From COP26 to COP27, What Has the World Bank Group Done?

For climate action, the road from Glasgow to Sharm el-Sheikh has been complicated. Overlapping crises have threatened to derail climate action even as the impacts of climate change have become increasingly visible around the world. [tweetquote:[tweetText=For the World Bank Group, the last year has been one of implementation and impact to help developing countries tackle the climate crisis.,tweetData=WBG_Climate,tweetHash=ClimateActionWBG]]

Here are five ways we stepped up support that made a difference to people on the ground:

1. Delivered record climate finance.

The World Bank Group delivered $31.7 billion of climate finance in fiscal year 2022 – the most in a single year in its history. The Bank Group’s climate finance rose 19% from the previous year and cemented the Bank Group as the leading multilateral financier of climate action in developing countries. Of the total, the World Bank delivered $26.2 billion in FY22 in climate finance. Nearly half of that—$12.9 billion—specifically supported investments in adaptation and resilience. IFC, the private sector arm of the Bank Group, delivered an unprecedented $4.4 billion in climate finance and mobilized an additional $3.3 billion from other sources. MIGA, the Bank Group’s political risk insurance and credit enhancement arm, delivered $1.1 billion in climate finance.

2. Mobilized new finance for the poorest countries.

With developing countries particularly hard hit by COVID-19 and its impacts, the Bank accelerated the replenishment of its fund for the poorest, the International Development Association (IDA). The Bank convened a global coalition of around 50 development partners from high-income and middle-income countries, who together pooled $23.5 billion in donor contributions. The Bank combined these resources with its own resources and its unique ability to leverage $4 for every $1 on the financial markets to generate a $93 billion financing package, the largest multilateral financing package for poor countries in history. The historic IDA20 replenishment was agreed in December 2021 and started implementation in July – it is already helping around 75 of the world’s countries to respond to the COVID-19 crisis and build a greener, more resilient, and inclusive future.

3. Prioritized climate change in its assistance to the poorest countries.

Included in that $93 billion IDA20 financing package is an ambitious policy package for climate – the World Bank is delivering more than 250 country-level actions to support the world’s poorest countries toward both adaptation and mitigation, with implementation already underway. IDA20 is supporting at least 50 countries to develop, update and/or implement their national climate targets (NDCs) to the Paris Agreement or to develop Long-Term Strategies to adapt to and mitigate climate change. IDA20 is also supporting at least 20 countries with low-carbon energy strategies and policies, including battery storage in at least 15 countries and at least 10 GW of renewable energy, including on-grid, off-grid, and distributed renewable energy. IDA funds are also helping countries to adapt to rising climate impacts and preserve biodiversity. IDA will support for at least 20 countries to implement nature-based solutions such as landscape, seascape, and watershed restoration and management, and forest restoration and sustainable forest management, in support of biodiversity and ecosystem services. The Bank will also develop a methodology to identify, monitor and assess the extent to which project financing generates biodiversity and ecosystems services.

4. Identified the most impactful actions countries can take to adapt, decarbonize, and build resilience.

A new Bank Group core diagnostic, the Country Climate and Development Report (CCDR), shows which strategies will do the most, the fastest, to reduce GHG emissions in each country while also supporting green, resilient, inclusive development. [tweetquote:[tweetText=Emerging findings from the first set of CCDRs covering over 20 countries shows that reducing emissions can be achieved without compromising development,tweetData=WBG_Climate,tweetHash=ClimateActionWBG]]: taken together, CCDR low-carbon development strategies reduce emissions by 70%, without significant impact on growth, provided policies are well designed and, crucially, financing is available, especially grants for low-income countries. The Bank Group is working with countries on investment plans to minimize the costs while maximizing the impact of mitigation and adaptation efforts and enabling public and private investments for climate action. Through its support for projects and policies, the Bank is also placing a strong focus on needed investments in adaptation including climate-resilient infrastructure and a halt to land degradation and forest loss to improve agricultural productivity and carbon capture. These actions, combined with climate-responsive safety nets, green jobs (including for women), measures to build human capital and a more diverse economy, can reduce the number of households that fall into poverty because of climate change.

5. Spearheaded financial innovation.

The Bank Group launched innovative vehicles for investment in climate action and biodiversity to add to existing green bonds, Sustainable Development Bonds, and blue bonds. The new Wildlife Conservation Bond issued by the World Bank Treasury supports South Africa’s efforts to conserve endangered species such as the black rhino. Also known as the “Rhino Bond,” this five-year $150 million Sustainable Development Bond includes a potential performance payment from the Global Environment Facility. In addition, a new multi-partner fund, Scaling Climate Action by Lowering Emissions (SCALE) will ramp up results-based climate finance from donor countries, the private sector and foundations for GHG emission reductions – and help countries build capacity to access carbon markets. SCALE’s initial capitalization target is $1 billion by the end of 2023, with a long-term target of $5 billion.