The Australian Government is committed to taking real and significant climate action domestically and demonstrating leadership internationally. We are responding to global calls and evidence of accelerating climate change by increasing the quality and scale of our climate investments, better addressing climate risks across our development cooperation programs and supporting the private sector to also respond. Australia is implementing an ambitious climate agenda and increasing environmental protection, both at home and with our partners, to achieve a net zero and nature-positive world.

Australia has strengthened its climate finance commitment and expects to deliver $3 billion towards global efforts over 2020-25, largely through existing ODA commitments. This includes $1.3 billion in climate finance for the Pacific, most of which will support adaptation. We recognise the significance of the COP29 outcome on a New Collective Quantified Goal on climate finance and will continue to work with other countries to support ambitious climate action.

Our International Development Policy commits to at least half of all new bilateral and regional investments valued over $3 million having a climate objective from 2024-25, with a goal of reaching 80 per cent in 2028-29. The policy is centred on listening, respect, and genuine partnership, ensuring that Australian climate finance is responsive to partners' needs. The bilateral support Australia provides is jointly shaped through the creation of Development Partnership Plans, which identify where Australia can add value to a country's national development priorities, including their Nationally Determined Contributions and National Adaptation Plans.

Australia is deploying high quality climate finance that meets the needs of our partners in the Indo-Pacific. We prioritise grant-based funding for adaptation projects in the Pacific and draw on blended financing options to leverage additional finance for mitigation efforts in Southeast Asia. The Pacific receives the largest share of our climate finance, followed by Southeast Asia, and South and West Asia.

The transition to a net zero and climate resilient global economy will require increased climate finance from all sources. We are increasingly using innovative financing mechanisms to attract private investment for effective climate action. Our climate change action prioritises effectiveness, diversity, impact, and inclusion, and is built on partnering to share knowledge, technology and capacity building. Australia delivers climate finance through a number of mechanisms to optimise impact and scale:

• Grants: Australia delivers the majority of our climate finance through grant-based bilateral and regional development programs. Grants will remain an important mechanism for climate finance delivery, especially for adaptation activities, and for countries at risk of debt distress. Grants can also be effective in catalysing or crowding in private finance.
• Loans: Australia provides loans that support climate outcomes in partner governments and the private sector through the Australian Infrastructure Finance Facility for the Pacific (AIFFP), Southeast Asia Investment Financing Facility (SEAIFF) and Export Finance Australia.
  • Australia will introduce Climate Resilient Debt Clauses in all new sovereign loan agreements by the end of 2025. When included in sovereign loans, Climate Resilient Debt Clauses help small and vulnerable countries build economic resilience, allowing them to pause debt payments in the event of disasters. This approach supports disaster recovery, reduces the risk of debt distress and enables countries to focus on delivering for their citizens.
• Blended finance: Australia is working with the private sector to boost the size and impact of our climate finance. We are increasing the use of blended finance mechanisms to mobilise more finance for climate outcomes in the region. Australia's blended finance mechanisms, such as the $250 million Australian Development Investments (ADI) provide technical assistance to improve investment environments and de-risk private sector investment, including by providing first loss finance and supporting guarantees.
• Contributions to multilateral climate funds: Australia delivers climate finance through contributions to climate funds, including the Green Climate Fund ($50 million), Global Environment Facility ($80 million), Pacific Resilience Facility ($100 million) and Fund for Responding to Loss and Damage ($50 million).
• Contributions to multilateral development banks: A portion of Australia's funding contributions to multilateral development banks such as the Asian Development Bank and World Bank supports climate adaptation and mitigation efforts.

Beyond our commitment to provide and mobilise Australian climate finance, we are working to increase climate finance access for our development partners, particularly in the Pacific. Through the Climate Finance Access Network, we have embedded climate finance experts in Fiji, Kiribati, Papua New Guinea, Samoa, Solomon Islands, Tonga, Tuvalu and Vanuatu to provide localised support and capacity building to help Pacific ministries plan and prepare for climate investment opportunities, structure finance, and develop a pipeline of high-impact projects that support country-identified needs. Australia is also at the forefront of efforts to encourage multilateral development banks to increase support for climate change action.

• We supported World Bank reforms to devote 45 per cent of annual financing to climate action by the end of the 2024-25.
• We worked with donors to secure more grants through the Asian Development Bank's (ADB) Asian Development Fund 14 replenishment, including an additional USD500 million for Pacific island countries over 2025-2028, with an emphasis on funding for climate adaptation.

For information on how Australia's climate finance is calculated, please refer to DFAT's webpage. Guidance on climate integration is also available in our Good Practice Note on Integrating Climate Change into Development Assistance for Implementing Partners.

Australia's Climate Finance Provided and Mobilised 2020-23

¹Private finance mobilisation can vary significantly from year to year as it relates to specific deals and is subject to market conditions. As such, it cannot be projected with the same accuracy as direct government expenditure.

Transparent reporting

Australia has a strong track record of transparent reporting on both Australia's emissions and on our climate finance activities. Australia reports its climate finance biennially to the United Nations Framework Convention on Climate Change (UNFCCC) and publishes annual ODA climate finance expenditure through DFAT’s ODA Statistical Summary and climate webpages. Development finance for climate and the environment is also reported annually to the Organisation for Economic Cooperation and Development (OECD).

In December 2024, Australia submitted its third Biennial Communication on climate finance to the UNFCCC and first Biennial Transparency Report under the UNFCCC’s Enhanced Transparency Framework.