World Bank’s Banga eyes longer, cheaper loans as mission expands to climate

Image credit: World Bank/X

World Bank president Ajay Banga on Friday laid out ambitious plans to widen the development lender’s mission to include climate change and other global crises, speed decision-making and offer more – and cheaper – loans.

World Bank shifts focus to climate

In his first major address since taking office on June 2, the former MasterCard CEO said balance sheet steps in process would yield $157bn in new lending capacity over a decade, and the World Bank would explore loan maturities of 35-40 years for social and human capital investments.

“We’re investigating if we can reduce interest rates to incentivise exiting from coal as part of energy transitions,” Banga told the plenary session of World Bank and International Monetary Fund annual meetings in Morocco.

The lender also is looking for other ways to increase concessional finance for energy transitions for countries that use both its main lending arm for middle-income countries and its fund for low-income countries, Banga added.

His remarks come a day after the World Bank’s governing body approved a new vision statement: “To create a world free of poverty – on a liveable planet.”

The change, which has been in process for a year, broadens the bank’s previous statement focused on reducing poverty and promoting shared prosperity to include easing global crises also including pandemics, food security and fragile states.

“With this vision, we are …reflecting a reality that the luxury of choice was for the last generation,” Banga said.

The Indian-born US citizen said he was calling on member countries to replenish the bank’s Crisis Response Window, with a goal of raising $4bn.