The World Bank is planning to restrict the money it gives to coal-fired power stations, bowing to pressure from green campaigners to radically revise its funding rules.
The new proposals would not mean an end to funding for fossil fuels, but would represent a departure from previous regulations. Under these rules, the bank has provided sizeable financial support for coal-fired power stations in the developing world despite protests from governments and green groups.
Under the proposed new rules, only the very poorest countries would be eligible to receive grants or loans to build new coal-fired power stations—only if they could prove they were necessary and that alternatives like renewable energy were not feasible.
An entirely new energy strategy is being written by the development bank, in part due to concerns that its current funding favors fossil fuel power. The new draft proposals emphasize the potential of renewable energy sources.
But the proposals were criticized by campaigners as inadequate. "The draft strategy is disappointing. It looks as though the World Bank is trying to green wash its activities while by and large continuing with dirty business as usual," said Christian Aid Climate Change Senior Advisor Alison Doig. "While it proposes a ban on coal lending to middle-income countries, the bank will continue its fossil fuel investments in the poorest countries, condemning them to a high-carbon future. In real terms, this means that the bank could still end up spending more than ever on fossil fuels. . ."
The World Bank's record on funding fossil fuels has long been a target of green campaigners, spending £3.4B—one-quarter of its total energy-project budget on coal-fired power in developing countries in the year to June 2010, or 40x more than the sum spent five years previously.
World Bank to Limit Coal-Fired Power Plant Funding
Source: Guardian, Fiona Harvey (4/4/11)
"The bank could still end up spending more than ever on fossil fuels."