New Delhi: The Asian Development Bank’s actual finance numbers for its largest climate adaptation projects in countries in Asia, including India, are “overstated” and could be off by 44 per cent, USD 0.9 billion instead of the reported USD 1.7 billion, Oxfam claimed in a report.
The ADB, however, reaffirmed its figures, standing by its methodology and commitment to deliver USD 100 billion in climate financing by 2030, with USD 34 billion earmarked for adaptation and resilience.
“We stand by our climate adaptation finance numbers” and the bank’s determination is to fulfil its climate financing goals and its recent increase in climate finance commitments in 2023, a spokesperson of the Asian Development Bank (ADB) said, responding to the report released by Oxfam, a non-profit.
The report “Unaccountable Adaptation: The Asian Development Bank’s overstated claims on climate adaptation finance” focused on ADB’s largest climate adaptation projects in Asia and the Pacific, examining 15 major initiatives spread across countries such as Bangladesh, Cambodia, India, Indonesia, Pakistan, the Philippines, China and Papua New Guinea.
In it, Oxfam, highlighted “significant discrepancies” in the multilateral development bank’s reported figures.
“The actual climate adaptation finance provided by ADB may be substantially lower than what was officially reported — USD 0.9 billion instead of the claimed USD 1.7 billion, a difference of 44 per cent,” the report said.
“These projects collectively represented a significant portion of ADB’s reported adaptation finance in 2021 and 2022,” it said.
Regional policy and campaigns coordinator- Asia at Oxfam International, Sunil Acharya, likened the ADB’s disclosure of figures to a “malfunctioning compass misleading communities relying on promised climate finance”.
“Asia has been warming faster than the global average. The frequency of flash floods, avalanches in mountain regions has increased, and the plains are witnessing record-breaking high temperatures with dry conditions. In this alarming situation, the overstated climate finance claims feel like a cruel joke for those trying to uphold their dignity amid extreme climate challenges,” he said.
The report said that between 2019 and 2023, the majority of climate adaptation funding by the ADB –USD 9.8 billion (93 per cent) out of USD 10.5 billion — was allocated as loans, with only USD 0.6 billion (6 per cent) provided as grants.
The non-profit argued that these loans, given at market rates, should not be counted as climate adaptation finance as they risk burdening vulnerable countries with increased debt.
“Oxfam calculated the ‘grant equivalent’ — the more accurate measure of the present value of the finance to recipients — of the 15 projects to be just USD 0.3 billion out of the reported USD 1.7 billion. Further accounting for increases in interest rates, the recipients of these projects are estimated to repay USD 8.5 billion at present rates, an alarming 24 per cent increase from the initial USD 6.8 billion at initial interest rates,” the report said.
Furthermore, Oxfam’s analysis raised concerns about the distribution of the ADB’s climate finance, noting that only a small fraction reached Small Island Developing States (3 per cent) and Least Developed Countries (25 per cent) in the region, despite their acute vulnerability to climate impacts.
It has called on the ADB to enhance its climate finance assessments, urging “greater transparency and evidence-based reporting”.
The organisation emphasised the need for increased grant-based and concessional finance to support the most vulnerable countries in adapting to climate change.
In a written response to queries send by PTI, the ADB spokesperson said, “We stand by our climate adaptation finance numbers which are calculated based on the joint-multilateral development bank methodology. This is important to ensure all MDBs (multilateral development bank) report climate finance numbers that are consistent and comparable”.
“Oxfam’s findings are not directly comparable to ADB’s reporting. Oxfam uses a different methodology with key differences from the joint-MDB methodology. Oxfam’s review also covers a limited time period and a small set of projects,” the official said.
“As Asia and the Pacific’s climate bank, ADB is determined to deliver on our ambition to provide USD 100 billion in climate financing — including USD 34 billion for adaptation — from our own resources from 2019 to 2030. ADB committed USD 9.8 billion in climate finance from its own resources in 2023 — USD 5.5 billion for mitigation and USD 4.3 billion for adaptation — a more than 46 per cent increase on its 2022 climate financing commitments,” the spokesperson said.
