BAKU, Azerbaijan, November 21. The World Bank has placed climate change at the core of its mission, reflecting a significant shift in its mandate to focus on a world free of poverty on a livable planet, said Rolande Pryce, Regional Director for the South Caucasus, in an interview with TurkicWorld.
Speaking on the sidelines of COP29 summit in Baku, Pryce elaborated on the institution's strategic climate initiatives and the progress being highlighted at the global summit. "In October 2023, we revised our mandate," she stated. "This was a signal to everyone that we're putting climate at the center of our usual poverty reduction mandate".
At the forefront of the World Bank's climate efforts are three major initiatives. The first is the Country Climate and Development Reports (CCDRs), a diagnostic tool introduced three years ago. "The focus of that report is to help governments prioritize actions that reduce greenhouse gas emissions and boost adaptation and resilience, while also delivering on broader development goals," Pryce explained. "The point essentially is that there are trade-offs. It helps governments think through: if you had $1 to spend, where can you get the biggest bang for the buck regarding climate and development?"
The second initiative is the scaling up of climate finance. Pryce noted that the World Bank had surpassed its initial target of allocating 35% of total lending to climate finance, achieving a record $42.6 billion in the last fiscal year. "For the year ending June 30, 2025, we aim to move from 35% to 45% of total lending targeted at climate," she said. "This is significant because as the bank optimizes its balance sheet, the total volume of lending is expected to increase, meaning both the percentage and the amount allocated to climate finance will rise".
The third major initiative focuses on partnerships. Pryce highlighted the importance of collaboration with multilateral development banks (MDBs) and the private sector. "We’ve been more deliberate over the past year. As a group of MDBs, we’ve set a joint target to deliver $120 billion annually in climate finance by 2030," she shared.
Pryce emphasized that COP29 provides an opportunity to showcase these efforts while reinforcing the World Bank's leadership in climate action. "We remain the principal multilateral development bank for delivering climate finance. These initiatives reflect our commitment to addressing climate challenges while supporting sustainable development goals".
Private sector’s contribution to achieving climate financing targets
Further speaking, the regional director noted that the World Bank has been actively fostering private sector engagement to advance climate finance and low-carbon transitions.
"Governments cannot do it alone," Pryce emphasized. "Even with the support of multilateral development banks, the task is too great. That’s why we’ve been particularly focused on creating a larger space for private sector involvement, investment, and finance".
The regional director highlighted the bank’s efforts to provide governments with a structured roadmap for the low-carbon transition, emphasizing the critical role of the private sector. "It essentially gives the government a basis—a roadmap for this transition. It’s very clear about where the private sector can play a role," she explained.
A key initiative in this effort has been the establishment of a climate finance mobilization unit within the World Bank. "We have resources, but the typical challenge with climate finance is that it’s often insufficient or too expensive for governments," Pryce noted. The unit blends grant funding from private sector and donor resources with the World Bank’s own financing tools, such as IDA and IBRD resources. "This enables us to support larger climate-focused projects, including public-private partnerships and carbon markets," she said.
The World Bank has also been leveraging its expertise in carbon finance to expand carbon markets globally. "More and more, countries are trying to figure out how to create a market for reducing greenhouse gas emissions," Pryce said. "The idea is to enable emitters - whether countries or companies - to buy and sell capacity, ensuring overall global targets are met. Countries doing a good job in reducing emissions can secure financing through these markets".
MDBs unite to boost climate financing
Rolande Pryce further highlighted the transformative approach MDBs are adopting to integrate climate considerations into development efforts.
"The challenge is huge," Pryce stated. "But it's not as if it's a tiny pie, and we're scrambling for the crumbs. We've always worked with individual countries, placing their development ambitions at the center. Increasingly, those conversations have a climate focus."
She elaborated on how climate considerations are being woven into various projects: "For example, if you're building new schools, the discussion isn't just about designing the best classrooms anymore. Now, it might include climate-resilient infrastructure or installing solar panels for electricity. More and more, we’re focusing on greenhouse gas emissions, adaptation, and resilience in our engagements with governments."
Pryce also emphasized the collaborative efforts required for large-scale projects, pointing to the Black Sea submarine cable as an example. "That is a $3 billion infrastructure program. We know that the bank and individual governments alone cannot fund this, so we're actively collaborating with other MDBs like the Asian Development Bank and potentially the European Bank for Reconstruction and Development. Everyone is interested, and once the program is structured, we'll see how others can contribute," she explained.
To streamline such collaborations, MDBs are developing mutual reliance agreements. "When multiple MDBs are involved in the same program, we work on whose policies we will rely on to reduce transaction costs for governments. The goal is to avoid adding a 'tax' by bringing in too many players and to ensure seamless or at least less painful collaboration," Pryce said.
World Bank's support for vulnerable communities in the South Caucasus
The regional director reaffirmed the bank's commitment to supporting vulnerable communities in the South Caucasus by focusing on climate resilience and adaptation.
"The poorest and most vulnerable communities are at the core of what we care about," Pryce noted. She highlighted the importance of creating resilient communities, particularly in areas prone to natural disasters, such as coastal regions or riverbanks. "How are we ensuring that the infrastructure around them is resilient, won't fail them in difficult moments?" she asked, stressing the need for robust solutions to mitigate the risks of shocks.
According to Pryce, the World Bank has been actively working with South Caucasus countries to develop roadmaps for transitioning to low- or zero-carbon technologies in critical sectors like energy and transport. "People use buses, and buses create great emissions. How do we electrify the buses, for example?" she said, underlining the role of sustainable transport in reducing emissions.
Water scarcity, particularly in Azerbaijan, has emerged as a key area of focus. "A lot of your irrigation canals are no longer fit for purpose, need to be retrofitted, rehabbed," Pryce explained. She pointed out the need to introduce climate-smart agricultural practices and technologies that conserve water while maintaining high productivity.
The World Bank’s efforts also extend to regional infrastructure projects aimed at enhancing climate resilience. In Azerbaijan, the organization has been involved in projects that improve road infrastructure, making it resistant to flooding, erosion, and extreme temperatures. "It comes down to a lot of fine details," Pryce said, referring to elements like drainage systems and bridge adaptations designed to withstand climate impacts.
In Georgia, the focus has been on energy transition and modernizing the agriculture sector, while similar conversations are beginning in Armenia and Azerbaijan. Pryce described these initiatives as part of a broader strategy to address climate change in a practical and localized manner. "Our work is about rethinking infrastructure to respond to the climate impacts we see happening more frequently," she added.
Pryce further highlighted the pressing issue of the decreasing sea level in the Caspian and its potential impact on using the Middle Corridor as a trade route.
"We've discussed the impact of climate change on trade, with the Middle Corridor being one of the key routes. If we consider the Middle Corridor as the multimodal path from east to west, it starts in Central Asia, crosses the Caspian Sea, goes through the Caucasus, and continues over the Black Sea to connect with Europe and the east. Similar challenges arise when we think about multimodal transport - particularly freight coming by ship and continuing by rail," she elaborated.
When laying down or rehabilitating tracks, factors like drought, floods, extreme heat, or cold need to be considered, the country director explained.
"These conditions will influence the materials we use and where the tracks are placed. Clearly, these are crucial considerations. When I speak about a change in mindset, I mean that all of our institutions and governments are now integrating these factors into the design and implementation of our operations. Climate is no longer something in the distant future - it's here, and it impacts us every day. As such, climate mitigation and disaster vulnerability reduction are integral to our daily work," Pryce added.
Water shortages and flooding: World Bank addresses climate impacts in South Caucasus
Some countries simply lack access to sufficient water sources, whereas drought typically occurs when rainfall that once replenished those sources is no longer occurring, Rolande Pryce pointed out. "Both drought and water scarcity present major challenges. Flooding is another pressing issue we’re witnessing".
"These are very real, live challenges facing the countries I serve. We all share the same tools and work together to help countries conduct robust analysis to understand the most pressing challenges. Our goal is to address these issues while ensuring that broader development objectives are still met," she said.
One of the key ways the World Bank does this is through the Country Climate and Development Report, which helps guide governments on low- or zero-carbon transition strategies, the country director explained.
"We also focus on investing in resilient infrastructure - new projects that are informed by the climate challenges we face. Additionally, we must address critical older infrastructure. Aging infrastructure needs to be upgraded to meet the demands of the changing climate. We also recognize that designing, implementing, and monitoring climate projects requires strong institutional capacity. It’s essential that institutions and even small businesses adapt to this new reality. Many companies no longer know how to make their products climate-responsive, so we focus heavily on capacity building and providing technical assistance to help them upgrade their capabilities to face today’s challenges. These are just a few practical ways we’re helping the South Caucasus countries address climate change and its impacts," Rolande Pryce concluded.
