World Bank to drop 45% climate lending target after pressure from Trump
World Bank to drop 45% climate lending target after pressure from Trump
The World Bank says it will retire its target of allocating 45 percent of its annual lending to climate-related projects, while extending its Climate Change Action Plan (CCAP), which is due to expire today.
The lender announced the decision in a statement on Monday, saying it would shift its focus from lending targets to development outcomes.
The move comes amid pressure from the administration of US President Donald Trump, which has urged the World Bank to abandon climate financing targets and refocus on its core development mandate, including support for fossil fuel projects.
“Our framework has served its purpose well, embedding smart development in all we do in response to client needs and priorities. We will therefore extend the CCAP,” the bank said.
“We will explore and discuss ways to better structure our engagement on adaptation, nature and pollution.”
The World Bank said, at the request of its executive board, its Independent Evaluation Group would conduct a review of the CCAP, which has operated through rolling five-year plans since 2016.
The lender said it would continue tracking climate-related indicators, including net global greenhouse gas emissions and the number of beneficiaries with improved resilience to climate risks, through quarterly and annual reports covering its lending portfolio.
Ajay Banga, president of the World Bank, has increasingly shifted the institution’s focus towards what it describes as “smart development” — an approach that prioritises job creation while supporting projects with climate benefits, including drought-resistant agriculture, storm-resilient infrastructure and renewable energy where appropriate.
The World Bank had adopted the 45 percent climate lending target in 2023 during the administration of former US President Joe Biden, replacing an earlier target of 35 percent.
Bank officials, however, maintain that demand for projects with climate co-benefits from borrowing countries remains strong.
The decision follows sustained pressure from the Trump administration, which has argued that multilateral lenders have strayed from their core mandates by expanding into climate finance, gender and other policy areas.
In October 2025, 19 of the World Bank’s 25 shareholder countries endorsed the lender’s continued climate agenda in a joint statement.
However, the United States — the bank’s largest shareholder — did not sign the declaration, alongside Russia, Kuwait and Saudi Arabia, while India and Japan abstained.
The Climate Change Action Plan, first introduced in 2021 and extended for one year beyond its initial 2025 expiration date, provides the World Bank with the institutional framework to integrate climate considerations into its operations and align its activities with the goals of the Paris Agreement.
The Trump administration has repeatedly criticised international climate action.
Since returning to office, Trump has withdrawn the US from the Paris Agreement and argued that efforts to reduce greenhouse gas emissions have weakened economies.
