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Page added on July 19, 2013

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World Bank to Stop Funding Coal Projects

Alternative Energy

The World Bank Group has just agreed to stop funding coal projects. This is welcome news as the World Bank Group has funded almost $6 billion in coal projects over the past five years. As a part of a new energy strategy which will cover the Bank’s lending, the Bank agreed that it will only fund coal projects in “rare circumstances” under certain specific conditions. This commitment will help focus the World Bank Group on using scarce resources to combat climate change, spur clean energy deployment, and meet the energy needs of the poorest in the world. With the poorest communities feeling the brunt of the impacts of global warming this is a welcome shift from an institution that has clearly recognized the damages that will come from global warming.

The strategy specifically commits that the World Bank Group:

“will provide financial support for greenfield coal power generation projects only in rare circumstances. Considerations such as meeting basic energy needs in countries with no feasible alternatives to coal and a lack of financing for coal power would define such rare cases” [emphasis added].

While the definition of “rare circumstances” wasn’t completely detailed in the strategy, the U.S. and other countries have clearly signaled that investments in clean energy should be the primary focus of the World Bank Group. After all, President Obama recently committed that the U.S. won’t support using public financing – such as from the World Bank – for new coal projects overseas that don’t capture their carbon. So “rare circumstances” should be a high bar.

The strategy also commits the Bank to step up its efforts to help the poorest citizens gain access to energy and to spur clean energy like energy efficiency, wind, solar, and geothermal. It commits to Bank to view all of its energy sector support through the lens of how does it help countries secure the “affordable, reliable, and sustainable energy supply to end poverty and promote shared prosperity”. This will ensure that the Bank justify all projects on the basis of how they help the poor and supply sustainable energy. With renewable energy deployed around the world we have long past the point where people could say “renewable energy is only available in certain rich countries under certain conditions”. The cost of renewable has dropped significantly in recent years, in most cases it is cost competitive with coal generation even without factoring in the damaging pollution from coal power plants. Clean energy is real, being deployed widely around the world, and a viable economic investment so it is welcome that the Bank has signaled that they’ll shift their emphasis from 19th century to 21st century investments.

World Bank President Dr. Kim should be praised for helping shepherd through a policy to reform the Bank energy lending that stalled under his predecessor. Over two years ago the Bank attempted to reform their energy strategy and implement a similar limit on coal financing. But that strategy got hung up as China, India, and Saudi Arabia blocked adoption. This time those countries recognized that the landscape had changed and that a priority should be placed on using the Bank’s scarce funding to spur clean energy. Nearly 60 development, environment, faith-based, human rights, and community groups urged the Bank in this direction when they called on the Bank to stop funding climate destruction.

Hopefully it will spur other large financial institutions like the other development banks – such as the European Bank for Reconstruction and Development and the Asian Development Bank – and major private banks (e.g. the financial institutions in the Equator Principles) to follow suit. Over the past 5 years the development banks have invested more than $11.6 billion in coal projects (see figure).

Total IFI Coal Financing.pngThis shift in emphasis from the World Bank Group will allow them to focus scarce resources on helping poor countries tap into clean energy like energy efficiency, wind, solar, and geothermal. It is well past time for such a shift – better late than never.

NRDC



5 Comments on "World Bank to Stop Funding Coal Projects"

  1. Kenz300 on Fri, 19th Jul 2013 7:23 pm 

    The world needs to stop building any more coal fired power plants if we are to have any hope of dealing with Climate Change.

    Climate Change is real………….

    We need to deal with the cause (fossil Fuels) or we will deal with the impacts.

    It will be cheaper to deal with the cause.

    It is time to transition to safe, clean alternative energy sources like wind and solar.

  2. Kenz300 on Fri, 19th Jul 2013 8:10 pm 

    ‘Coal 101,’ Sierra Club Video, Targets Controversial Energy Source

    http://www.huffingtonpost.com/2013/06/09/coal-101-sierra-club-energy_n_3380693.html?utm_hp_ref=energy

  3. DC on Sat, 20th Jul 2013 12:26 am 

    The so-called ‘World Bank’ (its a US bank actually), is the enemy of both the people of the world, and the environment.What this really means is, they will fund a way to keep financing coal ‘off-the-books’, or re-assign the loan to some other less offensive sounding category.

    Dont believe a world of it and you wont be disappointed when you find out they never meant a word of the above.

  4. BillT on Sat, 20th Jul 2013 1:46 am 

    The World Bank and the IMF are both American controlled vampire organizations, designed to move wealth to the 1/10% and nothing more. They will do what they want and call it something else, just as DC says. The banking cartel is becoming aware of the fact that the sheeple are waking up and may just revolt.

  5. GregT on Sun, 21st Jul 2013 4:19 am 

    Yes BillT, and the sheeple that are waking up, are being awakened by the Internet. The sheeple farmers are very aware of that, and are now monitoring all activities. How much longer will those that are trying to wake the sheep up be allowed to do so? Not much longer, I suspect.