World Bank Group and IMF Deepen Joint Effort to Scale Up Climate Action

By India Education Diary Bureau Admin On Jun 2, 2024

WASHINGTON – The World Bank Group (WBG) and the International Monetary Fund (IMF) are deepening their cooperation through an enhanced framework to help countries scale up action to confront the threat of climate change.

The collaboration will provide critical support for countries’ climate strategies—through an integrated, country-led approach to policy reforms and climate investments. Within their respective mandates, the World Bank Group and the IMF will leverage their analytics, technical assistance, financing, and policy expertise to enhance country-driven reform programs.

Three principles will underpin the framework:

First, countries, the World Bank Group, and the IMF will work together closely to identify each country’s climate challenges—and the priority policy reforms needed to address them. This process will be informed by the World Bank Group’s Country Climate and Development Reports (CCDRs), the IMF’s climate-related analytics, and countries’ own climate ambitions.
Second, the World Bank Group and the IMF will work with other Multilateral Development Banks and development partners to help countries implement the reforms through technical assistance and financing.
Third, upon request, the World Bank Group and the IMF will help establish country-led platforms designed to mobilize additional climate finance, including from the private sector.

The enhanced framework will build on lessons learned since the release of the institutions’ Joint Statement on Enhancing IMF-World Bank Collaboration in September 2023.

This enhanced cooperation between the two institutions will foster country-driven partnerships, galvanize policy changes, and scale up investments to meet countries’ climate needs. The joint effort will also optimize the increased resources the institutions are dedicating to climate action and crowd-in additional resources from development partners and private sector.

The World Bank Group is ramping up its climate action with new measures including devoting 45 percent of annual financing to climate change adaptation and mitigation by 2025, working to bring renewable power to 250 million people in Africa by 2030, and expanding its crisis toolkit to support people on the front lines of the climate crisis. The institution has also optimized its balance sheet and is raising funds for a robust IDA21 replenishment and a new Livable Planet Fund.

The IMF is helping countries build resilience to climate change with support from its Resilience and Sustainability Trust (RST), which is funded by generous contributions from 23 countries. Since it became operational in October 2022, 18 countries have already benefitted from the RST. The enhanced WBG-IMF collaboration framework is expected to further raise the impact of the SDRs channeled through the RST.