Green Loan Money May Surge

By Douglas McIntyre  •  June 16, 2025
Blue Ox Studio Pexels

The World Bank will restart its program that allows lenders to buy private green energy loans. The plan is to use public money. According to The Guardian, “Avinash Persaud, a special adviser on climate change to the president of the Inter-American Development Bank (IADB), who developed the proposals, believes the plan could drive tens of billions of new investment in the fledgling green economy in poorer countries within a few years, and could provide the bulk of the $1.3tn in annual climate finance promised to the developing world by 2035.”

The plan would increase the capacity of poor governments to access funds that they may not have otherwise been able to obtain due to existing energy loan obligations. It is not difficult for poor nations to get funding from fossil fuel companies. Those companies know their investments in nations with proven oil reserves are likely to pay off. Green loans carry much more risk.

Green Lending

The heart of the problem is that the world’s wealthiest nations promised tens of billions of dollars to the poorest countries, allowing them to have the potential to reduce greenhouse gas emissions. These loans were never made in many cases. In others, the interest rates were too onerous. 

The World Bank’s proposal could be complex. It is not guaranteed that reducing the financial liabilities of developing countries will bring wealthier nations back to the lending table.

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