by Jake Schmidt
The World Bank has just announced its intent to seek $86 billion for a general capital increase (the GCI) from its donor countries (see World Bank press release). It is time for the World Bank to become a full part of the solution to global warming, not part of the problem and part of the solution at the same time. The World Bank needs to seize this opportunity to shift its energy investments to clean energy. The US should only approve a contribution towards the Bank’s general capital increase if it secures a firm commitment to transition to clean energy.
With the request of a general capital increase from the Bank, individual donor countries will now need to agree to fund this increase and commit to provide specific amounts. In the case of the U.S., the Treasury Department requests the funding, Congress would then need to authorize and ultimately approve a possible U.S. contribution. We expect such a request in the coming weeks.
World Bank is Not Doing Enough to Support Clean Energy Lending. With over $8.2 billion in energy investments around the world last year the World Bank has a significant influence on developing country energy investments. In 2009, the World Bank estimates that 40% of its energy sector lending was in “low carbon energy”*—with energy efficiency and renewables** accounting for 21% and 17% respectively . While the share of “low carbon energy” has increased in the past from only 17% in 2003, fossil fuels are still a large share of the Bank’s energy investments. The Bank Information Center calculates that from 2007-2009 fossil fuels still made up over 48% of the World Bank’s energy lending, while 35% of their energy loans were for energy efficiency and renewables (excluding large hydro). Continued...