WASHINGTON - The World Bank has pumped US$14.8 billion (S$21.2 billion) into fossil fuel projects globally in the period following the landmark 2015 Paris climate accord, a report said on Thursday.
Though the multilateral lender pledged in 2018 to end financing for upstream oil and gas, and direct funding had declined, the move failed to include indirect financing, according to the report compiled by an NGO coalition called The Big Shift Global.
It comes amid growing pressure on US President Joe Biden to fire World Bank chief David Malpass, a Trump appointee who has dodged questions about the reality of human-driven climate change.
"Each time the World Bank invests in another fossil fuel project, it fuels more climate disaster," said Sophie Richmond of Big Shift. "There is no justification for using taxpayers' money to exacerbate the climate crisis."
One of the main ways the Bank continued to fund fossil fuels was by exploiting a "major loophole" by lending to intermediaries such as banks or financial institutions and by acting as a guarantor in case a country did not meet its obligations, the report said.
Under the 2015 Paris deal, world leaders committed to limiting long-term warming to 1.5 Celsius to avert devastating outcomes for the planet's future habitability.
The biggest project listed in the report, called "Investing in Climate Disaster: World Bank Finance for Fossil Fuels," was the Trans-Anatolian Pipeline in Azerbaijan, funded in 2018 to the tune of US$1.1 billion, with the Bank acting as a guarantor.
"It serves to perpetuate on-going use of fossil gas in Europe," the report said, while noting that while the pipeline may increase gas export revenues, market volatility makes it an unreliable source of income.
The World Bank Group's own assessment stated the project was "expected to have potentially significant adverse social and environmental impacts that are diverse, irreversible, or unprecedented" - but it gave a green light anyway.
Another project highlighted was the construction of two coal plants in Indonesia called Java 9 and 10, where the Bank supplied US$65 million in indirect funds - despite the fact that the Java and Bali grid is already experiencing 40 per cent oversupply of electricity.
"It is obvious that the new Java 9 & 10 coal-fired power plants will bring more disaster in terms of environmental, social and health issues, in an area already covered with coal plants and industries," said Yuyun Indradi of Trend Asia, an NGO that promotes clean energy.
The report's authors also rejected the Bank's treatment of natural gas as a "bridge" between fossil fuels and renewable energy, saying it crowded out needed investments in clean energy.
In a statement to Agence France-Presse, the World Bank said, "We dispute the findings of the report: it makes inaccurate assumptions about the World Bank Group's lending.
"In fiscal year 2022, the Bank Group delivered a record US$31.7 billion for climate-related investments, to help communities around the world respond to the climate crisis, and build a safer and cleaner future."
A separate report published by Oxfam earlier this week said the World Bank "supplies very little evidence to support its claims about the amount of climate finance it provides," leaving the public to take their figures "on faith". AFP