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The new development financing agreement will help fund a railway bypass to the congested rail corridor between Cairo and Alexandria while also promoting private sector participation in the railway sector. According to the World Bank and the Egyptian government, the project will “significantly” contribute to Egypt’s $324bn national climate change plan for 2050 through the reduction of greenhouse gas emissions by an estimated 965,000 tons over 30 years.
“This operation is part of a wider set of efforts dedicated to offering timely and comprehensive support to Egypt’s economic development and climate change plans,” says Marina Wes, World Bank’s country director for Egypt, Yemen and Djibouti. “We hope that through supporting more job creation, including for women, a cleaner environment, and providing safer mobility, the operation will contribute towards a brighter and more prosperous future for all Egyptians.”
However, the timing and benefits of the project, coming weeks before the COP27 in Sharm el-Sheikh, has left some activists wondering whether it’s a face-saving exercise following a stream of criticism of the Bank’s record on green financing.
“There is a kind of a credibility crisis happening” at the bank, says Christian Donaldson, senior policy adviser for International Financial Institutions and Economic Justice at Oxfam International in Washington.
“[It’s] no coincidence, I would say, that this loan is being announced right before COP,” Donaldson tells The Africa Report. “I think all that is connected.”
Indeed, on the same day that the Egypt program was announced, Oxfam released a long-awaited report raising doubts on the accuracy and scale of the World Bank’s climate finance commitments.
The 39-page report titled ‘Unaccountable Accounting’ says an audit of the Bank’s $17.2bn climate finance portfolio for FY2020 found that it “could be off” by as much as 40% ($7bn). Oxfam argues that a lack of transparency in where the money is going and how it is used undermines the fight to address climate change, given the World Bank’s unique role as a standard-setter for other financial institutions and as the largest multilateral provider of climate finance, accounting for 56% of the total from all multilateral development banks.
“The only way to have confidence in the Bank’s climate finance accounting is through public disclosure of documentation that shows how climate finance assessments are made for these projects,” the report says.
“Having this information,” the report says, “will allow stakeholders to hold the Bank and recipient governments accountable — something made more important given that so much of what is currently claimed as climate finance is provided through debt instruments that will require repayment, which can strain limited public resources needed to fund public services. This increased transparency will also help safeguard against the possibility that the climate finance claims are simply greenwashing. Otherwise, there is a real risk of over-reporting and/or underinvesting in mitigation and adaptation, which could lead to dire consequences.”
[…] the Group remained in a fossil-funding paradigm, harmful to people, countries and planet
The World Bank Group (WBG) is also under fire for continuing to fund fossil fuel projects. Since the Paris agreement on climate action was signed in 2015, the Bank has provided nearly $15bn of finance directly to fossil fuel projects, according to a new report from a coalition of non-governmental organisations.
“Even after the Paris Agreement, climate science and climate impacts should have been focusing minds at the WBG on the need for a transition to clean renewables sources of energy,” says the report from The Big Shift Global, “the Group remained in a fossil-funding paradigm, harmful to people, countries and planet.”
Even as its funding and accounting practices come under scrutiny, the Bank’s chief has also come under attack over his remarks on climate change.
An appointee of President Donald Trump, himself an infamous climate change denialist, David Malpass had to overcome widespread scepticism in the early days of the Joe Biden administration. With new leadership in Washington, the former senior Treasury Department official managed to reinvent himself as a green champion, describing climate change as an “immense” challenge last year.
Criticism resurfaced last month on the margins of the UN General Assembly in New York. After former Vice President Al Gore called Malpass a “climate denier” and called for his resignation, the director dug in his heels and said “I’m not a scientist” when asked if he supported the scientific consensus on man-made global warming.
🌎🔥 Today I asked World Bank president @DavidMalpassWBG if he believed in the scientific consensus that the man made burning of fossil fuels is rapidly and dangerously warming the planet.
“I’m not a scientist,” he said.
Here’s a thread about the remarkable exchange. 🧵 1/ pic.twitter.com/t0nQheybzi
— David Gelles (@dgelles) September 20, 2022
The exchange earned him a rebuke from the White House.
“We disagree with the comments made by President Malpass,” White House spokeswoman Karine Jean-Pierre told reporters. “We expect the World Bank to be a global leader of climate ambition and mobilisation of significantly more climate finance for developing countries.”
Despite the criticism, Oxfam’s Donaldson says the Egypt program is a welcome step in the right direction.
“The bank has a lot of investments, and it’s been supporting countries in many different ways in terms of climate issues,” he tells The Africa Report.
The key now, he says, is to improve credibility through greater transparency.
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