- World Bank provides assistance and finance for fossils despite climate pledge
- Energy transition too slow to avert climate crisis
- Ongoing fossil fuel investments push world past 1.5°C global warming
Berlin, Washington D.C. | October 12th 2020
As the World Bank conducts its digital Annual Meeting, civil society groups criticize the bank’s ongoing investments in the fossil fuel industry. Research conducted by Urgewald reveals that the World Bank Group has invested over $12 billion in fossil fuels since the Paris Agreement, $10.5 billion of which were new direct fossil fuel project finance.
In order to arrest the escalating climate crisis, the world needs an urgent and just transition from fossil fuels to renewable energy. Data shows that the energy transition is happening far too slowly. Researchers from several expert organizations, including the UN Environment Program, determined the world is currently on track to produce 120% more fossil fuels by 2030 than is compatible with a 1.5°C pathway.  Thus, we are already on track to miss the Paris Climate Agreement goal. In addition, according to the Economist, annual investments in wind and solar capacity need to reach about $750 billion, which requires a tripling of current investment levels. 
Simply put, there is far too much invested in fossil fuel production and not enough in renewable energy. Actions that slow down the energy transition result in more destabilizing climate-related consequences. The World Bank states that without urgent action, climate change will push more than 100 million people into poverty by 2030. 
The World Bank is a big part of the problem
The World Bank Group  provides public assistance for development around the world. The World Bank Group has committed to assisting countries to meet the goals of the Paris Climate Agreement and often points to its investments in renewable energy and other “climate finance.” However, since the adoption of the Paris Climate Agreement in December 2015, the World Bank Group has financed (see Tables 1 and 2, below):
Table 1. World Bank Group1 Finance to Fossil Fuels since the Paris Climate Agreement
1 The World Bank Group = the International Development Association (IDA), the International Bank for Reconstruction and Development (IBRD), the International Finance Corporation (IFC) and the Multilateral Investment Guarantee Agency (MIGA).
2 As of August 12, 2020.
3 Only a portion of this amount goes into fossil fuels. The actual amount is unknown due to a lack of transparency.
- $10.5 billion in new direct finance for fossil fuels in 30 countries (new loans, guarantees, equity).
- Plus $200 million of technical assistance in 11 countries aims to push specific large fossil fuel projects forward and/or to increase future fossil fuel investments – includes funding consultants to help market investment into Brazil’s upstream oil and gas resources.  Brazil is the world’s ninth largest oil producer and had record-breaking oil production in 2019.
- Plus $1.4 billion remains in existing equity in fossil fuel operations – until divested, the Bank’s equity continues to provide financial benefits to fossil fuel operations, such as lowering the cost of loans for expansions or development of new oil/gas fields. The WBG continues to get dividends and capital gains (or losses) from its equity in these operations.
- In total, since the Paris Climate Agreement, the WBG has at least $12.1 billion of public assistance working to make 38 countries more dependent on fossil fuels. Additionally, billions more flow to fossil fuels through WBG mixed operations and indirect funding, see Table 1.
- $4 billion or 35% of WBG fossil fuel assistance went to eight G20 countries.
- $1.4 billion went to expand upstream oil and gas operations (exploration & production) in at least 17 countries – including four of the top 15 oil producers in the world.
- $2.3 billion went for oil and gas exports and $650 million went to six oil refineries.
- Billions more go to fossil fuels through WBG mixed operations funding both fossil fuels and renewable energy (> $3 billion since Paris Agreement); investments made through financial intermediaries (e.g. commercial banks); and the Bank provides $8 to over $10 billion annually in budget support, which governments are free to spend on any infrastructure or power/fuel payment, except for nuclear power.
“The World Bank's billions in public assistance are distorting the market in favor of fossil fuels over renewable energy, which is slowing down the energy transition. Instead of creating a just energy transition, the World Bank is creating more dependency on fossil fuels,” says Heike Mainhardt, Senior Advisor for Multilateral Development Banks at Urgewald.
“Instead of assisting a just energy transition, the World Bank is helping to expand fossil fuel production in G20 countries that are already top producers, such as Brazil and Mexico. Simultaneously, the Bank is paving the way for the creation of new Petrostates in frontier countries, such as Mozambique,” adds Ute Koczy, Finance Campaigner at Urgewald.
Out of Time – Out of Fossils
The world is running out of time to avert a worsening climate crisis. At this point, every public dollar the World Bank invests in fossil fuels pushes the world further and further away from being able to limit global warming to 1.5°C. The World Bank must get out of all fossil fuels now. The Bank’s public assistance should only be used to assist countries towards a just energy transition. Rather than locking countries into dependency on the fossil fuel industry, the Bank should finance job training for workers to leave those industries.
Table 2. Type of World Bank Group Fossil Fuel Finance since the Paris Climate Agreement1
G20 countries are underlined.
1 The UN Paris Climate Agreement was adopted on December 12, 2015. These data represent World Bank Group finance disclosed as of August 12, 2020. This table does not include finance from investments made through financial intermediaries, or through budget support. The World Bank Group includes the International Development Association (IDA), the International Bank for Reconstruction and Development (IBRD), the International Finance Corporation (IFC) and the Multilateral Investment Guarantee Agency (MIGA).
2 Upstream oil and gas includes $750 million in new investments/technical assistance and $300 million in existing equity.
3 Technical Assistance that targeted coal mining in Mozambique also targeted gas, thus the $53 million for coal is not added to the overall total to avoid double counting. Furthermore, the finance for technical assistance in Afghanistan was provided by the donor-funded Afghanistan Reconstruction Trust Fund. Thus, no finance was included in this table as it does not come from the World Bank’s budget.
Table 3. World Bank Group Fossil Fuel Project Finance Since the Paris Climate Agreement1:
By Bank Division2 (million US$)
Source: Urgewald, World Bank Group Energy Project Finance Database, August 12, 2020.
1 Figures represent World Bank Group project finance for fossil fuels (oil, natural gas and coal) approved since the UN Paris Climate Agreement was adopted by consensus on December 12, 2015. All data were collected from project information contained on the World Bank Group's webpages. Data do not include WBG funding through technical assistance ($200 million for fossil fuel development since Paris Agreement), non-earmarked budget support ($10 - $20 billion annually), financial intermediaries, or active equity invested before December 13, 2015. It is important to note that over 50% of IFC's funding goes through financial intermediaries, which on-lend to projects, including fossil fuel projects.
2 World Bank Group Divisions include: International Bank for Reconstruction and Development (IBRD), International Development Association (IDA), International Finance Corporation (IFC), and Multilateral Investment Guarantee Agency (MIGA).
3 Fossil fuel finance from December 13 to December 31, 2015.
4 As of August 12, 2020. Does not represent the full year for 2020. Figure will be updated after the end of the year.
 SEI, IISD, ODI, Climate Analytics, CICERO, and UNEP. (2019). The Production Gap: The discrepancy between countries’ planned fossil fuel production and global production levels consistent with limiting warming to 1.5°C or 2°C. http://productiongap.org/
 The Economist. (2020). Is it the end of the oil age? September 17, 2020. https://www.economist.com/leaders/2020/09/17/is-it-the-end-of-the-oil-age
 The World Bank Group includes the International Development Association (IDA), the International Bank for Reconstruction and Development (IBRD), the International Finance Corporation (IFC) and the Multilateral Investment Guarantee Agency (MIGA).
 As part of the World Bank’s Energy and Minerals Sectors Strengthening Project II, in 2018, the Bank funded consultants “for the implementation of Brazil’s long-term oil and natural gas marketing policy.” According to Bank program documents, part of government marketing efforts include driving upstream investment into its pre-salt oil and gas resources, which included holding bid rounds for new onshore and offshore exploration areas in late 2019. In May 2020, WB approved an additional $38 million for further technical assistance.