Overview

About 3.5 billion people live in countries rich in oil, gas, or minerals. But all too often these resources have become a source of conflict rather than opportunity. Many of these countries also suffer from poverty, corruption, and conflict stemming from weak governance.

Mineral resources play a dominant role in 81 countries, which collectively account for a quarter of world GDP and half of the world’s population. Africa alone is home to about 30% of the world’s mineral reserves, 10% of the world’s oil, and 8% of the world’s natural gas. At the same time approximately 43% of its people live in extreme poverty.

The World Bank helps countries seize opportunities for development, poverty reduction, and boosting shared prosperity by focusing on effective extractive industries governance, improving domestic resource mobilization, increasing transparency, and promoting inclusive growth while ensuring local community needs are met and the environment protected.

Last Updated: Apr 10,2017

The Bank’s work in the extractive industries sector focuses on three main pillars that support the overall goals of ending extreme poverty and boosting shared prosperity: 1) financial sustainability; 2) social sustainability and 3) environmental sustainability. To achieve these broad goals the Bank uses a wide range of instruments, from financing to analytical work and global knowledge and partnerships.

Along with our core lending, analytical work, and knowledge products, the Bank administers a number of Multi-Donor Trust Funds (MDTF) to achieve ambitious development goals. The Extractives Global Programmatic Support (EGPS) MDTF supports programs ranging from transparency and governance, to legal and regulatory reform, local economic diversification, strengthening institutions, and social and environmental sustainability.

The Global Gas Flaring Reduction Partnership (GGFR) is a public-private initiative comprising international and national oil companies, governments, and international institutions. GGFR’s focus is ending routine gas flaring at oil production sites around the world as a way to increase energy access, improve efficiency, and mitigate climate change. GGFR works with industry and governments around the world to harness natural gas associated with oil production, and to conserve it or put it to productive use rather than wastefully flaring it, causing millions of tons of CO2 to be emitted.

Financial Sustainability: The Bank works with governments to strengthen fiscal regimes, remove subsidies, improve tax administration and revenue transparency to build resilience to economic shocks and lessen the opportunities for the resource curse. It also assists governments implement structured financial solutions to de-risk private sector investments, strengthen enterprises, and reinforce public-private partnerships.

The Bank also works with governments to develop policies for oil, gas, and mining regimes and capacity building for effective management. It starts with supporting capacity building for contract negotiation, and includes legal and regulatory frameworks, tax and royalty administration as well as revenue management.

To advance transparent revenue management, the Bank supports the implementation of the Extractive Industries Transparency Initiative (EITI) through technical assistance to countries working to publish and verify company payments and government revenues from oil, gas, and minerals. A total of 51 countries are implementing the EITI standard, of which 49 are eligible for World Bank support.

By supporting governments to create an enabling environment, improve sector governance and lower risk, extractive industries can leverage large scale private sector investment through IFC involvement.

Social Sustainability: For effective development outcomes, local communities must actively participate in extractive industries operations, leveraging the industry’s infrastructure, job creation, and small business opportunities to provide sustainable development over time. To that end, the Bank works to promote inclusive growth, bringing together diverse stakeholders to improve accountability, lessen impacts on communities, women and the most vulnerable people, particularly in fragile areas. The Bank also leverages extractive industries projects to achieve shared value and enhance livelihoods.

Environmental Sustainability: The World Bank works with governments to develop strategic environmental and social assessments to anticipate sector-wide impacts and to incorporate environmental and social priorities into extractive industries’ policies and regulatory arrangements.

Last Updated: Apr 10,2017

The Bank is active in the extractive industries in about 70 countries and is the largest provider of extractives-related development assistance by a significant margin. IDA/IBRD cumulative investment over the past decade is about $3.3 billion.

An overview of the World Bank Group’s portfolio in extractive industries is available here.

Some examples of our projects and initiatives:

The Bank’s Mining Governance and Development Project in Togo streamlines the institutional framework of key organizations in extractive industries to strengthen efficiency and accountability for effective management of the sector.

In Mozambique, the Bank supports sustainable development of new gas resources, including creating the enabling environment and building capacity for a new Liquefied Natural Gas (LNG) industry, along with more mature mining sector reforms.

In Guinea, the Bank is supporting the government build systems and capacity to manage its mining sector, including the development of major growth corridors around bauxite and iron ore mines.

The World Bank is working closely with the government of Afghanistan to ensure sustainable development of the country’s natural resources. This includes support for geological exploration, data compilation, capacity building of various government agencies managing mineral and petroleum resources, and support managing ancient and treasured cultural assets around the Mes Aynak site.

In Sierra Leone, the Bank is providing support for small-scale mining as well as operationalizing the entire regulatory chain for minerals.

In Mongolia, the Bank provided technical assistance for mining tax administration and strategic approaches to management of the mining sector’s environmental and social aspects. 

The World Bank-introduced “Zero Routine Flaring by 2030” Initiative commits governments and oil companies to (a) not routinely flare associated gas in new oil field developments and (b) to end existing (legacy) flaring as soon as possible and no later than 2030. As of April 2017, 65 governments, oil companies, and development institutions have endorsed the global Initiative.

The Bank’s Mining Investment and Governance Review (MInGov) provides access to policy and institutional analyses that affect the sustainable development of the mining sector, including the investment climate, effectiveness of public institutions in developing and monitoring the sector, and costs and benefits to stakeholders. Investors, companies, and other sector stakeholders benefit from access to country-specific governance data, and policies and practices that affect investment risk and decision-making in the sector.

Last Updated: Apr 10,2017

To achieve sustainability goals and improved governance in extractive industries, which are important drivers of economic growth and poverty reduction in many developing countries, the World Bank has developed partnerships with a wide range of organizations in the sector. This helps align efforts, while also leveraging resources and expertise to end poverty and boost shared prosperity.

Last Updated: Apr 10,2017





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