THIMPHU—December 4, 2015: World Bank Vice President for the South Asia Region Annette Dixon today announced that the global lender will increase its support and provide up to an additional $3.8 million to combat climate change and prevent natural disasters in Bhutan and South Asia.
During her three-day visit to Bhutan, and in parallel with the International Climate Change Summit (COP21) in Paris, Dixon praised Bhutan’s commitment to remaining carbon neutral and highlighted two new climate change and resilience initiatives during a joint session with Bhutan’s Minister of Agriculture and Forests, Lyonpo Yeshey Dorji.
The Bank’s support will comprise a new weather and disaster improvement project to strengthen weather forecasting and natural disaster early warning in Bhutan and the South Asia region, as well as a Bhutan-specific pilot program for climate resilience funded through a grant from the Climate Investment Funds (CIF). This grant will help Bhutan develop a comprehensive climate resilience strategy and pave the way for additional international financing from other multilateral development banks.
“Bhutan is setting the stage for an ambitious agenda to tackle climate change and protect the people of Bhutan and South Asia from the risks of a warming climate and extreme weather,” said Dixon. “Bhutan has long been a champion and a global leader for climate change adaptation and disaster resilience. And with this new funding, we’re initiating a transformative low-carbon strategy, which will embrace all sectors of the economy and could become a model for the rest of South Asia.”
During her first official visit to the country, Dixon met with his Majesty the 5th King and the leadership of Bhutan, learned about the country’s development progress, and discussed new areas for collaboration to promote further social cohesion, regional integration, further develop the private sector, and better manage urbanization.
While Bhutan shows robust economic growth and poverty has diminished dramatically, the country’s economy relies heavily on donors’ aid and remains dominated by the public sector. Dixon encouraged Bhutan to continue to improve its business climate and investment environment, and accelerate its fiscal reforms.
“The Bank stands ready to support Bhutan manage the next stage of its economic and social development,” said Dixon. “The country has strong economic fundamentals and has the potential to stimulate entrepreneurship and provide more and better jobs for its population,” she concluded.
The World Bank in Bhutan:
The World Bank strategy in Bhutan focuses on improving rural livelihoods and managing urbanization while protecting the country’s natural assets. It has currently committed $191 million in concessional development credits, a number of technical assistance grants and analytical work for these areas to improve fiscal and spending efficiency, fostering private sector growth and competitiveness and supporting green development. Private sector development is one of the key priorities of the World Bank Group in Bhutan, through supporting a good environment for private sector investment and job creation.
World Bank Group’s commitment to climate finance:
Since 2011, the World Bank Group has committed $52 billion to more than 900 projects with climate-related activities - on average, a little over $10 billion a year. Twenty one percent of the Bank Group’s funding is climate related and, as announced in October, the Bank Group is aiming to raise that to 28 percent by 2020 in response to client demand -- a one third increase in direct climate financing.