World Bank proposes $100 billion extra annual lending capacity to tackle climate change, poverty

With an aim to enable the multilateral lender to pursue a more inclusive agenda focused on addressing climate change and alleviating poverty, the World Bank’s Development Committee has put forth a proposal to establish an additional annual lending capacity exceeding $100 billion over the next decade.

The final proposals from the joint ministerial committee composed of the boards of governors of the World Bank and the International Monetary Fund (IMF) reflect the recommendations put forth by the Independent Expert Group established by the G20, which was co-chaired by N.K. Singh, Chairman of the 15th Finance Commission and former US Treasury Secretary Larry Summers.

The group has already submitted its second volume to Finance Minister Nirmala Sitharaman and will make a detailed presentation to the G20 at Marrakech scheduled next week, reported ET.

The group has put forward a roadmap and a comprehensive strategy for overhauling multilateral development banks (MDBs), such as the World Bank and Asian Development Bank. The plan includes specific proposals aimed at allowing MDBs to mobilize private capital in addition to increasing their financial capability.

“We are going into greater granularity on how you really achieve this private capital—what incentive, risk mitigation can you do,” Singh was quoted by ET as saying in an interview 10 days back.

During the G20 Leaders’ Summit that took place in New Delhi on September 9 and 10, the New Delhi Leaders’ Declaration which was adopted by G20 leaders, elevated the importance of climate change on the global geopolitical agenda. The leaders also agreed to reform MDBs to make them bigger and better and more cognisant of the needs of the Global South.