Bank / Credit Union

World Bank takes aim at climate change

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January 3, 2023

The World Bank plans to increase its lending capacity to combat climate change and other global issues as part of its evolution roadmap. In addition, it aims to shift its resources away from a country and project specific lending model it has used since its creation, according to a report by CNBC.

In particular, the bank will look at a capital increase, as well as changing its structure to provide more lending and financing tools like guarantees for private sector loans. The roadmap states that providing lending for climate change, health care, food security and other issues will need a capital increase for its middle-income lending arm the International Bank for Reconstruction and Development.

Janet Yellen, U.S. Treasury secretary, has called on the World Bank to fund investments to help middle income countries move away from coal power to renewable energy, according to the report.

The World Bank's roadmap would also offer higher statutory lending limits, lower equity-to-loan requirements and callable capital, which is money that is pledged but not paid in by member governments.

"The challenges the world is facing call for a massive step up in the international community's support," the bank said in the document. "For the WBG to continue to play a central role in development and climate finance, it will need a concerted effort by both shareholders and management to step up WBG financing capacity."