Edinburgh, 30 June (Argus) — The World Bank said on 29 June that it will drop its commitment to allocate 45pc of its annual lending to projects with climate co-benefits.
US treasury secretary Scott Bessent said in April that the World Bank’s 45pc target needed “jettisoning”, arguing that it “breeds inefficiency, distorts economic decision making, and moves the bank away from its core mission”.
Bessent said the organisation must do more to “advance developing country access to abundant, affordable, and reliable energy to support economic growth and poverty reduction”, including fossil fuels such as gas, oil and coal, “rather than restrict borrower choice”. He also called on the bank to increase the number of gas projects.
The World Bank committed to stop financing upstream oil and gas projects from 2019, although it can consider natural gas investments in countries with urgent energy needs and no short-term renewable alternatives, provided they do not lead to long-term carbon lock-in.
The 45pc target was set in 2023 during the administration of then US president Joe Biden. Current US president Donald Trump has opposed climate action domestically and internationally, and withdrew the US from the Paris climate agreement after returning to office in 2025.
The US wields the largest influence in World Bank decisions and holds around 16pc of the voting power in its lending arm, the International Bank for Reconstruction and Development.
The World Bank said it will continue to support clients in delivering ambitions set out in their national climate plans, known as Nationally Determined Contributions (NDCs).
The World Bank also said it has extended its 2021-25 Climate Change Action Plan (CCAP) but has dropped the plan’s target of allocating 35pc of finance to climate-related projects.
“We will continue to track and report on our two scorecard indicators on net greenhouse gas (GHG) emissions and beneficiaries with enhanced resilience to climate risks,” the bank said.
By Caroline Varin
