At the Annual Meetings of World Bank Group and IMF in Lima today, the World Bank announced that it will increase climate financing to potentially US$29 billion annually with the support of its members, giving a huge boost to global efforts to help countries tackle the impacts of climate change and move toward low-carbon growth.
Currently, 21 percent of the Bank Group’s funding is climate related, but that could rise to 28 percent in 2020 in response to client demand, representing a one-third increase in climate financing. The World Bank now provides an average of US$10.3 billion a year in direct financing for climate action. If current financing levels were maintained, this would mean an increase to US$16 billion in 2020.
“We are committed to scaling up our support for developing countries to battle climate change,” said World Bank President Jim Yong Kim. “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.”
In addition, the World 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 US$13 billion a year in 2020. The direct financing and leveraged co-financing together represent an estimated US$29 billion.
The 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.
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.
“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,” said Rachel Kyte, Bank Group Vice President and Special Envoy for Climate Change. “Now our focus shifts from the commitment to finance to executing the projects and programs that will make a difference in people’s lives.”