Exclusive: US Treasury and USAID Urge Development Banks for Urgent Discussions on Extreme Heat, Reports Reuters

By David Lawder

WASHINGTON – Officials from the U.S. Treasury and the U.S. Agency for International Development (USAID) are convening leaders of multilateral development banks for an urgent virtual meeting focused on the challenges posed by extreme heat and its severe effects on developing nations.

Scheduled for Thursday morning, this meeting marks a first-of-its-kind initiative aimed at exploring ways to reallocate resources to help countries enhance their climate resilience and adaptability in light of damaging heatwaves and record high temperatures witnessed globally this summer.

Despite a significant increase in investments targeting climate change in recent years, the bulk of this funding has prioritized the transition to clean energy and the reduction of carbon emissions over supporting nations in adapting to negative climate impacts such as severe droughts, wildfires, intense storms, and rising sea levels.

As oppressive heatwaves affect countless communities and claim numerous lives, Treasury Secretary Janet Yellen plans to emphasize at the meeting the urgent requirements of the developing nations that are being disproportionately affected by heat. She aims to connect their needs with broader initiatives being undertaken by multilateral development banks to amplify their lending capacities in response to climate change and other global challenges.

"Extreme weather events, including heat waves, are becoming increasingly severe and frequent, from the East Coast of the United States to India," Yellen stated in her remarks to the banks. "Mitigating these events and addressing climate change as a whole is a core priority for the Treasury Department."

During the meeting, Yellen will urge the World Bank and similar institutions to incorporate temperature increases into their assessments of developing countries’ abilities to adapt to climate-related challenges.

USAID Administrator Samantha Power highlighted the urgency of the situation, noting that among 400 projects funded by climate investment funds, only seven specifically addressed extreme heat. "The multilateral development banks are crucial for securing adequate funding to tackle the scale of the extreme heat crisis," she said. Rising temperatures are believed to cause tens of thousands of deaths annually and could result in a staggering $2.4 trillion cost to the global economy by 2030.

In response to these challenges, USAID is committing over $8 million to support the establishment of heat-resilient schools in Jordan, recognizing that high temperatures can hinder education and disrupt classroom operations.

World Bank Senior Managing Director Axel van Trotsenburg will represent World Bank President Ajay Banga at the meeting. Additionally, the presidents of the Inter-American Development Bank (IDB), the Asian Development Bank, the African Development Bank, the European Bank for Reconstruction and Development, and the Japan International Cooperation Agency are expected to participate.

An IDB representative indicated that President Ilan Goldfajn plans to emphasize the importance of heat mitigation within the bank’s climate strategy. In 2023, the IDB allocated $100 million for technical assistance concerning climate issues and extreme heat, including initiatives in Chile to create cooler urban environments through green infrastructure.

Goldfajn will also focus on the coordinated efforts among development banks to enhance their collective impact in the fight against climate change. This includes the introduction of innovative financing strategies, such as using International Monetary Fund reserves to support hybrid capital initiatives.