Officials and activists have said that the World Bank’s plan to relax its spending guidelines and lend more money to climate projects in developing nations does not go far enough.
The International Bank for Reconstruction and Development (IBRD), the largest division of the World Bank, may reduce its equity-to-lending ratio by one percentage point to 19%, according to the bank’s president David Malpass, who made the announcement last week.
This would free up almost $4 billion a year for initiatives to reduce emissions and prepare for climate change. The World Bank asserts that it devotes nearly a third of its budget to climate change initiatives and is putting this issue front and centre in all of its work.
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However, one of the main minds behind the campaign for the World Bank’s green reform, Avinash Persaud, an advisor to Barbados’ prime minister Mia Mottley, said 19% was “not low enough but a start”.
Similarly, an official from Germany’s economic cooperation and development (BMZ) noted that while the planned adjustment “is a first step,” additional reforms are needed considering the tasks ahead.
The US and Germany, two of the bank’s largest shareholders, have joined the effort to restructure the bank, which was first launched on the Caribbean island of Barbados. When Malpass steps down in June, the US will choose the bank’s new president.
Story was adapted from Climate Home News
