US Urges World Bank to End Ban on Upstream Oil and Gas Financing

The United States has called on the World Bank Group to formally lift its restrictions on financing upstream oil and gas projects, arguing that access to affordable and reliable energy is essential to industrialisation, job creation and poverty reduction.

In a statement issued on October 14 during the IMF and World Bank Annual Meetings in Bangkok, US Treasury Secretary Scott Bessent said the Bank should adopt a technology-neutral approach to energy financing and respond to borrowing countries’ demand for natural gas projects.

“The Bank cannot credibly invoke country ownership while categorically excluding upstream projects before their development merits are even assessed,” Bessent said.

The position puts energy financing at the centre of Washington’s push to refocus the multilateral lender on economic growth and development. The US has argued that the Bank should prioritise projects with the greatest development impact rather than maintain restrictions that limit countries’ energy choices.

Bessent reiterated US support for the World Bank and African Development Bank goal of extending energy access to 300 million additional people in Africa. He said achieving the target would require removing constraints on support for natural gas and positively responding to borrower demand for gas projects.

The statement also welcomed a recently approved International Development Association project intended to secure near-term gas supplies, prepare midstream and downstream investments, and develop gas strategies in West Africa. Bessent said the success of energy policy should ultimately be measured by whether countries gain the supply needed to expand economic activity, create jobs and reduce poverty.

The US also announced an initial contribution to the Nuclear Energy Assistance Trust Fund, which is intended to help countries prepare for future nuclear energy investments.

Beyond energy, Washington is pressing the World Bank to redirect resources towards poorer countries, strengthen procurement competition and quality, and graduate more advanced economies from its lending programmes. Bessent cited planned phase-outs of sovereign lending to China and Poland as steps towards concentrating the Bank’s resources where they are most needed.

He also called for greater World Bank support for critical-mineral supply chains, including infrastructure, local processing capacity and project financing, as well as a potential role in deep-sea mining.

The proposals form part of a wider US effort to narrow the mandates of the IMF and World Bank, restrain administrative spending and place greater emphasis on economic growth, financial stability and poverty reduction.

Source: FSX Business News