Finance provided and catalysed by multilateral development banks (MDBs) will help pay for implementation of the UN Sustainable Development Goals and the Paris Climate Agreement in many developing countries. Although MDBs already track and report on their climate finance, less is known about how investments across their entire energy supply portfolios relate to achieving sustainable development and climate-change objectives.
This paper provides a first-cut assessment of how the energy supply investments of the World Bank, International Finance Corporation (IFC), and Asian Development Bank (ADB) align with the Paris Agreement goal to limit global temperature rise to well below 2°C. It includes how best to promote the deployment of technologies that are unambiguously aligned with 2°C scenarios, how to put in place the conditions that foster alignment with such scenarios, whether and how to deploy energy supply technologies that remain controversial, and how to manage the risk of technologies that lock in high-carbon energy generation for long time periods. The majority of projects considered in our analysis are 2°C-aligned or could be aligned under the right conditions; getting the conditions right will be key to achieving a low-carbon future.