UK to give Asian Development Bank guarantee to unlock climate finance

LONDON (Reuters) - Britain will next month provide a guarantee for the Asian Development Bank (ADB) to help unlock more than $1 billion of climate finance for developing countries, Foreign Secretary David Lammy said on Tuesday.

Earlier this month the ADB said it had approved a new goal to devote 50% of its annual lending to climate finance by 2030 and boost financing of private sector projects as part of a strategy update for the rest of the decade.

"I'm determined to restore Britain's reputation for commitment and innovation in the world of development finance. This starts with the multilateral development banks," Lammy, whose Labour Party has been in power since July, said in a speech on climate change at London's Kew Gardens.

"That's why next month, I will lay before parliament a UK guarantee for the Asian Development Bank, which will unlock $1.2 billion in climate finance from the bank for developing countries in the region."

Lammy said that, subject to reforms, Britain also supported a capital increase for the International Bank for Reconstruction and Development as a key source of climate finance.

Wealthy nations have a commitment to provide $100 billion each year in climate finance to developing countries to help them cope with climate change, and the COP29 UN climate summit in November is tasked with agreeing a new funding target.

Countries remain far from agreement, however, with vulnerable and developing countries wanting a far larger funding goal and donors such as Canada and the European Union saying stretched national budgets mean a huge jump in public funding is unrealistic.

(Reporting by Kylie MacLellan; Editing by Andrew Cawthorne)