MARRAKESH, Morocco - World Bank President Ajay Banga said on Tuesday the global lender has dramatically cut its funding of fossil fuel projects but defended its investments in natural gas, even as the bank eyes reforms to battle climate change.

Reforming the World Bank and the International Monetary Fund (IMF) to better address climate change and other global challenges is at the top of the agenda as they hold their annual meetings in Marrakesh, Morocco, this week.

Mr Banga said changes undergoing at the bank could boost its funding capacity to US$150 billion (S$205 billion) over the next decade, though he warned it would still not be enough.

“After we deliver a better bank, we will need a bigger bank,” he said at a town hall with civil society organisations.

He took over the job in June from Mr David Malpass, who stepped down early from his five-year term amid questions about his stance on climate change.

In Marrakesh, Mr Banga was grilled by members of non-governmental organisations about the bank’s continuing funding of fossil fuel projects. He said the World Bank had allocated only US$170 million to natural gas last year out of the US$120 billion it committed.

It has “dramatically” reduced investments in fossil fuels since 2019 and has not directly funded coal plants since 2010, he said. Its financing of renewable energy projects has tripled to US$39 billion over the past 10 years.

“What we’re trying to do is to reduce the investment in fossil fuels,” he said, adding that poorer nations still need natural gas for their development. He said a discussion is needed about the role that natural gas, which pollutes less than oil or coal, should play in the energy transition. AFP