The latest data on fossil and clean energy finance from Multilateral Development Banks
Yesterday sees the release of the data on project financing from the nine major Multilateral Development Banks on the Energy Policy Tracker – of which I4CE is partner – and a new Big Shift Global briefing, showing that, since the beginning of the pandemic, the Banks provided at least $12 billion to clean energy and $3 billion for fossil fuels. 2020 was also the first year where there might be no project financing for coal from the MDBs, although transparency from the Banks on their finance flows remains an issue.
The Multilateral Development Banks (MDBs) that are included in this analysis and on the Energy Policy Tracker are the World Bank Group, the European Investment Bank, the Asian Development Bank, the European Bank for Reconstruction and Development, the Islamic Development Bank, the Inter-American Development Bank, the Asian Infrastructure Investment Bank, the African Development Bank and the New Development Bank.
The analysis shows that overall project finance spending on fossil fuels in 2018-2020 fell by 40% in 2018-2020 compared to the period 2015-2017. While this is a welcome step as a result of many of the Banks’ exclusion policies on coal and specific areas of oil & gas, experts highlight that the 2020 drop is partially a result of the pandemic-fuelled decline for major oil and gas project approvals as well as less transparent spending towards general recovery packages.
In 2020, the nine MDBs combined provided at least $3 billion in support for fossil fuels, a figure that is fundamentally at odds with the many statements of support for a green recovery and a transition to the green economy that all the Banks have made.
Gas made up more than 75% of known MDB fossil fuel support in both 2020 and the two years preceding it, marking this as the key area to address for all of the Banks. The available data also shows that 2020 may be the first year the nine major Multilateral Development Banks had zero known finance for coal – but as the IsDB has suspended reporting of its project finance, the publicly-available data might be incomplete.
This data has been released ahead of the UK Global Summit on Climate and Development and the Spring Meetings of the World Bank Group and the International Monetary Fund. As the UK, EU, and US move to end their international public finance for fossil fuels, pressure is mounting on the Banks to do so as well. This release also follows two letters calling on the World Bank to make a whole-of-institution commitment to end all types of support for fossil fuels at their 2021 Spring Meetings — one from nine Executive Directors of the World Bank and another from more than 150 civil society organizations and academics.
Energy Policy Tracker
The EnergyPolicyTracker.org provides real time data on public finance for energy around the world. The website is updated regularly to reflect current climate and energy policy commitments from 31 major global economies and 9 MDBs. Regular updates can be received by signing up here. The data is provided by a consortium of 23 organizations across the world, including I4CE.
The Energy Policy Tracker classifies policies depending on the type of energy they support, such as fossil fuels or clean energy, and assesses whether they were approved with or without environmental strings attached. The database does not classify policies according to the environmental impact of recovery measures. There may be differences in research findings provided by the Energy Policy Tracker and other recovery trackers due to the diversity of methodological approaches. More information about the Energy Policy Tracker methodology can be found on the project webpage.
The Big Shift Global Coalition
The Big Shift Global Coalition is made up of over forty civil society organizations from across the globe calling for an end to public financing of fossil fuels and a shift to investing in sustainable, renewable energy to provide energy access for all. The full list of members is available here.