World Bank Group President David Malpass intends to step down from his position by the end of June, a year early.
CarrZee: this move at the World Bank could speed shift to derisking climate-saving investments in emerging nations.
Source doc below, also Just Energy Transition Partnership (JETP) context …Financial Times here:
Also this follow up:
US leads search for new World Bank chief with climate at heart
Malpass of the World Bank Fails to Answer Accusation by Vice President Al Gore That He’s a Climate Denier (2)
PRESS RELEASE FEBRUARY 15, 2023
World Bank Group President Malpass Announces Intention to Step Down
Malpass Says Bank Group Well Positioned to Tackle Critical Development Challenges, Increase Impact, and Support Economic Growth
WASHINGTON, Feb. 15, 2023 — World Bank Group President David Malpass today informed the Board of Executive Directors of his intention to step down from his position by the end of the Bank Group’s fiscal year on June 30 after serving more than four years. During Malpass’s tenure, he focused on seeking stronger policies to increase economic growth, alleviate poverty, improve living standards, and reduce government debt burdens. Over the last four years, the Bank Group’s five institutions (IBRD, IDA, IFC, MIGA, and ICSID) responded quickly to global crises, mobilizing a record $440 billion in response to the COVID-19 pandemic, war in Ukraine, sharp global economic slowdown, unsustainable debt burdens, climate change, and food, fertilizer, and energy shortages.
“It has been an enormous honor and privilege to serve as President of the world’s premier development institution alongside so many talented and exceptional people,” said Malpass. “With developing countries facing unprecedented crises, I’m proud that the Bank Group has responded with speed, scale, innovation, and impact. The last four years have been some of the most meaningful of my career. Having made much progress, and after a good deal of thought, I’ve decided to pursue new challenges. I want to thank our staff and Boards of Directors for the privilege of working with them every day to strengthen the effectiveness of our operations in the most challenging of times.”
With developing countries under severe financial pressure, Malpass met frequently with world leaders to discuss supportive policies, including debt reduction to break the cycles of unsustainable debt. Under his leadership, the Bank Group more than doubled its climate finance to developing countries, reaching a record $32 billion last year. Malpass led efforts to enable and increase private sector investment and trade and contributed thought leadership to the Bank Group’s analytical products on fiscal and monetary policy, currency systems, and governance reform. Malpass also strengthened the institution’s management and personnel and will leave the Bank Group with solidified finances and fundraising to support its AAA credit rating.
“The Bank Group is fundamentally strong, financially sustainable, and well positioned to increase its development impact in the face of urgent global crises,” said Malpass. “This is an opportunity for a smooth leadership transition as the Bank Group works to meet increasing global challenges, facilitate private investment, sharpen its focus on global public goods, and maintain strong momentum on operational delivery and portfolio performance for client countries.”
During Malpass’s tenure, the Bank Group accomplished the following:
- Implemented record surges in financing of over $157 billion in response to the COVID-19 pandemic and $170 billion in response to the war in Ukraine.
- Completed IBRD and IFC capital increases, record IDA19 and IDA20 replenishments, and rapid ramp-up of medium- and long-term bond issuance.
- Provided emergency health and vaccine operations in more than 100 countries.
- Mobilized $18 billion in emergency financing for Ukraine to support the continuation of essential government services.
- Initiated a process with the Bank Group’s shareholders to evolve the institution’s Vision and Mission, Operating Model, and Financial Capacity and Model to increase resources for development.
- Launched the Bank Group’s Climate Change Action Plan to better integrate climate and biodiversity with development and growth.
- Made $30 billion available in projects to address the food, fertilizer, and fuel crisis facing developing countries.
- Launched the Pandemic Fund to improve preparedness, with initial pledges of $1.6 billion from 25 countries and donors.
- Increased financing and staffing for fragile and conflict-affected regions and for clean water, electricity access, and improved nutrition.
- Evolved the Bank Group’s relationship with China by reducing lending and focusing on global public goods and marine plastic pollution reduction.
- Launched innovative financial instruments, including a joint bond issuance with UNICEF, wildlife conservation bonds, an Emission Reduction-Linked Bond in Vietnam, and a concessional financing trust fund to provide results-based support for emissions reduction.
One of Malpass’s key initiatives was to promote debt transparency and sustainability, key to rebuilding investment and growth. Under Malpass’s leadership, the Bank Group:
- Launched the 2023 Global Sovereign Debt “Roundtable” process with the IMF to strengthen the debt restructuring process.
- Issued the timely “Global Waves of Debt” report in December 2019, which called for “debt management and transparency to be top priorities for policymakers—so they can increase growth and investment and ensure that the debt they take on contributes to better development outcomes for the people.”
- Worked with global leaders to break the cycles of unsustainable debt.
- Implemented the Bank’s Sustainable Development Finance Policy (SDFP) to incentivize countries to move toward transparent, sustainable financing.
- Strengthened debt reconciliation and reporting, including central bank swap lines, in the World Bank’s foundational database, International Debt Statistics (IDS).
Another key priority was to strengthen the effectiveness of Bank Group management. During his tenure, Malpass:
- Prioritized transparency of internal and external activities including through detailed financial and climate disclosures.
- Implemented an important realignment of World Bank operations to deepen collaboration and better integrate the Global Practices and Regional Operating units.
- Worked to ensure fiscal discipline, increased trust fund cost recovery, and downsized the Bank Group’s real estate footprint.
- Partnered with the Presidents of six Historically Black Colleges and Universities (HBCUs) to promote the sharing of knowledge and talent among the institutions and developing countries.
- Achieved double-digit improvement in Staff Engagement Surveys on working together, clarity of strategy, and progress toward a culture of openness and trust.
- Initiated the Sexual Harassment Working Group, Anti-Racism Task Force, and Task Force on Workplace Culture to help build a better, more cohesive, collaborative, and responsive working environment.
- Navigated multiple threats to staff security, including staff evacuations from Afghanistan, Myanmar, Sudan, Ukraine, and following coup d’états across the Sahel.
Photo from World Bank website
See this below from Nov. …odi-org. World Bank reform could be crucial for Just Energy Transition Partnerships.
16 November 2022
What’s the state of play on Just Energy Transition Partnerships?
Written bySierd Hadley
Image credit:Jakarta, Indonesia. Image license:Revan Pratama/Unsplash
ODI will be publishing daily updates on the climate negotiations from Sharm El Sheikh. Visit our COP27 hub or follow us on Twitter and LinkedIn for commentary on the most contentious topics at COP27.
One of the most important announcements from COP27 so far is the deal struck between Indonesia and a group of international actors to provide $20 billion to support the transition to cleaner electricity generation. The latest Just Energy Transition Partnership or JETP builds on the excitement surrounding a similar agreement with South Africa launched at COP26 last year.
JETPs are perhaps the most ambitious efforts by advanced economies to support the rapid decarbonisation of large middle-income countries. There is also an expectation that similar JETPs could be established in other countries, with negotiations underway for India, Senegal and Viet Nam. But will JETPs be the model partnership for aligning national development and international climate goals that many believe?
Why was there so much excitement about South Africa’s JETP?
After over a decade of international climate finance, developing countries have little reason to believe that developed countries will provide the programmatic support they need to genuinely pursue low-carbon, climate-resilient development. Climate finance to date has typically been insufficient and fragmented, a project-by-project approach that does not add up to sectoral transformation.
Against this backdrop, South Africa’s JETP provided a signal that a sub-group of the world’s richest economies were committed partners in the collective global effort to fight climate change while supporting the economic and social aspirations of major emitters in the developing world. South Africa’s JETP was founded on a pledge of $8.5 billion to support the decarbonisation of South Africa’s failing power sector, which has been a drain on both the economy and the national budget while producing some of the most carbon-intensive electricity in the world.
For South Africans, the JETP potentially offers financial support for the challenging energy transition, a precondition for revitalising the economy and creating much-needed jobs. There is currently no other mechanism which would unlock the scale of international public finance needed to retire South Africa’s multiple coal-fired power plants, re-skill fossil fuel workers and support local economic development in coal mining regions.
For South Africa’s development partners, the JETP offers a relatively low-cost way to rapidly cut emissions and stimulate private investment in clean energy, electrification and other green technologies. But it won’t be free, and the Government of South Africa is already signalling its frustration with the small share of grants in the new arrangement – which amount to less than 3%.
How is the JETP model is being adapted to Indonesia?
The deal struck with Indonesia shows that the international community is keen to build on the momentum created by the JETP in South Africa. (It is possible that a deal with Viet Nam may still emerge later this year, while an announcement for India is expected at the G20 Summit in July.)
These are very different contexts from that in South Africa. The three Asian economies have experienced rapid economic growth in recent years, although the Covid-19 pandemic led to brief contractions and an increase in poverty. The average age of a power plant in is 10-15 years compared to around 30–40 years in South Africa.
Indonesia and India stand out among many emerging economies because they have a power surplus, at least in key regions where industry is concentrated. There is therefore less scope to decarbonise electricity by adding new clean energy: commercially viable coal plants (under the current, favourable regulatory regimes) will need to be closed and replaced with renewables to reduce the carbon intensity of power. These conditions reduce some of the immediate political and economic pressures for energy sector reform, at least when compared to South Africa or other nations facing energy shortages.
The commitments adopted in the Indonesian JETP reflect the country’s different circumstances, with an ambition to peak emissions from the energy sector earlier than business-as-usual projections rather than to rapidly decommission coal-fired power as renewables come online. Both the existing JETPs commit to expand the quantity of renewable energy, though Indonesia’s focuses on increasing the share of renewables while South Africa’s focuses on the substitution of renewables for coal.
The new JETPs also involve different partners. The International Partners Group (IPG) for South Africa’s JETP is coordinated by the UK, while negotiations with Indonesia were led by the United States and Japan. Indonesia is also attracting financial support from Japan, Denmark, Norway and New Zealand, who were not involved in South Africa. The different composition of the IPG shapes the politics of the JETP, and potentially has implications for its long-term viability – with Joko Widodo’s presidency guaranteed to end and Joe Biden facing elections in 2024.
What have we learnt from the first two JETPs?
JETPs are highly political. Direct negotiations between the host governments and their international development partners are integral to securing the scale of ambition needed to satisfy both sides. The relatively closed nature of those discussions has also been important for forging the partnership, even though it has been a source of dissatisfaction for many civil society groups.
Negotiations are slow and resource-intensive. The announcement of the South African and Indonesian JETPs were broad commitments responding to a specific political window, but the specifics of the financing terms, reform plans, coordination structures, etc. take time to pin down. A detailed investment plan was only published by the Government of South Africa the week before COP27 began, a year after the JETP was announced at COP26.
The “just” aspects will be hardest to agree and finance. Only half of the $20 billion pledged for Indonesia will come in the form of public financing, and just a small share is likely to be provided as grants. Grant financing pledged by South Africa’s IPG was reported at less than $20 million. While international loans, guarantees and private finance will help scale up infrastructure investment, grant (or highly concessional) financing is more important for easing the impact on those communities affected negatively by the economic transition. On the other hand, there is an argument to be made that international grant finance (which will be limited in supply) should be reserved to support adaptation and loss and damage in the poorest and most vulnerable countries, rather than climate action in middle-income countries with better domestic revenue generation and access to capital markets.
For further lessons for JETPs from development cooperation, please see our working paper: Country Platforms for Climate Action: Something Borrowed, Something New?
Could the JETP model be replicated at scale?
It is far too early to make definitive assessments of the two JETPs announced to date. Progress is certainly encouraging in terms of agreeing the broad direction of travel within the host countries and finding alignment between host countries and their development partners. But experience shows it can be difficult to sustain strong political partnerships in the longer term as priorities change. It will be especially challenging if development partners renege on their commitments, as the US has previously done in the climate arena and the UK in the development arena.
Signs are that the JETP model will not be replicated in all countries demanding support – at least in its current form. It is currently politically unthinkable to offer such partnerships to some of the countries defining themselves as ‘developing’ under the climate accords, such as China and Saudi Arabia. Similarly, there is little sign of a JETP for adaptation, which some are calling for. But even for countries which are more likely candidates for future JETPs, the process is too intensive for donor countries to manage bilaterally at scale.
For the JETP to become a more durable and less transactional model for climate finance, the next step may be stronger integration in the multilateral system. Bold reforms are mooted within both the multilateral development banks and the IMF. Could this include the institutionalisation of JETPs? Something to watch in 2023.