Paper short abstract:

The article argues for a post-colonial reengineering of the current development debt framework theory and practice that can exacerbate green colonial practices.

Paper long abstract:

The question whether development banks truly enable sustainable and equitable growth or promote “green” neo-colonial practices is increasingly debated among scholars and practitioners of development. This paper analyzes the long-term impact of debt by Northern development banks on the portfolios of commercial banks in the Global South. In order to do so, we analyze development loans from six Northern development banks to Southern financial institutions. These six banks have different sizes and origins, and they exemplify different types of projects. Moreover, we examine the exposure of these financial institutions to Fossil Fuel stranded assets and compared these exposures to the original purposes of these development loans. This method juxtaposes theories and practices of development in the six development banks over a period of 30 years. The results show an increase in exposure to Fossil Fuel and its future risks for institutions in the Global South, while maintaining the returns for Northern institutions. They also demonstrate the continuing harmful impact created by these Northern development practices between 1990 and 2020, and the future risk facing the South’s financial institutions with their high exposure to stranded assets in the Fossil Fuel industry. With these insights, this research aims to decolonize practices of development banks and the underlying development literature and “knowledge” that justify these practices as these practices can create considerable risks for vulnerable groups within Global South. In conclusion, this paper argues for a post-colonial reengineering of current development debt framework theories and practice that can exacerbate such green colonial practices.