The World Bank has removed its target of directing 45 percent of its financing to climate-related projects, marking a policy shift that is raising concerns among development experts and environmental groups about the future of climate finance for Africa.
The decision comes as the bank’s five-year Climate Change Action Plan reaches its conclusion after surpassing its financing goal. During the 2024 financial year, the institution committed approximately US$51 billion, about 48 percent of its total lending, to projects with climate-related benefits. More than one-third of that funding went to African countries, supporting investments in renewable energy, climate adaptation, water security and resilient transport infrastructure.
The removal of the formal target follows months of discussions among the bank’s shareholders. Reports indicate that the United States, the institution’s largest shareholder, pushed for greater flexibility in lending priorities, while several European countries and developing nations favoured retaining the benchmark. Although the numerical target has been dropped, the World Bank says its climate agenda will continue without a fixed deadline.
In a message to staff, World Bank President Ajay Banga said climate considerations would remain embedded across the institution’s operations, stressing that lending decisions would be guided by the development priorities of client countries rather than predetermined funding quotas.
The policy also signals a broader shift in how the bank intends to assess its climate performance. Speaking at the Hamburg Sustainability Conference, World Bank Managing Director Paschal Donohoe said future reporting would focus more on the measurable impact of climate investments than on the percentage of financing allocated to climate projects.
According to Donohoe, measuring success through development outcomes rather than spending levels provides a more meaningful assessment of climate interventions. The bank argues that climate action is now integrated across its operations, making standalone financing targets less relevant to its long-term strategy.
The move, however, has drawn criticism from development organisations, which argue that clear financing targets are essential for maintaining accountability and ensuring continued investment in climate adaptation, particularly in low-income countries.
Selma Huart, advocacy officer at Oxfam, warned that eliminating the benchmark could weaken oversight and reduce the prominence of climate adaptation within future lending programmes. She said the absence of a clear quantitative commitment creates uncertainty over whether funding for climate-vulnerable countries will be sustained as competing development priorities place increasing pressure on multilateral resources.
For Africa, the implications extend well beyond environmental policy. Climate finance has become a critical source of investment for strengthening economic resilience, improving infrastructure and supporting fiscal stability. International financial institutions estimate that African countries require substantial funding to respond to increasingly frequent droughts, floods, heatwaves and other climate-related shocks that continue to disrupt agriculture, energy production, transport networks and public health systems.
Many African governments have integrated climate adaptation into their national development strategies, recognising that environmental risks increasingly threaten macroeconomic stability and long-term economic growth. Multilateral climate finance plays an important role in reducing investment risks while enabling governments to fund large-scale infrastructure projects that would otherwise remain beyond domestic budgetary capacity.
In recent years, the World Bank has been one of Africa’s largest providers of climate-related development finance. Its investments have supported renewable energy generation, resilient transport systems, irrigation schemes and water security projects in countries including Madagascar, Tanzania and Niger, helping reduce climate vulnerability while improving productivity, expanding public services and creating economic opportunities.
The bank’s revised approach reflects a broader debate within the international development finance community over how climate finance should be measured. While some policymakers argue that focusing solely on spending targets risks prioritising the volume of funding over its effectiveness, others maintain that clear financial commitments remain essential for sustaining political momentum and providing predictable support to vulnerable economies.
The policy change comes as African countries prepare more ambitious Nationally Determined Contributions (NDCs) under the Paris Agreement while grappling with rising debt levels, constrained fiscal space and growing investment needs. International estimates suggest the continent faces an annual climate financing gap worth tens of billions of dollars, particularly for adaptation projects that deliver significant public benefits but often generate limited commercial returns.
Although the World Bank insists climate considerations will remain central to its lending strategy, the removal of a formal financing target places greater emphasis on project quality, implementation and measurable development outcomes.
For African governments, securing reliable climate finance will remain critical to achieving development goals that increasingly depend on resilient infrastructure, sustainable energy systems and effective climate adaptation. As climate risks intensify across the continent, the scale and effectiveness of multilateral financing will continue to play a decisive role in protecting economic growth, strengthening public finances and building long-term resilience.
