COP28: World Bank Announces Boost in Climate Financing to Include 45% of Budget

President of the World Bank Ajay Banga has announced that the international development lender will devote 45 percent of its yearly financing budget to climate-related causes for the fiscal year July 1, 2024, to June 30, 2025, a press release from the World Bank said.

The financial institution added that, in the event of climate disasters, it would extend debt repayment pauses.

“We’re putting our ambition in overdrive and putting to work more than $40 billion per year – around $9 billion more than the original target,” Banga said, as Reuters reported.

Two years ago, the bank announced an average climate-related financing goal of 35 percent by 2025 and has been running at 36.3 percent since July of last year, according to the press release.

Banga announced the increased commitment on Friday at the United Nations COP28 climate conference as part of a revamping of the World Bank to make it better able to respond to the climate crisis and other emergencies around the world, reported Reuters.

Banga said financial resources would be directed in equal parts to climate adaptation and mitigation by the bank’s main branch, the International Bank for Reconstruction and Development, as well as its fund for countries with the most need, the International Development Association.

Banga added that the bank would expand the scope of its loans’ Climate Resilient Debt Clauses to cover its existing loans for the most vulnerable nations facing the aftermath of climate-related calamities like floods or hurricanes.

Banga said the repayment pauses would now cover debt interest payments rather than just principal repayments, which gives nations more resources to maintain access to water, food, power and additional necessities.

“In October, the World Bank secured an ambitious — and expanded — mandate to create a world free of poverty on a livable planet,” the press release said. “In addition to boosting resilience and adaptation among those hardest hit by the effects of climate change, World Bank Group projects also will focus on safeguarding ecosystems and biodiversity to protect the health of people and planet.”

Under Banga, the World Bank, founded in July of 1944, aims to expand its initiatives to assist with global hunger and the climate crisis.

“Having pledged to squeeze more from its balance sheet to fund the fight against climate change, the Bank will continue to deliver on adaptation to help countries devastated by climate shocks and on mitigation to help reduce the greenhouse gases contributing to climate change,” the press release said.