Whose Green Transition Is It Anyway?

Two years ago, the International Accountability Project, or IAP, first launched the Energy Finance Tracker, or EFT, and Energy Finance Tracker Report, as the accompanying analysis of energy investment trends between 2022 and 2023. The goal of EFT was to provide a tool for movements and communities to follow the money, hold 16 major development banks accountable for their role in the global energy transition, and push them to support priorities for a just energy transition. However, that direction looks less certain. As we dug deeper into the data from January 2024 to December 2025, we noticed that development banks still favor privatization and promote greenwashing and false solutions.

In just four years, EFT tracked 2,119 projects related to energy financing. We noticed a staggering increase in development bank funding toward energy projects, with total investment increasing from US$ 139.8 billion (as of December 2023) to US$ 304.3 billion (as of December 2025). However, we argue that this increase does not represent a victory for the climate and communities. Instead, we find that this capital is flowing into an increasingly privatized landscape. The share of public sector funding has slipped to just 30.1% (US$ 91.5 billion as of December 2025), as development banks increasingly prioritize private sector interests that now command nearly 69% (US$ 209.5 billion as of December 2025) of the total portfolio.

The EFT also tracked a surge in high-risk (Category A) projects, which jumped from 9.9% (92 projects as of December 2023) to 14% (297 projects as of December 2025) of total investments by development banks. We argue that this shows a dangerous trend where development banks accelerate large-scale energy infrastructures by sidelining environmental and social safeguards. Such a rush replicates extractive colonial models that promote greenwashing and false solutions, which bring harsher impacts on local communities’ livelihoods, lands, and resources.

A prime example is found in Brazil’s Alto Jequitinhonha region, where International Finance Corporation (IFC) has provided a US$ 155.64 million loan, complemented by up to US$ 117,2 million (€100 million) from other lenders, to expand Aperam BioEnergia’s large-scale eucalyptus plantations and charcoal production for the steel industry. While marketed as a “sustainable” project eligible for carbon credits, the operation of Aperam BioEnergia has been criticized as a “greenwashing” that functions more like an ecological desert than a forest. The expansion of this project impacts more than 30 local communities, including four Quilombola groups. These groups reported that the eucalyptus plantations strain and pollute their water sources, and further damage their health and traditional livelihoods. Beyond these human impacts, the project also causes significant biodiversity loss. Researchers have found that non-native eucalyptus monocultures are known to harm the local ecosystems they replace.

We believe that a just transition requires a shift to supporting decentralized, community-led renewable energy through direct grants rather than debt-intensive loans.

The preference for greenwashing and false solutions also still pertains elsewhere. Despite the severe harm and rising tensions reported by local communities, IDB Invest has proposed a US$ 150 million loan to AES Colombia and the oil company Ecopetrol SA for large-scale wind farm projects in the Upper and Middle Guajira region of Colombia. While framed as Colombia's just energy transition initiative, the project actively threatens the traditional livelihoods of the Indigenous Wayúu people and has proceeded without their Free, Prior, and Informed Consent (FPIC). IDB Invest is moving forward with this funding even though this negligence has caused dangerous levels of conflict. The Indigenous Wayúu people, who maintain deep spiritual and customary law over their lands, have made it clear how far they will go to protect their home. One community leader stated, “The Wayuu defend their territory with blood and death, if necessary.”

The threats to the region extend beyond wind farms, as La Guajira is also being designated as a hydrogen production hub to supply Europe with “green” fuel through the European Union’s Global Gateway program. This initiative has been criticized as neocolonial because it prioritizes European energy needs over local rights in a region that already suffers from some of the lowest energy access rates in Colombia. A community leader from the Indigenous Wayúu people, Eliel de Jesus Castillo, denounced the injustice by saying, “While large electricity projects are being installed in our territories, we have no energy in our homes.”

The words of Indigenous Wayúu leader Eliel de Jesus Castillo are a stark reminder for development banks, corporations, and governments that the current energy transition often perpetuates deep injustices against the very communities whose resources are being extracted. Instead of replicating extractive models, development banks must stop promoting false solutions that are implemented without community consultation, cause environmental damage, and lead to the further grabbing of local lands and resources.

We believe that a just transition requires a shift to supporting decentralized, community-led renewable energy through direct grants rather than debt-intensive loans. A successful example of this approach is found in Nepal, where a local initiative supported by the Community Empowerment and Social Justice Network (CEMSOJ) developed a community-based renewable energy project for the Indigenous Tamang and Chepang communities. Additionally, it is also evident in Malaysia.

We further believe that a just transition can finally serve the people it claims to help by prioritizing the voices of those promoting climate justice and being community led. If the system continues to favor corporate profit over human rights and the environment, we are forced to ask: Whose transition is it anyway? Because at the end of the day, the word “just” before transition means changes must ensure that the “whole of society is brought along in the pivot to a net-zero future,” rather than shifting power into the hands of a few.