World Bank eyes energy financing options, holds fast on equality issues

By David Lawder

WASHINGTON, April 25 (Reuters) - The World Bank's steering committee on Friday endorsed the lender's plans to explore options to expand energy access, including potential financing for nuclear energy, in a move in line with directives to broaden energy financing by U.S. President Donald Trump's administration.

But the group's statement also endorsed the development lender's gender and equality strategy, just days after U.S. Treasury Secretary Scott Bessent on Wednesday said the World Bank and the International Monetary Fund had suffered from "mission creep" straying too far from their core development and economic stability mandates into climate change, gender and inclusion issues.

A statement from the World Bank and International Monetary Fund joint Development Committee called on the World Bank Group (WBG) to work towards providing energy access to 300 million Africans by 2030.

"We encourage the WBG to explore further options for increased affordable and reliable energy access, including potential support for nuclear energy," the Development Committee said.

Bessent urged the World Bank to focus on energy affordability rather than seeking to "meet distortionary climate financing targets." He welcomed the lender's plan to end a prohibition on the bank's nuclear energy financing and urged it to support gas and other fossil-fuel-based energy production.

The Development Committee noted the bank's target to devote 45% of its lending to climate activities by fiscal year 2026, but said that this should respond to "client requests for mitigation support including access to electricity, effective and resilient transportation solutions, biodiversity, sustainable food production and climate adaptation projects."

TAKING A STAND

The panel's statement fully endorsed the World Bank Group's gender strategy and called for further efforts to promote equality.

"We commend the WBG for its programs that expand economic opportunities for women entrepreneurs, including its work to provide 80 million more women and women-led businesses with capital, and elevate human capital for women and girls," the statement said.

German Development Minister Svenja Schulze told reporters she pressed for inclusion of critical issues such as women's rights and climate during the Development Committee's discussions.

"I insist on mentioning women’s rights and empowerment and climate change concerns, even if the U.S. is pressuring the bank to retreat from those goals," Schulze said, adding that EU members make up 23% of the bank's shareholdings, with the U.S., the largest single shareholder, at 16%.

"We set a course for the bank over the past two years, and we must stick to it,” Schulze said.

Participants noted that the United States did not speak first during the Development Committee meeting as it has traditionally done, and there was little support for its views, except from Russia.

One participant, who asked not to be identified, said the U.S. stance toward the World Bank was surprising after decades of strong support, noting that it remained unclear if Washington would make good on its pledge to provide $4 billion for the International Development Association, the bank's fund for the World's poorest countries.

Bessent said that a decision whether to proceed with the pledge, made by former President Joe Biden, would depend on U.S. budget deliberations and implementation of reforms to the World Bank.