World Bank is considering lifting its ban on gas projects

Andrea Shalal, reporting for Reuters:

The World Bank’s board has agreed to end a longstanding ban on funding nuclear energy projects in developing countries as part of a broader push to meet rising electricity needs, the bank’s president Ajay Banga said on Wednesday.

Banga outlined the bank’s revised energy strategy in an email to staff after what he called a constructive discussion with the board on Tuesday. He said the board was not yet in agreement on whether the bank should engage in funding the production of natural gas, and if so, under what circumstances.

The global development bank, which lends at low rates to help countries build everything from flood barriers to railroads, decided in 2013 to stop funding nuclear power projects. It announced in 2017 it would stop funding upstream oil and gas projects beginning in 2019, although it would still consider gas projects in the poorest countries.

This story is mostly about nuclear, but why would Banga even consider reversing a ban on fossil gas that was put in place by his predecessor (under whose leadership the World Bank was widely criticised for not doing enough on climate) in 2017? If this is all about helping poor countries get electricity, how did fossil gas become a better choice today?

The costs of renewables and battery storage have decreased drastically since 2017, and many developing countries struggled to pay for imported fossil fuels after Russia invaded Ukraine in 2022. If anything, renewables are the cheaper and more secure option today. Why would the new champion of climate action at the World Bank want to go back to fossil gas?

Here might be a clue, as reported by Max Bearak for the New York Times:

The Trump administration, while far less concerned about climate change than it is with competing against the Russian and Chinese nuclear industries, is trying to expand the fleet of American reactors and quadruple their contribution to the country’s electric grids. Cabinet officials have emphasized support for a new generation of smaller reactors that offer the promise of faster deployment but have yet to be proven.

The United States is the World Bank’s single largest shareholder and holds significant sway over its policies. In April, Treasury Secretary Scott Bessent urged the bank to lift its ban, saying in a speech that doing so would “revolutionize energy supply for many emerging markets.”

I bet Trump wants the World Bank to lift its ban on fossil gas, too.