Urja Khabar
KATHMANDU; The World Bank Group (WBG) has announced that it will discontinue its target of allocating 45 percent of its annual financing to projects with climate co-benefits, while reaffirming its commitment to supporting initiatives that reduce greenhouse gas (GHG) emissions and strengthen climate resilience.
In a public statement issued this week, the multilateral development institution confirmed that its five-year Climate Change Action Plan (CCAP) has officially expired. As part of the transition, the WBG will no longer maintain the climate finance targets established under the plan.
The decision marks a significant shift in the bank's climate financing strategy and has raised concerns that developing countries—particularly those in Africa—could receive reduced support for climate adaptation and resilience initiatives.
According to the WBG, climate-related projects accounted for 48 percent of its total lending in the last fiscal year, amounting to US$51 billion, exceeding its previous target of 45 percent. More than one-third of that financing was directed to African countries.
"We will retire the 45 percent climate co-benefits target and the 35 percent target in the Climate Change Action Plan (CCAP). We have done significant work in responding to client demand and needs. Further progress on outcomes will continue to be driven by client ambition and enabled by the work of the Knowledge Bank, consistent with countries' international commitments," the WBG said in its statement.
Despite dropping the financing target, the World Bank emphasized that it remains committed to measuring and reporting its climate-related outcomes. The institution said it will continue tracking two key performance indicators: reductions in net GHG emissions and the number of people benefiting from increased resilience to climate risks.
"The WBG will continue its work to strengthen its outcome measurement methodology and collaborate with other Multilateral Development Banks (MDBs) to improve climate impact assessment," the statement added.
The policy shift comes amid sustained pressure from the United States—the World Bank's largest shareholder—to scale back mandatory climate financing targets. The move contrasts with the position of several European governments and many developing countries, which had advocated retaining the 45 percent climate finance commitment.
Nepal is among the major beneficiaries of World Bank assistance. According to government data, the bank has committed approximately US$10.41 billion to 149 projects across the country. Many of these investments—including electricity transmission and distribution upgrades, irrigation modernization, road and bridge rehabilitation, and disaster risk management—are directly or indirectly linked to climate adaptation and resilience.
Recognized as one of the world's most climate- and disaster-vulnerable countries, Nepal remains a priority for the World Bank's climate and resilience agenda. Under its Country Partnership Framework (2025–2031), the World Bank plans to invest approximately US$2.7 billion in Nepal through both public and private sector financing, with a strong focus on disaster preparedness, climate resilience, sustainable infrastructure, and inclusive economic growth.
While the retirement of the climate finance target does not immediately affect ongoing projects, development experts say the long-term allocation of climate funding will increasingly depend on borrowing countries' priorities and the World Bank's evolving development strategy.
