However, the Bank does this while admitting it funds coal-fired plants for development. This enters the Bank onto a double edged sword of development. Sometimes, coal-fired plants could be the most viable option for development. When the costs of bringing green energy to an under-developed nation are too great, and the need for energy by those who don't have it is even greater. However, the coal plants could do harm to developing nations if they do contribute to climate change.
From The Times analysis of the report, writer Ben Webster looks into coal projects the World Bank funds. For the full report, you can download it from the World Bank's website.
The 260-page report advises against “locking the world into high-carbon infrastructure” but makes no mention of the bank’s plans to subsidise coal power plants in India, South Africa, Botswana and other developing countries.
Last year the bank and its partner, the Asian Development Bank, approved $850million in loans to finance a coal-fired plant in Gujarat, western India.
The Environmental Defence Fund, a US lobby group, said that the plant, the first of nine planned in India, would be one of the biggest new sources of greenhouse gases on Earth, emitting 26.7million tonnes of CO2 a year for the next 50 years.
The bank is also contributing $5billion towards South Africa’s power generation expansion plan, which includes six coal plants.
Marianne Fay, the bank’s chief economist for sustainable development, said that coal was the cheapest and most secure way to deliver electricity to the 1.6billion people without it. She said: “There are a lot of poor countries which have coal reserves and for them it’s the only option. The [bank’s] policy is to continue funding coal to the extent that there is no alternative and to push for the most efficient coal plants possible. Frankly, it would be immoral at this stage to say, ‘We want to have clean hands, therefore we are not going to touch coal’.”
Tim Jones, policy officer of the World Development Movement, which campaigns to reduce poverty, said: “The World Bank is acting in the interests of Western countries and companies and not in the long-term interests of the world’s poor.
“It is an absolute disgrace that money meant for clean technologies will actually be used for building new coal power stations. Every pound of green aid that will be spent on funding coal power through the World Bank is money that should be spent on supporting renewable energy in developing countries.”
The bank said that it had lent $5billion for fossil fuel projects in the past three years and $11billion for “low-carbon” alternatives.