Developed countries provided and mobilised $136.7 billion in climate finance for developing nations in 2024, crossing the long-delayed $100 billion annual goal for the third consecutive year.
The OECD report says climate finance rose from $132.8 billion in 2023 to $136.7 billion in 2024, after first crossing the $100 billion mark in 2022.
Low-income countries received only 7% of total climate finance, while lower-middle-income countries received the largest share at 39%.
Adaptation finance reached $34.7 billion in 2024, but developed countries still need to increase it by $5.8 billion in 2025 to meet the Glasgow Climate Pact commitment.
Loans continued to dominate public climate finance, raising concerns over debt, equity and whether the most climate-vulnerable nations are receiving support on fair terms.
Developed countries provided and mobilised $136.7 billion in climate finance for developing nations in 2024, surpassing the long-delayed $100 billion annual goal for the third consecutive year, according to the latest climate finance report by the Organisation for Economic Co-operation and Development (OECD). However, low-income countries received only 7 per cent of total climate finance, while private finance mobilisation remained heavily concentrated in middle-income economies.
The report, Climate Finance Provided and Mobilised by Developed Countries in 2013-2024, showed that climate finance rose from $132.8 billion in 2023 to $136.7 billion in 2024, after first crossing the $100 billion mark in 2022. The goal had originally been due by 2020.
Public climate finance continued to account for nearly three-quarters of the total in 2023 and 2024. Multilateral public climate finance rose steadily by $3.5 billion annually to reach $57.7 billion in 2024, while bilateral public climate finance fell by $6.3 billion, or 12 per cent, in 2024 after a sharp rise in 2023.
Private finance mobilised through public interventions recorded its biggest annual increase so far in 2024, climbing by $7.6 billion, or 33 per cent, to $30.5 billion. Multilateral development banks drove much of the increase, with private finance mobilisation rising from $14.3 billion in 2023 to $17.4 billion in 2024.
However, concerns over trust have been compounded by the quality and distribution of finance. According to climate finance experts, loans continue to dominate public climate finanLoans continue to dominate public climate finance, concessional bilateral lending has declined, and most private capital is flowing to middle-income countries and mitigation projects rather than the most climate-vulnerable nations.
While acknowledging that developed countries have now met the $100 billion climate finance target, Sehr Raheja, programme officer for climate change and green economy at Delhi-based think tank Centre for Science and Environment, said the delayed delivery and the nature of the finance continued to undermine trust among developing nations.
“The target was met two years later and remains modest against the new $300 billion New Collective Quantified Goal (NCQG) and the aspirational $1.3 trillion target. It undermines trust. A two-year delay is significant. The quality and terms of climate finance further deepen concerns, as loans continue to dominate and concessional bilateral lending has declined,” she said.
The report flagged major concerns over adaptation finance, which remains far below what vulnerable countries need.
Adaptation finance reached $34.7 billion in 2024, only modestly higher than $33.6 billion in 2023.
The report said developed countries would need to increase adaptation finance by another $5.8 billion, or 18 per cent, in 2025 to meet the commitment made under the 2021 Glasgow Climate Pact to double adaptation finance from 2019 levels.
The OECD identified several barriers slowing adaptation finance flows, including economic and financial constraints, limited technical capacity, fragmented institutions and weak enabling environments in developing countries.
To address these gaps, the report recommended targeted support to strengthen institutional capacity in developing countries, improved delivery mechanisms for adaptation finance, wider use of blended finance tools to attract private investment and tapping alternative financing sources.
The report also signalled that adaptation finance is likely to become a central issue ahead of 31st Conference of the Parties (COP 31) to the United Nations Framework Convention on Climate Change, as pressure mounts on developed countries to deliver on the Glasgow commitment while responding to escalating climate disasters across vulnerable economies.
Loans remained the dominant instrument in public climate finance.
In 2024, loans accounted for 67 per cent, or $68.5 billion, of public climate finance, while grants represented 29 per cent, or $29.7 billion.
The report noted that low-income countries depended far more on grants than loans. Between 2016 and 2024, grants accounted for around 65 per cent of public climate finance for low-income countries, reflecting their limited capacity to take on more debt and their greater focus on adaptation needs.
The report also raised broader concerns around equity and effectiveness.
Raheja said most mobilised private finance flowed towards middle-income countries and mitigation projects, highlighting that private capital still largely follows bankability rather than climate vulnerability or actual need.
Mitigation finance continued to dominate overall flows, accounting for nearly two-thirds of total climate finance. It reached $86.9 billion in 2024, while cross-cutting finance addressing both mitigation and adaptation rose from $11.9 billion in 2023 to $15.1 billion in 2024.
Energy projects remained the largest recipient sector, accounting for 41 per cent of mitigation finance between 2016 and 2024. Adaptation finance, by contrast, was spread across sectors such as water, agriculture, disaster risk reduction, health and social infrastructure.
The report highlighted persistent inequality in climate finance distribution. Lower-middle-income countries received the largest share, at 39 per cent of total climate finance in 2023 and 2024, while low-income countries received only 7 per cent.
The energy sector accounted for 41 per cent of total private climate finance mobilised between 2016 and 2024, while 66 per cent of mobilised private finance flowed to middle-income countries. Low-income countries accounted for only 3 per cent of mobilised private finance.
Asia remained the largest regional recipient of climate finance between 2016 and 2024, with 39 per cent of total flows, although Africa’s share rose steadily from 24 per cent in 2016 to 31 per cent in 2024.
Climate finance for Least Developed Countries reached an annual average of $24.5 billion in 2023 and 2024, while Small Island Developing States received $3.8 billion in both years. Adaptation finance represented 46 per cent of climate finance flowing to these vulnerable groups, far higher than the global average.
The report comes as countries prepare to operationalise the new climate finance framework agreed at COP29 in Baku, Azerbaijan under the United Nations climate process. The NCQG calls for scaling climate finance for developing countries from all sources to at least $1.3 trillion annually by 2035, including at least $300 billion per year led by developed countries.
The OECD said future climate finance systems are expected to rely increasingly on blended finance, guarantees and catalytic interventions to mobilise larger volumes of private capital. The report highlighted ongoing work by multilateral development banks and the OECD to improve the measurement of “private finance catalysed” through public interventions and policy reforms.
The report also pointed to major changes under the Paris Agreement’s Enhanced Transparency Framework, which will reshape climate finance reporting from 2024 onwards, although longer reporting timelines could delay official finance data further.
Attention is now shifting from whether developed countries can meet the old $100 billion target to whether the global financial system can scale climate finance nearly tenfold to meet the new $1.3 trillion annual goal by 2035, while ensuring vulnerable nations are not left behind.