World Bank Considers Looser Loan Requirements to Boost Climate Lending

From Watts Up With That?

Essay by Eric Worrall

“… higher statutory lending limits, lower equity-to-loan requirements and the use of callable capital – money pledged but not paid in by member governments – for lending. …”

Exclusive: World Bank seeks more funds to address climate change, other crises -document

By David Lawder
5 minute read January 4, 20236:42 AM GMT+10 Last Updated a day ago

WASHINGTON, Jan 2 (Reuters) – The World Bank is seeking to vastly expand its lending capacity to address climate change and other global crises and will negotiate with shareholders ahead of April meetings on proposals that include a capital increase and new lending tools, according to an “evolution roadmap” seen by Reuters on Monday.

…

The bank said proposals under consideration include higher statutory lending limits, lower equity-to-loan requirements and the use of callable capital – money pledged but not paid in by member governments – for lending.

Development experts say this shift would greatly increase the amount of lending compared to the current capital structure, which only utilizes paid-in capital.

…Read more: https://www.reuters.com/business/sustainable-business/world-bank-seeks-more-funds-address-climate-change-other-crises-document-2023-01-03/

An atrium is seen at the World Bank headquarters in Washington, U.S., October 14, 2017. REUTERS/Yuri Gripas

I find the “Callable Capital” proposal particularly unsettling.

If the Biden Administration is legally able to agree to changes to World Bank governance within the existing charter, without having to ratify any new treaties, this might open a back door for international climate projects to access US taxpayer’s funds which have not yet been paid to the bank, without oversight from the newly elected Republican Congress.