The World Bank must use “informed risk-taking” to encourage private investors to get more engaged in helping developing countries deal with climate change and leapfrog fossil-fuel energy sources, its new president Ajay Banga said yesterday.
Banga told CNN’s Fareed Zakaria GPS programme that efforts now underway to stretch the World Bank’s lending capacity and revamp its business model could potentially free up “tens of billions” of dollars, but not the estimated trillions of dollars needed to ensure a just energy transition.
“The only way forward is to find a way to get the private sector to believe that this is part of their future,” said Banga, who will visit Peru and Jamaica this week as part of a tour to visit countries in every region where the bank operates.
“That’s kind of a thing that we can do with informed risk-taking,” Banga said, noting that renewable energy was now cheaper in many cases than fossil fuels due to improvements in storage and duration.
Affordable electricity was the key starting point for social and economic development in emerging economies, but new solutions were needed to avoid the “emissions-intensive growth model” followed by advanced economies, or there was no hope of curbing emissions by 2050, he added.
The Indian-born executive was nominated by the US for the job precisely because of his previous work in the private sector, and he has pledged to identify barriers for greater investment and find ways to maximise the bank’s impact.
Banga told CNN he would also work closely with other multilateral lenders and development organisations, noting that he would be joined in his visits this week by Inter-American Development Bank President Ilan Golfajn.
“We need so much to be done. We need all shoulders at the wheel,” he said. “What we don’t need is silos in this effort.” — REUTERS
