and why this role in climate finance has evolved, and how MDBs are managing this change internally. This paper addresses these questions through an analysis of energy support provided by the Asian Development Bank (ADB). The paper maps trends in the number and monetary value of ADB energy projects and technical assistance activities, presenting descriptive statistics on five categories of energy between 2000 and 2014. The results indicate that ADB while decreased its support for fossil fuel interventions, this sector continues to enjoy substantial funding support. At the same time, support for sustainable energy projects has also increased, reflecting the Bank’s evolving priorities and providing a rough proxy for its entry into the climate finance system. These new insights enhance understanding of the changing dynamics of multilateral climate finance and its complex relationship with development finance institutions. Given their financial resources and policy influence, it is essential for MDBs to support the goals of the new global climate finance architecture. But to be considered a serious actor in the climate finance system, ADB has to revisit its policy architecture, strengthen its accounting procedures, and coordinate its efforts with those of other actors across this fragmented system.