World Bank approves Morocco clean energy project after ending climate lending target

The World Bank board of directors on Wednesday approved $265 million in financing to support construction of a new pumped hydropower storage plant in Morocco, two days after abandoning a goal to devote 45% of its lending resources to climate-related projects. The Ifahsa Pumped Hydropower Storage Project in northern Morocco will serve as a giant rechargeable battery for the national electricity grid, pumping water to an upper reservoir during periods of high solar and wind energy production, the World Bank said in a statement. The approval comes after the World Bank Group on Monday said it would "retire" its goal to devote 45% of its lending resources to projects with climate benefits after pressure to do so from the Trump administration.

The development lender said it would renew its Climate Change Action Plan without specific lending input targets to meet client country demand for such projects. Its Independent Evaluation Group will conduct a review of the CCAP. The 300-megawatt Ifahsa facility will enable Morocco to integrate at least 1 gigawatt of additional solar and wind energy into its national grid, helping unlock around $1 billion in private investment. The bank said this would replace approximately 3 terawatt-hours of electricity currently generated from fossil fuels each year - avoiding an estimated 1.7 million tons of carbon dioxide emissions annually. The World Bank said the project will generate 820 direct jobs annually during construction and additional employment opportunities across the energy sector.