Ajay Banga

Ajay Banga didn’t like the existing decor, so when he took over as World Bank president he gave his grand two-story corner office a makeover. Old-school leather furniture? Gone. Dark lighting that made the space feel like a dungeon? Replaced. And a depressing painting? Swapped out for three framed motivational quotes: “Question everything always,” “Done is better than perfect,” and “Fail harder.” “They are kind of my philosophy of working,” he tells me only moments after my walking in the door. My conversation with Banga at the World Bank’s Washington, D.C., headquarters dug into the wonkiest details of climate finance, from the role portfolio guarantees can play in reducing credit risk to the investment challenges posed by volatile currencies in emerging markets. But his quick office tour offered just as much insight about his approach to running the world’s most important development bank: seemingly small tweaks can make a huge difference.

Banga entered office in 2023 after his controversial predecessor, David Malpass, was forced to resign following controversial remarks that seemed to doubt the science of climate change. Many environmentalists called for a full-scale revamp of the 80-year-old World Bank and other international financial institutions. The bank’s most powerful members—including and especially the U.S.—have also pushed for a greater focus on climate while stopping short of endorsing some of the boldest efforts to remake the institution. Banga has approached the task judiciously.

Under his leadership, the bank has added climate to its mission statement. To implement his agenda, he has pursued a range of seemingly small reforms that can have a big impact accelerating global climate action and intertwining it with the bank’s long-standing development agenda. He has tweaked the rules about how much the World Bank can lend, freeing up space to finance more climate projects. He has sought to integrate climate change into other development programs, from agriculture to education. And he has worked closely with the private sector in hopes that companies will step up to invest the lion’s share of the trillions of dollars needed to pay for expanding clean energy in the Global South. “There’s a whole Rubik’s Cube to be solved,” he says. “If it begins to make sense numerically, money does flood in.”

This work comes as the focus of the global climate conversation increasingly turns toward finance—both for the energy transition and the adaptation needed to prepare communities around the world for the increasingly dire effects of rising temperatures. Research has found that emerging markets and developing countries need to spend upwards of $2 trillion annually to meet global climate goals. And at the annual U.N. climate conference—this November known as COP29 and held in Baku, Azerbaijan—diplomats from nearly 200 countries are working to hash out a climate-finance deal that lays out how much countries in the Global North will give to help their developing counterparts. The most ambitious proposals call on wealthy nations to provide upwards of a collective $1 trillion each year to the Global South. Banga knows that the World Bank’s work is a critical part of the picture, but he tries not to dwell on it. Getting the small things right first will eventually lead to big changes, he says. “Rather than get bogged down by the trillions,” he says, “work on solutions, and let them build at scale.’”

In late October, as finance ministers from around the world flocked to Washington, D.C., for the annual meetings of the World Bank and the International Monetary Fund (IMF), Banga darted between conversations on agriculture, gender, and jobs. From a quick glance at his schedule, climate change barely seemed to come up. But actually listening to him talk paints a different picture. At an agriculture dialogue, his announcement to double the bank’s agriculture-finance commitments to $9 billion annually by 2030 included programs for smallholder farmers to incentivize greener practices. His gender strategy links gender inequality with growing weather extremes; simply put, more fragile societies lead to increased risk of gender violence. And he frames investments in jobs and education as a pathway not just to growing economies but also to climate resilience and the deployment of clean energy.

In a way, this is a unique feature of how Banga envisions the bank working on climate. He tells me the approach is born of his travels to member countries around the world where he saw how climate change was exacerbating other challenges on the ground, from migration to educational attainment. “It’s intertwined,” he says. “You can’t segregate it.” There’s an element of practicality to this approach too. The World Bank was first founded after World War II to help finance the reconstruction of Europe, and, along with the IMF, has since become a central node in a group of international financial institutions meant to help developing countries grow their economies and get through tough times. And, while the effects of climate change are of dire concern to leaders in the Global South, that’s not the only thing on their minds. Citizens still expect their governments to deliver development—from better roads and bridges to new jobs. And that has been especially challenging in the post-COVID-19 period when strained budgets have left many countries in deep debt.

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Banga has had to thread a difficult needle—showing member countries that he is committed to the bank’s tried-and-true mission while advancing climate efforts. And so many of his efforts have focused on using existing mechanisms rather than creating new, exclusively climate-focused ones. He adjusted the so-called equity-to-loans ratio, which determines how much the bank can lend, to allow it to lend an additional $30 billion over the next decade. He streamlined bureaucratic processes to cut average project approval time from 19 months to 16. And he used the bank’s profits to start a new Livable Planet Fund, which will be used to cut the costs of financing projects. The results have been significant. The bank’s climate finance deployed neared $43 billion in the last fiscal year. That’s a 10% increase over the prior year and brings it close to reaching its 2025 target of devoting 45% of its financing to climate. And all that money can go even further as it attracts private capital on its coattails.

Still, it doesn’t take a math Ph.D. to see that the World Bank won’t be able to fill the massive climate finance gap on its own. The bank manages hundreds of billions of dollars in investments; climate change requires annual investments that measure in the trillions. “There is no way that any amount of financial engineering that I do with the balance sheet ... can get there,” he says. “The reality is everybody has fiscal constraints.” Banga’s solution is private finance. The owners and managers of trillions of dollars in capital have said they want to invest in the energy transition, but a flurry of risks have held them back. “This idea that you can wave a wand and get the private sector to come in ... it’s not how it works,” says Banga.

But Banga thinks he can bridge the gap. It makes sense. Before leading the World Bank, Banga had a storied career in the private sector, most notably as the CEO of Mastercard but also in banking and in growth equity. Since taking office, he has launched a Private Sector Investment Lab working with the CEOs of BlackRock, HSBC, and other big financial institutions to work through the biggest challenges holding back private investment, from currency risk to a lack of regulatory certainty. In October, he launched a set of solutions tailored to address those risks. “He fundamentally understands that to take on these big, bold aspirations and actually execute them on a timeline, you have to work outside of your own institution,” says Rajiv Shah, the president of the Rockefeller Foundation, which in September joined a World Bank program to provide electricity to 300 million people across Africa.

Every World Bank president faces their share of critics. And Banga is no exception. Some fear that his climate initiatives veer too far from the bank’s original mission. Others say his climate work is too piecemeal and too reliant on the private sector. A re-envisioning of the postwar international financial system with new institutions focused solely on climate would better serve us, they say. Banga is aware of all the challenges the bank must navigate, particularly as countries face populist revolts in parts of the world that aren’t too happy about multilateralism. 

Without my prompting, Banga addresses widespread concern that now-President elect Donald Trump may not like his agenda, saying that his work at the bank is “common sense” and “has nothing to do with politics.” “Smart management of money… Who's going to say no to that?” he asks almost incredulously. “The fact that I'm willing to do more work with the private sector, you really think President Trump will say no to that?”

Still, the long-term future of the bank is clearly on his mind. Along with his IMF counterpart, he’s convened a working group to think through some of the big questions. But when I ask him about what the bank may look like in 30 years, he pivots right back into the programmatic changes he’s making today. “Forecasts are not destiny,” he says. “You can change destiny, but you have to work at it.”