Guest essay by Eric Worrall
The World Bank has been accused of secretly funding a massive new Indian backed Queensland coal mine. But the back story behind this strange development goes far deeper – it began with a brutal attempt by President Obama to use US influence to defund fossil fuel resource development in poor countries.
Adani coalmine ‘covertly funded’ by World Bank, says report
The bank’s private sector arm is accused of subsidising loans that funded the Indian firm’s Queensland exploration bid.
Adani’s Carmichael mine has been “covertly funded” by the World Bank through a private arm that is supposed to back “sustainable development”, according to a US-based human rights organisation.
Adani Enterprises acquired exploration rights for Australia’s largest proposed coalmine in 2010 with a US$250m loan from banks including India’s ICICI, which was in turn bankrolled by the World Bank’s private sector arm, the International Finance Corporation, a report by Inclusive Development International says.
The report accuses the World Bank of using “back channels” to conceal its support for a company that “would have little chance of receiving direct assistance from the IFC”, which has a “mandate for sustainable development”.
ICICI was among six Indian banks that received US$520m from the IFC between 2005 and 2014.
This means the World Bank has exposure to the contentious Carmichael project, from which a growing number of Australian and overseas banks are shying away.
The referenced report is available here.
Back in April 2015, WUWT reported how an attempt by the Obama administration to push the World Bank into choking off finance for coal projects in the third world had backfired. China stepped into the breach, and used its enormous state resources to create a new bank, to provide the fossil fuel finance the Obama influenced World bank was no longer willing to provide, effectively sidelining the renewables obsessed world bank into international irrelevance.
Japan joined the coal rush, offering Japanese financial services as an alternative to the new Chinese Infrastructure Investment Bank. Japan added to the humour of the situation, by demanded the UN classify the Japanese financial offering as “climate finance”, on the grounds that Japan were financing supercritical coal plants. Japan wanted recognition for the difference between the reduced CO2 output of their supercritical plants, and the CO2 a traditional coal plant emits.
The sidelining of the World Bank was a catastrophic blow to President Obama’s attempts to influence international energy development, and a substantial loss of US influence and prestige on the world stage.
If these new accusations are true, if the World Bank did knowingly secretly finance the Carmichael Coal Project, my interpretation is that the World Bank has quietly ditched its alleged commitment to defund fossil fuel projects, and is now fighting for survival, secretly funding coal projects in an effort to claw back market share and international relevance from their upstart Japanese and Chinese rivals.