As prepared for delivery
Excellencies, distinguished guests, thank you for the invitation to speak to you today.
There are four broad elements that are fundamental to overcoming the climate crisis facing us today and unlocking strong, sustainable, inclusive, and climate-friendly growth.
- The first is solid national policies. They are the bedrock from which to build climate ambition. For instance, they can set a clear direction of travel to redirect subsidies to be more effective. They can also help identify investment priorities and drive financing at scale, including by attracting private capital.
This is especially timely as there is a critical window for countries to strengthen their national climate targets (Nationally Determined Contributions or NDCs) ahead of next year¡¯s COP30.
- We are already directly supporting over 37 countries with technical support and financing to help them enhance and implement their current NDCs.
Through the World Bank¡¯s Country Climate and Development Reports or CCDRs, we are providing robust analysis to help governments identify ¡°no regret¡± strategies, pinpoint policy and regulatory bottlenecks and operationalize key climate and development priorities.
To date, we¡¯ve published CCDRs covering 59 countries, 29 of which are IDA countries.
We also welcome initiatives like the Climate Vulnerable Forum¡¯s Climate Prosperity Plans and other such efforts that support countries to develop their own tailored platforms.
The second element is financing: We all know that the scale of financing needs is in the trillions. But more than quantity, the kind of financing is also critical.
For lower income countries especially, there are clearly greater needs for concessional resources.
The WBG is doing its part to stretch the balance sheet, adding $150 billion over the next decade through measures like lowering the equity-to-loan ratio and leveraging hybrid capital.
We find that, on average, climate action financing needs exceed 5% of GDP in lower-income countries that are also more vulnerable to climate impacts.
For climate specifically:
- The WBG delivered a record $42.6 billion for climate.
- And we are stepping up do more: At COP28, we committed that at least 45% of our annual financing will support climate action this year. We are on track to meet this commitment, having delivered 44% in the fiscal year that ended in June 2024.
- Collectively, the MDBs delivered $125 billion in climate finance, a 25% increase from the previous year, with $74.4 billion going to low- and middle-income countries in 2023 (the last year for which comparative data is available).
We are also leaning forward with IDA20 to address challenges posed by the current aid structure.
- We¡¯ve committed $66 billion in the first two years of the current IDA cycle to meet unprecedented demand, with over 90% going directly to recipient governments, reducing fragmentation and strengthening country systems.
- In FY24, IDA delivered $13.5 billion in climate finance (of which $5.2 billion went to adaptation).
We expanded our Climate Resilient Debt Clauses to offer countries relief when they face severe natural disasters. As of this month, 11 IBRD and IDA clients have signed these agreements.
We are also doubling down with a focus on results as part of our new Corporate Scorecard. This Scorecard aims to deepen our understanding of how our investments deliver results on the ground, how they build the resilience of people and communities or reduce emissions.
This focus on results will help us and countries better understand what works and could be scaled and replicated. It will also help signal opportunities for private sector investments.
- For example, the Climate Investment Funds have established a Capital Markets Mechanism to raise private capital through bonds to fund clean technology projects in developing countries.
- This is also an effort that brings together the World Bank and 5 other MDBs, among other partners.
Which brings me to my third point: strong collaboration and partnerships.
No single country, donor, or MDB has the resources to match the immense financing needs.
That¡¯s why we are actively working with other MDBs as a system, for instance:
- Together, we are developing common indicators and a standardized framework for the ¡°MDB Common Approach to Measuring Climate Results,¡± ensuring clear measurement of climate results to guide future actions.
- A new co-financing platform with other MDBs will help improve coordination across the multilateral system.
- Together with ADB, we are committing to provide 300 million people in Africa with electricity access by 2030.
- With IaDB, we are working to restore the Amazon and increase support for net-zero deforestation efforts.
And we are strengthening our partnership with the IMF, including on climate. Just this past June, we announced our Enhanced Cooperation Framework on Climate Action, with Madagascar and Tanzania the first two countries to benefit from this.
Fourth and finally, underpinning all of these efforts is a crucial element: knowledge and innovation.
- We know that, even in the most challenging environments, fresh ideas and innovations can drive and deliver transformative global solutions.
- That¡¯s why we have a new Knowledge Compact and have established three new departments focused on Knowledge and Learning, Innovation, and Outcomes.
Our work in the carbon pricing and carbon markets space, for instance, is an example of how we approach knowledge and innovation.
- We are building a strong knowledge base with cutting edge analysis of the latest trends and opportunities.
- We help countries put in place strong enabling policies, working with partners in the MDB and private sector ecosystem.
- And we deliver tangible results for people and planet.
With sound national policies, a strong international financial architecture, and good knowledge and collaboration, a positive future for people and planet is possible.
Thank you.
