World Bank Still Investing Billions in Fossil Fuels, Study Shows
(Bloomberg) -- The World Bank Group has continued to invest in fossil fuels despite pledging to fight climate change, according to German environmental lobby group Urgewald, which cited over $2 billion spent on projects in the past two years.
The bank has spent more than $12 billion on such projects since the Paris Agreement to combat global warming was adopted in 2015, about the same amount it spent on fossil fuels from 2014 to 2018, a study by Urgewald showed. The data, which Urgewald updates annually, was compiled from World Bank data and by contacting projects, companies and governments that received the funds.
Urgewald’s latest tally of World Bank spending on fossil fuels showed that the majority of the money invested over the last five years -- $10.5 billion -- was new direct project financing, including new loans, guarantees, and equity.
The World Bank said in a statement that it stopped financing upstream investments in oil and gas in 2019, but continues to assist “resource-dependent developing countries” with “advice on energy solutions that are economically viable.”
“Reliable energy services are key to preventing and fighting Covid-19,” it said. “We are working with governments, the private sector, and other partners to re-purpose and accelerate energy operations to provide clean, reliable and affordable energy to hospitals and other critical health facilities.”
Financial institutions around the world are focusing on supporting renewable energy projects in order to cut carbon emissions and slow global warming. Researchers from the United Nations Environment Program have found that the world is currently on its way to exploiting 120% more fossil fuels by 2030 than is compatible with the Paris goal of keeping the average increase in global temperatures below 1.5 degrees Celsius.
The Urgewald study was released ahead of the World Bank’s 2020 Annual Meetings beginning Monday. The bank has said that without urgent measures to mitigate the effects of global warming, climate change will drive more than 100 million people into poverty by 2030. But the institution is “a big part of the problem,” Urgewald said in a statement.
“The new report with updated data show that the bank hasn’t reduced its support for fossil fuels,” said Heike Mainhardt, senior adviser for multilateral development banks at Urgewald. “They have promised to help countries to make the energy transition, but what they are really doing is helping the expansion of fossil fuels.”
Urgewald cited the following projects recently supported by the World Bank as examples:
- In May 2020, the bank approved an additional $38 million to continue a technical assistance program supporting upstream oil and gas in Brazil.
- It provided $20 million in March 2019 for the Petroleum Resource Governance and Management Project in Guyana and its assistance project is scheduled to last until at least April 2021.
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