World Bank agrees to limit financing of coal-fired power

The World Bank has agreed to limit financing of coal-fired power plants to “rare circumstances” as part of a new energy strategy aimed at tackling climate change.

The Washington-based global development institution said in its “Energy Sector Directions Paper,” updated every 10 years, that it will amend its lending policies for new coal-fired power projects, restricting financial support to countries that have “no feasible alternatives” to coal, as it seeks to balance environmental efforts with the energy needs of poor countries.

World Bank

The World Bank has over the years argued that funding coal-fired power plants is sometimes necessary to bring energy to the world’s poorest nations and to help them eradicate poverty, so while a tougher stance has been adopted, there still appears to be wriggle room in order to facilitate countries with no alternative in terms of energy security and the combatting of poverty.

Analysts say coal is often the cheapest energy source in places like Kosovo, where the World Bank is mulling whether to support the country’s plans for a coal-fired power plant.

In its latest paper, the World Bank also backed increased support for hydroelectric power, reversing its decision to abandon those projects in the 1990s under pressure from aid groups that warned they would displace people.

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