World Bank Invests Record Sums in Coal
Last year, $3.4bn was invested in the dirtiest fossil fuel despite international commitments to cut emissions
Record sums were invested last year in coal power - the most carbon intensive form of energy on the planet - by the World Bank, despite international commitments to slash the carbon emissions blamed for climate change.
The World Bank said this week that a total of US$3.4bn (£2.2bn) - or a quarter of all funding for energy projects - was spent in the year to June 2010 helping to build new coal-fired power stations, including the controversial Medupi plant in South Africa. Over the same period the bank also spent $1bn (£640m) on looking and drilling for oil and gas.
However, the Bank Information Centre, which examined the spending, disagreed and said the figure invested in coal was $4.4bn in the fiscal year 2009-10.
The discrepancy is due to the World Bank not including in its figure a $1bn project in India which is funding power transmission networks for coal-fired power stations rather than the stations themselves.
Environmental campaign groups said spending on coal in that period was 40 times more than five years ago, and claimed there was an "incoherence at the heart of the World Bank's thinking about energy" that would damage long term attempts to cut emissions of carbon and other greenhouse gases from such plants.
"At the same time as the bank is seeking to gain control of the billions which will be channelled to developing countries to help them cope with global warming, the bank is still lending staggeringly large and growing sums to finance coal-fired power," said Alison Doig, senior advisor on climate change for the charity Christian Aid.
"We know that coal is the dirtiest of all the fossil fuels - the one which most exacerbates the climate crisis which is having devastating effects on the lives of people living in poverty. We also know that by financing the building of coal power stations the bank is locking countries into coal use for the next 40 to 50 years [the life expectancy of the plants]."
The World Bank defended its payments saying that the figures for 2010 were distorted by two major coal projects in Botswana and South Africa, while over the five year period from 2005 the bank had spent US$4.5bn on coal power, and $12.5bn on renewable energy and energy efficiency - including a record year for these sectors also last year.
Coal plants were only subsidised when there were "exceptional circumstances where countries have few or no prospects for other energy sources," said Roger Morier, a World Bank spokesman.
"Our energy portfolio is increasingly oriented to renewable energy and energy efficiency," added Morier. "We are fulfilling our mandate of responding to the urgent needs of our client countries for access to efficient, reliable, affordable electricity, while also helping those countries to get on a low-carbon development path as soon as possible."