Policy Context

The EC outlines three key areas of climate cooperation with partner countries:

  1. Dialogue and cooperation on climate policy development and implementation;
  2. Expertise sharing through bilateral and multilateral cooperation initiatives, including research collaboration and technology transfer through Horizon Europe; and
  3. Development financing for partner countries to tackle climate change and/or adapt to climate change impact.

Within the Multiannual Financial Framework 2021-2027, climate has been mainstreamed across the EUI's main development instrument, the NDICI.

ODA Spending

How much ODA do the EUI allocate to climate projects?

In 2022, the EUI surpassed France, becoming the 3rd largest OECD DAC donor to projects related to climate change in absolute terms, and stepping up to 12th largest in relative terms.

How is EUI's climate ODA changing?

In 2022, the EUI's ODA to projects related to climate change increased by 33% compared to 2021.

The increase in climate change-related ODA was especially driven by an increase in funding to projects with a significant focus on climate change mitigation and/or adaptation. In 2022, 29% of climate-related ODA went to projects with a significant focus on climate change, above the DAC average of 15%.

The increase in climate change-related projects with a significant focus aligns with the EC’s plan to "mainstream" or integrate climate action across all EU programs, including development initiatives.

How does EUI allocate climate ODA?

Key sectors receiving the EUI's climate financing in 2022 included agriculture, multisector programs, and energy.

The majority of EUI climate spending supports cross-cutting initiatives, while projects with specific focus on mitigation and adaptation receive 21% and 18%, respectively. Under the 2021-27 MFF, the EUI have committed to spend 35% of NDICI’s budget on climate-related projects.

ODA to climate has maintained a modest upward trajectory from a low in 2020. In 2022 and 2023, the EU continued to support projects across a variety of sectors, including green and renewable energies and Just Energy Transition Partnerships.

The energy sector received the largest share of adaptation-related funding in 2021, however most projects had adaptation as their secondary focus. On the contrary, more projects in environmental protection had adaptation as their primary driver. The funding focused specifically on environmental policy and management. Agriculture funding was mainly directed to agricultural development and agricultural policy and management.

Multilateral Spending and Commitments

In addition to bilateral flows, the EUI contribute to climate change adaptation and mitigation in low- and middle-income countries through their contributions to multilaterals. Recent commitments to climate-change-related organizations include:

Tracking Commitments at COP27

Funding Outlook

What is the current government's outlook on climate ODA

The EUI have set a 35% climate spending target for the NDICI over 2021-2027 compared to the previous programming period: 20% for 2014-2020. Commission President Ursula von der Leyen pledged an additional US$4.7 billion in her 2021 State of the Union address. Half of the funding will be dedicated to climate adaptation measures.

Climate change and green transition will be major areas of cooperation between EU and countries in Africa. In February 2022 at the 6th AUEU Summit, climate change and green transition were highlighted as the major areas of cooperation.

EU is mobilizing clean energy investments. In December 2021, The EU launched its new strategy, Global Gateway, to mobilize US$355 billion via a ‘Team Europe’ approach in investments in clean energy (and other sectors such as digital and transport infrastructure, health, education, and research systems) across the globe. Initiatives under this Strategy include the Just and Green Recovery Team Europe Initiative for South Africa, Just Energy Transition Partnerships with Vietnam, Indonesia, India, and Senegal, as well as the Team Europe Initiative on Green Recovery in Nepal.

Through the GCCA+, the EUI will continue to foster policy dialogue and cooperation on climate change. With a strong focus on low-income countries and small island states that are most vulnerable to climate change, the GCCA+ supports these countries in increasing resilience and implementing climate change adaptation and mitigation strategies. Since 2008, the EUI have invested US$777 million in the GCCA+.

EUI will strengthen cooperation with low-and middle-income countries on R&I in climate change. In April 2022, the European Parliament adopted a resolution on the EC’s May 2021 Communication on its Global Approach that called for strengthening EU cooperation with lower- and middle-income countries on R&I in climate change (along with other key sectors).

Support for bankable climate-related projects is part of the EU’s portfolio. The EU EIP encourages EU investments in partner countries in Africa and the EU Neighborhood through the EFSD+. It includes financial guarantees and blending instruments for investments into sustainable development, technical assistance for developing bankable climate projects, and improving climate business investment in partner countries.

Key Bodies

Related Publications

Donor Updates in Brief: 2023 OECD Preliminary Data

Germany’s 2024 budget: Massive ODA cuts after a fiscal odyssey

Climate Finance Commitment Tracker

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