The World Bank announced Sunday at the end of its Spring Meetings its intent to seek more than $86 billion for a general capital increase from its donor countries with additional funds going toward new strategic priorities following the global recession.
With the Bank having granted internal approval for the increase, the additional funding will now need to be approved by the finance ministries of the World Bank’s individual donor countries. (Funding from the United States is proposed by the U.S. Treasury and submitted to the U.S. Congress for approval.)
While in its announcement the Bank included climate change among its areas for strategic focus, it did not address NGOs' call to condition capital increases in sustainable energy financing.
In a statement released Sunday and distributed to finance ministries around the world, nearly 90 international organizations, including Environmental Defense Fund and development, environment, faith-based, science, women's, and indigenous groups, called for international financial institutions to stop using public resources to subsidize the fossil fuel industry.
While World Bank funding is limited and the need for electricity for economic development is critical, funding should be directed towards renewable and sustainable energy sources.
Until policies phasing out carbon-intensive infrastructure are approved, the statement says,
countries should direct funds requested by the Bank and other institutions for general capital increases to other financing mechanisms for supporting sustainable development, poverty reduction and clean energy.
EDF strongly encourages the U.S. Congress and Treasury to help shift World Bank resources and strategy towards a fundamental rethinking of development policies to favor strictly low- or no-carbon energy sources, both by providing sufficient funding for the Bank’s dedicated Clean Investment Funds and by reorienting the Bank’s overall lending portfolio toward low-carbon development.