SUN's POWER is 21st century future for WORLD BANK
World Bank to Stop Funding Coal Projects
Posted July 18, 2013
The World Bank Group has just agreed to stop funding coal projects. This is welcome news as the World Bank Group has funded almost $6 billion in coal projects over the past five years. As a part of a new energy strategy which will cover the Bank’s lending, the Bank agreed that it will only fund coal projects in “rare circumstances” under certain specific conditions. This commitment will help focus the World Bank Group on using scarce resources to combat climate change, spur clean energy deployment, and meet the energy needs of the poorest in the world. With the poorest communities feeling the brunt of the impacts of global warming this is a welcome shift from an institution that has clearly recognized the damages that will come from global warming.
The strategy specifically commits that the World Bank Group:
“will provide financial support for greenfield coal power generation projects only in rare circumstances. Considerations such as meeting basic energy needs in countries with no feasible alternatives to coal and a lack of financing for coal power would define such rare cases” [emphasis added].
While the definition of “rare circumstances” wasn’t completely detailed in the strategy, the U.S. and other countries have clearly signaled that investments in clean energy should be the primary focus of the World Bank Group. After all, President Obama recently committed that the U.S. won’t support using public financing – such as from the World Bank – for new coal projects overseas that don’t capture their carbon. So “rare circumstances” should be a high bar.
The strategy also commits the Bank to step up its efforts to help the poorest citizens gain access to energy and to spur clean energy like energy efficiency, wind, solar, and geothermal. It commits to Bank to view all of its energy sector support through the lens of how does it help countries secure the “affordable, reliable, and sustainable energy supply to end poverty and promote shared prosperity”. This will ensure that the Bank justify all projects on the basis of how they help the poor and supply sustainable energy. With renewable energy deployed around the world we have long past the point where people could say “renewable energy is only available in certain rich countries under certain conditions”. The cost of renewable has dropped significantly in recent years, in most cases it is cost competitive with coal generation even without factoring in the damaging pollution from coal power plants. Clean energy is real, being deployed widely around the world, and a viable economic investment so it is welcome that the Bank has signaled that they’ll shift their emphasis from 19th century to 21st century investments.
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