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I: Forcing energy-poor low-income countries to disproportionately focus on climate mitigation is anti-development
To be blunt, the data suggests that the World Bank continues to use its financial and advisory leverage to mislead low-income countries into incurring debts to disproportionately finance mitigation projects, rather than climate adaptation and investments in reliable and affordable energy access:
64 percent was directed towards mitigation and 36 percent towards adaptation. The figure below shows that for every income group, mitigation spending exceeds that on adaptation. It is somewhat of a mystery why the World Bank claims to have spent over $3 billion in two years on mitigation in the poorest countries that account for less than one percent of global emissions [emphasis mine]
… it is a legitimate question as to how much the Bank should be financing activities that are only justifiable on grounds of their climate mitigation impact: clients have made clear they don’t think the institution should be focused on that[emphasis mine]. And in all of this it remains very hard to say how much, if any, of what is being labeled climate finance by the World Bank is “activities that wouldn’t happen absent a climate focus.”
Of course some of this is just climate theatre, motivated by the need to please a section of the Bank’s leadership and board by tagging every small project as climate-related. But even accounting for that, it should worry everyone that the Bank’s staff feel the need to pander to their superiors in this manner. The tendency to lazily load all manner of issues onto project designs results in unwieldy projects that are unfocused and more about checking boxes and shoveling money out the door than actual impacts on the ground.
So what exactly explains the variance between African policymakers’ stated development priorities and the World Bank projects they actually sign up for?
Climate change is not a top policy priority in most developing countries. According to a surveys from 2020-2021, the top priority areas most likely to be cited were education; agriculture and rural development; governance reform; and work around jobs, poverty, and the economy. Source: CGD
First off, many of the policy documents motivating these projects tend to be written exclusively by Bank staff or co-authored between Bank staff and country policymakers. A good example of this are the collections of Country Climate and Development Reports and Mission 300 compacts. In addition to this direct contribution, the Bank enjoys a psychological hold on policymakers’ understanding of feasible policy options. Many sincerely believe that the Bank’s policy mongers know what they are talking about. All this makes a mockery of claims that African governments sign onto these policies willingly.
Second, there’s the cash. It always amazes how much policy damage one can do in African states with relatively little money. For example, Kenya is currently destroying its basic education system for a few hundred million dollars in “reforms” money. For perspective, in FY25/26 its education sector’s tax-funded allocation was nearly $7b. The point is that when bilateral donors or multilaterals show up with cash, there’s always an official who stands to make money and is therefore motivated to accept the project. And it goes without saying that politicians love opportunities to cut ribbons.
Which is to say that it takes a lot of policy discipline to reject funded projects.
And as I’ve repeatedly argued here before, the World Bank and other donors should be spending a lot more time and resources not on mitigation but on helping low-income countries achieve reliable and affordable access to energy — especially for firms.
II: Why should we care about the World Bank’s policy posture regarding energy access and climate change?
It’s hard to overstate the World Bank’s agenda setting powers. Which is why everyone should be alarmed by the continued disproportionate focus on climate mitigation over adaptation and pro-growth energy abundance in the Bank’s projects. While the sums involved per project may be small and many of the projects likely to have minimal impact, the fact of the matter is that each project consumes policymakers’ scarce attention while also hoarding whatever little state implementation capacity exists in low-income countries. This isn’t a case of climate denial. Rather, it’s a sober recognition that energy-poor developing countries that have contributed very little to global warming and continue to have negligible emissions should be the last to be forced to decarbonize or prioritize mitigation. Energy poverty is really bad for both humans and the environment/climate.
A common justification for foisting anti-development climate policies on low-income countries is that they’ll be the worst affected. It’s a common opening in many countries’ climate and development reports. This claim conveniently neglects the fact these countries will be the worst affected precisely because they are poor and largely lack climate resilient infrastructure. It’s a mystery to me why accelerating economic growth and structural economic change (which will necessarily require increasing the supply of energy) never gets considered as the number one climate adaptation strategy in these countries. Instead, what we have now are lots of energy-poor countries essentially forced to commit to steep reductions in emissions and rising energy costs; accompanied, of course, with lots of feel-good micro-level livelihoods projects with climate tags.
How can we ensure that legitimate concerns about global climate change do not completely swamp the urgent energy needs of low-income countries?
One way out of this impasse would be to adapt and build upon a brilliant suggestion from the folks at the Energy for Growth Hub. Presently, the International Energy Agency (IEA) views 50-100 kWh per capita as the floor of modern energy access. This is the same unambitious lowest common denominator standard used to define universal energy access under SDG 7. Obviously, this bar is too low.
100 kWh is enough to power several light bulbs for a few hours a day, charge a mobile phone, and occasionally run a fan or other small appliance. It’s not enough for modern appliances.
To raise the bar, the Energy for Growth Hub proposed that the floor for energy access — the Modern Energy Minimum — should be 1000 kWh per capita (250 kWh at home, and 750 kWh outside the home). For perspective, the average electricity consumption in rural Kenya is about 34.1 KWh per capita (national average is below 200 kWh per capita). U.S. electricity consumption is about 12,500 kWh per capita. In Asia, Bangladesh (603 kWh), Indonesia (1257 kWh), and Vietnam (2624 kWh) are all ahead of the African average. It is also worth emphasizing that per capita electricity consumption has been declining across Africa since peaking in the late 1980s.
Trends in per capita electricity consumption across the Continent. Source: Author using data from the World Bank.
Now, I would argue that we should build on this level of the modern energy minimum and develop an understanding that low-income countries should be free to get to the 1000 kWh per capita level however they can with no questions asked. Any external energy-related interventions, including for climate reasons, would then have to match the most cost-effective domestic energy source. It’s only above the 1000 kWh per capita threshold that international obligations related to emission reductions and other mitigation efforts would kick in. Of course this wouldn’t absolve countries from caring for the environment and being concerned about climate change (many of these countries already have very low emissions and highly green grids anyway). Instead, the goal would be to shield these countries’ energy sectors from malign influence by donors and other policy mongers.
III: Conclusion
Why the focus on electricity? First, the evidence suggests that power is constantly a top 3 problem for most firms across the Continent. Furthermore, the lack of reliable and affordable power is correlated with reduced firm growth and job creation. This is obviously bad.
Second, electrification is the best possible climate transition strategy. According to the IEA, the share of electricity in final energy consumption is a mere 12%. Raising this share — especially among firms — would be the smart thing to do, regardless of how the power is generated. The sources of power can always be cleaned up further down the road. Failure to reliably electrify large consumers of energy will make them likely to lock-in dirtier energy sources in their final consumption, and make the transition process down the road more expensive (both politically and economically), and therefore harder.
Is there any chance of the World Bank changing its approach to matters climate and energy access? Yes. Partly because of the botched transition efforts in a section of OECD countries and political shifts in the United States, the World Bank (or at least its leadership) is slowly shifting with regard to energy abundance. For example, it recently stopped its opposition to the development of nuclear power. And even rhetorically, mentions of climate in Ajay Banga’s are apparently trending downwards (“3.33 per speech in 2024, 0.33 so far in 2025”) — although this is likely due to the need to pander to the current U.S. administration.
I believe change is possible. Yet for that to happen more people must be willing to hold the line and insist on a clear understanding of objective facts regarding energy poverty in low-income countries. Due to its agenda setting powers, the willingness to change must start at the World Bank. Surely, they of all organizations wouldn’t want to promote projects whose net effects resemble the policies championed by degrowthers.
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