Development Banks’ Inconvenient Truth

Multilateral development banks concluded a two day conference in London yesterday on “Financing Clean Energy”. Non-governmental organizations were generally shut out of the meeting, restricted to a handful of participants, but a long list of oil and energy companies were in attendance and they were ready to discuss just about anything other than phasing out international subsidies to oil and other fossil fuels.

Recently the World Bank proudly announced that it was able to increase renewable energy and energy efficiency by 20 percent last year, but a close look at the figures also reveals that the Bank increased support for oil, mining and gas by 40 percent. The Bank’s private sector lending arm, the International Finance Corporation, increased its financing to fossil fuels by more than 50 percent!

These figures illustrate the serious failures and contradictions involved in the World Bank’s energy work. It is nothing short of hypocrisy for development banks to talk about combating climate change while channeling billions into fossil fuel projects.

Yesterday’s conference was jointly organized by the EBRD, the World Bank Group, the World Economic Forum and the World Business Council for Sustainable Development and attended by approximately 100 participants, including representatives from multilateral development banks, private investment banks, European governments, and European and Japanese companies. It failed to fully involve renewable and energy efficiency companies and relevant civil society organisations involved in energy and development issues. Following criticism, however, the EBRD invited a small number of NGO representatives and European renewable and energy efficiency associations at the last minute, though they were significantly outnumbered by representatives from the likes of Shell, Chevron, ABN Amro, Dupont, EDF and Suez.