The World Bank Drives Billions into Fossil Fuel Investments

Around the world, climate change is intensifying the destruction and human suffering caused by severe weather events, including, inter alia: flooding, hurricanes, drought, heat waves and forest fires.

UNICEF reports that a billion children worldwide are vulnerable to the effects of climate change. The World Bank states that without urgent action, climate change will push more than 100 million people into poverty by 2030.

The burning of fossil fuels is the biggest contributor to the climate crisis. No fossil fuel investments are needed to provide energy access to the poor because existing renewable energy technologies are already the best option. As such, the UN Sustainable Energy for All initiative states thatfinancing of fossil fuel projects as a means of closing the energy access gap should be terminated.”

There are no more excuses, no public assistance should be used to boost or prop up the development of fossil fuels. Yet the World Bank is still using its public funding to drive billions and billions into fossil fuel investments, including coal.

Since the Paris Climate Agreement (2016-2020), the World Bank has provided:

  • $12 billion in direct project finance for fossil fuels in over 35 countries (see Table 1);

  • $10-$20 billion annually given as government budget support – representing a huge fossil fuel loophole as the World Bank does not restrict spending on fossil fuels, including coal expansion. From 2016 to 2019, 81 countries received budget support;

  • Billions more in fossil fuel-enabling infrastructure, such as transmission lines to evacuate power from new coal-fired plants (examples include: in India, Indonesia, and Pakistan mega coal power projects would not have gone forward without the World Bank-funded transmission lines);

  • Fossil-friendly policy reforms in at least 18 countries that increased fossil fuel profits – driving billions into new fossil fuel investments (see Table 2), examples include, inter alia: tax breaks for coal and gas in Mozambique; tax breaks favoring oil and coal in Colombia; and higher electricity tariffs resulting in higher profits for new coal-fired plants in Pakistan;

  • Technical assistance in over a dozen countries aimed at increasing fossil fuel investments (see Table 3). Yesterday’s technical assistance is today’s mega fossil fuel project, examples include, inter alia: Pakistan’s Thar lignite coal fields – the largest in Asia; Mozambique’s coal and liquified natural gas (LNG) blocks; and Brazil’s pre-salt offshore oil fields.

In order to be in alignment with the Paris Climate Agreement goals, the World Bank must get out of all fossil fuels now, including:

  • Stop financing all fossil fuel projects (coal, oil and gas) and enabling infrastructure, including through financial intermediaries (i.e., on-lending through banks and equity funds).

  • Stop allowing billions in budget support to be used for fossil fuel expansion.

  • Stop fossil-friendly policy reforms, including tax breaks and increasing tariffs to cover higher profit margins and capacity payments for new fossil fuel power plants.

  • Stop all technical assistance for fossil fuel expansion, including geodata, transaction advisory, and policy formation.

  • Donor governments should not consider a World Bank-suggested capital increase for climate finance until the World Bank ends all fossil fuel assistance. Redirect the tens of billions in fossil fuel assistance to climate finance first.

Table 1. World Bank Group Fossil Fuel Finance since Paris Climate Agreement1

Table 1 WB Fossil Finance

Source: All data collected from World Bank Group webpages by Heike Mainhardt for Urgewald, August 2020
Note: G20 countries are underlined.
1 The UN Paris Climate Agreement was adopted on December 12, 2015. These data represent World Bank Group investments approved up to August 12, 2020. This table does not include finance from investments made through financial intermediaries, or through budget support. The World Bank Group includes the International Development Association (IDA), the International Bank for Reconstruction and Development (IBRD), the International Finance Corporation (IFC) and the Multilateral Investment Guarantee Agency (MIGA).
2 Upstream oil and gas includes $750 million in new investments/technical assistance and $300 million in existing equity.
3 Technical Assistance that targeted coal mining in Mozambique also targeted oil and/or gas, thus the $53 million for coal is not added to the overall total to avoid double counting. Furthermore, the finance for technical assistance in Afghanistan was provided by the donor-funded Afghanistan Reconstruction Trust Fund. Thus, no finance was included in this table as it does not come from the World Bank’s budget.
Table 2. Policy Reforms of World Bank Development Policy Finance 2016-2019

Table 2 WB Policy Reforms

Source: All data collected from World Bank webpages by Heike Mainhardt for Urgewald, 2020.
*”Improving” the business environment often involved expediting the permitting process or decreasing the number of days to set up a business.

In at least 18 countries, World Bank policy reforms targeted benefits favoring fossil fuel investments. Those countries included: Burkina Faso, Colombia, Egypt, Ghana, Gambia, Indonesia, Iraq, Jordan, Liberia, Mozambique, Niger, Pakistan, Papua New Guinea, Romania, Senegal, Serbia, Tunisia, and Ukraine.

Examples include, inter alia: tax breaks for coal and gas in Mozambique; decrease in corporate income tax while maintaining VAT tax exemptions favoring oil and coal in Colombia; and higher electricity tariffs resulting in higher profits for new coal-fired power plants in Pakistan.

It should be noted that when the World Bank targets reforms to energy tariffs, this often involves increasing tariffs usually under the banner of reducing energy subsidies. However, these tariff increases typically increase the profit margins for new coal and/or gas power plants or new oil and gas field developments. In 29 countries the Bank targeted energy tariff reforms and it is believed the majority of these energy tariff increases benefitted new fossil fuel investments.

In most cases, without further research and assessment, it is not possible to determine what forms of energy benefit from the World Bank-required policy reforms as the World Bank tends not to provide enough information.

Table 3. Examples of World Bank Fossil Fuel Technical Assistance (active 2013-2025)

Table 3 WB Technical Assistance

Source: all data were collected from the World Bank Group webpages by Noah Gibbs for Urgewald, August 2021.
*Not associated with environmental regulation/management.
~International Finance Corporation (IFC) Advisory Services. IFC is the private sector arm of the World Bank Group.
^Also involves assistance for renewable energy
+The Vietnam Power advisory services project is no longer on IFC's website. It was last viewed on January 4, 2019 and was still active at that time.


    Bild Anprechpartner   Heike Mainhardt

    Heike Mainhardt
    Senior Adviser für Kampagnen zu multilateralen Finanzinstitutionen
    heike.mainhardt [at]

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