In a significant boost to climate action, the World Bank has allocated $42.6 billion for climate-related projects this year which is a 10% increase from the previous year. Last year the figure stood at $38.6 billion.
This marks a $4 billion increase in climate financing during the fiscal year which ended June 30.
This shows a steady progresses towards the bank’s goals, but is well short of the trillions of dollars in additional resources needed annually to finance the clean energy transition in emerging market and developing countries.
World Bank President Ajay Banga has increased balance sheet leverage and taken other capital adequacy measures to squeeze out an additional $10 billion to $12 billion in annual lending capacity over 10 years to help tackle climate change and other global crises including pandemics, in addition to its traditional anti-poverty and development mission.
The bank in December committed to devoting 45% of its total lending for fiscal 2025, which started on July 1, to support climate adaptation and mitigation.
The World Bank’s climate finance for fiscal year 2025 includes a plethora of projects in diverse regions, such as cyclone shelters in Bangladesh and electric bus systems in Cairo and Dakar.
The International Bank for Reconstruction and Development which is the main lending arm for middle-income countries, and the International Development Association, which serves the poorest countries, together delivered $31 billion in climate finance. Of this amount, $10.3 billion specifically supported investments in adaptation and resilience.
The International Finance Corp which is the private sector lending arm, provided $9.1 billion in long-term climate finance.
The Multilateral Investment Guarantee Agency, the bank’s political risk insurance and credit enhancement arm, delivered $2.5 billion in climate finance for the fiscal year.
