The World Bank Group announced Dec. 12 that it would stop funding upstream oil and gas projects after 2019.
A representative for the organization, which provides low-interest loans, zero- to low-interest credits, and grants to developing countries, said upstream oil and gas projects account for 1% to 2% of its current $280 billion portfolio. "In exceptional circumstances," the World Bank said it would continue funding upstream oil and gas projects "in the poorest countries where there is a clear benefit in terms of energy access for the poor and the project fits within the countries' Paris [climate] Agreement commitments."
During an interview with the BBC that took place the same day, World Bank Group President Jim Yong Kim said the policy change would affect low and middle income countries and alluded to a shift toward funding renewable projects: "The price of solar has gone down so much, the cost ... of batteries has gone down so much. We think that energy needs can be provided by other means. And the science of this is changing so quickly, we want to get out ahead. And we don't think we need to be in the upstream oil and gas business anymore."
The International Finance Corp., a member of the World Bank Group, had announced April 21 that it would invest up to $325 million in the Green Cornerstone Bond Fund. A joint venture with France-based Amundi SA, the $2 billion initiative, of which over $1 billion is subscribed, aims to expand private funding for climate-related projects in emerging markets.
The World Bank said a $1.15 billion development policy loan agreement it signed with Egypt on Dec. 8 was aimed at reducing fossil fuel subsidies and creating the environment for low-carbon energy development.
