By Abbas Nazil
The World Bank is considering removing its target of allocating 45 per cent of its lending to climate finance as negotiations intensify over the future of its Climate Change Action Plan (CCAP), a key framework guiding the institution’s response to climate change and alignment with international climate commitments.
According to officials and experts familiar with the discussions, pressure from the United States, the bank’s largest shareholder, has contributed to growing uncertainty surrounding the future of the climate strategy, which is set to expire on June 30 after already receiving a one-year extension.
The CCAP, originally launched in 2021, serves as the World Bank’s primary roadmap for integrating climate action into its operations, investments and development programmes.
The framework outlines measures aimed at supporting global climate goals, increasing climate-related financing and ensuring that World Bank-funded projects do not undermine efforts to limit global warming.
If the plan expires without replacement or renewal, the institution would lose its overarching climate finance benchmark and a major policy instrument designed to keep its activities aligned with the objectives of the Paris Agreement.
Sources involved in the discussions indicated that World Bank management is weighing options that include removing the 45 per cent climate finance target in an effort to secure agreement among shareholders and prevent a complete collapse of the framework.
The target has been one of the most visible indicators of the bank’s commitment to climate action, guiding investments in renewable energy, climate adaptation, resilience building and other environmental initiatives across developing countries.
However, negotiations over the future of the plan have become increasingly contentious in recent months.
Several experts and officials familiar with the process said the United States has pushed for substantial weakening of the framework and has questioned the continued relevance of some climate-related commitments within the institution’s development agenda.
According to the sources, some participants in the negotiations believe the U.S. position has reduced prospects for compromise and made it more difficult to reach consensus before the deadline.
The uncertainty has raised concerns among climate advocates, development experts and borrowing countries that rely on World Bank support for climate adaptation and mitigation projects.
Many observers argue that the expiration of the Climate Change Action Plan without a replacement could weaken the bank’s ability to demonstrate leadership in global climate finance at a time when developing nations are facing increasing climate-related challenges.
The issue comes amid growing international attention on the role of multilateral development banks in mobilising climate finance and supporting vulnerable countries affected by rising temperatures, extreme weather events and environmental degradation.
The World Bank has become one of the largest providers of climate-related development financing globally, making its climate policies highly influential in shaping investment priorities and development strategies across multiple sectors.
Stakeholders are now closely monitoring the ongoing negotiations, with less than two weeks remaining before the current framework expires.
The outcome could determine whether the institution retains a clear climate finance target, adopts a revised strategy or faces a policy gap that could reshape its approach to climate action and sustainable development in the years ahead.
As discussions continue, the future of the World Bank’s climate agenda remains uncertain, with the decisions made in the coming days expected to have significant implications for global climate finance and international development efforts.
