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World Bank criticised for coal, oil and gas funding
World Bank criticised for coal, oil and gas funding
While the influential development bank has scaled up clean energy finance, fossil fuels are still getting a larger share of support, campaigners found
The World Bank is supporting the controversial Trans Anatolian Pipeline gas project (Pic: Tanap)
The World Bank Group faces criticism for continuing to back fossil fuel development, despite moves to clean up its portfolio.
It has earned green credentials for ending direct lending to coal-fired power plants, promising to axe support for oil and gas exploration and increasing its clean energy budget.
Yet over the last five years, the group’s support to oil and gas actually increased, while coal benefitted from indirect subsidies, according to analysisfrom German NGO Urgewald.
The study, which covers 675 active investments, found $21 billion is going towards fossil fuels. While clean energy finance grew rapidly from 2014-18, it has yet to catch up. The equivalent figure is $7bn or $15bn, depending on the inclusion of large-scale hydropower and other projects with disputed environmental benefits.
“It is a big disappointment to find that the World Bank Group continues to provide such vast amounts of public finance for fossil fuels,” said report author Heike Mainhardt. “The bank thereby completely undermines its own efforts for renewable energy sources as well as the Paris climate goals.”
A spokesperson for the World Bank defended its record, saying the Urgewald report “paints a distorted picture of our energy sector work”. The inclusion of “legacy projects where financing was approved many years ago” means it “does not reflect the substantial changes that have happened in World Bank energy financing over the past decade,” he said.
In the last fiscal year, the bank approved $20.5 billion in finance for climate action, he added, meeting a 2020 target two years ahead of schedule.
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Gas companies face Californian wipe-out, say S&P, Moody’s
Gas companies face Californian wipe-out, say S&P, Moody’s
Ratings agencies say the state’s bid to go 100% renewable poses a ‘significant threat’ to gas generators’ credit stability
Newport Wedge, California (Photo: Tom Walker/Flickr)
Gas companies in California face credit downgrades, ratings agencies say, after the state pledged to get all of its power from renewable sources by 2045.
On 10 September, California governor Jerry Brown signed a bill which would require 100% of the state electricity’s to come from carbon-free sources.
That would have no immediate effect on most gas generators, according to a report by Standard & Poor’s (S&P) analyst Michael Ferguson this month. However, he said: “We believe that over the long term, with the growth of renewable energy, these utilities face a significant threat to their market position, finances, and credit stability.”
Within a fortnight of the California bill, S&P had revised its ratings outlook for Middle River Power, an equity firm backing a natural gas-fired plant providing electricity for 500,000 people in San Berdinado, from stable to negative. On top of increased competition from renewables, the credit agency cited “a more challenging (…) regulatory environment for natural gas-fired assets over the long term because of aggressive renewable energy goal”.
“This gas plant is going to have to be refinanced,” Ferguson told Climate Home News, “and it’s going to get more and more difficult to refinance over the long-term because they are going to be facing increasing renewable penetration… Longer-term the prospects for [all] gas generation are going to be weaker.”
S&P’s report largely echoes an assessment by its rival Moody’s, released in September. According to Moody’s, the state’s new legislation was “credit negative” for companies Calpine Corporation, NRG Energy, Pacific Gas & Electric Company (PG&E), Southern California Edison Company, Los Angeles Department of Water and Power.
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