A report by a consortium of NGOs has revealed the World Bank Group’s continued investment in fossil fuel projects of nearly $15 billion since the signing of the Paris Agreement in 2015.
The report, titled ‘Investing in Climate Disaster: World Bank Group Finance for Fossil Fuels’, details 10 directly funded projects supported between 2018 and 2021, and 5 more indirectly funded projects.
Established in 1944, the World Bank Group (WBG) is a financial institution that provides loans and grants to the governments of low and middle-income countries for capital project pursuits. The World Bank is the collective name for the International Bank for Reconstruction and Development (IBRD) and International Development Association (IDA).
Among the projects WBG supported, as revealed by the report, is the Trans-Anatolian pipeline in Azerbaijan. Over $1.1 billion in guarantees were provided to ensure the completion of this pipeline, enabling Azerbaijan to exploit its significant natural gas reserves.
“The Project is expected to have potentially significant adverse social and environmental impacts that are diverse, irreversible, or unprecedented,” said The Multilateral Investment Guarantee Agency (MIGA).
The WBG’s investment into two Brazilian natural gas projects in 2018 and 2019 saw the International Finance Corporation (IFC) provide nearly half a billion dollars to Brazil as loans to fund the creation of new gas plants within the country.
This investment went through despite Brazil’s potential for renewable energy and delicate environmental ecosystems that will be put at risk by continued investment in fossil fuels.
The IFC claimed the new gas projects in Brazil would be “improving sustainable natural resource management and climate resilience.”
The report is not the first time the World Bank has faced environmental criticism. The institution has faced multiple controversies for allegedly ignoring the rights of Indigenous peoples and rigging data to boost China’s climate ranking.
Last week, current World Bank President, David Malpass, came under fire for his response to a question about human-related greenhouse gas emissions causing climate change. “I don’t even know — I’m not a scientist.” Malpass has since apologised.
“From a strategy standpoint, clean energy projects are better, cheaper vehicles for job creation than fossil fuel projects,” said Jim Barrett, an energy and environmental economist who consulted with the World Bank in 2021.
“It’s not a matter of whether or not a fossil fuel investment creates jobs, he said. “It will no doubt create jobs. The question is, is there a better, more productive way to invest a million dollars in developing countries? And the answer is yes.”
A spokesperson from the World Bank Group responded: “We dispute the findings of the report: it makes inaccurate assumptions about the World Bank Group’s lending. In fiscal year 2022, the Bank Group delivered a record $31.7 billion for climate-related investments, to help communities around the world respond to the climate crisis, and build a safer and cleaner future.”
The news follows calls from a global coalition of NGOs who have also called on Net-Zero Banking Alliance (NZBA) members to set more stringent rules on financing fossil fuel projects at Climate Week NYC.
