World Bank group funds 65% of MDB petrochemical projects: IEEFA and IAP
Agrochemicals are set to receive $861m in future multilateral development bank petrochemical investments.
The World Bank group accounts for 65% of the $10.04b in petrochemical investments tracked across 16 multilateral development banks, according to IEEFA and IAP.
Their Global MDB Investment in Petrochemicals Tracker covers 92 projects and draws on data from the Early Warning System hosted by IAP.
Within the World Bank group, the International Finance Corporation holds a 35% share of total investment, the Multilateral Investment Guarantee Agency 24%, and the World Bank itself 7%. Other multilateral development banks (MDBs) tracked include the European Investment Bank at 18%, the European Bank for Reconstruction and Development at 6%, and the Asian Development Bank at 2%.
Expansion and greenfield projects represent 57% of investments, whilst decarbonisation accounts for 14% and research and development 10%. Decarbonisation projects include integrating renewable energy, constructing hydrogen production facilities, and developing emissions reduction strategies for the sector.
Agrochemicals receive the highest funding at $3.23b, followed by polymers and plastics-related projects at $3.03b, and petrochemical infrastructure at $2b. Polymers and plastics-related projects form 66% of active project investments, whilst fertilisers receive 64% of approved project investments.
The Southwest Asia and North Africa region receives 39% of total investments, Africa 22%, Europe 20%, and Asia (excluding West Asia) 12%. Oman, Nigeria, Belgium, Germany, India, China, Indonesia, Mexico, and Argentina are the leading recipient countries in their respective regions.
"IEEFA's research over the past three years has pointed to oversupply in the industry, which is witnessing stressed profits. The petrochemical industry is also a proven hard-to-abate sector. In this context, MDBs' continued interest in petrochemicals is high-risk on both financial and climate fronts," said Swathi Seshadri, Energy Specialist for Petrochemicals at IEEFA South Asia.
“MDBs are backsliding on their climate commitments while continuing to finance petrochemical projects. As these investments sidestep the scrutiny applied to financing carbon-intensive projects, the costs are borne by affected people and the climate. MDBs must hold petrochemical investments to the same standards and safeguards as any other project,” said Vaishnavi Varadarajan, Program Coordinator - Asia Pacific, International Accountability Project.
