S. 3123

119 S3123 IS: Sustainable International Financial Institutions Act of 2025
 U.S. Senate
 2025-11-06
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 II  119th CONGRESS  1st Session  S. 3123  IN THE SENATE OF THE UNITED STATES   November 6, 2025   Mr. Merkley  (for himself and  Mr. Sanders ) introduced the following bill; which was
  read twice and referred to the  Committee on
  Foreign Relations    A BILL
To require the use of the voice and vote of the United States in
  international financial institutions to advance the cause of transitioning the global
  economy to a clean energy economy and to prohibit United States Government assistance to
  countries or entities to support fossil fuel activity, and for other
 purposes.
1.
Short title
This Act may be cited as the   Sustainable International Financial Institutions Act of 2025  .
2.
Clean energy and climate justice at international financial
 institutions
The International Financial Institutions Act ( 22 U.S.C. 262c et seq. ) is amended by adding at the end the following:
XX
Clean energy and climate justice
2001.
Clean energy and climate justice
(a)
In general
The United States Executive Directors at the international financial institutions specified in subsection (c) shall use the voice and vote of the United States in those institutions—
(1)
to advance the cause of reducing greenhouse gas emissions and transitioning the global economy to a clean energy economy, including by seeking to channel assistance toward countries and entities that are building clean and sustainable energy systems;
(2)
to oppose any policy reform, investment, loan, or extension of financial or technical assistance to any country or entity, that is intended to create, or will have the effect of creating, new capacity for, or the expansion of, fossil fuel activity, including—
(A)
any such policy reform, investment, loan, or extension of assistance that would support the refurbishment or life extension of existing fossil fuel capacity; or
(B)
any such investment, loan, or extension of assistance to a country or entity that would necessitate, or is predicated upon, increased fossil fuel capacity outside of the country receiving the investment, loan, or extension of assistance or the country in which the entity operates, as applicable, without regard to whether the activity falls within the portfolio of the international financial institution providing the investment, loan, or extension of assistance; and
(3)
to support the phasing out of funding for internal combustion engines for passenger vehicles and buses by 2027 in a way that is sustainable and sensitive to communities in need of mobility.
(b)
Reduction of contributions; deposit in escrow account
(1)
Determination of expenditure on new fossil fuel
 capacity
In each fiscal year, the Secretary of the Treasury shall—
(A)
determine the amount of investments, loans, and extensions of financial or technical assistance provided by each international financial institution specified in subsection (c) to any country or entity to create new capacity for fossil fuel activity during the preceding fiscal year; and
(B)
reduce the contribution of the United States to that institution by the amount determined under subparagraph (A).
(2)
Deposit in escrow account
The Secretary shall deposit in an escrow account the amount by which the contribution of the United States to each international financial institution specified in subsection (c) is reduced under paragraph (1)(B).
(3)
Release from escrow account
The Secretary shall release to each international financial institution specified in subsection (c) the amount in the escrow account under paragraph (2) attributable to contributions to that institution reduced under paragraph (1)(B) at such time as the Secretary determines and certifies to Congress that the institution is no longer providing investments, loans, or extensions of financial or technical assistance to any country or entity to create new capacity for fossil fuel activity.
(4)
Reports required
Not later than 120 days after depositing amounts into the escrow account under paragraph (2) attributable to contributions to an international financial institution specified in subsection (c) reduced under paragraph (1)(B), and annually thereafter until amounts are released to that institution under paragraph (3), the Secretary shall submit to Congress a report that documents investments, loans, and extensions of financial or technical assistance provided by that institution to any country or entity to create new capacity for fossil fuel activity during the preceding fiscal year.
(c)
International financial institutions specified
The international financial institutions specified in this subsection are the following:
(1)
The International Bank for Reconstruction and Development.
(2)
The International Development Association.
(3)
The International Finance Corporation.
(4)
The Multilateral Investment Guarantee Agency.
(5)
The African Development Fund.
(6)
The African Development Bank.
(7)
The Asian Development Fund.
(8)
The Asian Development Bank.
(9)
The European Bank for Reconstruction and Development.
(10)
The Inter-American Development Bank.
(11)
The Inter-American Development Bank Invest.
(12)
The North American Development Bank.
(d)
Definitions
In this section:
(1)
Fossil fuel activity
The term  fossil fuel activity  means the exploration, development, mining or production, processing, refining, transportation (including pipelines transporting gas, oil, or products thereof), combustion, distribution, or marketing of, or the construction or operation of plants for the processing or refining of, coal, petroleum, natural gas, or any derivative of coal, petroleum, or natural gas that is used for fuel.
(2)
Fossil fuel
(A)
In general
The term  fossil fuel  means all forms of coal, oil, and gas.
(B)
Inclusions
The term  fossil fuel  includes—
(i)
bitumen from oil sands;
(ii)
kerogen from oil shale;
(iii)
liquids manufactured from coal;
(iv)
coal bed methane;
(v)
methane hydrates;
(vi)
light oil derived from shale or other formations;
(vii)
natural gas liquids; and
(viii)
all conventionally and unconventionally produced hydrocarbons.
(3)
Policy reform
The term  policy reform  means a process at an international financial institution that changes rules, regulations, or institutions and results in incentivizing fossil fuel investment, such as by lowering tax liability or increasing energy tariffs.
 .
3.
Prohibition on foreign assistance that would support fossil fuel
 activity
The United States may not provide, directly or indirectly (such as through a financial intermediary), any loan, insurance, guarantee, or extension of financial or technical assistance, including policy guidance, to any country or entity for any fossil fuel activity (as defined in section 2001(d) of the International Financial Institutions Act, as added by section 2) or a related infrastructure project, including through the United States International Development Finance Corporation, the Export-Import Bank of the United States, the Trade and Development Agency, the United States Agency for International Development, or the Millennium Challenge Corporation.