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Overview

  • Energy is at the heart of development.  Without energy, communities live in darkness, essential services such as clinics and schools can barely function, and businesses operate under crippling constraints.  Energy also makes possible the investments, innovations and new industries that are the engines of jobs and growth for entire economies.

    At the World Bank, we are committed to helping countries ensure access to affordable, reliable and sustainable energy for all, as called for in Sustainable Development Goal (SDG) #7. This work is central to delivering on World Bank’s primary mandate: ending poverty and boosting shared prosperity.

    Access to sufficient and sustainable energy is also essential to reaching other SDGs, and is at the center of efforts to tackle climate change.

    Roughly one billion people live without electricity. Hundreds of millions more live with insufficient or unreliable electricity.  At the same time, approximately 3 billion people cook or heat their homes with polluting fuels like wood or other biomass, resulting in indoor and outdoor air pollution that has widespread health impacts.

    New large-scale approaches that combine grid and off-grid electrification have contributed to impressive gains in energy access in a number of countries. In others, mini-grids are showing promise in closing the access gap.  At the same time, solar home systems are increasing in efficiency as they decrease in cost – making them affordable to consumers in South Asia and Sub-Saharan Africa. 

    Globally, the energy sector is going through a revolution. Renewable energy costs have dropped precipitously in the last ten years, and energy storage such as batteries are starting to show the same pattern.  The world now adds more renewable power capacity annually than it adds in net new capacity from all fossil fuels combined. Disruptive technologies are starting to be widely deployed, such as smart grids, smart meters and geospatial data systems that have upturned energy planning.

    The new dynamics of energy – modern grids powered by increasingly large shares of renewable energy; broad programmatic approaches that are leading to significant expansions in energy access; a commitment to action at the municipal, sub-national, national and international levels; and sustained engagement and investment by the private sector – are leading to exciting new opportunities.  

    It is now possible to reduce outages that hamper daily life and business development, while keeping electricity costs low. It is now possible to substantially increase energy access while reducing the impact of power generation on local pollution and carbon emissions. It is now possible to bring services such as refrigeration and lighting, at low cost and high efficiency, to communities that could once only dream of them.

    At the World Bank, we are seizing these opportunities.

    Last Updated: Apr 10, 2018

  • The World Bank has a long track record of supporting the expansion of energy access, both on- and off-grid, and rural and urban electrification.

    • The vast majority of the World Bank’s energy portfolio – whether power generation, energy efficiency, support to clean cooking and heating, technical assistance and policy support, and transmission and distribution – contributes to improved or expanded energy access.

    Between FY2014 and FY2017, the World Bank has directly contributed to new and improved electricity access for more than 45 million people.

                    - Over the past eight years, the World Bank has committed $1.3 billion for off-grid electrification in 24 countries.  Of these projects, 90 percent were based on renewable energy, mostly solar.

    • Beyond direct support to energy access, the World Bank’s financing of major transmission and distribution projects is helping to strengthen and extend electricity grids – even in some of the world’s poorest countries.
    • Support to regional energy integration has improved energy security and reliability while bringing down consumer prices.
    • In clean cooking and heating, the World Bank currently manages a portfolio of more than $318 million, with programs in 14 countries, including Bangladesh, China, Ethiopia, Kenya, Kyrgyzstan, Mongolia, Senegal, and Uganda. These programs have helped 11 million people get access to cleaner, more efficient cooking and heating solutions.

    The World Bank is one of the largest providers of finance for renewable energy and energy efficiency projects in developing and middle-income countries.

    • Between FY2014 and FY2017, the World Bank provided more than $9.5 billion in financing for renewable energy and energy efficiency.  During the same period, 80 percent of World Bank investments in power generation have been in renewable energy.
    • In countries like China, Morocco and Turkey, the World Bank’s efforts to help strengthen institutions, develop legal frameworks, and improve policies and regulations, have helped set the stage for a historic expansion in renewable energy capacity.
    • In countries including Brazil, India and Mexico the Bank has helped embed energy efficiency into government procurement and city planning, and supported the wide dissemination of energy-saving consumer appliances.
    • Under the Climate Change Action Plan adopted in 2016, the World Bank will use multiple instruments to de-risk renewable energy investments with a cumulative target of adding 20 gigawatts in renewable energy generation. Through a combination of policies and investments in power systems, the World Bank will enable a further 10 gigawatts of renewables to be integrated into grids.

    The World Bank is committed to working with countries to transition to low-carbon energy systems and ensure that everyone around the world has access to affordable, reliable and sustainable energy.

    • The World Bank is committed to helping countries meet the climate mitigation and resilience targets they set as part of the Paris Agreement process – the Nationally Determined Contributions, or NDCs.  This includes helping to develop specific road maps for NDC implementation, mobilize resources, and establish supportive policies.
    • In some countries, natural gas still plays an important role during the energy transition. We support natural gas as a flexible energy source that can help countries make the transition more quickly to renewables, expand access to energy for the poor, and displace carbon-intensive coal.
    • The World Bank Group (WBG) announced in December 2017 that it would no longer finance upstream oil and gas investments after 2019. Current projects already in the portfolio would continue as planned.

                      - In exceptional circumstances, consideration will be given to financing upstream gas in the poorest countries where there is a clear benefit in terms of energy access for the poor and the project fits within the countries’ Paris Agreement commitments.

                      - The WBG will continue to provide technical assistance that helps our client countries strengthen the transparency, governance, institutional capacity and regulatory environment of their energy sectors – including in oil and gas.

    • The World Bank has not financed new coal-fired power plants since 2010. Under our Energy Sector Directions Paper, we would only finance coal plants under rare circumstances, such as when there are no feasible alternatives to meet basic energy needs.
    • In 2013, a $20 million Energy Subsidy Reform Facility was set up through the World Bank’s Energy Sector Management Assistance Program (ESMAP), to help countries reform, reduce or remove fossil fuel subsidies while protecting the poor.  Since then, the facility has provided assistance to roughly 50 countries, and helped shape $5 billion of World Bank development financing that includes subsidy reform objectives.

    The shift toward cleaner sources of energy is leading to greater demand for the minerals and metals used in the manufacturing of many solar, wind and storage technologies.

    • The resulting higher demand further underscores a need to strengthen sector governance to manage the impacts from mining and to ensure sustainable, equitable development.
    • The World Bank is conducting research to better understand the relationships between minerals and the low-carbon economy in order to better advise governments on improving sector governance.     

    The World Bank delivers on its commitments in energy through a wide range of instruments: policy engagement, technical assistance, direct investment, policy lending, guarantees and risk mitigation, application of global best practices, and critically, through facilitation of private sector investment.

    The World Bank also supports strategic global partnerships such as the Global Gas Flaring Reduction Partnership (GGFR) and the Energy Sector Management Assistance Program (ESMAP), and provides foundational and ground-breaking research, advisory products and analysis. Recent research (much of it supported by ESMAP) includes:

    Last Updated: Apr 10, 2018

    • The World Bank is supporting India’s mission to increase solar generation to 100 GW by 2022 with $1 billion in lending. One example is support to the 750 MW Rewa Ultra Mega Solar Ltd. Project, which has doubled the solar capacity of the state of Madhya Pradesh and is one of the largest single-site solar plants in the world. The energy generated will help power metropolitan rail transportation in India’s capital city, New Delhi. The project is projected to save 1 million tons per year in greenhouse gas emissions, which is equivalent to taking 215,000 cars off the road every year.
    • With the support of the World Bank and other partners, Morocco launched its first utility-scale solar energy complex -- a critical step in the Moroccan Solar Energy Program. The Noor-Ouarzazate Concentrated Solar Power (CSP) complex expects to achieve over 500 megawatts (MW) of installed capacity, providing power to more than 1 million Moroccans. It is also expected to help Morocco reach its goal to install 2 GW of solar power in the country and derive 42 percent of all its electricity through renewable sources by 2020. CSP will also ultimately help the country reduce its dependence on oil by about 2.5 million tons and reduce carbon emissions by 760,000 tons per year – which translates to a reduction of 17.5 million tons of carbon emissions over 25 years.
    • A $480m IBRD renewable energy guarantee is helping mobilize US$3.2bn in investment in the Argentine renewable energy sector. The project is expected to reduce GHG emissions substantially over 20 years. Benefits include reduced air pollution and fossil fuel use, and a more secure energy supply. The RenovAr renewable auctions, supported by this guarantee, are now bringing back private investors at competitive prices for renewable energy (about 4 to 6 USc/kWh) - lower than the average cost of electricity generation (about 7 USc/kWh in 2015) and decreasing with each round. This will help Argentina benefit from its abundant renewable resources and could ultimately help it achieve its target to produce 20 percent of its electricity from renewable sources by 2025.
    • The World Bank’s long-term partnership with Turkey - including technical expertise, policy assistance on market structure, regulation and pricing and development policy loans, has helped power the country’s energy transformation and attract private sector interest, especially in the renewable energy projects. For example, ESMAP’s Global Geothermal Development Plan helped leverage a $350 million project to scale up private sector investment in the sector. Through such efforts, the Bank aims to support Turkey’s goal to be 20 percent more energy efficient by 2023, with renewable sources of power accounting for 30 percent of its total energy needs. 
    • With the World Bank’s support, Indonesia is planning a new Geothermal Risk Mitigation Facility to develop more than 1 GW of new geothermal capacity. The facility is expected to help mobilize several billion dollars in private sector funding, unlocking investments through risk mitigation for exploration and early production drilling. Ultimately, the facility could help Indonesia reach its target of increasing the share of new and renewable energy in its primary energy mix to 23 percent by 2025, including an overall addition of 5.8 GW of geothermal capacity -- a clean alternative to coal-fired power generation in a country where 30 million people still lack access to modern and reliable electricity.
    • The World Bank’s  growing partnership with India’s Energy Efficiency Services Limited (EESL) aims to help the country tackle its huge energy efficiency challenge, including through an LED light bulb distribution program that has driven down the cost of efficient lighting across India. EESL has already deployed more than 275 million energy-saving LED bulbs, avoiding 29 million tons of CO2 emissions equivalent per year. It has also distributed 4.2 million LED tube lights, and 4 million street lights in municipalities. Now, India is looking to expand this same approach to high efficiency air conditioners, agricultural pumps, and electric vehicles.
    • In Kenya, the Bank supports more than $1.3 billion of geothermal generation, transmission, distribution, off-grid and clean cooking investments.  This helped Kenya expand electricity access rates from 23 percent in 2009 to about 42 percent (about 4 million households) in 2015.  A recently approved $150 million Kenya Off-Grid Solar Access Project is designed to provide service to another 240,000 households, and to establish the framework for serving Kenya’s remaining off-grid population.
    • In Rwanda, the World Bank-supported Electricity Access Scale Up and Sector Wide Approach Project is the largest single project contributing to the country’s Electricity Access Rollout Program, which was launched in 2009. Between 2009 and 2017, the project has connected nearly 1.2 million people (or 256,816 connections) to the grid, and helped take electricity to 88% of schools, 76% of health centers and more than 94% of administrative centers in the country. Thanks to the Program, the rate of grid-connected electricity access in Rwanda has risen to 29% in 2016, compared to just 10% in 2009.
    • The Ethiopia Electrification Program (a $375 million IDA credit), approved in March 2018, will support the Ethiopia’s National Electrification Plan launched in 2017. The Plan will dramatically shift the focus on ‘last-mile service delivery’- from expanding the network to increasing the number of connections. It will provide one million last-mile household connections. The initial priority will be access to reliable electricity services for education and health facilities. Only 24 percent of primary schools and 30 percent of health centers have access to electricity services.
    • Bangladesh received the largest amount of investment in New-Access (direct investments in new grid and off-grid connections) from the World Bank, recording $748.27 million from FY05-15. The Bank has helped Bangladesh deploy a record 1.4 million solar home systems and over 10 million energy efficient CFL bulbs. More than 18.5 million people in rural areas now have reliable access to solar-powered electricity. It created 70,000 direct jobs.
    • In Zambia, the Electricity Service Access Project ($26.5 million IDA credit) will provide connections to the national grid for about 22,000 low-income households and about 1,000 MSEs (micro and small enterprises) in rural areas. Access to electricity in Zambia is at 31 percent; however, it is only 4 percent in rural areas.
    • In Myanmar, thanks to a $400 million IDA credit, 750,000 households will be connected to the grid by 2021 and off-grid electricity will be extended to another 500,000 households.  It will also provide electricity to 23,000 clinics, schools and religious buildings. The credit will also fund technical assistance to build capacity among local staff to implement the plan, improve policies and regulation around electricity and renewable energy, and develop a framework to plan out future electrification and monitor results. The goal is to bring electricity to everyone in Myanmar by 2030.
    • Scaling Solar brings together a suite of World Bank Group services under a single engagement aimed at creating viable markets for solar power in each client country.

    The “one stop shop” program aims to make privately funded grid-connected solar projects operational within two years and at competitive tariffs.

    • Before enacting reforms Egypt spent 7 percent of its GDP on energy subsidies, more than on health, education, and defense combined. The World Bank and ESMAP provided technical assistance that helped Egypt reduce subsidy spending by almost a third by 2015 and design a national communication strategy to build awareness. This technical assistance was followed by development policy lending in three consecutive one-year tranches of $1 billion over 2015-2017 that maintained the momentum of reform.
    • Through supporting local cookstove initiatives, the World Bank is also helping improve livelihoods. In Bangladesh, World Bank support helped to install one million clean stoves in homes by January 2017, nearly two years ahead of schedule. In the process, jobs were created as the stoves were made by local entrepreneurs and sold by local partner organizations.

    Last Updated: Apr 10, 2018

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In Depth

Energy Sector Management Assistance Program

The Energy Sector Management Assistance Program (ESMAP) offers advisory services, knowledge, and toolkits for energy policy makers.

Global Gas Flaring Reduction Partnership

The World Bank is part of a global initiative to reduce gas flaring at oil production sites around the world.

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The Extractive Industries practice facilitates the industries’ contribution to poverty alleviation and economic growth through good ...

Unlocking Clean Cooking and Heating Solutions Key to Reaching Sustainable ...

Nearly 2.9 billion people in the developing world still use polluting fuels like wood, coal and charcoal to cook and heat their homes.

Additional Resources

Contact

Washington D.C.
Nicholas Keyes
nkeyes@worldbankgroup.org
Washington D.C.
Anita Rozowska
arozowska@worldbankgroup.org