World Bank won’t abandon top credit rating to boost climate lending – Malpass says
World Bank President David Malpass said on Tuesday that the lender is not considering giving up its top-tier credit rating as a means to expand lending as it revamps its business model to address climate change and other global crises.
“The triple-A rating is very important to the financial stability of the bank, and also is a huge benefit to the clients, because we pass on the benefits of that good credit rating to them through our low borrowing costs,” Malpass told a briefing on the World Bank’s latest economic forecasts.
Some non-profit groups have urged the bank to accept a lower credit rating, arguing that this would unlock significant amounts of funding to help developing countries invest in clean energy and climate adaptation – and address other pressing global needs such as pandemic preparedness and food security.
The World Bank is discussing an “evolution road map” with its board this week to meet calls from the United States and other shareholders to vastly expand its role in climate finance and elsewhere. Malpass told reporters the talks were going well.
The bank is exploring various other ways to expand its balance sheet, including using callable capital – funds pledged but not paid in by shareholding governments – as well as new forms of leverage, capital increases or bigger contributions to the bank’s fund for the poorest countries, Malpass said.
