World Bank to launch new trust fund for emission reduction grants

By David Lawder

WASHINGTON (Reuters) – The World Bank said on Monday it was launching a trust fund to pool public funds to provide grants for projects aimed at reducing carbon emissions, including the dismantling of coal-fired power plants. .

The Scaling Climate Action by Lowering Emissions (SCALE) fund will provide grants to developing countries as they achieve pre-agreed results in reducing greenhouse gas emissions, the World Bank President said, David Malpass, in an article on LinkedIn.

SCALE will be the new umbrella trust fund for the bank’s results-oriented climate finance activities. Malpass said the World Bank was capitalizing on the new fund, with the aim of launching it at the COP27 climate change conference in Egypt in November.

In a document submitted to the Joint Development Committee of the World Bank and the International Monetary Fund, the bank said it had identified three areas that lend themselves particularly well to these results-based financing grants: natural climate solutions based on agriculture, forestry, land use and oceans; sustainable infrastructure such as energy and transport; and fiscal and financial solutions that directly or indirectly mobilize resources for climate action.

The bank said the SCALE fund will bring new resources to emission reduction projects in low- and middle-income countries, help generate larger projects, generate high-quality carbon credit assets and help countries improve access to international carbon markets.

The World Bank has not identified a projected size for the new fund. The world’s largest multilateral development lender in fiscal year 2022, ending June 30, provided more than $30 billion in climate-related finance.

But US Treasury Secretary Janet Yellen last Thursday urged the World Bank and other multilateral development banks to change their business models beyond financing country-specific projects and to dramatically increase lending to meet to climate change and other pressing global needs.

(Reporting by David Lawder; Editing by Leslie Adler)

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