Despite the talk of “green finance” and global commitments, many multilateral development banks (MDBs) continue funding billions of dollars in fossil fuel projects, ignoring their impact on the climate, says research by advocacy group Oil Change International (OCI).
It shows that six main international development banks financed at least $5bn in 2016 for fossil fuel projects.
While the Inter-American Development Bank had the highest green-to-brown ratio among MDBs — being the leader in green projects — the European Bank for Reconstruction and Development and the World Bank Group had the lowest green-to-brown ratio, the analysis found.
Some projects that were highlighted as climate finance were in fact fossil fuel projects, it found. A $10 million offshore gas exploration project in Azerbaijan, the Lukoil Shah Deniz Stage II project, funded by the European Bank for Reconstruction and Development was one such.
“While some progress has been made, development banks must do more to green their investments. As a first step, the banks should commit to ending finance for fossil fuel exploration and provide transparency about project emissions.” said Dr. Helena Wright, Senior Policy Advisor at E3G, in a statement.