Up to $41 billion in climate funds remain untraceable, casting doubt on the World Bank's climate commitments. File Picture: AFP
A significant portion of the World Bank’s climate finance — estimated between $24 billion and $41 billion — remains unaccounted for, according to a report published by Oxfam on October 17.
This startling revelation comes as the World Bank, responsible for 52% of all multilateral development bank (MDB) climate finance, is under increasing scrutiny for transparency ahead of its 2023 Annual Meetings in Washington, DC.
The audit of the World Bank’s 2017-2023 climate finance projects found severe gaps between projected and actual spending for climate-focused initiatives.
“The Bank is quick to brag about its climate finance billions — but these numbers are based on what it plans to spend, not on what it actually spends once a project gets rolling,” said Kate Donald, head of Oxfam International’s Washington DC Office.
Donald emphasised the opacity of the process, comparing it to a doctor assessing one’s diet solely from a grocery list rather than the actual food consumed.
While the World Bank reports its climate finance on an ex ante basis, meaning projected costs before project implementation, there is no ex post analysis to verify funds spent on climate adaptation and mitigation efforts after project closure.
This reporting gap makes it impossible for external stakeholders, including member states and beneficiary communities, to assess the Bank’s actual impact on climate mitigation.
Oxfam’s report further outlines an average discrepancy of 26-43% between budgeted and actual expenditures on climate projects. This inconsistency undermines efforts to hold the Bank accountable, especially as climate finance becomes critical for low- and middle-income countries grappling with climate impacts.
The Bank’s climate funds aim to support essential adaptation and clean energy initiatives, yet the lack of transparency casts doubt on whether these funds reach their intended purpose.
Donald highlighted that gathering data for the report was a challenging process. “We had to sift through layers of complex and incomplete reports, and even then, the data was full of gaps and inconsistencies,” she noted, stressing that climate finance information should be readily available and transparent to the public.
The findings have implications beyond financial accountability. At the upcoming COP negotiations, where the Global North is under pressure to commit $5 trillion annually in public climate finance, Oxfam’s report shows how this lack of transparency risks undermining trust in international climate finance.
Oxfam’s recommendations include a call for the Bank to implement rigorous ex post climate finance reporting at project closure and create a public, searchable climate finance database.
Without such measures, Oxfam warns that the Bank’s new climate finance targets will continue to lack credibility, potentially impeding progress in urgent climate mitigation and adaptation efforts worldwide.
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