S. 3123 — Sustainable International Financial Institutions Act of 2025

This section directs the U.S. Executive Directors at 12 specified international financial institutions (IFIs)—including the World Bank's International Bank for Reconstruction and Development and International Development Association, International Finance Corporation, Multilateral Investment Guarantee Agency, African Development Bank and Fund, Asian Development Bank and Fund, European Bank for Reconstruction and Development, Inter-American Development Bank and Invest, and North American Development Bank—to use the U.S. voice and vote (1) to advance reducing greenhouse gas emissions and transitioning to a clean energy economy by channeling assistance to clean energy systems; (2) to oppose policy reforms, investments, loans, or assistance creating or expanding fossil fuel activity (i.e., exploration through marketing of coal, oil, gas, or derivatives), including refurbishments or those necessitating increased fossil capacity elsewhere; and (3) to support phasing out funding for internal combustion engines in passenger vehicles and buses by 2027 in a sustainable manner sensitive to mobility needs. The section further requires the Secretary of the Treasury, for each fiscal year, to (1) determine each specified IFI's preceding-year funding for new fossil fuel capacity; (2) reduce the U.S. contribution to that IFI by the determined amount and deposit it in escrow; (3) release escrowed funds upon certifying the IFI no longer funds such capacity; and (4) submit to Congress, within 120 days of each deposit and annually thereafter until release, a report documenting the IFI's fossil fuel funding. (Thus, U.S. contributions to these IFIs, which finance development projects in low- and middle-income countries, are effectively conditioned on ending support for new fossil fuel capacity.)

This section prohibits the United States from providing, directly or indirectly, any loan, insurance, guarantee, or financial or technical assistance—including policy guidance—to any country or entity for fossil fuel activities (as defined in section 2001(d) of the International Financial Institutions Act) or related infrastructure projects, including through the U.S. International Development Finance Corporation, Export-Import Bank of the United States, Trade and Development Agency, U.S. Agency for International Development, or Millennium Challenge Corporation.