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At a glance

·         Access to environmentally and socially sustainable energy is essential to reduce poverty. An estimated 1.4 billion people are without access to electricity worldwide, almost all of them in developing countries, and 85% living in rural areas.  About half of the developing world population uses solid fuels—wood, charcoal, coal and dung—for cooking and heating. Every year, fumes and smoke from open cooking fires kill an estimated 1.9 million people, mostly women and children, from emphysema and other respiratory diseases. 

·         To make the leap to universal access to modern energy services by 2030, new capital investment of about $40 billion will be needed every year. This is in addition to worldwide annual investments of about $450 billion just to sustain energy services at current levels.

·         More than 80% of energy consumed worldwide comes from burning fossil fuels, which produce greenhouse gases that cause climate change. The Bank Group is a key player in a worldwide effort to move to low-carbon renewable energy and enhance energy efficiency.

What We Do: World Bank Group Engagement in Energy

·         World Bank Group financing for energy is on a growth trend, with $41 billion committed since 2003.  In fiscal year 2011, total Bank Group energy financing was $8.2 billion.

·         The WBG’s energy portfolio is multifaceted; this is essential to address the complexities of the challenge, and the need to intervene on many fronts. It includes support for projects and programs that increase access to modern energy services, provide advice on energy reforms and regulation, develop renewable energy and energy efficiency, and increase energy generation, as well as expand transmission and distribution.

·         Electricity can transform the lives of the poorest. Women can earn an income by keeping a corner store or village eatery open at night. Mothers in childbirth after dusk and their newborns have a better chance at survival. Medicines and perishable food can be kept cool in a refrigerator. Children can read and study at night. Factories that otherwise would be closed can stay open, providing jobs and a path out of poverty.

Renewable Energy, Energy Efficiency & Clean Energy

·         Even as the Bank seeks to expand access to the poor, it has also increased its emphasis on renewable energy, energy efficiency, and other forms of energy for which associated greenhouse gas emissions are small, or none (in the case of efficiency improvement).

·         The World Bank Group’s renewable energy portfolio increased from a total of $3.1 billion between fiscal years 2008-09 to $4.9 billion in 2010-11. During this same period, the renewable energy proportion rose from 20% to 23%. The absolute dollar figures will decline in coming years as the Bank Group’s overall portfolio contracts after the extraordinary level of fiscal crisis lending in 2009 and 2010. But even amid year-to-year fluctuations, continued adoption of pro-growth, pro-poor and climate-resilient policies by countries will likely reinforce their interest in renewable energy financing from the Bank Group.

·         The International Finance Corporation (IFC) has increased investment in new renewable energy from $627 million in 2010 to nearly $2 billion in fiscal year 2011.

·         The Multilateral Investment Guarantee Agency (MIGA) supports green infrastructure that builds renewable energy capacity, encourages resource conservation and distribution efficiency, improves sanitation and offsets greenhouse gas emissions. Since fiscal 1990, MIGA has provided investment guarantees totaling over $2.5 billion for 73 green infrastructure projects worldwide.

·         To help countries make the transition to low-carbon development that supports poverty reduction and economic growth, the Bank, with the Energy Sector Management Assistance Program (ESMAP), has supported Brazil, China, India, Indonesia, Mexico, Poland and South Africa to assess GHG mitigation as part of their development strategies. ESMAP is a global knowledge and technical assistance trust fund, administered by the World Bank, which informs and supports the Bank’s lending programs and policy dialogue on energy. 

·         The Government of Norway and Australia’s Global Carbon Capture and Storage Institute have financed the Carbon Capture and Storage Trust Fund (CCSTF), which helps developing countries explore CCS potential, as part of low-carbon growth strategies. Workshops have been held in Southern Africa, the Balkans and Washington.

·         The Global Partnership on Output-Based Aid (GPOBA), a multi-donor results-based financing mechanism, ties disbursement of funding to achievement of specified outputs.  Its energy portfolio—Armenia Heating and Gas, Colombia Natural Gas, Bolivia Solar Home System (SHS) Energy, Nepal Biogas, Ghana SHS, Ethiopia Rural Electrification, India Mumbai Slum Electrification, Bangladesh SHS, and Bangladesh Renewable Energy Mini Grid schemes—is valued at $47 million and expected to benefit 3.5 million people.

Project Achievements

·         Mali. In Mali, the Bank has provided—through IDA—two zero-interest credits for a total of $70.6 million to support a household energy and rural access project, which includes installation of solar photo-voltaic electricity systems in some 40 rural communities. 

·         Morocco. The Bank is implementing a $750-million grant by the Clean Technology Fund to the Middle East and North Africa Concentrated Solar Power Scale Up Program, part of which is financing the world’s largest concentrated solar power plant in Ouarzazate, in eastern Morocco.

·         India. The Bank approved a $648 million loan to THDC India Ltd. to support construction of the Vishnugad Pipalkoti Hydroelectric Plant on the River Alaknanda, expected to generate 1,665 million kilowatt-hours of electricity each year and meet peak spurts in demand from households and industries.  The 444 megawatt project will also help reduce India’s greenhouse gas emissions by 1.6 million tons each year. 

·         Indonesia. Bank support of $175 million for a Geothermal Clean Energy Investment Project will help Indonesia meet growing energy needs in a clean and climate-friendly way, by boosting efforts by Pertamina Geothermal Energy to raise generation capacity by up to 150 megawatts in geothermal fields in North Sulawesi. This will displace an equivalent capacity of coal-based power generation, which will reduce local and global environmental pollution.

·         Poland. The Bank’s support for a $1.1 billion Energy Efficiency and Renewable Energy Development Policy Loan is helping Poland reduce projected “business-as-usual” energy consumption by 20 percent and raise the share of renewable energy in final energy consumption to 15 percent by 2020, thereby meeting the country’s 20-percent GHG reduction commitment to the EU.

·         Turkey. A $600 million loan is helping Turkey develop its renewable energy, building 966 megawatts of generation capacity through hydro, geothermal, wind and landfill gas to produce 3,810 GW-hours of electricity a year. This will reduce GHG emissions by 1.7 million tons a year.

·         The Energy Efficient Cities Initiative promotes energy-efficiency programs and planning in developing-country cities.  As part of this initiative, the Bank-administered ESMAP has developed a database of case studies and best practices to help policymakers draw from the experience of cities around the world in developing efficiency policies and programs.  

World Bank Group Financing for Energy by Type, FY07-FY11 (Revised US$ Millions)*

1: This category includes hydropower.

2: These categories are not mutually exclusive; some projects are classified as “Blended Low Carbon and Access”.

3: Sum of New Thermal Generation and Upstream Oil, Gas, Coal categories.

* The numbers in this table were drawn from a review of WBG energy financing undertaken in 2011.

For more information, please see: www.worldbank.org/energy

Contacts:

Christopher Neal: (202) 473-2049/ Email: cneal1@worldbank.org

Roger Morier: (202) 473-5675 / Email: rmorier@worldbank.org