World Bank energy strategy review considers reversing phaseout of support for gas production
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Article summary
As World Bank pushes to provide electricity to 300 million people in Sub-Saharan Africa by 2030 under Mission 300, it considers lifting ban on support for gas production.
World Bank President Ajay Banga launched a review of the Bank’s energy financing at the Spring Meetings. Following discussions by its executive board in June, the Bank has lifted its ban on nuclear energy, per Bloomberg reporting (see Observer Winter 2024), and is now debating support for ‘upstream’ gas projects. In 2017, the World Bank announced that it planned to phase out support for such projects (see Observer Spring 2018).
As Bloomberg reported, Banga justified the shift by arguing that meeting rising power demand in low- and middle-income countries is “one of the most urgent and complex development challenges we face.” Among the Bank’s efforts in this area is Mission 300, an initiative to deliver energy access to 300 million people in Sub-Saharan Africa by 2030 (see Observer Winter 2024). At a Mission 300 summit in Dar es Salaam in January, some heads of states of the 12 countries referenced gas as a ‘transition fuel’. This has been challenged by African civil society, which have raised concerns over delayed decarbonisation and stranded asset risks. This is particularly the case for upstream gas, which has a decades-long lifespan (see Observer Summer 2025).
To achieve Mission 300 Development Policy Finance, the Bank’s policy-based lending instrument (see Inside the Institutions, What is World Bank Development Policy Financing?), is being used to create an ‘enabling environment’ for foreign investment, often tied to unbundling, privatisation and liberalisation of energy sectors. Yet these policies have a weak track record of delivering affordable, reliable energy (see Report, Gambling with the planet’s future?). A June Bretton Woods Project briefing also found that the Bank is now counting the majority of these reforms as climate finance, effectively greenwashing its privatisation agenda (see Briefing, A just energy transition deferred).
