By Andressa Lima (UFPA)
In recent years, the climate crisis has become one of the greatest threats to global sustainable development. In this context, climate finance has become an essential tool for enabling the transition to low-carbon economies, enhancing environmental resilience, and supporting adaptation measures to already observed impacts. Since the Paris Agreement in 2015, this mechanism has taken center stage in the architecture of international climate cooperation. Multilateral funds play a strategic role in this landscape by channeling resources from developed countries to developing nations, enabling concrete mitigation and adaptation actions. More than merely filling budget gaps, these mechanisms have facilitated private capital mobilization, institutional strengthening, and contribute to advancing climate justice.
Beyond being channels for resource transfer, multilateral funds are part of the global financial architecture aimed at addressing the climate emergency. They provide essential technical and financial support for implementing climate policies and carry significant political weight: they represent the acknowledgment—by historically high-emitting countries—of their common but differentiated responsibilities, as established by the United Nations Framework Convention on Climate Change (UNFCCC).
These funds are financial mechanisms established by international agreements and managed by global entities such as the World Bank, the Inter-American Development Bank (IDB), the Green Climate Fund (GCF), and the Global Environment Facility (GEF). They act as a bridge between developed countries—historically more responsible for emissions—and developing nations, which often face technical and financial limitations in dealing with climate change effects.
One of the main objectives of these funds is to facilitate access to resources under favorable conditions, such as reduced interest rates, concessional loans, or grants, promoting investments in renewable energy, forest conservation, sustainable agriculture, clean transport, and resilient infrastructure. Additionally, they help catalyze additional financing from the private sector, expanding the reach and impact of global climate initiatives.
According to the report The Global Climate Finance Architecture (2025), prepared by Climate Funds Update, COP29 set the target of tripling annual disbursements from multilateral funds linked to the UNFCCC by 2030, based on 2022 levels when approximately US$ 1.87 billion were mobilized. This scale-up in financing is seen as crucial for accelerating global climate action.
The Green Climate Fund (GCF), the largest multilateral fund under the UNFCCC’s Financial Mechanism, had approved 286 active projects, with US$ 15.9 billion in financial commitments by December 2024. Moreover, the Adaptation Fund (AF) has been guaranteed, since COP26 in Glasgow, 5% of the revenues from the new market mechanism under Article 6.4 of the Paris Agreement, reinforcing its importance as a direct source of adaptation finance for developing countries.
The COP29 decision, incorporated into the New Collective Quantified Goal (NCQG)—which envisions at least US$ 300 billion annually in financing for developing countries by 2035, with an expanded target of US$ 1.3 trillion/year from public and private sources—emphasized the need to strengthen direct access to resources, simplify approval and disbursement processes, and expand the use of non-debt financial instruments, especially for the most vulnerable countries. Thus, the strategic role of multilateral funds in promoting a just, equitable, and truly inclusive climate transition was reaffirmed.
Although essential, these funds face challenges related to financial flow predictability, access bureaucracy, and dependence on voluntary contributions, which can hinder continuous support to the most affected countries. Therefore, their strengthening and expansion are fundamental to fulfilling global commitments and building a more sustainable and just future for all.
To better understand the dynamics of multilateral climate finance over time, Graph 1 below presents the total volumes of financing approved per year, highlighting the evolution from 2010 to 2023.
Graph 1: Total Climate Finance Approved per Year (Multilateral Funds)
As observed in Graph 1, the volume of climate finance approved by multilateral funds has grown consistently since 2010. In the early years, annual values remained below US$ 2 billion, with US$ 1.09 billion in 2010 and US$ 1.42 billion in 2012. From 2016 onwards, the annual volume surpassed US$ 2.4 billion, reaching US$ 3.22 billion in 2018 and peaking in 2021 with US$ 4.19 billion approved. This growth reflects global efforts to scale up climate finance in response to commitments under the Paris Agreement. However, amounts have fluctuated in recent years: after falling to US$ 2.22 billion in 2022, there was a recovery in 2023 (US$ 2.9 billion) and 2024 (US$ 3.41 billion). This recent variation suggests ongoing challenges in the stable mobilization and approval of climate resources globally.
In addition to the temporal evolution of multilateral climate finance, it is important to analyze the financial performance of each major fund. Graph 2 below presents the financial performance of the largest multilateral climate funds, highlighting both approved and disbursed amounts to date.
Graph 2: Financial Performance of the Top Multilateral Climate Funds
Graph 2 reveals a significant mismatch between approved and effectively disbursed amounts by the major multilateral climate funds, exposing persistent challenges in financial execution. The Green Climate Fund (GCF-1) leads in approved volume, with US$ 8.7 billion, but has disbursed only US$ 1.97 billion, reflecting an execution rate below 23%. This pattern repeats in other large mechanisms, such as the Clean Technology Fund (CTF), which approved US$ 5.78 billion but disbursed only US$ 2.19 billion, and GCF-IRM, with US$ 5.14 billion approved and US$ 3.52 billion disbursed. GCF-2, despite having over US$ 2.6 billion approved, released only US$ 59 million, showing even greater delay.
On the other hand, smaller funds such as the Adaptation Fund (AF) and the Least Developed Countries Fund (LDCF) show better relative performance, with disbursements of US$ 756 million and US$ 548 million respectively, over approved volumes of US$ 1.21 billion and US$ 1.5 billion. GEF-4, for its part, is the only one among the top 10 to have fully executed its approved amount (US$ 931 million). This difference highlights that while large funds concentrate most of the authorized resources, smaller funds have been more operationally efficient, managing to overcome bureaucratic hurdles more swiftly and ensure effective delivery of resources.
The disparity between climate finance approvals and disbursements reflects bureaucratic obstacles, access difficulties, and institutional limitations in beneficiary countries, especially where infrastructure is weak. Barriers such as inadequate technical proposals, lack of local expertise, and coordination bottlenecks contribute to this gap. These challenges underscore the need for reforms in the climate finance architecture to improve efficiency. The recommendations from COP29—aimed at simplifying processes and strengthening direct access—are important advances, but their implementation must be closely monitored to assess their real impact.
Another relevant aspect in the analysis of climate finance is the geographic distribution of disbursed resources from multilateral funds. Graph 3 below illustrates this distribution, showing where the resources have been directed.
Graph 3: Geographic Distribution of Disbursements from Multilateral Climate Funds
Graph 3 shows that climate resources disbursed by multilateral funds are heavily concentrated in regions with high socio-environmental vulnerability. Sub-Saharan Africa leads with US$ 4.25 billion, the highest volume among all regions. Next are Latin America and the Caribbean with US$ 3.39 billion, and East Asia and the Pacific with US$ 2.60 billion, confirming the prioritization of these areas in the international climate agenda. The “Not Applicable” category, totaling US$ 1.65 billion, refers to projects not tied to a single geographical region, according to World Bank classifications. It includes global, cross-cutting, or transboundary initiatives such as capacity building, institutional support, or worldwide programs.
Regions such as South Asia (US$ 1.62 billion), the Middle East and North Africa (US$ 1.26 billion), Europe and Central Asia (US$ 1.06 billion), and Western Asia (US$ 100 thousand) recorded significantly lower disbursement volumes, which may reflect both strategic allocation decisions and institutional or local demand constraints. The geographic distribution of disbursements reinforces the role of multilateral funds as instruments of climate justice, while also highlighting the need to broaden regional coverage more equitably and responsively to diverse vulnerabilities.
After examining regional distribution, it is also essential to understand the thematic allocation of climate resources. Graph 4 shows the division of disbursements among the main areas of focus for multilateral funds: mitigation, adaptation, and multi-objective projects.
Graph 4: Disbursement by Thematic Focus of Multilateral Climate Funds
Graph 4 reveals an asymmetry in the thematic allocation of disbursed resources, with a clear predominance of funding for climate change mitigation. This category received the highest volume of resources—over US$ 8.7 billion—reflecting the priority given to actions that reduce greenhouse gas emissions. Next are adaptation-focused projects, totaling about US$ 4.4 billion, aimed at addressing climate impacts already underway, especially in vulnerable contexts. Multi-objective projects, combining mitigation and adaptation measures, totaled approximately US$ 2.6 billion, indicating a growing, though secondary, trend toward integrated approaches.
The gap between resources allocated to mitigation and adaptation remains significant—especially considering that developing countries, the main beneficiaries of these funds, face more urgent adaptation challenges. This disparity underscores the need to rebalance international financial flows to ensure greater climate justice and more effectively address the real vulnerabilities of the most affected populations.
In summary, multilateral funds play a strategic role in the architecture of international climate finance, not only as resource transfer channels but also as instruments of structural transformation and climate justice. The data analysis shows that, despite advances in approved volumes and thematic diversity, significant challenges remain in financial execution, geographic equity of resource distribution, and balance between mitigation and adaptation. To fully fulfill their role, governance must be strengthened, disbursements accelerated, and financial flows aligned with the real needs of the most vulnerable countries.
In this context, the current moment—marked by a new cycle of goals and commitments under COP29 and the New Collective Quantified Goal—represents a window of opportunity to reform and expand the effectiveness of these mechanisms in addressing the global climate crisis. COP30, to be held in Belém, in the heart of the Amazon, will bring both the challenge and responsibility of advancing transparency, financial predictability, and fair resource allocation, reaffirming the leadership of developing countries in the international climate agenda.
