Trump Pushes World Bank to Finance More Fossil Fuel Development

U.S. is applying pressure to lenders to drop restrictions on projects contributing to climate change

Financial Times

Attracta Mooney in London and Aime Williams in Washington

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Donald Trump’s administration is pressuring the World Bank to fund more fossil fuel projects,

The U.S. president, who has promised to unleash American fossil fuels and has railed against green energy, has torn up many of former president Joe Biden’s green energy and climate policies since returning to the White House.

His administration is now targeting the financing of energy in developing countries, according to five development officials.

“The Americans are talking about all gas everywhere,” said a senior official from a country on the board of the World Bank.

An increase in lending to gas exploration projects by the World Bank and other multilateral development institutions would mark a startling shift in direction for lenders, which have been under pressure in recent years to tackle climate change.

A rise in fossil fuels financing in industrialized countries would hit efforts to limit the global temperature rise. While industrial countries are largely responsible for historical greenhouse gas emissions, levels are rising fastest in developing markets. Last year was the hottest on record.

Some development banks have introduced restrictions on lending to fossil fuels in recent years, including the World Bank Group, which stopped financing new upstream oil and gas projects in 2019, with some limited exceptions for gas.

In 2023, the bank said it aimed to provide 45 per cent of its annual financing to climate by 2025.

But in a June meeting of the World Bank’s board, U.S. officials strongly supported the bank lending to projects that would unearth new stores of natural gas, according to three people familiar with the matter.

Following the meeting, Ajay Banga, the World Bank president, wrote in an email to staff that the lender’s board was not in agreement over its involvement in upstream gas. “This will require further discussion,” he said.

A spokesperson for the World Bank declined to comment while the board continued to deliberate on the matter.

A spokesperson for the U.S. Treasury said the U.S. was using its “voice and vote to respond to countries’ energy priorities and needs”.

“An all-of-the-above energy strategy that provides for the financing of upstream gas would be a positive step towards reconnecting the World Bank, and all other multilateral development banks, to their core missions of economic growth and poverty reduction,” the spokesperson said.

The U.S. was also piling pressure on other development banks both publicly and privately to roll back their green efforts while expanding fossil fuel lending, the people said, including financing gas pipelines. The U.S. is a major shareholder in many development banks, which gives it substantial influence over the institutions’ policies and priorities.

“The U.S. is saying all energy is good energy. They are saying we should also accept other energy, not just renewables,” one development bank official said.

Two years ago, former World Bank president David Malpass — a Trump appointee — left the bank before his tenure had expired after facing criticism over his climate stance.

Janet Yellen, Biden’s Treasury secretary, led a group of world leaders who wanted the bank to provide much of the money needed to power the global energy transition.

Economists estimate that US$1.3 trillion annually will be needed by 2035 in climate finance by developing economies, with multilateral development banks expected to play an important role in providing and distributing this cash.

Earlier this year, Scott Bessent, U.S. Treasury secretary, publicly called on the World Bank to finance more gas.

“The World Bank must be tech neutral and prioritize affordability in energy investment. In most cases, this means investing in gas and other fossil fuel-based energy production,” he said.

Last year, multilateral development banks, including the World Bank Group, estimated their annual collective climate financing for low- and middle-income countries would reach US$120 billion by 2030.

In September, a report compiled by the European Investment Bank said climate finance from development banks had more than doubled over the past five years to reach US$85 billion in 2024.