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ODA Spending

ODA in Context

The EUI are the fourth-largest OECD DAC donor to projects which relate to tackling climate change, in absolute terms, spending US$4.6 billion in bilateral allocable ODA in 2020.

The EUI spent 20% of their bilateral allocable ODA on climate change-related projects in 2020 putting the EUI in thirteenth place out of the DAC members. This is below the goal outlined under the current MFF for 2021-2027, which is for 30% of EU expenditure to further climate objectives.

In 2020, the EUI's ODA to projects relating to climate change was the lowest it has been since 2016.

Despite the overall climate change-related ODA decreased between 2019 and 2020, funds flowing to projects with a principal focus on climate change mitigation and/or adaption actually increased.

While an increase in climate change-related projects with a principal focus is reflective of the EUI’s firm commitment to the issue, the decrease in significant funding does not align with the EC’s plan to "mainstream” or integrate climate action across all EU programs, including development initiatives.

Key sectors receiving the EUI's climate financing in 2020 included agriculture (23%), energy (17%), other multi-sector initiatives (11%), and infrastructure (10%).

In line with the EUI's priorities, in 2020, the EUI’s climate-related bilateral allocable ODA focused almost equally on adaptation (79%) and mitigation (74%).

Multilateral

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

Funding & Policy Outlook

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.

EU 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 to R&I that called for strengthening EU cooperation with lower- and middle-income countries on R&I in climate change (along with other key sectors).

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

EU is mobilizing clean energy investments. In December 2021, The EU launched its new strategy, Global Gateway, to mobilize €300 billion (US$341.9 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.

EU will continue to support climate change adaptation in partner countries. At COP26 in November 2021, the EC announced that it will contribute €100 million (US$114 million) to the Adaptation Fund. Also in 2021, the EC released a new strategy on climate adaptation, which outlines how it plans to close the climate adaptation financing gap by mobilizing larger-scale financing, including through the EFSD+.

Support for bankable climate-related projects is part of the EU’s portfolio. The EU EIP encourages EU investments in partner countries in countries in Africa and the EU Neighbourhood 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.

Through the GCCA+, the EUI will continue to foster policy dialogue and cooperation on climate change. The GCCA+ has a strong focus on low-income countries and small island states that are most vulnerable to climate change and supports these countries in increasing resilience and implementing climate change adaptation and mitigation strategies. Since 2008, the EUI have invested €738 million (US$841 million) in the GCCA+.

Key Bodies