Global financial institution World Bank has pledged a corpus of $200 billion for climate action over a five-year period. The World Bank has set this corpus to meet climate targets set by it for the period 2021-2025. The new corpus of $200 billion for period beginning 2021 and ending 2025 is twice the World Bank’s current five-year investments in support for countries to take ambitious climate action.
Out of the $200 billion, approximately $100 billion will be provided in direct finance from the World Bank, and approximately $100 billion of combined direct finance from the International Finance Corporation (IFC) and the Multilateral Investment Guarantee Agency (MIGA) and private capital mobilized by the World Bank Group.
The new plan significantly boosts support for adaptation and resilience, recognizing mounting climate change impacts on lives and livelihoods, especially in the world’s poorest countries. The plan also represents significantly ramped up ambition from the World Bank Group, sending an important signal to the wider global community to do the same.
The new financing will ensure that adaptation is undertaken in a systematic fashion, and the World Bank will develop a new rating system to track and incentivize global progress. Actions will include supporting higher-quality forecasts, early warning systems and climate information services to better prepare 250 million people in 30 developing countries for climate risks. In addition, the expected investments will build more climate-responsive social protection systems in 40 countries, and finance climate smart agriculture investments in 20 countries.
“Climate change is an existential threat to the world’s poorest and most vulnerable. These new targets demonstrate how seriously we are taking this issue, investing and mobilizing $200 billion over five years to combat climate change,” said, World Bank Group President, Jim Yong Kim.
A key priority is boosting support for climate adaptation, recognizing that millions of people across the world are already facing the severe consequences of more extreme weather events. By ramping up direct adaptation finance to reach around $50 billion over FY21-25, the World Bank will, for the first time, give this equal emphasis alongside investments that reduce emissions.
“There are literally trillions of dollars of opportunities for the private sector to invest in projects that will help save the planet,” said, IFC CEO Philippe Le Houérou.
“Our job is to go out and proactively find those opportunities, use our de-risking tools, and crowd in private sector investment. We will do much more in helping finance renewable energy, green buildings, climate-smart agribusiness, urban transportation, water, and urban waste management,” added Houerou.
The new targets build on the World Bank Group’s 2016 Climate Change Action Plan. In 2018, the World Bank Group provided a record-breaking $20.5 billion in finance for climate action: doubling delivery from the year before the Paris Agreement and meeting its 2020 target two years ahead of schedule.
To increase system-wide impact for countries, the World Bank Group will support the integration of climate considerations in policy planning, investment design, implementation and evaluation. It will also support at least 20 countries implement and update Nationally Determined Contributions and increase engagement with Ministries of Finance in the design and implementation of transformative low-carbon policies.
Recently, World Bank Group committed $1 billion for a new global program to accelerate investment in battery storage for energy systems in developing and middle-income countries. The program will help these countries ramp up their use of renewables – particularly wind and solar power – improve energy security, increase grid stability and expand access to electricity.
Earlier, Mercom reported that that World Bank also approved $55 million in financing to expand the use of renewable energy in rural areas of Bangladesh that grid electricity cannot easily reach.
Saumy is a senior staff reporter with MercomIndia.com covering business and energy news since 2016. Prior to Mercom, Saumy was a copy editor at Thomson Reuters. Saumy earned his Bachelors Degree in Journalism & Mass Communication from the Manipal Institute of Communication at Manipal University. More articles from Saumy Prateek.