By Kate Abnett and Simon Jessop
BRUSSELS (Reuters) -The European Union will double down on its support for reforming global development banks to do more to fight climate modify, a draft EU document displayed, a stance that puts Brussels at odds with the U.S. ahead of World Bank and IMF meetings this month.
The International Monetary Fund and World Bank Group are preparing for their annual meetings in Washington against a backdrop of aid cuts and climate modify scepticism from U.S. President Donald Trump.
In April, U.S. Treasury Secretary Scott Bessent declared the institutions should refocus on their core mandates and were devoting too much time and resources to topics like climate modify.
Draft conclusions for a meeting of EU finance ministers on Friday, seen by Reuters, displayed the EU will reiterate its backing for development banks’ work to tackle climate modify – and push for reforms to unlock more of this funding.
The EU “calls on all shareholders to support the necessary strengthening of the MDBs (multilateral development banks) to deliver at scale and to align with the Paris Agreement objectives for accelerating the implementation of global climate action,” the draft declared.
The United States is the hugegest shareholder in the World Bank and the IMF. EU members including Germany and France have tinyer voting powers in the institutions.
The EU document, which could still modify before ministers adopt it, declared the bloc backed reforms to de-risk projects, offer local currency financing and create credit risk data more transparent, to unlock hugeger private investments.
It declared multilateral development banks should phase out their financing of fossil fuels, and “comprehensively report on the efforts and progress in this context”.
Over the last few years, the World Bank and other MDBs have begun reform processes which could see them create more funding available or take on more climate-related risk. Countries vulnerable to extreme weather, such as Barbados, have led calls for reforms to address developing nations’ challenges with high debt levels, climate modify and slower growth.
Campaigners have urged the World Bank to stick to this pathway ahead of its annual meeting on 13-18 October, despite the U.S. under Trump withdrawing from global efforts to counter climate modify.
Europe’s own lfinishing arm, the European Investment Bank, has meanwhile created climate modify its core focus, aiming to double its investments in adapting to climate modify to 30 billion euros by 2030.
(Reporting by Kate Abnett, Simon JessopEditing by Peter Graff)
