Developed countries provided $115.9bn in climate finance to developing nations in 2022, exceeding a pledge to donate $100bn a year between 2020 and 2025 for the first time, according to data from the Organisation for Economic Co-operation and Development (OECD).

Climate finance mobilised and provided by developed countries in 2022 rose by 29% year-on-year from $89.6bn in 2021, the OECD reported. The bulk of the donations was public finance with $41bn in bilateral public finance and $50.6bn in multilateral public finance. Private sector funds also contributed a substantial $21.9bn, while export credits accounted for the remaining $2.4bn.

The $100bn per year pledge, made by developed countries in 2009 for the period 2020-25, was missed in both 2020 and 2021. However, the OECD said in November, just before the UN COP28 climate summit, that the target would likely be met in 2022, which has now been confirmed.

"Private climate finance for the least developed countries and small island developing states was very limited, underscoring the need for tailored international support to help address the challenges these nations face in attracting private investment for climate action," the OECD noted as cited by Argus.

A significant portion of the public climate finance was in the form of loans, which made up just over two thirds (69%) of all public finance. Although the level of grants has increased steadily since 2016, loans exacerbate the debt burden of developing nations, which complain they can’t afford to invest into the green revolution as they have so many other basic needs to promote growth.

In 2022, most of the finance was allocated for mitigation efforts, such as cutting emissions, amounting to $69.9bn or 60% of the total. Adaptation finance, which aids in adjusting to climate change, rose by nearly a third to $32.4bn.

Countries will decide on the next phase of the $100bn annual climate finance goal that will start after 2025 at COP29 in Azerbaijan this November. Many developing nations are advocating for a new pledge of $1 trillion per year, while developed countries have yet to specify a new target. The timeframe for the new target, known as the new “collective quantified goal”, also needs to be established.