A report from the Bank Information Centre (BIC) and worldwide partner organizations has found that the World Bank’s $5 billion policy loans are supporting investment in coal and other fossil fuels. These incentives threaten climate change efforts, indigenous groups and natural resources and undercut initiatives to build wind, solar and geothermal power infrastructure and protect vulnerable rainforests, including the Amazon.
Seven World Bank policy operations from 2007 to 2016, in Indonesia, Peru, Egypt and Mozambique, total $5 billion. The BIC has discovered that while the funds were intended to boost low-carbon growth, they are instead supporting investment incentives on projects that will put the climate, forests and people at risk.
In Peru, the World Bank is providing subsidies to government-proposed public-private partnerships (PPP) that will develop three natural gas pipeline networks and 26 new oil and gas concessions in the Amazon, among others. In Indonesia, the World Bank will fund four coal power plants and three coal transport railways on forest-rich islands. In Egypt, the bank will subsidize more than a dozen oil and gas projects, 12.5 gigawatts of new coal power plants and 12 pending oil and gas exploration agreements. And in Mozambique, a country highly susceptible to drought, flood and cyclones, they are turning the country into a major coal producer.
The illuminating report shows that the World Bank’s policy lending actually does the opposite of what it promised to do. Meanwhile, each of these countries has the potential to develop renewable energy, including vast solar and wind resources in Egypt and tap into one of the world’s largest supplies of geothermal resources in Indonesia.