In its energy sector directions paper the bank said it would only finance coal-fired power plants in “rare circumstances”, in a move echoing US President Barack Obama’s policy to curb climate change.

The bank said an example of rare circumstances was when it needed to “meet basic energy needs in countries with no feasible alternatives”

The paper states that WBG will make every effort to “minimize the financial and environmental costs of expanding reliable energy supply” while also recognizing that “each country determines its own path for achieving its energy aspirations”.

It emphasizes the importance of selecting areas in which the bank can best help countries mobilize energy solutions that reduce poverty sustainably.

WBG president Jim Yong Kim, who led the discussion with the executive board, said the paper’s directions were anchored in the group’s overarching goals of reducing the global rate of extreme poverty to 3% by 2030 and fostering the income growth of the bottom 40% in every country.

“We need affordable energy to help end poverty and to build shared prosperity,” Kim said.

“We will also scale up efforts to improve energy efficiency and increase renewable energy –according to countries’ needs and opportunities.”

The bank’s move may not have a huge practical impact – it hasn’t funded a major coal project since providing South Africa with a $3 billion loan in 2010 – but it signals a growing global pressure and trend for major organizations and world powers to take steps away from the fossil fuel.

In a blog post last week, Center for Global Development visiting policy fellow Scott Morris weighed up the World Bank’s options and said while it was important the bank minimized its lending for coal, it needed to ensure it didn’t do it at the expense of its larger goals.

“The bank should be ambitious in working towards clean energy approaches in its development strategies but it would be a mistake to definitively rule out coal in all circumstances,” Morris said.

“Such a decision would be bad for development and would also undermine the very goals that the bank’s coal critics espouse by further pitting developing and developed countries against each other in the climate debate occurring within the bank.”