Introduction

National development banks (NDBs) are critical public finance institutions for the structural transformation required to achieve low-carbon, climate-resilient economies. Research in 2023 highlighted that NDBs are the largest public providers of mitigation finance and the second-largest providers of adaptation finance. Despite this, they are frequently overlooked in international climate finance discussions. The 2015 Paris Agreement is built on a country-centric response through Nationally Determined Contributions (NDCs) and National Adaptation Plans (NAPs). Additionally, the Compromiso de Sevilla, adopted in July 2025, explicitly references the importance of exploiting the potential of national public development banks (PDBs) in mobilising resources for sustainable development and addressing efficiency challenges.

Do climate policy commitments integrate NDBs?

A desk study of 222 NDBs across 103 emerging markets and developing economies (EMDEs) and Small Island Developing States (SIDS) reveals that formal integration is rare. Only 18 NDBs (8.1%) are explicitly mentioned in their country’s NDC or NAP, representing 17.5% of the countries considered. The research categorises countries into several groups based on their level of alignment. ‘Full integration’ exists in only 15 countries, where the NDB is named in policy and is actively involved in climate action. Conversely, the largest grouping (40.8%) falls under ‘policy detachment’, where NDBs report climate engagement in their annual reports but are not referenced in national climate policies. A further 16.5% show ‘mutual disconnection’, where neither the policy nor the NDB annual reports mention climate issues. Integration appears more likely in relation to NAPs (24%) than NDCs (11%), suggesting it may be driven by climate adaptation needs.

How do NDBs view climate policy integration?

Survey results indicate that 68% of NDBs report having climate goals, consistent with the 71% of NDBs that mention climate in their annual reports. However, climate-related lending remains modest, with the majority reporting it accounts for only 1–10% of annual financing commitments. There is a notable dissonance between NDB perceptions and government policy; eight NDBs believe their governments view them as primary financiers for climate priorities despite being omitted from policy documents. Furthermore, 13 out of 28 respondents are not included in inter-ministerial coordination bodies. While 82% of NDBs refer to National Development Strategies in their own plans, only 43% were consulted during those strategies’ development, indicating a significant gap in policy formulation engagement.

Case studies on NDBs’ climate policy integration

The report examines three specific scenarios to better understand the context of integration. In Zimbabwe, the Infrastructure Development Bank of Zimbabwe (IDBZ) demonstrates full integration. It is the only local institution with Green Climate Fund (GCF) accreditation, and its staff were directly involved in drafting the national NAP. Peru also shows full integration in its NAP, which names the Development Bank of Peru (COFIDE) as playing a fundamental role. COFIDE has an ambitious target of 35% of its annual investments qualifying as ‘sustainable’. In contrast, Malaysia represents ‘policy detachment’. While the Bank Pembangunan Malaysia Berhad (BPMB) has climate mandates and participates in COP delegations, it is not mentioned in Malaysia’s NDC. Barriers in Malaysia include weak local demand and the limited availability of subsidies.

NDBs’ integration and climate effectiveness

Almost 90% of surveyed NDBs believe that deeper integration into policy processes would improve their effectiveness in addressing climate issues. The primary barriers limiting NDBs are external: 79% cited limited access to long-term finance, and 50% noted limited access to technical expertise. Internal barriers, such as a lack of dedicated staff or resources, affected 39% of respondents. Access to concessional finance is often vital for stimulating demand for climate investments. There is a strong association between integration and GCF accreditation; of the 31 NDBs with accreditation as of May 2026, nearly 30% are formally referenced in their countries’ NDCs or NAPs. This suggests that the potential to receive concessional funding is a significant rationale for integrating NDBs into national policy.

Conclusions and recommendations

The central recommendation is that governments should deliberately integrate NDBs into climate policy formulation. For NDB leadership in non-integrated institutions, the priority is to internally align on the strategic value of climate action and engage policy-makers through both formal and informal dialogue. Integrated NDBs should focus on deepening operational capacity and pursuing accreditation to funds like the GCF. For policy-makers, the Ministry of Finance should review governance arrangements to ensure NDB mandates support climate investment. The Ministry of Environment/Climate should involve NDBs earlier in strategy design to incorporate financing considerations from the outset. Finally, Ministries of Energy and Industry should work with NDBs to translate sectoral transition strategies into investable project pipelines.