Germany and Canada back ‘fundamental reform’ of World Bank to scale climate finance

Svenja Schulze, Minister for Economic Cooperation and Development

Svenja Schulze (SPD), Bundesministerin für wirtschaftliche Zusammenarbeit und Entwicklung., © dpa-Zentralbild

25.10.2022 - Article

On October 11, a group of 10 countries led by the U.S. and Germany presented the World Bank's leadership with a plan for fundamental reform of the institution.

The World Bank was established at the end of World War II in a world very different from today. The World Bank's main objective is to provide loans and grants to developing countries to eradicate poverty and achieve the Sustainable Development Goals.

The proposals aim to enable the bank to address global challenges such as climate change mitigation and biodiversity conservation.

Developing countries have pointed to the need for affordable financing to transition to clean energy and invest in resilience without going into unsustainable levels of debt. But funding is not flowing to those who need it most.

Development Minister Svenja Schulze, who serves as Germany’s representative on the World Bank’s board of governors, said, “The World Bank’s current model…. is no longer appropriate in this time of global crises. Challenges and investment needs are so great that the model needs to be adjusted.”

Schulze said the reforms should include “climate loans on better terms” and “targeted budget support for governments that want to implement policy reforms to make their economies climate neutral.”

Germany expects a response from the bank by the end of the year.

More information:

Federal Ministry for Economic Cooperation and Development
Climate Change News

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