Briefing: Shifting MDB energy finance from false solutions to truly just transitions

Multilateral development banks (MDBs) are under growing scrutiny over how their energy finance shapes the energy systems of tomorrow, and whether it is helping, or hindering, just transition to sustainable energy. This briefing by the Banking on Renewables campaign sets out key recommendations for MDB clean energy financing: avoid false solutions; bank on renewables that power people and protect the planet. 

• Click here to learn about the Banking on Renewables campaign

While MDBs claim alignment with the Paris Agreement and the Sustainable Development Goals, their recent energy investments show a troubling pattern: Public finance continues to flow to large-scale, centralised, high-risk projects, with no consideration of social and environmental protections. 

These kinds of projects — including large hydropower, industrial biofuels, nuclear, carbon capture and storage (CCUS), ‘blue’ and ‘green’ hydrogen for export, waste-to-energy, fossil gas, and carbon markets — are false solutions to the climate crisis. They distract and delay from real, people-centred solutions, while undermining equity, deepening debt, and sidelining women, youth and local communities. 

This briefing sets out to expose the disconnect between MDB rhetoric and practice when it comes to investing in the energy transition, and make recommendations for the kind of real solutions that MDB finance should scale up. 

To do this, it looks closely at four real-world examples of energy projects across Africa and Asia. Not all of these are MDB-funded, but they highlight the kinds of pathways that public financiers are increasingly opening the door to. These examples raise red flags about harmful technologies that deepen injustice, while also pointing to the kinds of renewable approaches MDBs should champion. 

• Koeberg Nuclear energy in South Africa and Hyphen Green Hydrogen Project in Namibia, written by Power Shift Africa
• Large hydropower in Pakistan, written by Indus Consortium (also available in Sindhi language)
• Distributed solar in Kenya, written by Youth For Sustainable Energy (Y4SE)

The key recommendations for MDBs are:

1. Increase the priority of funding decentralised and mixed small, medium, and large-scale renewable energy, that delivery community ownership and benefits
2. Reject false solutions
3. Reform climate finance frameworks
4. Ensure community participation and Free, Prior, and Informed Consent for Indigenous peoples
5. Strengthen safeguards, improve transparency, and ensure remedy for harms.

The briefing is also available in Urdu.

The briefing was published by Recourse in October 2025, with Power Shift Africa, Indus Consortium, Youth For Sustainable Energy (Y4SE), Strategic Youth Network for Development (SYND), MenaFem-Movement for Economic Development and Ecological Justice, Climate Clock DRC, Alliance for Empowering Rural Communities, Committee for Peace and Development Advocacy (COPDA, Inc.), International Accountability Project, We The World Botswana, Southern Africa Region Climate Action Network, African Youth Alliance for Sustainability, and Greenhut.