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Forms of funding

An analysis of the financial instruments used by development donors to fund clean air projects. Part of The State of Global Air Quality Funding 2026, the only analysis of international development funding for clean air in 2020-2024.

  1. Report home
  2. Key findings
  3. Trends in air quality funding
  4. Top funders for air quality
  5. Forms of funding
    1. Non-concessional finance increases in 2024
    2. Loans remain the dominant instrument of air quality funding
  6. Where is funding going?
  7. Which sectors get air quality funding?
  8. Funding for fossil fuels vs air quality
  9. Deep dive: Southeast Asia
  10. Funding focused on super pollutants
  11. Recommendations for development donors
  1. Report home
  2. Key findings
  3. Trends in air quality funding
  4. Top funders for air quality
  5. Forms of funding
    1. Non-concessional finance increases in 2024
    2. Loans remain the dominant instrument of air quality funding
  6. Where is funding going?
  7. Which sectors get air quality funding?
  8. Funding for fossil fuels vs air quality
  9. Deep dive: Southeast Asia
  10. Funding focused on super pollutants
  11. Recommendations for development donors

Non-concessional finance increases in 2024

Non-concessional air quality funding increased from $12 billion of total air quality funding in 2023 to $17 billion in 2024, increasing its share of total funding from 38% to 58%. Meanwhile, concessional funding fell from $19 billion to $12 billion, reducing its share to 42%.1 Despite these changes, the medium-term picture points to stability: the share of non-concessional funding among total air quality funding was 53% across both the 2019-2023 and 2020-2024 periods. This shows that despite year-on-year fluctuations, a structural shift over the medium term has yet to emerge.

MDBs drove the rise in market-based lending. The World Bank, the European Bank for Reconstruction and Development (EBRD) and the Asian Infrastructure Investment Bank (AIIB) together provided $6.4 billion, up from $2.5 billion in 2023. This reflects MDBs’ broader financing patterns; they also delivered most climate finance through loan-based instruments.2

Concessional funding is important for projects that deliver important health and environmental benefits but generate limited direct financial returns. While the shift towards non-concessional funding in 2024 was substantial, it is too early to determine a trend; the balance between funding types remained broadly stable across the two five-year periods.

Loans remain the dominant instrument of air quality funding

Total air quality funding provided through loans increased from $102 billion in 2019-2023 to $110 billion and accounted for 89% of funding in 2020-2024. This increase in non-concessional funding in 2024 was driven predominantly by market-rate lending for large-scale infrastructure projects that deliver air quality co-benefits, particularly rail and public transport, renewable energy and energy efficiency. Grant funding rose from $8.2 billion in 2019-2023 to $9.6 billion in 2020-2024, while maintaining a 7.7% share. Project-level equity investments remained relatively low, accounting for $2.5 billion over the same period. The instrument mix remained stable across both periods.

Notes and references

1The OECD Creditor Reporting System database does not indicate whether debt financing has been provided on concessional terms. Proxies have therefore been used in this analysis. Where loans are marked as “ODA loans” in the database, they are categorised as “low-cost debt”. Loans that do not meet ODA criteria – marked as “Other official flows” (OOF) in the OECD database – are categorised in our methodology as “market-rate debt”, based on the assumption that this funding does not meet the ODA requirements on concessionality. Given that some loans classed as OOF may have concessional terms and fail to meet ODA criteria for other reasons, this report’s estimates of concessional funding should be seen as conservative.

2ADB. 2026. MDB Climate Finance Dashboard.