In a blow to the fossil fuel energy industry but a win for renewable energy advocates, the World Bank announced on December 12 that it will no longer offer financial support for oil and gas exploration after 2019, as news network france24 reports.
The bank, which provides loans to developing countries to foster economic growth, made the announcement at the One Planet summit called by French President Emmanuel Macron.
“The World Bank Group will no longer finance upstream oil and gas, after 2019,” it said in a statement in Paris, where world leaders sought to unlock more money for the shift away from fossil fuels.
The move, it said, was meant to help countries meet the greenhouse gas-curbing pledges they had made in support of the 2015 Paris Agreement to limit global warming.
“In exceptional circumstances, consideration will be given to financing upstream gas in the poorest countries where there is a clear benefit in terms of energy access for the poor and the project fits within the countries’ Paris Agreement commitments,” the statement said.
The bank pledged to transform its operations in recognition of a “rapidly changing world” after vowing in 2015 to have 28 percent of its portfolio dedicated to climate action by 2020.
The World Bank’s rationale is to provide financial and other assistance to aid the economic advancement of developing countries.
U.S. President Donald J. Trump’s withdrawal from the Paris Climate Agreement and slashing of funding for climate projects has contributed to the constraints in the global effort to limit global warming by promoting and funding less-polluting energy sources, reports AFP.
Funding renewable energy projects has become more attractive in recent months, as new studies show it is now cheaper to build and run commercial renewable energy sources than it is to fund existing fossil fuel power plants, like coal, running, according to science and technology website Futurism.
In its 2016 annual report, the World Bank Group said it had invested just over $3 billion in “extractive industries” in 2016. The World Bank says on its website that extractive resources, which include mining and fracking, “have an impact on reducing poverty and boosting shared prosperity”.