World Bank president says private funds should aid energy transition

The World Bank's newly-appointed president Ajay Banga has lauded improvements in the renewable fuels space, and said private investment could help countries transition to clean energy regimes.

In an interview with Fareed Zakaria on CNN, Banga pointed out that renewable energy today is cheaper than fossil fuel per unit of energy, "thanks to what has happened in the last 3-4 years in technology of generation and storage", adding, "and that's only going to keep improving."

He said an energy transformation could require trillions of dollars, and that the bank's funds were limited. He suggested roping in the private sector capital to aid transitions in developing markets, saying the bank could help them understand risks.

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"There is a pathway, but that pathway seems to lead to the developed world currently, because of the kinds of risk that people perceive in the emerging markets," Banga said. What the bank needed to do was sit down with investors, governments, multilateral development banks and other authorities to create a "different playbook", that would give companies a clear idea of risks involved.

"That's kind of a thing that we can do with informed risk-taking," Banga said, adding that private companies had to deliver returns for shareholders and could not necessarily take on all the risks involved.

The former Mastercard CEO also said emerging economies needed to avoid the "emissions-intensive growth model" followed by the western countries if the world was to meet its Net Zero targets. Earlier this month, US scientists warned that CO2 emissions were now 50 percent higher than the pre-industrial era.