Climate Change

Development progress has stalled in many countries amid low growth, increased fragility and conflict, pandemic-related setbacks, and the impacts of climate change. An essential part of our vision to end poverty on a livable planet is helping people and communities adapt and prepare for the unpredictable and life-changing weather patterns they are experiencing.  Droughts, extreme heat, flooding and storms push millions into poverty annually, causing unemployment and risking unplanned internal and cross-border migration. Every year, an estimated 26 million people fall into poverty due to extreme weather events and natural disasters. These shocks have the potential to push a total of 130 million into poverty by 2030. We are supporting countries to meet these challenges in a way that builds resilience across families, communities, and companies, and doesn’t inadvertently increase pollution.

Helping people and communities adapt means making development investments that improve quality of life while also creating local jobs, strengthening education, and promoting economic stability. It also ensures that limited development resources are used wisely—by building infrastructure that can withstand future disasters, rather than needing to be rebuilt after each one. The World Bank Group is committed to meeting the needs of its clients – developing countries – who are asking our projects to have climate benefits, seeing it as smart development for their unique situations. This is a practical approach that opens the door to every resource at our disposal—bringing in industries and investors across the spectrum to participate. It creates opportunities, ensuring that no one is left out of the solutions we need for a more sustainable future. 

This means building hospitals that can withstand natural disasters and roads that don't get washed away with rainfall. Countries are investing in resource efficient rice harvests, heat-resistant varieties of seeds, drip irrigation, and restoring forests and mangroves to protect rural and coastal communities, improve their food security, and identify new private sector opportunities that will create jobs.

We are supporting reliable and affordable energy, boosting utility efficiency, and increasing regional power integration. We are also investing in country priorities – for example, improving affordable and efficient public transportation to get people back and forth to work, or improving on-farm productivity with new varieties of seeds and healthier livestock.

Last Updated: Apr 28, 2025

Strategy

The World Bank Group is committed to meeting the needs of developing countries with smart development solutions. We are guided by our Board-approved Climate Change Action Plan 2020-2025 (CCAP), which lays out our goals of supporting adaptation and mitigation, our diagnostic tools to help countries with analytics related to climate change and development, and our commitment to align financing flows with the objectives of the Paris Agreement to support countries’ climate commitments. The CCAP has been extended until June 30, 2026, with no other changes.

To respond to increasing client demands, the Bank is directing 45% of its financing to development projects with strong climate co-benefits, with the goal of half to projects with adaptation benefits and half with mitigation benefits in IBRD/IDA operations. 

Adaptation builds resilience with durable roads, flood-resistant infrastructure, and water-efficient irrigation. Simple, cost-effective solutions—like improving drainage systems or using drought-resistant seeds—deliver outsized impact. 

Mitigation cuts emissions. It is about helping countries grow and create jobs while minimizing their emissions.   It means investing in a mix of energy sources as part of a practical energy future, and extends beyond energy to sectors like agriculture, where better practices can cut methane, and transportation, where shifting freight from roads to rail can lower carbon footprints, and water and waste.

Smart development is an essential element of a more prosperous and healthier world. Through targeted support, we can help countries thrive, using new technologies that are more effective and efficient, while reducing poverty and building a cleaner planet.   

Activities

The World Bank Group delivered a $42.6 billion in smart development finance that had climate co-benefits in fiscal year 2024—which covers July 1, 2023 to June 30, 2024.

In 2024, we partnered with other Multilateral Development Banks (MDBs) to launch a common approach for measuring resilience outcomes in a more systematic way. This approach pivots from mostly measuring the volume of our finance with climate co-benefits, to also measuring results. In addition to the current practice of disclosing climate finance (mitigation and adaptation) data for each project, the World Bank is disclosing sub-project level climate finance data, from April 1, 2025.  The World Bank will also disclose climate finance at the close of each project which could facilitate comparison between committed and disbursed amounts. This enhanced transparency measure will be effective from July 1, 2025 (the start of fiscal year 2026). 

Our analytics include the Country Climate and Development Reports (CCDRs), with over 60 published to date covering 74 economies. Countries are tapping into our vast stores of development knowledge to gain expertise, especially in strengthening the enabling environment for private sector investment and supporting smart development in their local communities and local businesses.

Since 2008, we have issued approximately $19 billion equivalent through over 220 labeled (green, blue) bonds in 28 currencies. We have also engineered new instruments, whether issuing the Bank’s first sustainability linked loan to Uruguay to improve livestock productivity and decrease their footprint, or developing new instruments including outcome-based bonds or guarantees that have supported carbon markets.

We are working with over 30 countries in establishing domestic carbon pricing mechanisms and preparing for the next generation of international carbon markets. We are also helping countries to design and implement large scale programs that generate high integrity carbon credits in the forests and other sectors.

And we are supporting nature-based solutions to development challenges such as using soil stabilization to reduce erosion, and mangrove restoration to improve fisheries and protect coastal infrastructure from wave inundation. The World Bank currently has over $14 billion active investments in environment, natural resources, and the ocean.

Efforts like Mission 300 help align private capital with public priorities to achieve results neither could accomplish alone. Philanthropies and development banks provide the financial backbone; countries take the lead on project conception and implementation.

As part of a blueprint for methane reduction, through the Global Methane Reduction Platform For Development (CH4D) platform we are supporting 24 country-led programs to deliver better rice production, livestock operations and waste management systems with methane reduction, enhanced environmental resilience and improved livelihoods.

We have significantly expanded our crisis toolkit in several ways: broadening the scope of our Climate Resilient Debt Clauses to now cover disasters such as droughts, floods, and pandemics, offering vulnerable countries much-needed financial flexibility during crises.

Last Updated: Apr 29, 2025

The World Bank Group delivered a record $42.6 billion in climate finance in fiscal year 2024—which covers July 1, 2023 to June 30, 2024—supporting efforts to end poverty on a livable planet, investing in cleaner energy, more resilient communities, and stronger economies. This is a 10% increase in climate finance compared to the previous year.

Selected sectoral results:

Energy

• In Ethiopia, the National Electrification Plan focuses on “last-mile service delivery” for households, schools and local health centers, with an emphasis on reliable and affordable access for all. The Bank is currently supporting the National Plan through a $375 million IDA credit that will help bring electricity to one million households, and pilot new approaches for off-grid electrification. In March 2019, Ethiopia launched an updated version of the Plan (NEP 2.0), which includes a detailed framework for the integration of off-grid technologies with grid connectivity to achieve universal access by 2025.
• The World Bank’s support to clean cooking totals more than $400 million in 21 countries—mainly in Africa and South Asia—helping 20 million people access cleaner and more efficient cooking and heating solutions.
• As part of a $775 million partnership, the $8.5 billion Climate Investment Funds is helping India expand its rooftop solar industry. In less than a year, the program has enabled close to 500 MW of new rooftop solar capacity. It is estimated that rooftop solar alone can save almost 2 billion tons of CO2 emissions and lead to nearly 50,000 jobs.
• The Bank’s Carbon Initiative for Development (Ci-Dev) has emission reduction purchase agreements (ERPAs) for thirteen programs—twelve in Sub-Saharan Africa and one in Asia. Of these, six have had issuances of Certified Emission Reductions (CERs)—representing almost half of the portfolio.  In total they have achieved more than 360,000 tons of CO2 reductions through clean energy access programs ranging from low-carbon cooking programs in Lao PDR, Ethiopia and Madagascar, biodigester programs in Burkina Faso and Kenya, to solar energy and rural electrification programs in Ethiopia, Kenya and Uganda.
• In Uzbekistan, IFC committed a $17.5 million loan and a $17.5 million blended finance for the Navoi Scaling Solar project, a 100 MW solar PV plant. This is Uzbekistan’s first private sector infrastructure financing. IFC advised the government on the competitive bidding process, which resulted in the country procuring power at $2.679 cents / kWh for 25 years.

Adaptation and Resilience

• The Bank has committed to ensuring that half of our climate finance supports adaptation and resilience.
• The World Bank has scaled up analytical work and metrics related to adaptation and resilience.
  • The Resilience Rating System, being piloted in 20 IDA19 projects across all regions and covering a range of sectors, is helping us assess resilience across two dimensions: the resilience of a project’s design (whether it is resilient to risks from climate change and natural hazards); and the resilience gained through project outcomes (whether it builds the resilience of people and of the wider system). Based on the pilot experience, the method is updated and will be applied to IDA20 projects to support better resilience impacts of investment projects.
  • The Adaptation Principles report lays out 6 universal principles (along with 26 actions, 12 toolboxes and 111 indicators) to help policymakers plan for adaptation.

• Some highlights of work underway with support from Global Facility for Disaster Reduction and Recovery (GFDRR) include:
  • Supporting  the historically conflict-torn Bangsamoro region of the Philippines in adopting a conflict-sensitive approach to climate and disaster resilience. Already, 67 officials, nearly half of whom were female, have received in-depth training on how to design conflict-sensitive disaster recovery frameworks.
  • Working with local authorities in Bucharest to ensure that the Romanian capital’s emergency preparedness and response system is fully inclusive and does not leave people living with disabilities behind. Eighty percent of participants found that trainings on disability-inclusive emergency preparedness and response supported by the team improved their understanding of the specific vulnerabilities and needs of persons living with disabilities, while 64 percent said that they would be likely to apply knowledge and skills from the trainings in their work.
  •  The report, “Unlivable: What the Urban Heat Island Effect Means for East Asia's Cities” provides a deep dive assessment of the urban heat island effect in East Asia’s cities and how it is interacting with climate change. The report also provides recommendations for how the leaders of these cities can significantly mitigate the impact of this effect on local temperatures while also further promoting greater adaptation to extreme urban temperatures.

Transport

The Bank’s transport portfolio has been rapidly shifting toward climate-smart projects: Since FY17, the Transport global practice has committed $14.86 bn to low-carbon and climate-resilient solutions through 177 projects. All FY23 projects included climate co-benefits.

• In Dakar, Senegal, the Bank is working with partners to help develop a new transport system aimed at moving 300,000 passengers per day. The Dakar Bus Rapid Transit (BRT) Pilot Project will improve travel conditions and reduce by half the average rush hour in-vehicle travel time by public transport. Senegal's NDC lists the BRT as central to reducing the country’s transport-related carbon emissions.
• In Bangladesh, the Bank supported the development of the country’s inland waterway transport sector. Through a pilot exercise some of Bangladesh’s cargo transport along the Dhaka-Chittagong corridor is shifting to inland waterways which would reduce emissions in line with the country’s NDC, lower transaction costs for suppliers and improve the reliability and efficiency of freight transport in the country.
• Due to their size and location, Small Island Developing States are disproportionately affected by climate change. In a bid to enhance their overall climate resilience, the Bank has substantially increased assistance to the transport sector in many of these countries, with a clear focus on adaptation. For instance, the Pacific Climate-Resilient Transport Program is currently under implementation in Samoa, Tonga, Tuvalu, and Vanuatu, with more countries expected to join in a second phase.
• IFC partnered with ALD, a leading global vehicle leasing company and a subsidiary of Société Générale, to reduce carbon emissions in transport by accelerating the adoption and penetration of green vehicles in emerging markets. The US$400 million IFC investment will help ALD grow its green fleet, a combination of hybrid, plug-in hybrid and battery electric vehicles, in seven countries –Türkiye, Mexico, India, Serbia, Romania, Bulgaria, and Croatia. The financing, which was intermediated by Société Générale on behalf of ALD, is expected to add 15,000 green vehicles with the potential to reduce carbon emissions by 22,180 tons a year across the target countries by 2026.   

Food and Agriculture

Climate change and agriculture are closely linked. The fast pace of climate change is challenging farmers’ ability to adapt and cutting into their livelihoods. On the other hand, agriculture is also a major part of the climate problem. Together with forestry and land use change, it generates up to 29% of total GHG emissions. 

• We are supporting a  $125 million project in Jordan which aims to strengthen the development the agriculture sector by enhancing its climate resilience, increasing competitiveness and inclusion, and ensuring medium- to long-term food security.
• In Bolivia, we are supporting a $300 million project that will contribute to increasing food security, market access and the adoption of climate-smart agricultural practices.
• The $2.3 billion Food Systems Resilience Program for Eastern and Southern Africa helps countries in Eastern and Southern Africa increase the resilience of the region’s food systems and ability to tackle growing food insecurity. The program will enhance inter-agency food crisis response also boost medium- and long-term efforts for resilient agricultural production, sustainable development of natural resources, expanded market access, and a greater focus on food systems resilience in policymaking.
• A project is promoting sustainable family farming in rural areas of Piaui, a state in Northeastern Brazil, with a focus on helping producers boost their incomes and increase their climate resilience. Approximately 24,000 family farmers are expected to directly benefit from this initiative, especially indigenous peoples.
• The Word Bank continues to support the Accelerating Impacts of CGIAR Climate Research for Africa project in advancing climate-smart agriculture technologies and addressing critical gaps in climate resilience and food security in Ethiopia, Ghana, Kenya, Mali, Senegal, and Zambia.

Forests and Landscapes

• The Forest Carbon Partnership Facility (FCPF) has now signed 15 Emissions Reduction Payment Agreements (ERPAs) with a total contract value of over $720m, committing to reduce emissions through reforestation programs by more than 145 million tons of carbon to 2025. The 15 FCPF countries are: Chile, Costa Rica, Côte d'Ivoire, Dominican Republic, DRC, Fiji, Ghana, Guatemala, Indonesia, Laos PDR, Madagascar, Mozambique, Nepal, Republic of Congo and Vietnam.
• Results-based payments are now flowing from the FCPF: Mozambique, Costa Rica and Ghana are among those that have now received their first payments from the transaction of jurisdictional REDD+ certified emission reductions. These milestones signal that reductions in greenhouse gas emissions generated from forest conservation and other sustainable land uses have a central place in international carbon markets.
• For decades, illegal hunting and overfishing in Colombia’s Orinoquia region contributed to significant biodiversity loss. But leveraging financing opportunities can support new economic options for local communities, while also helping to preserve the enormous biodiversity, carbon and ecosystem value of the region. The World Bank’s BioCarbon Fund Initiative for Sustainable Forest Landscapes aims to support these efforts by building an enabling environment in Orinoquia for economic growth in harmony with environmental conservation.
• In Peru, the  Dedicated Grant Mechanism (DGM) project has supported Improvement of forest management in indigenous communities. The project has financed activities to reforest or improve the natural regeneration of forests, traditional agriculture, use and conservation of indigenous medicine, agroforestry to improve biodiversity and indigenous landscape management practices in Loreto, San Martin, Atalya, Madre de Dios and Ucayali. In addition, the project has supported the demarcation of 48 native communities; titled 42,280 beneficiaries and 212,486 hectares of native community lands in high threat areas, and  facilitated the  recognition process  of 217 native communities and their registration  the public registry.
• IFC has published first-to-the-market Biodiversity Finance Guidelines – a practical, hands-on reference for investors interested in entering the biodiversity finance space.  The Guide provides a clear classification of transactions that fit the definition of biodiversity finance, adding clarity and transparency to the heretofore vague regulatory environment.

Cities

As the world continues to urbanize, how cities are built and managed – especially over these coming two decades - will determine the trajectory of GHG emissions and safeguard development gains for future generations.  In FY23 alone the World Bank as a whole approved around US$8.13 billion toward 40 green and resilient investment operations in cities across 30 developing countries.

Key programs in support of the Bank’s work on cities and climate change include:

• The City Climate Finance Gap Fund (Gap Fund) was launched in 2020 to support cities turn their climate ambitions into projects ready to be financed and implemented. The Gap Fund focuses its support on the critical early stage of project identification and preparation. As of December 2023 it has already supported more than 200 cities across 70 countries with the development of city-level climate strategies and the identification and development of urban climate investments.
• The City Resilience Program (CRP)  helps cities become more resilient to the adverse impacts of disasters and climate change. The program supports risk-informed urban planning, identifies investments that enhance city resilience, and facilitates access to financing to ensure that those investments materialize. This integrated approach helps create the conditions for equitable and sustainable economic growth in a context of rapid urbanization and increasing urban climate and disaster risk. To date, the program has worked with 253 cities in over 80 countries around the world.  
• Urban resilience goes hand in hand with environmental sustainability. The World Bank’s Global Platform for Sustainable Cities is a partnership and knowledge platform to promote integrated solutions and cutting-edge knowledge for cities seeking to improve their resilience and overall urban sustainability. The Platform includes 28 cities across 11 countries that have received $151 million from the Global Environment Facility and leveraged $2.4 billion in project co-financing. 

Water and Waste

• In Brazil, IFC signed a $56 million green and sustainability linked A loan to Companhia Riograndense de Saneamento (Corsan) a state-owned water utility in June 2021. This is IFC’s first sustainability-linked loan in infrastructure in Latin America and second in the water sector globally. The investment will support Corsan's water loss program and energy efficiency improvement efforts through network replacement and substitution of obsolete electric pumps and hydrometers.  IFC has also worked with SABESP, one of the largest water treatment and sanitation companies in Brazil, to reduce pollution and improve water access and quality in communities alongside the Pinheiros River.
• IFC committed a $30 million loan (in local currency equivalent) to IZSU, the water utility of the City of Izmir, Turkey, in order to upgrade its water treatment and supply Infrastructure. This investment is the first sustainability-linked loan for IFC and first long term local currency loan to a Turkish municipal client from an international lender. The proceeds will be used for eight sub-projects in three areas, network pipeline construction, greenfield potable water treatment plant, and replacing and rehabilitating the water supply trunk. This will reduce wastewater collected in tanks, provide better quality drinking water, and improve water supply reliability. 
• In August 2020, IFC committed a $60 million investment in ALBA Asia Group which is a pan-Asia waste management and recycling company. The company focuses on waste treatment, bio waste management, plastics recycling, and smart city waste solutions. IFC’s investment will support eight waste and bio waste projects in China, mostly in frontier regions. It supports the WBG’s focus on promoting circular economy business models, in particular to help enhance environmentally sustainable waste management in the region.
• In Belgrade, Serbia, IFC and partners provided a €260 million package to transform the Vinča landfill into a new sanitary landfill, a waste-to-energy plant and a construction waste recycling unit. The project helps address the challenge of municipal waste management, curb air and water pollution, and contribute to the city’s electricity grids for the next 30 years.

Innovative Partnerships

• The Coalition of Finance Ministers for Climate Action is a global initiative that recognizes the unique capacity of Finance Ministers to address climate change and believes that progress can be accelerated through collective action and engagement.
  • The initiative was launched in April 2019 at the WBG and IMF Spring Meetings. The Coalition now has over 90 member countries and is supported by 25 Institutional Partners. Member countries represent about 40% of global carbon emissions and 66% of global GDP.. 
  • Coalition Members work together on the development of economic and financial policies that support low-carbon and climate-resilient growth. Its work is organized around the six Helsinki Principles that all member countries endorse upon joining the Coalition.
• Innovate4Climate  is the World Bank Group’s annual global conference on climate finance, carbon markets and climate investment. It brings together national and corporate leaders to foster the exchange of knowledge and best practices and promote investments in proven transformative climate-smart solutions.
  • The eight edition will be hosted in Berlin, Germany from September 10 – 12, 2024. Through its 3-day program, the conference will  focus on carbon pricing and carbon markets.

• The Partnership for Market Implementation assists countries to design, pilot, and implement carbon pricing instruments aligned with their development priorities. With the goal of putting carbon pricing programs in place in at least 30 countries by 2025, the Partnership is already rolling out support for more than 25 countries. This support includes emissions trading systems, carbon taxes, carbon crediting mechanisms, as well as strategies to access the next generation of international carbon markets.
  • The Partnership also focuses on delivering in-country capacity building and supporting the global carbon market architecture through strategic advice on carbon market strategies, institutional strengthening, policy design and infrastructure development.
  • The Partnership offers robust practice guidance on carbon pricing policy and market development through events, workshops, and reports, including the World Bank’s Annual Report on State and Trends of Carbon Pricing and the Carbon Pricing Dashboard.

• The Climate Warehouse program prototypes, tests, and develops digital infrastructure to foster greater transparency, trust, and integrity in the carbon markets. The Bank’s Climate Warehouse program is working with public and private sector partners to build an end-to-end digital ecosystem and underpin the development of carbon markets. This initiative builds and pilots modular components of the ecosystem needed to digitize the generation, reporting, and transfer of carbon assets.
  • Examples include the  metadata platform to connect, harmonize, and aggregate carbon registry data (Climate Action Data Trust), digital MRV systems, national carbon registries, tokenization instruments, and a one-stop resource platform that enhances knowledge-sharing and capacity-building.
  • This program also houses the secretariat of the Digital for Climate (D4C) Working Group – a collaborative initiative by WB, UNFCCC, UNDP, EBRD and ESA and other stakeholders (e.g. IETA, CAD Trust) that aim to build modular and interoperable components for end-to-end digital ecosystem for carbon markets.

• The Connect4Climate (C4C) program is a World Bank Group Multi-Donor Trust Fund that draws on the knowledge and convening power of international institutions to develop innovative climate communication and advocacy strategies.
  • Since its inception in 2009, C4C has been known for its ability to enhance climate consciousness among diverse audiences; build cross-sectoral and multilateral coalitions to advance international climate goals; and encourage ambitious climate action among the public, the private sector and policymakers. In 2024, as part of the G7 Ministerial Meeting on Climate, Energy and Environment, C4C will help organize a “Planet Week” in Turin. In partnership with the Italian Ministry of Environment and Energy Security, this week-long series of cultural events will engage the public to advance climate action and solidarity.
  • By collaborating with leaders from across the international community and creative economy, C4C works to catalyze a global climate movement with youth at the center. As a founding partner of the Max Thabiso Edkins Climate Ambassador Program, C4C supports a new global cohort of young people every year in broadening their climate knowledge, developing novel solutions, strengthening their leadership skills, and launching campaigns in their local communities. C4C is also key partner for the Italian Government’s Youth4Climate platform, which has been engaging young climate leaders since Pre-COP26 to drive ambition, power action, and spark solutions.

Last Updated: Oct 11, 2024