This page is part of the E3G Public Bank Climate Tracker Matrix, our tool to help you assess the Paris alignment of public banks, MDBs and DFIs.
| Paris alignment | Reasoning |
|---|---|
| Some progress | The IsDB provides extensive policy-level technical assistance through activities such as the Climate Action Enhancement Package (CAEP), the interconnected Technical Cooperation Programme and Reverse Linkage approach, and an array of other initiatives focused on providing technical and capacity building support to member countries. Support is primarily oriented around NDC implementation. However, there is limited evidence as to how alignment with the temperature goals of the Paris Agreement is verified, as well as how the Bank’s commitment to provide support for “updating and improving” NDCs is operationalised in practice. There is also relatively little indication of the Bank having an extensive climate-related technical assistance offer targeted at supporting non-sovereign clients, such as financial intermediaries, despite some evidence of standalone efforts (such as to support the role of Islamic financial institutions in climate action). |
| Climate-related technical assistance at policy-level | NDC ambition increase goal? | Non-NDC technical assistance |
| The Bank provides extensive policy-level technical assistance as an implementing partner of the NDC Partnership’s CAEP. Moreover, the Bank has notably developed a Climate Change Knowledge Hub (in partnership with the Stockholm Environment Institute), to serve as a repository of climate action information for its member countries, among other standalone policy-level technical assistance efforts. | While the CAEP is primarily focused on NDC implementation and lacks a clear framework for ensuring this supports enhanced ambition, the Bank’s Climate Action Plan (CAP) notably makes explicit reference to the provision of technical assistance for the purpose of “updating and improving” NDCs. However, it remains unclear how this is operationalised. | The IsDB operates two interconnected technical assistance mechanisms (the Technical Cooperation Programme and Reverse Linkage approach) designed specifically for cooperation between MCs, and operationalised through an array of capacity building activities. While there is limited information available regarding specifically climate-related technical assistance provided under these mechanisms, the IsDB has provided valuable standalone technical assistance, such as to support the role of Islamic financial institutions in climate action. |
Policy-level, climate-related technical assistance
The IsDB provides policy-level, climate-related technical assistance to member countries (MCs) through two main mechanisms:
- NDC Partnership’s Climate Action Enhancement Package (CAEP): As a CAEP implementing partner, the IsDB provides dedicated technical assistance for NDC implementation. The Bank has so far carried out CAEPs for Lebanon and Palestine, where it has helped to develop NDC implementation action plans across five sectors (health, water, solid waste, transport and gender). This includes providing detailed technical support for: (1) analysis of barriers for priority mitigation and adaptation actions; (2) assessment of enabling environments; (3) development of implementation action plans; and (4) policy option appraisal and recommendations. However, there is insufficient evidence to suggest that the Bank’s support for NDC implementation through CAEPs also extends to (or is complemented by) supporting countries with raising future ambition of NDCs in line with a pathway for compatibility with ideally 1.5°C (or maximum 2°C). As a result, it is unclear how the Bank is actively ensuring that its technical assistance for NDCs contributes to enabling countries to ratchet ambition in line with the temperature goals of the Paris Agreement.
- Technical Cooperation Program and Reverse Linkage: The IsDB operates two interconnected technical assistance mechanisms designed specifically for cooperation between MCs. The Technical Cooperation Program (TCP), established in 1983, serves as the foundational framework for enabling South–South Cooperation. The program is demand-driven, with MCs determining their needs for capacity development, and provides a forum for exchange among senior officials. Reverse Linkage (RL) is in turn a technical cooperation mechanism embedded within the TCP framework through which MCs exchange knowledge, expertise, technology and resources to develop their capacities and devise solutions. The mechanism features guiding principles that include country leadership, selectivity, adaptability and proactivity. Both the TCP and RL are operationalised through activities such as: (1) organisation of seminars and workshops on policy matters; (2) technical courses for capacity building; (3) consultative meetings on important issues; (4) studies and research; and (5) advisory services through expert consultants. However, there is limited specific evidence regarding their explicit use for climate-related technical assistance, besides the Bank’s Climate Change Policy (CCP) indicating they can be used for this purpose.
In addition to these flagship initiatives, the IsDB has also developed a Climate Change Knowledge Hub in partnership with the Stockholm Environment Institute to serve as a dynamic repository of climate action information for its MCs. This platform connects different information sources and provides valuable e-learning resources on climate-related issues. The Bank has also undertaken standalone policy-level technical assistance efforts with a climate focus, such as with GIZ on capacity building for sustainable transport approaches.
Separately, the Bank’s CCP commits to mainstreaming climate considerations into country programming through the Member Country Partnership Strategy (MCPS) process.[1] This is intended to include: (1) sector analysis and diagnostics to identify climate risks and opportunities; (2) integration of climate considerations into country financing and advisory programming; and (3) support for accessing climate finance. Relatedly, the Bank’s Climate Action Plan (CAP) notably makes explicit reference to the provision of technical assistance for the purpose of “updating and improving” NDCs (as well as translating them into strategies and action).
Other technical assistance
Beyond policy level support, there is limited evidence of the IsDB having dedicated climate-related technical assistance initiatives. That said, the Bank has previously provided valuable standalone technical support, such as to the General Council for Islamic Banks and Financial Institutions (CIBAFI) to reinforce the role of Islamic financial institutions supporting climate action.[2]
There remains scope for the Bank to expand its capacity building engagement with clients to enhance and sustain its impact across its areas of operation. Targeted technical assistance for non-sovereign clients could be particularly valuable in view of the potential benefits from scaling up on-lending to financial intermediaries (FIs), and considering the Bank’s commitment to Paris alignment currently only covers sovereign operations.
Recommendations:
- The IsDB should more clearly operationalise its commitment to updating and improving NDCs. This could involve both incorporating relevant actions into existing programmes predominantly focused on NDC implementation (such as the CAEP), and/or scoping the potential for a dedicated investment platform for supporting NDC ambition raising across MCs, as has been effectively developed by the Inter-American Development Bank (IDB).
- The IsDB should consider developing a targeted technical assistance offer for non-sovereign clients, such as FIs. This could be focused on supporting key areas of institutional climate mainstreaming among FIs across the Bank’s regions of operation, such as in the development of Paris alignment approaches and effective climate-risk screening tools, as well as supporting comprehensive reporting and disclosure.
- Given the prevalence of fossil fuel subsidies across IsDB MCs, subsidy reform has significant potential as a key policy lever for facilitating a just energy transition, while also supporting MCs with implementing and raising ambition of their NDCs. Accordingly, the IsDB should consider exploring the appetite (among both MCs and prospective external donors) and potential for a dedicated technical assistance (and/or policy-based lending) programme for this purpose, aimed at supporting MCs with managing a shift in the allocation of scarce national public finance toward proactively supporting the energy transition.
[1] For further details of this, see “Country level work” metric.
[2] Information received directly from the IsDB.
Last Update: July 2025