World Bank Group Climate Finance Rises to Record High Levels
The World Bank Group financed a record-high $20.5 billion in finance for country-level climate action in the fiscal year 2018. All told, 32.1 percent of the global development bank group's financing consists of "climate co-benefits."
That exceeds a target of 28 percent of its lending volume being climate-related by 2020, the group highlights. The climate finance target was a key aspect of the bank group's Climate Change Action Plan, which it adopted in April 2016. The plan is designed so that the World Bank Group supports developing, under-developed and lesser developed nations worldwide to achieve the national goals they have set as signatories to the UNFCC Paris climate change agreement.
The World Bank Group's two main lending arms – IBRD and IDA – nearly doubled the share of projects expected to deliver climate co-benefits over the past two fiscal years. That figure rose from 37 percent in FY2016 to 70 percent in FY 2018.
Climate-smart investments across the developing world
World Bank financing in developing countries for climate change adaptation and resilience rose as well. In total, the development bank group's climate change adaptation investments rose to $7.7 billion in FY'18 as compared to $3.9 billion the previous year. Nearly half – 49 percent – of the World Bank's climate finance is now devoted to adaptation as opposed to climate change mitigation.
So-called “climate-smart” investments by World Bank Group member International Finance Corp. accounted for 36 percent of total investments in FY18 – more than $3.9 billion. The IFC focuses on private sector finance and development in emerging markets.
“The lion’s share of economic growth is taking place in emerging markets, and at IFC we recognize that we must ensure this growth is inclusive and sustainable. This is a trillion-dollar investment opportunity,” said Philippe Le Houérou, IFC’s Chief Executive Officer.
“We have a critical role to play to enable these opportunities to reach their full potential. Through our Creating Markets strategy, we are looking to expand successful platforms such as Scaling Solar and the EDGE green building initiative, as well as developing new solutions that will accelerate business in climate priority sectors.”
World Bank Group highlighted some of the results its climate-finance drive achieved in fiscal 2018:
- Generating or integrating 18 gigawatts of additional renewable energy into electricity grids, and mobilizing over $10 billion in commercial finance for clean energy;
- Developing 22 investment plans for climate-smart agriculture in 20 countries;
- Investing $784 million in improving climate-resilient transport systems; and
- Providing 38 million people in 18 countries with access to reliable climate information and early warning systems to deal with more frequent and intense natural disasters such as floods and hurricanes.
Commenting on the bank group's rising climate finance activities, World Bank CEO Kristalina Georgieva said:
“We have not just exceeded our climate targets on paper, we have transformed the way we work with countries and are seeing major transitions to renewable energy, clean and resilient transport systems, climate-smart agriculture and sustainable cities. This gives the most vulnerable people a fighting chance against climate change, by confronting and adapting to today’s impacts and working to contain future damage to our planet.”
Looking forward, the World Bank Group intends to announce new climate finance targets at the UN climate conference scheduled to take place in Poland this December. These will extend beyond 2020 and raise the group's commitment helping countries reduce greenhouse gas emissions and be better prepared to weather the increasing variety and intensity of climate-change risks and threats they face, the bank says.
Image credits: World Bank Group