The Multilateral Development Banks (MDBs) are a vital piece in the finance jigsaw: keeping temperature rise below 1.5°C requires fundamental shifts in the way financial flows from publicly backed and owned international financial institutions (IFIs) are channelled and managed. ECO is seriously underwhelmed by the MDBs joint COP27 statement . The statement mentions the MDBs being on track to fulfil their Paris alignment commitments, but it makes no mention of energy at all, let alone phasing out fossil fuels, and it provides few clues as to how commitments are being implemented. There is also no mention of the joint strategy to support countries to design their 2050 plans.
ECO will be listening carefully later today at the joint MDB update on their joint Paris alignment process. The time is up for foot-dragging. Last year, a lack of leadership and collaboration between MDBs delayed the process. This was exacerbated by World Bank President, David Malpass, who, as reported by the Financial Times, personally sought to undermine a joint MDBs climate ambition statement in the run-up to COP26.
ECO wants to see urgency from the MDBs to keep their commitments and align with the Paris Agreement. ECO will be looking out for: an exclusion of all direct and indirect support for gas including LNG; support for a just transition that includes support for decent jobs, economic alternatives and energy access for all; and support to scale up grants and concessional finance to kickstart the green transition in many countries. There should be no support for false solutions including Carbon Capture, Utilisation and Storage that locks the world into more fossil fuels.
As calls for reforms of the international financial institutions grow louder, ECO sincerely hopes that the update on the MDBs’ Paris alignment will be filled with ambition, urgency and action, not more delay from Malpass and his friends.