World Bank: After Malpass the ‘climate denier’, Banga the ‘green saviour’?

Merely a week after former chief David Malpass’ surprise resignation as president of the World Bank, Biden has put forward the former head of Mastercard to lead the institution. The nomination raises hopes for broader lending in the fight against climate change.

The name is in: Ajay Banga could soon become the next president of the World Bank. 

On Thursday, US President Joe Biden nominated the vice chairman of US equity firm General Atlantic to lead the institution, about a week after former leader David Malpass announced his resignation before the end of his term, due in April 2024.

By a long-standing convention, the US typically chooses the president of the multilateral development bank. The latter said earlier this week that formal interviews of all shortlisted candidates would then be conducted before a new president is selected by early May 2023.

Banga, also former CEO of Mastercard, was qualified in a statement from Biden as “uniquely equipped” to preside over the World Bank, at a time when the institution has drawn heavy criticism over its climate spending. 

“He also has critical experience mobilising public-private resources to tackle the most urgent challenges of our time, including climate change," the US president said.

Last October, anti-poverty group Oxfam found that the institution was supplying “very little evidence” to support its claims around the climate finance it provides. 

Of the $17.2bn that its main lending arms had contributed to that sector in 2020, the organisation explained that up to $7bn could not be independently verified.

Former President Donald Trump’s pick Malpass, who took up the World Bank’s helm in 2019 and plans to remain at its head until the end of June, came under fire over its apparent scepticism on climate change, facing in recent months mounting calls to step down.

It had led former US vice president Al Gore to describe him as a “climate denier.”

Responses

For US Treasury Secretary Janet Yellen, who had been putting pressure on Malpass to expand the institution’s lending capacities to address the climate crisis, the new nominee has the “right leadership and management skills, experience living and working in emerging markets, and financial expertise to lead the World Bank at a critical moment in its history.”

The nomination was also welcomed by climate advocates.

For the founder and CEO of the Council on Energy, Environment and Water, Arunabha Ghosh, “Banga brings a wealth of experience from the business world and understands the importance of sustainable and climate-focused investing.”

“If he is elected president of the World Bank, he would need to spearhead fundamental reforms in leveraging the bank’s balance sheet for more investment in sustainable infrastructure and catalysing much larger volumes of institutional capital by de-risking climate investments in emerging economies and developing countries,” he said in a statement issued by the GSCC Network.

A report published late last year by several campaign groups had called out the World Bank for channelling nearly $15bn into fossil fuel projects and policies since the Paris Agreement was made, while setting aside more vulnerable countries which need to adapt to extreme weather events and develop clean energy infrastructures.

“The World Bank Group is supposed to serve communities and countries in the Global South, but still funds more fossil fuels than any other multilateral development bank,” Associate Director of Global Campaigns at 350.org Cansın Leylim Ilgaz pointed out.

“Ajay Banga said it: climate action is about pure survival. Humanity’s climate safety is priceless,” Sonia Dunlop, programme leader of Public Banks at E3G, added in the GSCC statement. “Banga will be a fresh pair of hands at the wheel of what we hope will be a greener, bigger, transformational and reformed World Bank.”