The Climate Policy Initiative (CPI) has announced the release of a study, titled 'Mapping the World Bank Group Risk Mitigation Instruments for Climate Change,' which provides an overview of general risk coverage offered through the World Bank Group's (WBG) various member institutions, potential gaps compared to existing demand, and trends of risk coverage commitments for climate change.
26 September 2013: The Climate Policy Initiative (CPI) has announced the release of a study, titled ‘Mapping the World Bank Group Risk Mitigation Instruments for Climate Change,’ which provides an overview of general risk coverage offered through the World Bank Group’s (WBG) member institutions, potential gaps compared to existing demand, and trends of risk coverage commitments for climate change.
The study consists of: a brief; an annex summarizing the WBG’s instruments’ technical features and risk coverage provided; and presentation slides that include a more detailed overview of the resources committed by the WBG for risk mitigation, the evolution of risk instruments over the last few years, and their usage for climate related projects.
The brief begins with an overview of general risk coverage offered by the WBG through its various member institutions, highlighting the overall financial commitment from the Group and potential gaps in risk coverage. It then summarizes trends in risk coverage commitments for climate change before concluding with some recommendations. The study concludes that, at least in theory, the WBG provides coverage against most risk categories, particularly those faced by private debt investors. However, despite its increasing commitment to addressing climate change, the brief notes that few risk instruments appear to have been used at a significant scale to support climate-related projects.
The study identifies options that could improve this situation, namely: adopting a specific mandate for the WBG to broaden the use of its risk mitigation instruments for climate change in order to increase their availability to, and use by, climate investors; and enhancing uptake of guarantees and index-based instruments, two specific kinds of instruments with significant potential for climate related projects. [Publication: Mapping the World Bank Group Risk Mitigation Instruments for Climate Change – Brief] [CPI Press Release] [Publication: Mapping the World Bank Group Risk Mitigation Instruments for Climate Change – Fact Sheet] [Mapping the World Bank Group Risk Mitigation Instruments for Climate Change – Presentation Slides]