Nneka Nwogwugwu
The World Bank’s plan to loosen its spending rules and lend more money to climate projects in developing countries does not go far enough, according to officials and campaigners.
The bank’s president David Malpass said last week that the International Bank for Reconstruction and Development (IBRD), the biggest part of the World Bank, may lower its equity-to-lending ratio by one percentage point to 19%.
That would free up around $4 billion a year for emission-cutting and climate adaptation projects. The World Bank claims it spends about a third of its money on climate programmes and is making climate more central to its mission.
Reacting on Wednesday in an interview with Climate Home, Avinash Persaud, an adviser to Barbados’s prime minister Mia Mottley and one of the key brains behind the push for the World Bank’s green reform said that 19% was “not low enough but a start”.
Also, a spokesperson for Germany’s economic cooperation and development (BMZ) said the proposed change “is a first step” but “having in mind the dimension of the challenges ahead, more reforms are needed”.
The push to reform the bank began in the Caribbean island of Barbados but has been picked up by the US and Germany, two major shareholders in the bank. The US will pick the bank’s next president when Malpass retires in June.
Neither Persaud nor the BMZ put forward a precise equity-to-loan ratio. But E3G campaigner Franklin Steves said the bank should target a range of 15-18%, adding that should be a ceiling rather than the existing floor.
He said that 19% “fails to meet the level of ambition” that the bank’s government shareholders called for at its annual meeting last year or the recommendations of the G20 group of major economies.