World Bank to mobilize $10 toward climate action for every $1 received in grant money

Makhtar Diop, managing director of the International Finance Corporation, said that the world doesn’t have a problem of resources but a problem of managing those resources. (Twitter: @DXBMediaOffice)
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Updated 13 February 2023
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World Bank to mobilize $10 toward climate action for every $1 received in grant money

  • $1tn per year will be needed to exert energy transition in several countries, says International Finance Corporation managing director

DUBAI: For every $1 in grant money that the World Bank receives, it will mobilize $10 of its capital to invest in climate action, Makhtar Diop, managing director of the International Finance Corporation, told the World Government Summit on Monday.

“If we manage to have a bit more of investment of grant money, then we will be able to multiply investment significantly,” Diop told CNN’s Becky Anderson in a session titled “Investing in a sustainable future: the role of climate finance.”

Anderson said the climate crisis is one of the most pressing issues of our time.

“Mobilizing private capital alongside private policy is absolutely critical to transforming the world economy and putting us on a path to net zero by 2050. To reach that goal… as much as $9 trillion in investment is needed, every year. That’s one estimate. If you are more conservative, you might say it’s $6 or $7 (trillion), but that’s an awful lot of money, and 60 percent of those investment needs are in emerging markets. These markets are frankly starved of capital,” she said.

When asked about the funding gap for emerging markets and what should be done about it, Diop said: “The world doesn’t have a problem of resources but a problem of managing those resources to make sure we are using renewable energy…We also have a problem of managing the existing liquidity in the world and directing it to productive investment.”

Diop said it is estimated that $1 trillion per year will be needed to exert energy transition in many countries. What is missing, he explained, is a bankable project and liability for the private sector to assess the risk properly.

There are many factors, such as natural disasters and wars, that are rendering it difficult for investors to make decisions.

Diop said there is a need to de-risk those investments, which is what the IFC is trying to do by implementing a mechanism whereby bankable projects are brought together under one platform to simplify procedures.

Diop revealed that he is signing with the Abu Dhabi Development Fund an agreement to create a platform of $1.5 billion where both parties will co-invest in emerging countries around energy transition.

“Today, when we talk about green hydrogen, which is a new source of energy, it is mainly located in developing countries where you have the sun and hydro (power) in quantity,” said Diop.

These countries, he explained, “could become (exporters) of energy and (contribute) to the global public goods solution.”

Diop revealed that the World Bank Group is discussing an “evolution roadmap” to determine what more can be done to support energy transition and help countries fight climate change.

“This is a conversation that will require mobilizing more money because part of the resources of the WB Group are raised on the capital market and…not grant money,” he said.

What is needed, he explained, is certain technology that is currently expensive or the ability to invest in areas that are considered riskier in order to obtain more grant money.


Trump tells Iranians ‘help on its way’

Updated 4 sec ago
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Trump tells Iranians ‘help on its way’

  • US president says Iranians should 'keep protesting' and that he canceled all meetings with Iranian officials
  • Successive nights of mass protests nationwide may have killed thousands, NGO says
PARIS: US President Donald Trump urged Iranians on Tuesday to keep protesting against the country’s theocratic leadership, telling them “help is on its way” as international outrage grows over a crackdown one rights group said has likely killed thousands.
Iranian authorities insisted they had regained control after successive nights of mass protests nationwide since Thursday that have posed one of the biggest challenges to the clerical leadership since the 1979 Islamic revolution that ousted the shah.
Rights groups accuse the government of fatally shooting protesters and masking the scale of the crackdown with an Internet blackout that has now lasted almost five days.
New videos on social media, whose location AFP verified, showed bodies lined up in the Kahrizak morgue just south of the Iranian capital, with the corpses wrapped in black bags and distraught relatives searching for loved ones.
International phone links were restored on Tuesday, but only for outgoing calls, according to an AFP journalist, and the quality remains spotty, with frequent interruptions.
Trump, who has repeatedly threatened Iran with military intervention, said Iranians should continue their nationwide protests, take over institutions and record the names of “killers and abusers.”
“Iranian Patriots, KEEP PROTESTING,” Trump wrote on his Truth Social platform. “I have canceled all meetings with Iranian Officials until the senseless killing of protesters STOPS. HELP IS ON ITS WAY.”
It was not immediately clear what meetings he was referring to or what the nature of the help would be.
European nations also signalled their anger, with France, Germany and the United Kingdom among the countries that summoned their Iranian ambassadors to protest what French Foreign Minister Jean-Noel Barrot called “state violence unquestioningly unleashed on peaceful protesters.”
“The rising number of casualties in Iran is horrifying,” said EU chief Ursula von der Leyen, vowing further sanctions against those responsible.

- ‘In the thousands’ -

The Norway-based NGO Iran Human Rights (IHR) said it had confirmed 734 people killed during the protests, including nine minors, but warned the death toll was likely far higher.
“The figures we publish are based on information received from fewer than half of the country’s provinces and fewer than 10 percent of Iran’s hospitals. The real number of those killed is likely in the thousands,” the director of Norway-based NGO Iran Human Rights (IHR) Mahmood Amiry-Moghaddam said.
Fears have also grown that the Islamic republic could use the death penalty to crack down on the protests after Tehran prosecutors said Iranian authorities will press capital charges of “moharebeh,” or “waging war against God,” against some suspects arrested over recent demonstrations.
“Concerns are mounting that authorities will once again resort to swift trials and arbitrary executions to crush and deter dissent,” Amnesty International said.
IHR highlighted the case of Erfan Soltani, 26, who was arrested last week in the Tehran satellite city of Karaj and who, according to a family source, has already been sentenced to death and is due to be executed as early as Wednesday.
Iranian state media has said dozens of members of the security forces have been killed, with their funerals turning into large pro-government rallies. Authorities have declared three days of national mourning for those killed.
Amir, an Iraqi computer scientist, returned to Baghdad on Monday and described dramatic scenes in Tehran.
“On Thursday night, my friends and I saw protesters in Tehran’s Sarsabz neighborhood amid a heavy military presence. The police were firing rubber bullets,” he told AFP in Iraq.

‘Last days’

The government on Monday sought to regain control of the streets with mass nationwide rallies that supreme leader Ayatollah Ali Khamenei hailed as proof that the protest movement was defeated, calling them a “warning” to the United States.
In power since 1989 and now 86, Khamenei has faced significant challenges, most recently the 12-day war in June against Israel, which resulted in the killing of top security officials and forced him to go into hiding.
“When a regime can only hold on to power through violence, then it is effectively finished,” said German Chancellor Friedrich Merz during a trip to India. “I believe that we are now witnessing the last days and weeks of this regime.”
Analysts, however, have cautioned that it is premature to predict the immediate demise of the theocratic system, pointing to the repressive levers the leadership has, including the Revolutionary Guards Corps (IRGC), which are charged with safeguarding the Islamic revolution.
“These protests arguably represent the most serious challenge to the Islamic republic in years, both in scale and in their increasingly explicit political demands,” Nicole Grajewski, professor at the Sciences Po Center for International Studies in Paris, told AFP.
She said it was unclear if the protests would unseat the leadership, pointing to “the sheer depth and resilience of Iran’s repressive apparatus.”