Private sector involvement in climate action is key for closing the climate finance gap, which by some estimates ranges in trillions of dollars. As such, MIGA’s ability to mobilize private capital is essential for unlocking private sector potential for addressing climate finance needs in develping countries.
No one is more disproportionately affected by the risks and impacts from climate change than those in the least developed countries and emerging economies. Development inequality exacerbates the impacts of climate change on the poorest, and in the next two decades 143 million people could be internally displaced due to changing weather patterns, droughts, desertification, food scarcity, and other susceptibilities attributed to the adverse effects of climate change.
Since 2015, MIGA has made climate a priority area of its strategy along with IDA, and FCS and has sought to implement the commitments made in the WBG Climate Change Action Plan.
In FY18, we guaranteed US$ 917 million in climate finance, of which 75 percent was in support of renewables and approximately 50 percent went to fragile and conflict-affected situations, and IDA countries. MIGA also diversified the type of climate investments supported, including energy efficiency in buildings, reduction of GHG emissions related to food losses in the food processing supply chain, and climate smart agriculture. MIGA also supported clients in the Financial and Capital Markets sector to help identify climate finance in their portfolios.
MIGA contributed roughly 45 percent of the US$1.4 billion in 2017 to private climate finance directly mobilized by the WBG, and in FY18 alone MIGA directly mobilized over US$1 billion. Almost 60 percent of the projects guaranteed by MIGA in FY18 supported climate mitigation and adaptation across the globe.