The World Bank needs profound reforms, including reversing a ban on upstream oil and gas financing, U.S. Treasury Secretary Scott Bessent said in a statement for the World Bank Development Committee and the IMF International Monetary and Financial Committee.
The World Bank has made some steps in returning its focus on its core mission of reducing poverty and raising economic growth, Bessent said, but noted that “significantly more is needed.”
“We continue to support the World Bank and African Development Bank goal to extend energy access to 300 million more people in Africa,” the U.S. official said.
“Achieving this goal will require the Bank to take a technology-neutral approach rather than restricting borrower choice, including by removing constraints on its support for natural gas and positively responding to borrower demand for gas projects.”
Nearly a decade ago, the World Bank Group said in 2017 it would no longer finance upstream oil and gas after 2019. But the group noted that “In exceptional circumstances, consideration will be given to financing upstream gas in the poorest countries where there is a clear benefit in terms of energy access for the poor and the project fits within the countries’ Paris Agreement commitments.”
According to Bessent, “the World Bank Group should formally retire its prohibition on financing upstream gas and oil.”
“The Bank cannot credibly invoke country ownership while categorically excluding upstream projects before their development merits are even assessed,” the U.S. official said as the Trump Administration continues to pressure international institutions to drop ESG considerations and green policy agendas.
Since Donald Trump began his second term as U.S. President in January 2025, the United States has threatened – several times – to quit the International Energy Agency (IEA) if the organization, created in the aftermath of the 1970s Arab oil embargo, doesn’t return to forecasting energy demand without strongly promoting green energy.
In the latest such threat, U.S. Energy Secretary Chris Wright last month said that “We’re either going to reform the IEA or we will leave the IEA. My strong preference is that we reform it.”
By Michael Kern for Oilprice.com
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