World Bank Criticised for Giving $21 Billion Support to Fossil Fuel Projects

authordefault
on

By Natalie Sauer for Climate Homeย News

The World Bank Group faces criticism for continuing to back fossil fuel development, despite moves toย clean up itsย portfolio.

It has earnedย greenย credentialsย for ending direct lending to coal-fired power plants,ย promising to axe support for oil and gas exploration and increasing its clean energyย budget.

Yet over the last five years, the groupโ€™s support toย oil and gas actually increased, while coal benefitted from indirect subsidies, according toย analysisย fromย German NGOย Urgewald.

The study, which covers 675 active investments, found $21 billionย is going towards fossil fuels. Whileย clean energy finance grew rapidly from 2014-18, itย has yet to catch up. The equivalent figure is $7bn or $15bn, depending on the inclusion of large-scale hydropower and other projects with disputed environmentalย benefits.

โ€œIt is a big disappointment to find that the World Bank Group continues to provide such vast amounts of public finance for fossil fuels,โ€ said report author Heike Mainhardt. โ€œThe bank thereby completely undermines its own efforts for renewable energy sources as well as the Paris climateย goals.โ€

A spokesperson for the World Bankย defended its record, saying the Urgewald report โ€œpaints a distorted picture of our energy sector workโ€.ย The inclusion of โ€œlegacy projects where financing was approved many years agoโ€ย means it โ€œdoes not reflect the substantial changes that have happened in World Bank energy financing over the past decade,โ€ heย said.

Inย the last fiscal year, the bank approved $20.5 billion in finance for climate action, he added, meeting a 2020 target two years ahead ofย schedule.

The report comes days after the World Bank confirmed its new president, David Malpass, Donald Trumpโ€™s choice for theย job.

Environmentalists have voiced fears the former US treasury official might deprioritise climate change, in line with Trumpโ€™s politics. But Malpass offeredย early assurancesย he saw climate change as a โ€œkey problemโ€ wouldย not seek to reverseย the ban on coalย finance.

โ€œLooking at his background, we are very curious how seriously he will lead the bankโ€™s climate efforts,โ€ย Moritz Schrรถder-Therre, a spokesperson for Urgewald, told Climate Home News. โ€œThe bankโ€™s member states outside the USA, especially the powerful European shareholders, which are currently reconstructing their own energy systems at home to decrease their climate impact, should make sure that Malpass stops the bankโ€™s fossil business and increases its assistance for developing countries [to form] climate-resilient energy systems that benefit the poorest rather than the business and politicalย elites.โ€

The Urgewald report found World Bankย gas finance increased from $1.5bn in 2014 to $2.2bn. Oil projects also saw a slight increase. Renewables funding, including large hydropower, boomed from $0.5 toย $2.0bn.

It also identified backdoor support for coal. In March 2016, the Multilateral Investment Guarantee Agency (MIGA), a bank subsidiary, lent $783 million to the German Deutsche Bank and the Japanese Mizuho Bank. The funds were earmarked for the South African energy group Eskom to support a โ€œcapacity expansion programโ€. Among other purposes, they will finance transmission lines to transport electricity from Eskomโ€™s new coal-fired powerย plants.

The bank encouraged coal, oil and gas investments in Ghana, Kenya, Mauritania, Cote dโ€™Ivoire, Mozambique, Senegal, Egypt, Tanzania, Nigeria and Burkina Faso, according to the study. Fossil fuel projects in those countries benefited from tax breaks, consultations or assistance to draftย legislation.

Among the controversial projects highlighted by the study isย the Trans Anatolian Pipeline (Tanap), a 1,800-kilometre gas pipelineย through Azerbaijan and Turkey.ย The bank has providedย $800 million in loans and aย $1.1 billion guarantee to the project, which has beenย heavily criticisedย over climate, corruption and human rightsย concerns.

The development institute also granted $935m of loans and credits to an offshore gas field in Ghana, paving the way for associated oilย fields.

The World Bank and the International Monetary Fundย are holding spring meetings from 12 to 14 April inย Washington.

Image: Sosol gas pipeline in Tamane, Mozambique. The World Bank supports the gas project. Credit: Sasol/Wikimedia Commonsย CC BYSA 3.0. Updated 15/04/19: The headline was updated to reflect the details in amended paragraphย 4.

authordefault

Related Posts

Analysis
on

Right wing YouTuber Tim Pool is the latest to own โ€˜climate peopleโ€™ with fake facts spouted by a grizzled TV oilman.

Right wing YouTuber Tim Pool is the latest to own โ€˜climate peopleโ€™ with fake facts spouted by a grizzled TV oilman.
on

Critics say the controversial GWP* method โ€“ which New Zealand appears close to adopting โ€“ is โ€œopen to significant abuseโ€.

Critics say the controversial GWP* method โ€“ which New Zealand appears close to adopting โ€“ is โ€œopen to significant abuseโ€.
on

Lord Moynihan of Chelsea, who holds shares in Shell and TotalEnergies, called the green transition a โ€œchildrenโ€™s crusadeโ€.

Lord Moynihan of Chelsea, who holds shares in Shell and TotalEnergies, called the green transition a โ€œchildrenโ€™s crusadeโ€.
on

Carrboro, N.C., accuses Duke of knowingly fueling the climate crisis for decades with harmful emissions, deception, delay, and "greenwashing."

Carrboro, N.C., accuses Duke of knowingly fueling the climate crisis for decades with harmful emissions, deception, delay, and "greenwashing."