World Bank’s Development Policy Finance 2015 to 2021: Stuck in a carbon intensive rut

The report examines how World Bank Development Policy Finance (DPF) in Indonesia and Pakistan has facilitated the expansion of fossil fuels. In Indonesia, a $500 million loan specifically promoted natural gas infrastructure, while the Bank's private sector arm, the IFC, has been linked to coal projects. In Pakistan, the $400 million PACE program's 'prior actions' led to the fast-tracking of an energy plan (IGCEP) that slashed renewable energy targets from 30-33% to 17% and increased reliance on coal, gas, and large-scale hydropower. The authors conclude that DPF often supports fossil fuels by default through sector stabilisation and recommend that all fossil fuels be added to the World Bank's Excluded Expenditures list.

• A $500 million Sustainable and Inclusive Energy Development Policy Loan (DPL) to Indonesia facilitated the expansion of natural gas through conditionalities that the report claims have locked the country into high-carbon infrastructure for 40 years.
• The World Bank's International Finance Corporation (IFC) acted as Transaction Advisor for the 2,000 MW Central Java Coal Power Plant and has maintained a long-term investment relationship with Hana Financial Group, whose subsidiary backed the Java 9 and 10 coal projects.
• In Pakistan, the $400 million Program for Affordable and Clean Energy (PACE) required the adoption of a least-cost generation plan (IGCEP) as a prior action, which resulted in renewable energy targets being reduced from 30-33% to 17% by 2030.
• The 2021 IGCEP in Pakistan increases reliance on fossil fuels, planning additions of approximately 8.5 GW of coal and 10 GW of liquefied natural gas (LNG) and gas over the next decade.
• The report highlights that the IGCEP in Pakistan has scaled up large hydropower projects, which may increase water conflict and are vulnerable to climate-induced water shortages, as seen with the Tarbela dam operating at only 25% capacity during a heatwave.
• The authors recommend that the World Bank include all fossil fuels, including coal, oil, and gas, on the Excluded Expenditures list for Development Policy Finance to prevent the promotion of unsustainable energy.

APA

Witt, F., Prasetiyo, A., & Moulvi, Z. (2021). World Bank’s Development Policy Finance 2015 to 2021: Stuck in a carbon intensive rut. Trend Asia. https://trendasia.org/wp-content/uploads/2021/12/World-Banks-Development-Policy-Finance-2015-to-2021-Stuck-in-a-carbon-intensive-rut_final.pdf

Chicago

Witt, Fran, Andri Prasetiyo, and Zain Moulvi. World Bank’s Development Policy Finance 2015 to 2021: Stuck in a carbon intensive rut. Trend Asia, 2021. https://trendasia.org/wp-content/uploads/2021/12/World-Banks-Development-Policy-Finance-2015-to-2021-Stuck-in-a-carbon-intensive-rut_final.pdf.

Wikipedia

{{cite report |last1=Witt |first1=Fran |last2=Prasetiyo |first2=Andri |last3=Moulvi |first3=Zain |title=World Bank’s Development Policy Finance 2015 to 2021: Stuck in a carbon intensive rut |publisher=Trend Asia |date=December 2021 |url=https://trendasia.org/wp-content/uploads/2021/12/World-Banks-Development-Policy-Finance-2015-to-2021-Stuck-in-a-carbon-intensive-rut_final.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{witt2021world, author = {Witt, Fran and Prasetiyo, Andri and Moulvi, Zain}, title = {{World Bank’s Development Policy Finance 2015 to 2021: Stuck in a carbon intensive rut}}, institution = {Trend Asia}, year = {2021}, month = dec, url = {https://trendasia.org/wp-content/uploads/2021/12/World-Banks-Development-Policy-Finance-2015-to-2021-Stuck-in-a-carbon-intensive-rut_final.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }