By Karin Strohecker and Virginia Furness

LONDON (Reuters) – Multilateral development banks (MDBs) are increasingly focusing on climate change investments, according to Odile Renaud-Basso, president of the European Bank for Reconstruction and Development (EBRD).

Renaud-Basso's comments came amidst concerns about U.S. climate policy with the incoming Trump administration. She emphasized that MDBs are significantly increasing their investments in the green sector, stating, "MDBs are really stepping up the number and the action in their level of investment in the green sector."

Trump has previously labeled climate change a hoax and indicated intentions to withdraw from the Paris climate agreement.

The EBRD will participate next week in the UN Climate Conference COP29 in Azerbaijan, as Europe and China are under international pressure to lead efforts to mitigate climate change.

Renaud-Basso highlighted the EBRD's commitment to allocate billions to assist poorer nations in combating climate change effects, with $7.5 billion devoted to climate finance in 2023, attracting a total of $26.7 billion in private investments. The International Energy Agency anticipates that global clean energy investments will reach $2 trillion this year.

Notably, the EBRD has aided Azerbaijan in transforming its energy sector and approved two solar projects projected to produce a combined 750 megawatts of energy, totaling $666 million in investments.

In addition, concerns were raised regarding Trump’s proposals to increase tariffs on imports from countries like China and the EU, which could lead to adverse trade consequences. Renaud-Basso warned that escalating trade tensions could impede growth, particularly in emerging markets: "An increase of tensions…will never be good for growth of the economy and our region."

The EBRD recently downgraded its regional growth forecasts for the second consecutive time in October.

On the topic of Turkey’s shift toward more orthodox monetary and fiscal policies, Renaud-Basso underscored the importance of maintaining a consistent reform approach. Since June of last year, Ankara has worked to rectify economic imbalances through significant central bank rate raises and tax adjustments. She stated, "What is very important is the steadiness and the fact that they keep on track."