As the World Bank Group prepares to begin aligning its investments with the Paris Agreement from 1 July, the Multilateral Investment Guarantee Agency (MIGA), the bank’s commercial insurance arm, is coming under scrutiny for a series of recent guarantees supporting gas power projects (see Inside the Institutions, Multilateral Investment Guarantee Agency; Observer Winter 2022).
MIGA provided $407 million worth of guarantees to cover the acquisition and refinancing of the Bhola-2 220-Megawatt gas power station in Bangladesh in June 2022, a controversial project that was opposed by local communities over claims of land-grabbing.
“The World Bank’s finance for the Bhola power plant is yet another example of the World Bank’s failure to act seriously on the climate crisis,” said Claire O’Manique of international civil society organisation Oil Change International. “To stop undermining climate action and just development, the World Bank must stop funding climate destruction by immediately ending all of the $1.4 billion in fossil fuel finance they provide annually, as well as other indirect and policy supports that promote fossil fuels.”
MIGA also provided recent guarantees for two controversial gas projects in Mozambique – including $186.35 million to cover the acquisition of the Central Térmica de Ressano Garcia gas power plant in May 2022, and $251.3 million for the construction of the Central Térmica de Temane gas power plant in December 2021.
Although the World Bank Group’s 2021-25 Climate Change Action Plan notes, “All investment in new gas infrastructure will be assessed for consistency” with countries’ national climate plans, the CCAP provides no details of this screening process (see Observer Summer 2021).