- 04.04.2023
World Bank Group slammed for locking Asia into fossil gas
The World Bank Group (WBG) will host its Spring Meetings in Washington DC on 10-16 April 2023.
Climate and human rights campaigners in Asia say the WBG’s policies will lock Asia into fossil gas.
Campaigners demand that the WBG must ditch support for fossil gas and channel public funds instead into the just transition into renewable energy.
Climate and human rights campaigners in Asia slammed the World Bank Group (WBG) for supporting additional fossil gas in the region amidst the worsening climate crisis. According to the group, the WBG must honor its commitment to the Paris Agreement, including limiting global warming to 1.5oC, by stopping funding to fossil gas.
This critique of the WBG came ahead of the 2023 Spring Meetings in Washington DC during a webinar and STOP Funding Fossil Gas report on 4 April organised by Indus Consortium-Pakistan, Trend Asia-Indonesia, Coastal Livelihood and Environmental Action Network-Bangladesh (CLEAN) with the support of Recourse, NGO Forum on ADB, and The Big Shift.
Fiza Qureshi, programme manager at Indus Consoritum says that, “Fossil gas is bad for the climate, bad for human rights and bad for the environment. Women from flood-affected communities and those living without access to clean energy in Pakistan demand that the WBG shift all finance from dirty fossil fuels towards clean and indigenous sources of wind and solar. The WBG should focus its funding to build green and equitable futures in my country and in Asia.” Pakistan has been hit hard by climate-change induced floods that displaced around 8 million people in 2022. In the past years, the WBG and IFC’s strategy to mobilise up to $10 billion in investments to address the power shortage in Pakistan lead to supporting the construction of the country’s first liquified natural gas (LNG) terminal by the Engro corporation. This shift to fossil fuels has been costly for Pakistan’s environment as well as its people as the country had become highly reliant on imported LNG obtained at exorbitant spot prices.
Commenting on the debt-inducing impacts of the WBG’s support for LNG in Bangladesh, particularly the IFC’s funding of Summit Meghnaghat II power plant, Hasan Mehedi, chief executive at CLEAN said, “Volatile fossil gas prices are driving Bangladesh into an energy crisis. What we need urgently is to transition to sustainable, renewable energy. The WBG and the other MDBs must honor their commitments to the Paris Agreement and stop justifying fossil gas as a transition fuel.” Aside from the IFC support on LNG, the Multilateral Investment Guarantee Agency (MIGA) of the WBG issued guarantees totaling $407 million to cover the acquisition and refinancing of Nutan Bidyut (Bangladesh) Limited that owns and operates the Bhola-2 220MW, dual fuel gas/High Speed Diesel (HSD) combined cycle power plant. The Bhola power plant which also received support from the AIIB was actively opposed by Bangladeshi civil society because of the displacement of communities from their lands and livelihoods.
Even support for energy transition through the Just Energy Transition Partnerships (JETPs) has become another channel for the WBG’s financing for LNG. Andri Prasetiyo, campaigner at Trend Asia said “World Bank finance should be used to assist Indonesia to transition away from fossil fuels and not support LNG through the back door. The World Bank has an essential role in helping Indonesia to fulfill its commitments under the Paris Agreement, redirecting finance away from fossil gas to align both private investment and public policy with the goal of keeping global warming below 1.5⁰C.” Indonesia’s JETP which aims to mobilise $20 billion will be supported with public finance from the World Bank, and civil society fears that LNG might be part of the project deals.
Considering gas as transition fuel has become the justification for the WBG to continue supporting LNG projects in Asia. According to Fran Witt, campaign manager at Recourse, “The World Bank’s Climate Change Action Plan 2021-2025 (CCAP) is at the root of the problem. It states that ‘Natural gas investments may be considered aligned in countries where there are urgent energy demands and no short-term renewable alternatives to reliably serve such demand.’ Unfortunately leaving the door ajar for fossil gas has actually opened the floodgates. The dash for gas in Asia risks locking countries into an unsustainable energy models for decades to come”
Commenting on the WBG’s Evolution Roadmap, Witt lamented that the document’s “first draft left out institutional alignment with the Paris Agreement goals and was not clear on how it would catalyse the shift from dirty, fossil fuel-based economies to cleaner, inclusive, and more equitable development.”
Civil society and communities are demanding that the WBG shift its support away from fossil gas into renewable energy. However, opposition against fossil fuel projects, including LNG, has been met with repression. Tanya Lee Roberts-Davis, just transitions advocacy coordinator at NGO Forum on ADB, “While the opportunities for shifting rapidly towards reliance on power generated by the sun and wind are within reach across the region, including for example, in Vietnam, civil society groups working for renewable energy are operating in a climate of fear, following arrests of lawyers, environmental leaders, and spokespeople. There can be no just transition when those who are working towards the realisation of the rights to a healthy environment and to participate meaningfully in decisions affecting their lives are being systematically silenced.”
The group collectively demanded that the WBG must act as agents of transformative change to tackle the climate emergency by ditching the notion of fossil gas as a transition fuel across its entire portfolio, and shifting from dirty, fossil-fuel based investments to inclusive, renewable and sustainable development that is consulted on democratically at a local level.
ENDS
Watch a recording of the Facebook Live event held on 4 April 2023
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