World Bank Scales Back Climate Lending Target

The World Bank Group announced that it will abandon its goal of directing 45% of its annual lending toward projects with climate-related benefits. However, it will extend its long-term Climate Change Action Plan, which was due to expire on Tuesday.

The move follows pressure from the US administration to abandon the lending target adopted in 2023. The bank said it would focus on the impact of its financing rather than on numerical lending targets.

World Bank President Ajay Banga said the institution would instead prioritize "smart development" by supporting job creation, strengthening resilience to droughts and storms, and expanding renewable energy.

The bank also dropped its previous target of allocating 35% of lending to climate-related projects, although it said demand from borrowing countries for climate financing remains strong.

While France and 18 other countries backed the bank's climate agenda, its largest shareholder, the United States, opposed it, along with Russia and Saudi Arabia. US Treasury Secretary Scott Bessent last year called for the bank to return to its core mission, describing its emphasis on climate as "short-sighted".

The World Bank said it will continue implementing its Climate Change Action Plan, which will undergo an independent review. It also pledged to keep monitoring greenhouse gas emissions and climate resilience across its lending portfolio and to publish quarterly and annual reports.

(reuters, max)