World Bank’s role crucial in ensuring food, energy and climate finance: Nirmala Sitharaman
25 Oct 2022
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World Bank is well positioned to help all client countries in arranging concessional financing and technology transfer in areas like renewable and green energy and for developing an investment strategy for climate and development finance by bringing together all stake holders, union minister for finance and corporate affairs Nirmala Sitharaman has said.
Participating in the Development Committee (DC) meeting of the World Bankand thee International Monetary Fund in Washington DC, the finance hinister said that the WBG also must never lose focus on the internationally agreed basic principle of common but differentiated responsibilities. This necessitates avoidance of a one-size fit-all approach, she said.
She was participating in joint World Bank-International Monetary Fund (WB-IMF) meeting during the annual meetings 2022 in Washington DC, on Saturday.
The Development Committee had specifically met to discuss two critical aspects that the world is facing:
In her opening remarks, the finance minister stated that this is an excellent opportunity to put our heads together and think about how best we can negotiate the multiple challenges and bring back long-term growth. Despite this year's projected growth rate of 7 per cent for the Indian economy, we remain concerned about the global economic outlook and geopolitical environment, she added.
She said the Food and Energy Crisis paper rightly identified energy efficiency as the "first fuel of choice". Similarly, reducing crop loss and food waste should also be the "first intervention of choice" to ensure food security.
The finance minister urged the World Bank to avoid a unidimensional view of subsidies and to differentiate between distortive subsidies and targeted support to the vulnerable households.
Giving India's example as an illustration, Sitharaman said that by providing free LPG connections under the Pradhan Mantri Ujjwala Yojna over the last six vears. India has ensured that access to clean cooking methods has achieved near saturation for women in India. This has made a definitive contribution in improving India's performance on SDGS 3, 5 and 7.
While the quest for energy and food security necessitates non exclusion of fossil fuels from our energy mix, the finance minister noted that India has set up its first pure hydrogen producing plant as well as its first 2G bioethanol refinery this year.
Going forward, Sitharman said that there are 3 clear opportunities for the World Bank Group:
- Promoting behaviour change to increase energy efficiency and to reduce food losses. (Programmes like the Lifestyle for the Environment (LiFE) launched by the prime minister of India on the World Environment Day in June 2022 - World Bank Group president David Malpass delivered a wonderful keynote address during the occasion on mainstreaming responsible consumption behavior);
- Helping all client countries in arranging concessional financing and technology transfer in areas like renewable and green energy; and
- Supporting regional integration not only through International Development Association (IDA) but also through International Bank for Reconstruction and Development (IBRD).
On financing climate and development goals, the finance minister said that mitigation of risks is essential for crowding in private capital. While welcoming the launching of SCALE, the finance minister encouraged the World Bank to increase the share of grants from the current 5 per cent level and to work below the country level to support projects with huge climate impact beyond the national borders.
Sitharaman pointed out that prioritising consultations with key stakeholders throughout the formulation of CCDRS and following the "One Bank" approach are critical to their success.
While urging the World Bank to take the lead and also help build consensus across MDBS, the finance minister pushed for the recommendations of the Independent Review of the MDB Capital Adequacy Frameworks commissioned by the G20 hold the key for sustained financing.
