Co esponding au ho : Akomolehin F Olugbenga
Copy igh © 2025 Au ho (s) e ain he copy igh o his a icle. This a icle is published unde he e ms o he C ea i e Commons A ibu ion Liscense 4.0.
Explo ing he ole o in e na ional de elopmen banks in p omo ing g een inancing
mechanisms
Olugbenga F ancis Akomolehin *
Depa men o Finance, College o Social and Managemen Sciences, A e Babalola Uni e si y, Ado-Eki i. Eki i -S a e, Nige ia.
Wo ld Jou nal o Ad anced Resea ch and Re iews, 2025, 26(02), 2498-2513
Publica ion his o y: Recei ed on 18 Ma ch 2025; e ised on 29 Ap il 2025; accep ed on 01 May 2025
A icle DOI: h ps://doi.o g/10.30574/wja .2025.26.2.1539
Abs ac
This esea ch examines In e na ional De elopmen Banks (IDBs) while hey implemen g een inancing p og ams o
suppo enewable ene gy p ojec s and clima e adap a ion along wi h ene gy e iciency p ojec s in de eloping egions.
The s udy examines h ee geog aphic blocs o show how IDB s a egic ini ia i es lead o bo h success ul and
unsuccess ul ou comes. IDBs de elop en i onmen al emissions educ ion and communi y esilience de elopmen
h ough combined inancial app oaches ha inco po a e bo h g een bond p og ams wi h concessional loans as well as
blended inance o p oduce employmen oppo uni ies while ad ancing economic g ow h. Policy-make s play a i al
ole in de e mining IDB e ec i eness h ough hei commi men o ensu e ic ionless p ocedu es and open go e nance
sys ems wi h app op ia e mechanisms o engage he p i a e sec o . IDBs ope a e di e en ly om p i a e sec o
inancial ins i u ions h ough public unding ha lowe s p i a e in es men isks and expenses o mul iple business
sec o s ac oss a ious indus ies. The e alua ion me hods ocusing on success ack wo essen ial ac o s:
en i onmen al emission cu s alongside economic g ow h and social wel a e ad ancemen o assessing e ec s.
Signi ican achie emen s by IDBs pe sis despi e ongoing challenges ela ed o limi ed unding a ailabili y and
egula o y ba ie s a ec ing hei ope a ional e ec i eness. The esea ch p o ides h ee essen ial ecommenda ions
ha s ess public-p i a e ela ions enhancemen and ins i u ional p o iciency de elopmen and echnological sys ems
o o e seeing p ojec s. Accu a e go e nmen egula ions es ablished acco ding o in e na ional clima e a ge s should
o ce p i a e companies o ei he make s a egic in es men s o enhance hei sus ainabili y epo ing and isk
managemen p og ams. Wide implemen ing measu es will enhance he e ec i eness o IDBs o d i e ans o ma i e
g ow h in g een inance..
Keywo ds: In e na ional De elopmen Banks; G een Financing; Sus ainable De elopmen Goals (Sdgs); Renewable
Ene gy; Emissions Reduc ion; Clima e Adap a ion.
1. In oduc ion
Th ough i s de ini ion g een inancing mo es money o en i onmen al bene i p ojec s whose objec i e is ca bon
educ ion alongside ene gy e iciency imp o emen s and sus ainable de elopmen enhancemen . A UNEP epo
explains ha h ough g een inancing o ganiza ions di ec money s eams o igina ing om banking along wi h mic o-
c edi insu ance and in es men sec o s owa ds sus ainable de elopmen a ge s [1]. This unding solu ion ac s as an
essen ial ool o igh clima e change and es ablish sus ainable inancial g ow h. The impo ance o g een ene gy
inancing g ows apidly because i con ibu es o achie ing Sus ainable De elopmen Goal 7 (SDG 7) and Sus ainable
De elopmen Goal 13 which wo ks agains clima e change. The ene gy sec o needs a en ion because i p oduces
wo ldwide g eenhouse gas emissions exceeding wo- hi ds hus making i essen ial o achie ing hese a ge s. Clima e
mi iga ion depends on h ee co e en i onmen al pa hways: enewable ene gy implemen a ion, imp o ed ene gy
e iciency pe o mance and uni e sal access o sus ainable powe ne wo ks [2]. Resea ch in es iga ions du ing ecen
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imes demons a e he po en ial e ec i eness and ad an ages o g een inancing o each hese objec i es. The use o
O ganiza ion o Economic Co-ope a ion and De elopmen (OECD) economies o e 2000-2020 showed ha g een
inance d i es subs an ial ad ancemen o SDG 7 and SDG 13 by enabling access o clean ene gy alongside p omo ing
clima e ac ion acco ding o [3]. The expanding g een bond ma ke signi ies g owing in es men s owa d
en i onmen ally- iendly p ojec s acco ding o [4] who expec he ma ke alue o each US27.4 billion. The essen ial
ounda ion o g een inancing se es o each global sus ainabili y objec i es.
The de ini ion o g een inancing allows inancial esou ces o low owa d p ojec s which achie e ca bon educ ion
goals and imp o e ene gy e iciency while enhancing sus ainabili y. Acco ding o he UNEP epo g een inancing
enables o ganiza ions o manage money lows s a ing om banking and mic o-c edi and insu ance and in es men
sec o s owa d sus ainable de elopmen a ge s ([1]). Sus ainable inancial g ow h oge he wi h clima e change
mi iga ion depends on his impo an unding mechanism. G een ene gy unding con inues o gain impo ance because
i suppo s he a ainmen o Sus ainable De elopmen Goal 7 (SDG 7) and Sus ainable De elopmen Goal 13 ha igh s
clima e change. Coun ies mus ocus on ene gy sec o e o ms since clima e pollu ion om his sec o exceeds wo-
hi ds o global emissions he e o e equi ing immedia e ac ion o achie e hese a ge s. Renewable ene gy
implemen a ion oge he wi h imp o ed ene gy e iciency pe o mance and uni e sal access o sus ainable powe
ne wo ks o m he h ee essen ial en i onmen al pa hways o clima e mi iga ion ([2]). Resea ch s udies conduc ed in
ecen imes ha e p o en ha g een inancing can success ully deli e hese goals. G een inance h ough O ganiza ion
o Economic Co-ope a ion and De elopmen (OECD) economies du ing 2000-2020 c ea ed no able p og ess owa d
achie ing SDG 7 and SDG 13 h ough i s dual ole in deli e ing clean ene gy and clima e change ac ion as epo ed by
[3]. [4] p edic s ha g een bond ma ke alue will each US27.4 billion as he ma ke con inues i s expansion acco ding
o Wo ld Economic Fo um (2020). Eco- iendly unding s ands as he i al basis o ul ill wo ldwide goals p omo ing
sus ainabili y.
IDBs ope a e as essen ial inancial o ganiza ions dedica ed o boos ing economic de elopmen alongside sus ainable
egional p og ess. Examples o no able IDBs include he Wo ld Bank as well as he Eu opean Bank o Recons uc ion
and De elopmen (EBRD) and he In e -Ame ican De elopmen Bank (IDB). The ins i u ions p o ide mone a y and
me hodological suppo and policy men o ship o p ojec s which enhance economic ad ancemen and educe po e y
while boos ing sus ainabili y p ac ices. IDB ope a es wi hin a unding ci cle dedica ed o a ac ing capi al o majo
public p ojec s since p i a e en i ies o en a oid hese ini ia i es due o high- isk elemen s and long du a ion o
epaymen . As key ins i u ions, IDBs con ibu e o sus ainable de elopmen h ough loans and g an s and gua an ees
which collec i ely enable in as uc u e inancing and suppo educa ion and heal hca e ini ia i es besides
en i onmen al p og ams. The EBRD has commi ed o dedica ing mo e han 40% o i s inancial esou ces o g een
inancing ha suppo s Pa is clima e a ge s acco ding o [5]. Du ing he ecen yea s IDBs explici ly in ensi ied hei
sus ainable de elopmen emphase by in eg a ing hei ac i i ies wi h he Uni ed Na ions Sus ainable De elopmen
Goals (SDGs). Th ough hei unding ope a ions IDBs undamen ally con ibu e o clima e change mi iga ion p ojec s
and enewable powe ini ia i es along wi h sus ainable cons uc ion p og ams. The Wo ld Bank has inco po a ed
en i onmen al and social sa egua ds in o i s p ojec inancing o p omo e esul s ha main ain sus ainabili y and
inclusi i y [6]. The In e -Ame ican De elopmen Banks wo ks oge he wi h na ional go e nmen s along wi h p i a e
sec o o ganiza ions and ci il socie y g oups o shape de elopmen policies ha ca e o speci ic membe s a e
equi emen s. The join e o s be ween hese de elopmen pa ne s boos in e en ion success a es while main aining
sus ainabili y h ough p ojec s ha align wi h local needs.
The ole o IDBs owa d sus ainable de elopmen is i al ye hey ace a ious obs acles in hei ope a ions. The
assessmen exposed majo weaknesses in he p ocess o ga he ing g een inance esou ces while showing poo local
de elopmen linkages and inadequa e usage o inno a i e inancial p oduc s which include g een bonds. S udies show
IDBs make good p og ess wi h hei enewable ene gy inancing bu he de elopmen o equi y-based and inclusi e
p og ams emains insu icien [5]; [6]. These challenges in ensi y because o geopoli ical ensions alongside egula o y
ba ie s and insu icien impac assessmen amewo ks. The p ima y in en ion o his esea ch is o gauge he ole o
IDBs in sou cing unds o g een inancing along wi h hei con ibu ion o SDGs 7 and 13 as well as hei ba ie s in
p omo ing g een ene gy p ojec s. This analysis e alua es he adop ion o g een bonds and blended inancing as well as
he wo king ela ionships be ween IDBs and local go e nmen s and p i a e sec o s aimed a suppo ing hese
ini ia i es. This esea ch add esses an academic oid on IDB pe o mance s anda ds by p o iding bo h academic and
ope a ional s a egies ha enhance IDB unc ional e iciency. These ini ia i es display s a egies which boos esou ce
collec ion capabili y and es ablish ope a ional alignmen o sus ainabili y goals and es ablish c ea i e unding ools o
clima e esponse and enewable ene gy swi ching.
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2. Concep ual Re iew
2.1. Mechanisms o g een inancing
In G een inance e e s o inancial lows ( om na ional, in e na ional and p i a e sou ces) o g een ini ia i es and
p ojec s associa ed wi h en i onmen al sus ainabili y, p e en ion o en i onmen al deg ada ion, and a low ca bon
economy. They should suppo in es men s which help o achie e an ecological balance, o example lowe emissions o
g eenhouse gases, he de elopmen o enewable ene gy, and o ene gy e iciency. This app oach is in line wi h he o e -
a ching goal o sus ainable de elopmen as a icula ed in he Uni ed Na ions Sus ainable De elopmen Goals (SDGs), ha
is, he ag eed SDG 7 (A o dable and Clean Ene gy), SDG 13 (Clima e Ac ion) and SDG 17 (Pa ne ships o he Goals) [7].
G een inancing ins umen s a e p omo ed by In e na ional De elopmen Banks (IDBs) including he Wo ld Bank, he
Asian De elopmen Bank (ADB), and he A ican De elopmen Bank (A DB). They play a ca aly ic ole in e ms o capi al
mobiliza ion, isk mi iga ion, designing inancial ins umen s o suppo in es men in sus ainable in as uc u e, and
clima e change- esilien en u es in de eloping economies ([8]; [9]).
Key g een inancing ools include g een bonds, g een loans, sus ainabili y-linked inance, clima e unds, and ca bon
ma ke s. G een bonds G een bonds a e deb ins umen s issued o p ojec s wi h a clea en i onmen al e u n, such as
enewable ene gy cons uc ion, ene gy e icien buildings and clean anspo a ion. The o al olume o g een bonds
exceeded $1 illion o he i s ime in 2020, which e lec s he expanding impo ance o clima e-aligned in es men
p oduc s o in es o s [10]. The IDBs ha e been in he o e on o ac i i y in issuing g een bonds – o en on a signi ican
scale – and deploying hese unds in he p io i y sec o s which make a di ec con ibu ion o he Pa is Ag eemen and
na ional clima e ac ion plans [8].
The same is ue o g een loans, which a e based on G een Loan P inciples and p o ide capi al o bo owe s pu suing
en i onmen ally iendly p ojec s. These ha e become popula bo h wi h de elopmen banks and p i a e in es o s,
la gely because hey a e clea ly ocused on he en i onmen and he use o p oceeds is well‐speci ied [11]. Sus ainabili y-
linked loans and bonds They also di e om g een o p ojec -linked bonds and loans, in ha hey a e no con ingen on
pa icula p ojec s, bu he ESG sco e o he bo owe as a whole. They induce bo owe s o mee highe ESG s anda ds
by condi ioning he co enan s o a loan o he a ainmen o p ede e mined ESG s anda ds [12].
IDBs also con ibu e o in e na ional clima e unding ese oi s, like he G een Clima e Fund, ha help o le e age public
and p i a e inancing o implemen la ge scale clima e mi iga ion and adap a ion in as uc u e. Such in es men
inances in as uc u e, ecosys em p o ec ion and local esilience e o s in a ec ed a eas [13]. Ma ke based
mechanisms such as ca bon ma ke s and ETSs pu a p ice on ca bon emissions, d i ing indus y o minimise hei
en i onmen al impac . IDBs could se e o suppo he de elopmen o CPMs, such as h ough assis ing he in oduc ion
o egula o y amewo ks and capaci y-building o coun ies o implemen , o ake pa in, a CPM [14].
Figu e 1 IDB and Sus ainable De elopmen In e connec ed Mechanism
The inc easing signi icance o g een inancing ools is e lec ed in hei mains eaming in IDB s a egies, inancial ma ke s
and policy e o ms. The mass o g een bonds and loans has con inued o expand e en as in es o s inc easingly cas hei
a en ion o eme ging p oduc s, such as sus ainabili y-linked ins umen s and blended inance. These de elopmen s help
he inancial sec o o in eg a e ESG ac o s in he in es men p ocess, inc ease anspa ency, as well as con ibu e o
no malizing sus ainable inance [4]. As IDBs g ow hei g een inancing books, hese mechanisms a e playing a c i ical
ole in add essing he clima e inance challenge and ad ancing global sus ainabili y a ge s. They a e ins umen s o
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b idge g een in en ion and inancial ac ion: hey help ans o m in es men decisions in o no only economic bu also
long- e m en i onmen al and social pe o mance. Thus g een inance ins umen s, led and suppo ed by IDBs, a e
indispensable o global ansi ion o sus ainable, inclusi e de elopmen .
This ci cula diag am illus a es how In e na ional De elopmen Banks (IDBs) d i e sus ainable de elopmen h ough
in e connec ed mechanisms— inancing ins umen s (e.g., g een bonds), g een inancing applica ions (e.g., enewable
ene gy), and hei ou comes in clima e adap a ion and economic g ow h. I highligh s a con inuous eedback loop whe e
p ojec success in o ms u he inancial inno a ion and in es men p io i ies [8].
Figu e 2 G een Financing Mechanism o Social Founda ion
This doughnu economics diag am illus a es he balance g een inancing mechanisms aim o achie e—mee ing social
ounda ions (e.g., heal h, educa ion, wo k) wi hou b eaching he ecological ceiling (e.g., biodi e si y loss, wa e use). The
space be ween ep esen s he sa e and jus space o humani y, whe e IDB-suppo ed g een inance can d i e sus ainable
de elopmen ou comes [15].
2.2. In e na ional De elopmen Banks (IDBs)
In e na ional De elopmen Banks (IDBs) a e c ucial in d i ing g een inancing h ough capi al mobiliza ion o g een
ini ia i es, especially in de eloping economies. They a e pa o a global sys em o inancial and echnological CO2 sinks
ha cu e he wo ld by sinning less. In ac , he g ow h o g een, social and sus ainabili y bonds ha e been suppo ed by
he Wo ld Bank since issuance o i s i s g een bond in 2008, he eby di e si ying he de elopmen inancing channels
[8]. Howe e , despi e hese con ibu ions, IDBs ace big challenges o scale up g een inance. Eme ging ma ke s ace a
backd op o egula o y gaps and a lack o su icien incen i es o local companies o pu sue ambi ious clima e a ge s
ha limi s he supply o g een inance. Acco ding o a epo by he In e na ional Finance Co po a ion (IFC), inancial
i ms ace challenges in inc easing hei g een inance o e ings in hese ma ke egions due o low ma ke incen i es
and inadequa e egula o y amewo ks [16]. Fu he compounding he challenges is he complexi y in ol ed in
accessing de elopmen and clima e inance. The complex p ocedu es equi ed o accessing unds om such mul ila e al
de elopmen banks and in e na ional inancial ins i u ions can delay he expedien deli e y o clima e p ojec s,
pa icula ly in Leas De eloped Coun ies and Small Island De eloping S a es [17]. To ackle hese issues, he need o
e o ms o IDBs is widely ecognized. Imp o ing he e ec i eness o g een inancing ini ia i es could be achie ed by
inc easing he a ailabili y o in o ma ion, simpli ying access o unding, and p omo ing close collabo a ion wi h p i a e
sec o in es o s. Acco ding o he Wo ld Resou ces Ins i u e, IDBs need e o ms, no only mo e dolla s, o adequa ely
espond o cu en clima e and de elopmen inance needs [18]. Despi e he p og ess IDBs ha e made in acili a ing
g een inancing, hey ace egula o y, p ocedu al and pa ne ship challenges ha need o be add essed o ampli y hei
impac . Scalebili y o g een inance and ealiza ion o global sus ainabili y objec i es equi es sys emic e o ms and
ex ensi e collabo a ion wi h p i a e sec o agen s.
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2.3. Financing Mechanisms Used by IDBs
App oaches embedded in G een Financing o o e come sus ainable de elopmen p ojec challenges by In e na ional
De elopmen Banks (IDBs). In de eloping economies, hese mechanisms allow IDBs o mobilize esou ces, mi iga e isk,
and ca alyse in es men s in p ojec s ha p o ide en i onmen al and social e u ns. The inancing o en i onmen ally
sus ainable p ojec s is one o he mos signi ican ools ha IDBs pu in p ac ice, and g een bonds a e a good example o
i . These bonds a e issued o aise capi al o p ojec s like enewable ene gy, ene gy-e iciency and clima e-adap ion
ini ia i es. By epo ing on how hey will use p oceeds, g een bonds a e popula wi h e hical in es o s. The Wo ld Bank,
o example, has been a he o e on wi h nea ly $18 billion in g een bond issuance in mul iple cu encies since 2008
and has played a majo ole in de eloping he ma ke [8]. IDBs lowe he cos o capi al and ca alyze p i a e sec o
engagemen in unding o g een p ojec s when issuing g een bonds. Ano he i al inancing ehicle ha IDBs deploy
a e concessional loans. These loans in condi ions mo e a o able han he ma ke condi ions a e usually lowe han he
a e o he ma ke o longe han he epaymen pe iod in he comme cial banks, making he g een p ojec inancially
iable in a eas whe e he comme cial inancing could no conside he high isk and low e u n. The Asian De elopmen
Bank (ADB) ex ends concessional loans o inance enewable ene gy and clima e esilience p ojec s, especially in a eas
ex emely suscep ible o clima e change [11]. These loans ill unding gaps o p ojec s wi h high up on cos s bu
signi ican long- e m en i onmen al bene i s. G an s and blended inance a e o he impo an ools ha IDBs le e age.
G an s a e ypically u ilized o p o ide ini ial unding o easibili y s udies, capaci y-building, o pilo p ojec s, he eby
lowe ing isk o la ge in es men s. Blended inance - he use o public unds ( o example, g an s o concessional loans)
o le e age p i a e in es men , imp o ing he s uc u e o de elopmen inance and domes ically o in e na ionally
educing isk o p i a e in es o s. Fo his eason, he G een Clima e Fund is a good example o his – i blends public
and p i a e inance o suppo la ge-scale clima e p ojec s in de eloping coun ies, using limi ed public inance o
le e age subs an ial p i a e sec o in es men [13]. G een bonds and blended inance concessional loans and g an s a e
c i ical ins umen s ha allow IDBs o o e come inancial obs acles, inc ease p i a e sec o in ol emen , and und
success ul deli e y o p ojec s ha mee b oade sus ainabili y agenda.
Figu e 3 Financing Mechanism used by IDBs
This diag am illus a es he p ima y inancing mechanisms employed by In e na ional De elopmen Banks (IDBs),
including g een bonds, concessional loans, and g an s blended wi h o he inancial ools. G een bonds a e deb
ins umen s ea ma ked o en i onmen al p ojec s; concessional loans o e below-ma ke e ms o incen i ize
sus ainable in es men ; and blended inance combines public and p i a e capi al o de- isk p ojec s in de eloping
economies [8]; [10].
2.4. P ojec P io i iza ion and IDB Ini ia i es
O e 9/10 hs o hei inancing goes owa d: enewable ene gy, ene gy e iciency and clima e adap a ion p ojec s ha
will help he wo ld ansi ion owa d global sus ainabili y goals and he ine i able impac o clima e change. This is why
enewable ene gy de elopmen s ake p ecedence, as hey o e cleane , mo e sus ainable solu ions o many o he ossil
uel-d i en p oblems we ace, d as ically cu ing down ou ca bon oo p in . Wi h hei wo k, bila e al de elopmen
banks (IDBs) such as he Wo ld Bank ha e been hea ily in es ing in p ojec s o sola , wind, and hyd opowe o suppo
ene gy access and sus ainabili y. The Wo ld Bank, o ins ance, has inanced enewable ene gy p ojec s in de eloping
na ions, disbu sing $1 billion annually o sola ene gy ini ia i es [8]. Ene gy e iciency is also a key pilla since i enables
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us o educe ene gy consump ion and emissions while inc easing p oduc i i y a he same ime. IDBs exclusi ely und
p ojec s ha enhance he e iciency o buildings, indus ial p ocesses, and u ban anspo sys ems. Fo example, he
A ican De elopmen Bank (A DB) has ini ia ed p og ams such as he Ene gy E iciency P og am o A ica, ocused on
ad ancing ene gy e iciency in esiden ial and indus ial sec o s h ough inno a i e echnologies and policy amewo ks
[19]. Such adap a ion p ojec s a e needed o help communi ies cope wi h clima e impac s, like ising sea le els, ex eme
wea he e en s, and sca ci y o wa e . In es men s Include S eng hening Clima e Resilience: IDBs a e ocused on
p ojec s ha enhance clima e esilience, including h ough in as uc u e upg ades, sus ainable wa e managemen , and
ag icul u al adap a ion. Funded by he Asian De elopmen Bank and o he IDBs, he p ojec s ha e been gea ed owa ds
clima e- esilien in as uc u e and imp o ed li elihoods in ulne able a eas [13]. Alongside p io i izing p ojec s, IDBs
a e in ol ed in ini ia i es and pa ne ships o scale hei impac . Fo example, he Wo ld Bank has pa ne ed wi h
go e nmen s and p i a e sec o s akeholde s o mobilize inancing and expe ise in la ge-scale enewable ene gy
p ojec s, such as he Scaling Sola ini ia i e, which aims o accele a e he de elopmen o sola ene gy in A ica ([8]).
This o en includes echnical assis ance and capaci y-building p og ams, such as he In e na ional Renewable Ene gy
Agency (IRENA) pa ne ship wi h he A ican De elopmen Bank aiming o boos he deploymen o enewable ene gy
ac oss [52]; [19]. These p og essi e app oaches illus a e he impo ance o IDBs' wo k in p omo ing collabo a ion o
ackle inancing gaps and ackling echnical challenges. Wi h hei pa ne ships, IDBs le e age esou ces, sha e bes
p ac ices, and coo dina e e o s o maximize he impac wi h hese pa ne ships on hei in es men s, leading o global
sus ainable de elopmen and clima e esilience.
Figu e 4 To al Funding by Yea and Ca ego y:
This igu e displays he o al unding alloca ed o each p ojec ca ego y (Renewable Ene gy, Ene gy E iciency, and
Clima e Adap a ion) om 2022 o 2024. [20]
Figu e 5 To al Emissions Reduc ion by Yea and Ca ego y
The abo e igu e highligh s he cumula i e emissions educ ions achie ed by each ca ego y o e he same pe iod. [20]
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Figu e 6 To al Bene icia ies by Yea and Ca ego y
This igu e shows he o al numbe o bene icia ies impac ed by p ojec s in each ca ego y. [20]
Figu e 7 Regional Funding T ends (2022 - 2024) [20]
The abo e igu e displays enewable ene gy in es men ends h ough a able and isualiza ion ha examine egional
changes om 2022 o 2024. Asia leads in enewable ene gy in es men g ow h because i gene a es big in as uc u e
de elopmen while ecei ing inc eased o icial backing. The in es men s in bo h No h Ame ica and Eu ope main ain
s eady p og ession hanks o exis ing well-de eloped enewable ma ke s which ope a e unde s able policy
amewo ks. The a eas o A ica and La in Ame ica bene i om in e na ional concessional inancial suppo o each
enhanced p og ess despi e hei diminished g ow h a es.
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Figu e 8 Regional Emissions Reduc ion T ends (2022 - 2024) [20]
The g aph shows egional emissions educ ion changes in A ica, Asia and La in Ame ica spanning om 2022 un il 2024
which demons a ed o al emissions dec eases. The isualiza ion e eals which a eas achie ed he maximum ca bon
emission educ ion while showing hei speci ic ends h oughou 2022-2024. Addi ional in o ma ion along wi h
u he analysis equi es con i ma ion i needed.
2.5. Compa a i e Analysis
In e na ional De elopmen banks ( IDBs) egions compa a i e o e iew: A su ey o IDBs in A ica, Asia and La in
Ame ica and hei app oaches owa ds g een inancing and sus ainable de elopmen in a compa a i e con ex . In A ica,
he IDBs, he A ican De elopmen Bank, amongs o he s, plays a majo ole in inancing u ili y-scale enewables o
mee ene gy access gaps. Ini ia i es like he Dese o Powe p og amme se a a ge o p o iding sola ene gy o
millions, subs an ially lowe ing ca bon emissions while p omo ing de elopmen a ound he egion [21]. In Asia, he
Asian De elopmen Bank does ene gy e iciency and clima e adap a ion p ojec s while p io i izing u ban sus ainabili y
and clima e esilience in ulne able a eas. P og ams such as hei clima e-sma ci ies p og am ha e in eg a ed
ad anced echnologies and p i a e sec o pa ne ships o imp o e p ojec ou comes [11]. Fo ins ance, in La in
Ame ica he In e -Ame ican De elopmen Bank has ocused on comba ing de o es a ion and suppo ing enewable
ene gy p ojec s, which also e lec dis inc egional ea u es, including he need o conse e biodi e si y and mee
ene gy needs [22].
In con as o he p i a e sec o , IDBs ypically ha e wide de elopmen manda es and ake on b oade isk in ela ion
o enabling g een inancing ini ia i es. P i a e sec o p ojec s end owa d la ge , mo e inancially appealing p ojec s
such as u ili y scale sola and wind a ms in s able ma ke s. Unlike IDBs, which a e mo e inclined o und high- isk, high-
impac ini ia i es in unde se ed a eas, IDBs end o inance p ojec s wi h lowe isk p o iles, close o bankable
p ojec s, like o -g id enewable ene gy solu ions o u al elec i ica ion p ojec s. Addi ionally, IDBs equen ly use
blended inance ins umen s o d aw p i a e money o g een p ojec s by educing isks and issuing concessional
inancing. IDB-led amewo ks/ isk-sha ing a e used o ca alyze p i a e-sec o in es men in challenging ma ke s [10].
Success me ics o IDBs and p i a e sec o ini ia i es sha e some con e gence bu may e lec di e en p io i ies. A
he same ime, emissions educ ion is an impo an me ic o bo h because i ’s connec ed o global da a a ge s on he
clima e. Example p ojec s include he A ican De elopmen Bank’s enewable ene gy p ojec s ac oss he con inen ha
a e used o help educe emission and se e as benchma ks when compa ed o simila in es men s in la ge-scale sola
a ms in he p i a e sec o [23]. Job c ea ion is ano he me ic ha hey sha e, as IDBs o en a o p ojec s ha c ea e
local jobs. Fo example, he g een in as uc u e p ojec s o he Asian De elopmen Bank ha e gene a ed a ound 12
million jobs in cons uc ion and main enance, as well as de eloping skills [11]. Bu he la e is a key a ea o ocus o
IDBs who end o p io i ize wide socio-economic ou comes — like inc eased access o ene gy and imp o ed
p oduc i i y — o e inancial e u ns. Typically, IDBs employ egion-wide s a egies o add ess he unique challenges
and oppo uni ies o he a eas hey a e g owing in, while p i a e sec o ini ia i es a e a ac ed by he mos
comme cially iable p ojec s. Insis ing on emissions educ ions alongside job c ea ion and economic g ow h as success
me ics, highligh s he complemen a i y o oles played by IDBs and p i a e sec o playe s in making meaning ul
con ibu ions owa ds global sus ainabili y goals.
Wo ld Jou nal o Ad anced Resea ch and Re iews, 2025, 26(02), 2498-2513
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Figu e 9 Compa a i e O e iew o IDB S a egies in A ica, Asia, and La in Ame ica.
The diag am p esen s a compa a i e o e iew o IDB s a egies in A ica, Asia, and La in Ame ica. I highligh s egion-
speci ic p io i ies—sola expansion in A ica, u ban clima e esilience in Asia, and de o es a ion mi iga ion in La in
Ame ica—demons a ing how IDBs ailo g een inancing o local needs while suppo ing global sus ainabili y goals
([22]; [23]; [11]).
2.6. Challenges, Oppo uni ies and Fu u e Di ec ions
Fo eign De elopmen Banks (IDBs) ha e a good numbe o challenges as well oppo uni ies o encou age g een
inancing and p omo e sus ainable de elopmen . I is c ucial o unpack hese dynamics o maximize hei impac and
align hei ac i i ies wi h global clima e and de elopmen goals. Funding limi a ions con inue o be a majo issue o
IDBs, pa icula ly as he need o g een inancing ises in de eloping economies. Se e al o hem a e limi ed in hei
abili y o mobilize signi ican capi al o inance inc easing enewable ene gy, clima e adap a ion and ene gy e iciency
p ojec s. While he e a e some a emp s o mobilise unding on a la ge scale using ins umen s such as g een bonds and
blended inance, achie ing long- e m s able inancial esou ces con inues o be a challenge, wi h no able unding gaps
emaining. Funding challenges a e compounded by limi ed con ibu ions om dono coun ies and compe i ion o
capi al among mul iple de elopmen p io i ies [13]. Ins i u ional oadblocks a e ano he challenge, pa icula ly a
places wi h weak go e nance, limi ed echnical capaci y and agmen ed egula o y amewo ks, which ha e made IDB
ope a ions, e en mo e challenging. Ine iciencies in he p ojec app o al p ocess, lack o coo dina ion among
s akeholde s and insu icien local expe ise can hampe p ojec implemen a ion and diminish he e ec i eness o IDB-
unded ini ia i es. Fo example, he A ican De elopmen Bank has poin ed ou ha he s ong legal p o ec ions and
amewo ks needed o deploy g een inancing e ec i ely a e lacking in many A ican coun ies [23]. Also, IDBs' ole in
p omo ing g een inancing is also cons ained by Policy unce ain ies. A he same ime, inconsis en policies,
egula o y unce ain y, and insu icien ma ke signals o p i a e sec o engagemen discou age in es men s in g een
ini ia i es. In pa icula , uns able na ional policies, which a e common in eme ging ma ke s, can dis up p ojec
discipline and disincen i ize long- e m in es men in enewable ene gy and clima e esilience e o s [8].
No wi hs anding hese challenges, IDBs ha e much o gain om s eng hening hei con ibu ions o sus ainable
de elopmen . G een Finance Global in es men s o such g een inancing ha e inc eased o e he pas yea s, making
his de elopmen a po en ial pa h o wa d o IDBs o di e si y hei unding basis. E e -inc easing in e es in
sus ainable inance om ins i u ional in es o s, aligned wi h he g ow h o ESG-complian in es men s, p esen s
oppo uni ies o IDBs o a ac p i a e inance and le e age hei impac [10]. Ano he oppo uni y is an e iciency
imp o emen in p ojec execu ion. The IDs can acili a e he implemen a ion o g een p ojec s by whipping he se ices,
imp o ing collabo a ion among s akeholde s, and in oducing inno a i e inancing mechanisms. Wi h he help o
echnology and big da a analy ics, imp o emen s in p ojec moni o ing and e alua ion could be achie ed, and esul in
be e pe o mance o g een inancing p ojec s [11]. Simila ly, inc eased sus ainabili y p o ides a i al pa hway o
IDBs o ealign wi h global clima e objec i es. By suppo ing enewable ene gy, ene gy e iciency, and clima e
adap a ion, IDBs can po en ially play a g ea e ole in helping o achie e he a ge s o he Pa is Ag eemen and he
Uni ed Na ions’ Sus ainable De elopmen Goals. The IDBs can u he d i e sus ainable de elopmen and clima e
esilience h ough collabo a ions wi h p i a e sec o s akeholde s, local go e nmen s, and in e na ional o ganiza ions
Wo ld Jou nal o Ad anced Resea ch and Re iews, 2025, 26(02), 2498-2513
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