The World Bank Group has invested more than $12bn in fossil fuels since the Paris Climate deal in 2015 and “is a great part of the problem” when it could be helping the world to wean itself off the climate-destroying energy, German NGO Urgewald calculated as the bank has started its annual meeting.
Some $10.5bn alone went into direct project financing for fossil fuels in 30 countries, in the form of loans, guarantees and own capital.
“The billions in public support by the World Bank distort the market in favour of fossil fuels when compared to renewable energies, which slows down the energy transition,” said Heike Mainhardt, senior adviser for multi-lateral development banks at Urgewald.
“Instead of creating a fair energy transition, the World Bank creates greater dependency from fossil energy.”
The massive investments into fossil energy were made despite a pledge by the bank to help countries to reach the targets of the Paris climate deal, and have contributed to make 38 countries more dependent on fossil fuels, the NGO said.
Next to direct financing, the World Bank Group has also provided technical help worth $200m aimed at advancing large fossil projects or help increase future investments into fossil fuels, and has $1.4bn remaining in own capital for already operating fossil assets.
“Instead of supporting a fair energy transition, the World Bank contributes to expand the production of fossil fuels in G20-countries that already are top producers, like Brazil or Mexico. At the same time, the bank opens the way for the creation of new petro-states in emerging countries, such as Mozambique,” said Urgewald finance campaigner Ute Koczy.
The money channeled from the World Bank Group into the oil & gas industry includes €1.4bn to 17 countries to step up their hydrocarbon exploration – among them four of the 15 biggest oil producers – at a time the world needs less and not more oil production to avoid a climate catastrophe.
According to figures from the United Nations Environmental Programme (UNEP), the world is on a path to exploit 120% more fossil fuel sources than is compatible with the 1.5 degrees Celsius goal contained in the Paris accord – meaning according to Urgewald that the target won’t be met.
The World Bank Group also includes the International Finance Corporation and the International Bank for Reconstruction and Development.