Financing the Energy Transition: Are World Bank, IFC, and ADB Energy Supply Investments Supporting a Low-Carbon Future?

The analysis finds that most energy supply investments by the World Bank, IFC, and ADB are either aligned with or could be aligned with 2°C pathways under specific conditions. Electricity transmission and distribution (T&D) represent the largest share of financing for the World Bank and ADB, accounting for approximately half of the volume of financing and 40 percent of projects. While renewables projects outnumbered natural gas power generation projects in both number and finance volume, the report warns that natural gas must act as a true 'bridge' by displacing coal rather than adding to it. The study identified 21 oil and gas production projects as 'controversial' due to high emissions and lock-in risk. Misaligned projects often cited strong development rationales, but the authors argue that the urgency of climate change requires transformational rather than incremental improvements. The report recommends that MDBs improve disclosure of indirect financing, shift toward newer technologies like battery storage, and ensure fossil fuel production support is reviewed against G7 commitments to phase out inefficient subsidies by 2025.

• The majority of energy supply projects analyzed are either aligned with 2°C pathways or have the potential to be aligned if specific conditions are met.
• Investments in electricity transmission and distribution (T&D) constitute the largest portion of recent and approved energy supply financing for the World Bank and ADB, representing about 50% of the financing volume and 40% of the total number of projects.
• Renewables projects exceeded natural gas power generation projects in both the number of projects and the total volume of finance across the three MDBs.
• The review identified 21 oil and gas production projects, primarily involving natural gas, which are categorized as controversial due to their high emissions and the risk of creating stranded assets and carbon lock-in.
• While misaligned projects often have a strong development justification and may offer incremental GHG improvements over the status quo (such as replacing diesel generators), they pose a risk to the goal of limiting temperature rise to below 2°C.

APA

World Resources Institute (n.d.). Financing the Energy Transition: Are World Bank, IFC, and ADB Energy Supply Investments Supporting a Low-Carbon Future? https://www.wri.org/research/financing-energy-transition-are-world-bank-ifc-and-adb-energy-supply-investments

Chicago

World Resources Institute. Financing the Energy Transition: Are World Bank, IFC, and ADB Energy Supply Investments Supporting a Low-Carbon Future? n.d. https://www.wri.org/research/financing-energy-transition-are-world-bank-ifc-and-adb-energy-supply-investments.

Wikipedia

{{cite report |author=World Resources Institute |title=Financing the Energy Transition: Are World Bank, IFC, and ADB Energy Supply Investments Supporting a Low-Carbon Future? |url=https://www.wri.org/research/financing-energy-transition-are-world-bank-ifc-and-adb-energy-supply-investments |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{worldresourcesinstitutendfinancing, author = {{World Resources Institute}}, title = {{Financing the Energy Transition: Are World Bank, IFC, and ADB Energy Supply Investments Supporting a Low-Carbon Future?}}, institution = {World Resources Institute}, url = {https://www.wri.org/research/financing-energy-transition-are-world-bank-ifc-and-adb-energy-supply-investments}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }