CSO groups urge WB to stop funding ‘dirty energy’ projects

Business Mirror
TUESDAY, 29 NOVEMBER 2011 23:19 CAI U. ORDINARIO / REPORTER


CIVIL-society organizations (CSOs) from developing countries urged the World Bank (WB) to cut financing for energy projects that use coal or other similar environmentally harmful materials and finalize its energy strategy for the next 10 years.
In a report titled “Unclear on the Concept: How Can the World Bank Group Lead on Climate Finance without an Energy Strategy?” released at the climate talks in Durban, South Africa, the CSOs said despite WB’s clean energy campaigns, nearly half of the bank’s lending, or more than $15 billion, went to fund “dirty energy projects” like fossil fuels in the last four years.


“The World Bank cannot take a leadership role in global climate finance when it has no energy strategy to offer other than its gross and growing fossil fuel lending portfolio. The Bank’s fixation on centralized, coal power harms the climate and fails to address the central issue—energy poverty—plaguing developing countries today.


Instead, intervention should focus on the provision of energy access needs, where distributed renewable-energy [RE] systems is the proven cost-effective solution,” Red Constantino, of the international developing country group Basic South Initiative, said.


The report included data from the “Shift the Subsidies” database, which tracked multilateral development bank energy lending. It also showed how WB is experiencing difficulties in synching its core lending with climate goals.


Given the difficulties and contradictions, the groups said the WB should focus on cleaning up its act before making forays into climate finance initiatives. Civil-society advocates claim this lending directly undermines the institutions credibility as a leading institution in climate finance.


“The Bank should put its money where its mouth is and stop financing dirty energy,” said Karen Orenstein of Friends of the Earth.


Further, the groups said the WB is unable to finance its own energy strategy that will guide lending at the institution for the next 10 years. Without an energy strategy, the groups said the WB is risking its institutional credibility with its current consideration of a new coal project in Kosovo.


The project will provide public financing for the most heavily polluting form of coal (lignite) and comes on the heels of the WBG decision last year to lend more than $3 billion to help build the Medupi coal plant in South Africa.


The groups claimed that WB’s actions such as its core energy lending, its inability to pass a forward-looking energy strategy, and its mixed involvement in climate-related initiatives, only demonstrate that it does not take climate change impacts seriously.


“Credibility is a critical facet among institutions vying to leverage or manage climate finance flows. Unfortunately, it is doubtful the Bank has much to share in the Durban negotiations in this regard,” Constantino said.