• Countries can unlock new economic opportunities and jobs through climate action.

     

    The financing required for an orderly transition to a low carbon, resilient global economy must be counted in the trillions, not billions.  

     

    Last Updated: Oct 04, 2019

  • The World Bank Group (WBG) is working on innovative solutions to help countries meet their climate commitments.

    • The World Bank Group’s Climate Change Action Plan (2016-2020) lays out ambitious targets to be met by 2020, including helping client countries add 30 gigawatts of renewable energy, put in place early warning systems for 100 million people, and develop climate-smart agriculture investment plans for at least 40 countries.
    • In December 2018, the World Bank Group announced a new set of climate targets for 2021-2025, doubling its current 5-year investments to around $200 billion in support for countries to take ambitious climate action. The new targets build on the World Bank Group’s 2016 Climate Change Action Plan.
    • The World Bank recently launched a new Action Plan on Climate Change Adaptation and Resilience. Under this dedicated plan - the first of its kind - the World Bank Group will ramp up direct adaptation climate finance to reach $50 billion over FY21–25. This financing level—an average of $10 billion a year—is more than double what was achieved during FY15-18. The Action Plan forms part of the World Bank Group’s 2025 Targets.
    • More than 135 developing and middle-income countries have submitted national plans for climate action under the Paris Agreement – the Nationally Determined Contributions (NDCs). The WBG is now actively working with countries to help them deliver on and exceed their Paris ambitions, including through financing, technical assistance, and knowledge sharing.
    • The World Bank supports client countries in their efforts to implement their national climate commitments, including their nationally determined contributions (NDCs), in their follow up to the Paris Agreement.
    • Climate change is a key priority for the International Development Association (IDA), the World Bank’s fund for the poorest, and helps countries cope with climate change by bringing new solutions—such as better weather data and forecasting, drought-resistant crops, climate-resilient roads, disaster insurance, and cyclone-resistant houses and early warning systems.
    • The WBG is working together with the other multilateral development banks (MDBs) on common approaches to monitor and track their climate finance flows to client countries, as they increase their climate financing in mitigation and adaptation. The MDBs are continuing to align their financial flows to help countries meet the Paris Agreement, supporting the implementation of the NDCs and facilitating activities that transition development towards low greenhouse gas emissions and climate resilient development.
    • In partnership with the UN, the World Bank Group co-launched in September 2017 a platform for climate action, Invest4Climate, designed to bring together national governments, financial institutions, investors, philanthropies, and multilateral banks to support transformational climate investments in developing countries.

    Last Updated: Oct 04, 2019

    • The World Bank Group made a commitment to increase the climate-related share of its lending from 21% to 28% by 2020. For the second year in a row, the Bank Group has exceeded its targets, reaching 30% for fiscal year 2019. This total – roughly $17.8 billion across the Group – is the result of an institution-wide effort to mainstream climate considerations into all development projects. In 2018, the WBG provided a record-breaking $20.5 billion in finance for climate action.
    • In 2019, the World Bank also more than doubled the share of projects with climate co-benefits over the last three years, from 37% in fiscal year 2016 to 81% in fiscal year 2019. Adaptation continues to account for 49% of all World Bank climate finance two years in a row. In FY19, that amounted to $7.0 billion in adaptation investments.
    • IFC’s climate commitments in fiscal year 2019 amounted to 30% of its own account and mobilization, surpassing its 28% target. This translates to over $2.6 billion in own account climate-smart investments, and an additional $3.2 billion in core mobilization, reflecting a growing appreciation that climate-smart agriculture, green buildings, smart cities, clean energy, green bonds represent areas of opportunity for investing.
    • In FY19 IFC’s climate-related investments from its own account stood at $2.6 billion, covering 93 climate investment projects in over 40 countries. In addition, IFC mobilized $3.2 billion from other investors, reflecting a growing appreciation that climate-smart agribusiness, green buildings, smart cities, clean energy, and green bonds represent areas of opportunity for investing. The total number—$5.8 billion—represented 30% of IFC’s overall commitments for the year.
    • Climate financing by the world’s six largest MDBs hit an all-time high of $43.1 billion in 2018, according to the 2018 Joint Report on Multilateral Development Banks’ Climate Finance, boosting projects that help developing countries cut emissions and address climate risks. This represents an increase of more than 22% from the previous year, where climate finance totaled $35.2 billion – a 60% increase since the adoption of the Paris agreement. The Bank Group committed nearly half of the total climate finance from MDBs – a total of $21.3 billion.
    • In 2019 the International Development Association (IDA), the World Bank’s fund for the poorest, provided more than $6.9 billion in climate-related financing to more than 254 projects. 
    • The Bank Group is a pioneer in developing the green bond market, bringing new capital and innovation to countries. The Bank Group supports new green bond issuers by working with countries to put in place market frameworks that support green bond issuances.
    • The World Bank Group issued the first-ever labeled green bond in 2008. Since then, we have issued nearly $14 billion through 155 green bonds in 20 currencies. We helped set up green financing frameworks for the first green Islamic bond, and the first green bond by an emerging economy in Fiji.
    • The $8.3 billion Climate Investment Funds (CIF) has recently marked ten years of climate action, working in 72 countries. Among CIF’s more than 300 projects is the $80 million Dedicated Grant Mechanism for Indigenous Peoples and Local Communities, a one-of-a-kind program designed and led by representatives of Indigenous peoples and local communities to enhance their capacity to engage in and contribute to sustainable forestry dialogue and actions.
    • In November 2018, IFC committed 60 million euros in equity and 110 million euros in own account lending for the construction of hydropower plant that will increase Cameroon’s power generation capacity by 30%. IFC mobilized an additional 806 million euros from 11 development finance institutions and four commercial banks. French utility company EDF and Cameroon will also invest equity. The Nachtigal hydropower plant in Cameroon is the result of years of effort from IFC in project design and contract negotiation as well as the World Bank in reforming the country’s management of the Sanaga River and the electricity transmission network. The 420 MW plant will replace imported fuels and 100% of the investment counts as climate mitigation.
    • DRC, Ghana and Mozambique – African countries with globally significant forest resources – have recently signed landmark agreements with the World Bank that reward community efforts to reduce carbon emissions by tackling deforestation and forest degradation. Together, these three agreements, known as Emission Reductions Payment Agreements, unlock performance-based payments of up to $155 million. The payments will come from the Forest Carbon Partnership Facility Carbon Fund, whose Secretariat is hosted by the World Bank. Several other countries are expected to finalize similar agreements in the coming months.
    • In Rwanda, private company Inyenyeri is using results-based carbon finance to mobilize private finance to scale up clean cooking and reduce greenhouse gas emissions. It provides rural households with biomass fuel pellets for clean gasifying cookstoves, a solution that delivers climate, environmental, and health benefits and frees up time for women and children. With the support of the World Bank’s Carbon Initiative for Development, Inyenyeri’s customer base has tripled from 2017 to 2019.

    Last Updated: Oct 04, 2019

Additional Resources

For Media Inquiries

Washington, D.C.
Ferzina Banaji
fbanaji@worldbankgroup.org