World Bank pledges $29b for climate financing

In from Ali Smart … .

The World Bank Group has hinted of plans to increase climate financing to about $29 billion annually with the support of its members, the President, Dr. Jim Yong Kim, has said.

The finance is expected to boost global efforts and help countries tackle the impacts of climate change and move toward low-carbon growth.

Kim, who made this known at the International Monetary Fund (IMF)/World Bank Group meetings in Lima, Peru, said currently, 21 per cent of the Bank Group’s funding is climate related, saying the amount could rise to 28 per cent in 2020 in response to client demand, representing one-third increase in climate financing, pointing out that the International Development Bank now provides an average of $10.3 billion a year in direct financing for climate action.

“If current financing levels were maintained, this would mean an increase to $16 billion in 2020,” he said, adding that the Bank Group plans to continue current levels of leveraging co-financing for climate-related projects at current financing levels, that could mean up to another $13 billion a year in 2020. The direct financing and leveraged co-financing together, Kim said, represent an estimated $29 billion.

The World Bank Group’s announcement came in respond to developing countries’ calls for new resources to help address climate challenges. “We are committed to scaling up our support for developing countries to battle climate change,” Kim said.

“As we move closer to Paris, countries have identified trillions of dollars of climate-related needs. The Bank, with the support of our members, will respond ambitiously to this great challenge.”

The World Bank Group’s climate finance pledge is dependent on client demand and on maintaining current financial capacity. The Bank Group’s Board has agreed to a roadmap to review its shareholding and financing capacity in the coming years.

Read also: World Bank: Nigeria now 170th on ease of doing business

The investments will boost support for renewable energy and energy efficiency, climate-smart transport solutions, resilient cities, the restoration of degraded forests and landscapes, enhanced water security, and agricultural practices.

In the meeting of ministers, which was called by Peru and France, Kim called the financing of climate action a “collective challenge,” saying “we all know that country needs for ending extreme poverty and boosting sharing prosperity and combating climate change are enormous. Together, all of us here will have to find ways to respond to the expected rising demand.”

Rachel Kyte, Bank Group Vice President and Special Envoy for Climate Change, said: “Working together, the multi-lateral development banks are showing that we will respond to the incredible demand seen in the national contribution plans filed with the United Nations. Now our focus shifts from the commitment to finance to executing the projects and programs that will make a difference in peoples’ live.”

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