The U.S. Department of the Treasury, led by Scott Bessent, emphasized the necessity of deep reforms at the World Bank in a statement to the World Bank Development Committee and the International Monetary Fund's International Monetary and Financial Committee. Bessent stated that one of these reforms is lifting the ban on financing upstream oil and gas projects.
Need for a Change in Approach
Bessent added: "The World Bank is taking some actions to return to its core mission of reducing poverty and increasing economic growth, but it clearly needs more actions." He also emphasized support for the goals of the World Bank and the African Development Bank to expand energy access for 300 million people in Africa.
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Exceptions to Financing
In 2017, the World Bank Group announced that it would no longer finance upstream oil and gas projects after 2019. However, the group mentioned exceptional circumstances, stating: "In specific cases, financing for upstream gas projects in the poorest countries that have clear benefits for energy access for the poor and are consistent with countries' commitments under the Paris Agreement will be considered."
Bessent also emphasized: "The World Bank Group must formally lift the ban on financing upstream oil and gas projects. The bank cannot credibly emphasize country ownership while completely excluding upstream projects before assessing their developmental merits." These remarks come as the Trump administration continues to pressure international institutions to set aside environmental considerations and green agendas.
Since the beginning of Donald Trump's second presidential term in January 2025, the United States has repeatedly threatened to withdraw from the International Energy Agency (IEA) if the organization, established after the Arab oil embargo in the 1970s, does not revise its energy demand forecasts without heavily promoting green energy. In the latest threat, Chris Wright, the U.S. Secretary of Energy, said last month: "We either need to reform the International Energy Agency or we will withdraw from it. My strong preference is to reform this institution."
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