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The World Bank Group (WBG) has directed $7.49 towards new petrochemical capacity for every $1 spent on decarbonisation and efficiency, according to a briefing note by the Institute for Energy Economics and Financial Analysis (IEEFA).

This raises questions about its climate commitments despite reporting 100 per cent Paris alignment for its projects. The group accounts for 48 of the 93 petrochemical and fertiliser projects tracked across multilateral development banks (MDBs), with investments worth $6.6 billion, or 65.7 per cent of the total tracked value of $10.04 billion, the report said.

The findings are based on a database developed by IEEFA and the International Accountability Project.

Of the WBG’s petrochemical portfolio, $5.72 billion, or 86.7 per cent by project value, is directed towards new capacity, while $763.9 million, or 11.6 per cent, supports decarbonisation and efficiency. The expansion-to-decarbonisation ratio is more than double the 3.2:1 ratio across all MDBs covered by the tracker.

Even after the WBG began aligning new deals with the Paris Agreement, it approved $2.10 in new capacity for every $1 spent on decarbonisation, the report said.

The briefing note also flags the proposed expansion of a petrochemical complex operated by Indorama Eleme in Nigeria while a compliance investigation into an existing production line remains open.

Indorama expansion faces scrutiny

The International Finance Corporation (IFC) disclosed plans on July 27, 2026, to finance a fourth production line at Indorama’s Eleme complex, including a 65-km gas pipeline.

The project has been provisionally classified as Category A, the IFC’s highest environmental and social risk rating, and is part of a $1.25 billion financing syndication. Dutch development bank FMO is considering a $100 million participation.

Meanwhile, Line 3 at the complex is under a joint compliance investigation by the Compliance Advisor Ombudsman and the US International Development Finance Corporation’s Independent Accountability Mechanism.

Complainants allege that the IFC misclassified the project as Category B, raising concerns over Okulu River pollution and the absence of a cumulative impact assessment.

In July 2025, the ombudsman found sufficient preliminary grounds to warrant an investigation into potential environmental and social harm and IFC non-compliance.

Indorama group companies feature in seven WBG projects worth $1.66 billion, or 25.1 per cent of the tracked investment value, the report said.

Intermediated financing raises transparency concerns

Eight WBG projects worth $4.47 billion, or 67.7 per cent of its tracked portfolio, use financial intermediaries.

All three WBG guarantees covered by the tracker relate to such projects and total $3.08 billion. Their underlying assets are either undisclosed, spread across 22 countries or routed through a multi-sector facility, limiting transparency.

IEEFA said the WBG has no policy specifically addressing petrochemicals. Its 2019 exclusion policy covers upstream oil and gas, while joint multilateral development bank (MDB) Paris-alignment principles assess intermediated financing at the counterparty level.

This, the report said, can allow a guarantee to be classified as aligned even when the underlying portfolio includes fossil-fuel-linked assets.

“Petrochemical investments carry long-term risks that merit careful consideration from development finance institutions,” Swathi Seshadri, research lead, Global Petrochemicals, IEEFA said, citing overcapacity, stressed margins and feedstock supply disruptions.

Proposed and approved projects account for $3.21 billion, or 48.7 per cent of the WBG’s tracked petrochemical exposure, compared with an average of 37.6 per cent across the MDB tracker.

Six WBG projects worth $2.54 billion carry Category A environmental and social risk ratings.

IEEFA urged the WBG to assess petrochemical investments against its Paris-alignment commitments as rigorously as it assesses upstream oil, gas and coal projects.