Overview

Energy is fundamental to economic growth and environmental sustainability. It has been described as “the golden thread” connect­ing economic growth, social equity and environmental sus­tainability. Energy poverty stymies development. Modern energy services can help improve the quality of life for millions worldwide and underpin progress in all areas of development.

According to the World Bank’s Global Tracking Framework (GTF) released in April 2017, 1.06 billion people live without electricity- only a slight improvement since 2012. At this rate, the world will only reach 92% electrification by 2030. Another 3 billion rely on wood or other biomass for cooking and heating, resulting in indoor and outdoor air pollution that causes about 4.3 million deaths each year.

World Bank’s engagement in the energy sector is designed to help client countries secure the affordable, reliable, and sustainable energy supply needed to end extreme poverty and promote shared prosperity. World Bank strategy mirrors the objectives of the Sustainable Energy for All Initiative and the Sustainable Development Goal (SDG) on energy, or SDG7: achieving universal access, accelerating improvements in energy efficiency, and doubling the global share of renewable energy by 2030. Energy is connected to all of the other SDGs, and recognizing these linkages is pivotal to implementing the SDGs. With the historic Paris agreement to tackle climate change in place, it is now time to act and delivering on SDG7 is a cornerstone of that objective.

The latest GTF report finds that in order to meet global objectives, we have to accelerate efforts to reach sustainable energy goals by 2030. Increased financing, bolder policy commitments and a willingness to embrace new technologies on a wider scale are crucial.

The World Bank is working with a number of countries to help achieve this. Our focus is on assisting clients in managing the transition from high to lower carbon energy systems. We also seek to foster private sector participation and investment; embrace a multi-stakeholder, inclusive approach to the development of energy projects and to acknowledge and reflect individual country circumstances.

Last Updated: Apr 10, 2017

The World Bank is approaching the energy challenge from four angles:

  1. We are increasing our focus on low access countries that have prioritized energy issues in their country strategies with the Bank
  2. We are helping to mainstream sector-wide approaches for universal energy access in more than 18 countries, like in Myanmar where we recently committed $400 million to bring electricity to over 6 million people by 2021
  3. We are supporting mobilization of sector-level financing through what we call an investment prospectus, working with other development partners and private sector stakeholders
  4. We are working to build global knowledge on energy access through products such as:
    • GTF (Global Tracking Framework), new edition launched in April 2017
    • MTF (Multi-Tier Framework), new edition launching later this year
    • RISE (Regulatory Indicators in Sustainable Energy Report), launched in February 2017
    • SEAR (State of Energy Access Report), launching in May 2017

The World Bank Group is carrying out long-term system planning to identify and accelerate the implementation of the most economic low-carbon options in client countries, and support with lending and assistance as appropriate, to help client countries deliver affordable and reliable energy services in a manner that is consistent with their NDCs, the global climate goals, and the WBG’s Energy Sector Directions Paper.

The World Bank is focusing on crowding in private sector funding for clean energy, with the objective of mobilizing $25 billion of commercial funds over FY16–FY20, more than double the amount mobilized over the past five-year period. Crowding in this funding and expanding access to renewables will require a significant volume of concessional finance.

The WBG supports development of energy systems based on lowest-cost options with an emphasis on renewable sources such as hydropower, wind, solar and geothermal, while also promoting energy efficiency. Projects support achievement of universal access to electricity and modern household fuels, as well as improved utility performance and sector governance.

The World Bank supports client countries with policy and financial innovations. This includes helping governments create the right policy, regulatory, and contractual frameworks. Bank’s Global Geothermal Development Plan mobilizes new concessional financing for the risky and capital intensive upstream phases of geothermal development to catalyze investment in all other stages of the geothermal value chain, unlocking geothermal potential from Indonesia to Caribbean Islands.  In the MENA region, the World Bank is supporting development of the largest in the world concentrated solar power (CSP) with long term storage as well as development of innovative applications of CSP technology. It also works on large scale deployment of innovative technologies such as floating solar in Pakistan and India, electric storage-solar, and wind-solar hybrids in India.

In countries with low energy access, the priority is providing affordable and reliable energy. Grid, mini-grid, and off-grid solutions are pursued, while engagement in cleaner cooking and heating solutions is expanding.

Countries vary greatly in their ability to transition to sustainable energy sources and in some cases, natural gas is an important bridging or transitional fuel.  Gas is often the least-cost means of providing a flexible source of electricity when demand and supply fluctuate. The World Bank is helping countries develop national and regional gas markets and, where it makes economic sense, use natural gas as an alternative to coal and biomass.

We also recognize the global challenge of balancing energy for development with its impact on climate change and strive to help client countries realize affordable alternatives to coal power. There has been no WBG financing for “greenfield” coal-fired power plants since 2010.

The World Bank also supports strategic technical assistance initiatives through global partnerships and trust funds such as the Energy Sector Management Assistance Program (ESMAP) and the Global Gas Flaring Reduction Partnership (GGFR).  These initiatives include the SEforAll Technical Assistance Program to help countries reach the 2030 goal of universal energy access, the Global Geothermal Development Plan, Lighting Africa, Lighting Asia, Renewable Energy Resource Mapping, Energy Efficiency Guidance Notes and the Energy Subsidy Reform Technical Assistance and Delivery Facility.

Last Updated: Apr 10, 2017

World Bank Group energy financing, including IBRD, IDA, IFC and MIGA guarantees, has amounted to $61 billion since 2010, of which over $24 billion was for energy efficiency and renewable energy projects.

In FY16, WBG financing in the energy sector totaled $11.5 billion. Of that amount, about $2.9 billion was for renewable energy and energy efficiency projects and programs.

Energy Efficiency:

The Bank provides financing to help end users amortize the investments of higher cost energy efficient technologies and products, as well as support to energy efficient improvements in public facilities (schools and hospital buildings, street lighting, water pumping, etc.). Bank lending for energy efficiency is a core business line, with more than $7.6 billion from FY10 to FY16

Selected examples:

  • In Mexico, with climate finance and Global Environmental Facility support, the World Bank helped implement a program for replacing over 25 million inefficient light bulbs with compact fluorescent light bulbs, and almost two million old refrigerators with new, highly efficient ones, all targeted to low-income households.
  • Bangladesh -- deployed a record 10 million energy efficient CFL bulbs, and is currently supporting a TA the development of a large scale even more efficient LED bulb deployment, to help both the urban and rural poor households with weak access to electricity.
  • In Vietnam, the World Bank supported reforms aimed at developing a competitive market that attracts private investment in electricity generation and providing incentives for energy efficiency.
  • ESMAP provides assistance to city governments, such as Da Nang in Vietnam, to develop their energy efficiency options, and serves as a knowledge clearinghouse for best practices on energy-efficient urban development.

Renewable Energy:

The World Bank is supporting Renewable Energy investments, policy changes, partnerships with the private sector, and risk management.

Selected examples:

  • The World Bank is supporting smart grids to boost the uptake of renewable energy in Turkey, Ukraine and Vietnam.
  • The World Bank is preparing new solar park projects and transmission lines in support of India’s ambitious solar energy target.
  • The World Bank is reducing the risks for investors in geothermal energy in countries as diverse as Indonesia, Turkey, Nicaragua, Ethiopia, Dominica, and Armenia.
  • The World Bank Group launched Scaling Solar, a “one-stop shop” for governments that want to attract private investors to build large-scale solar plants, but lack the purchasing power of bigger emerging markets where strong competition has driven down solar prices to virtual parity with oil, gas, and coal-fired electricity.
  • World Bank Group-financed and largest private sector-led solar initiative in the Middle East and North Africa region – a solar park in Jordan that will generate sustainable power for a region where demand for electricity is rising rapidly every year.
  • With the support of Climate Investment Funds, Morocco launched the first phase of the largest concentrated solar power (CSP) plant in the world. When fully operational, the plant will produce enough electricity for more than one million Moroccan households.
  • Implemented as a public-private partnership, the solar home system (SHS) program in Bangladesh is currently installing over 70,000 SHS every month, making it the fastest growing program of its kind in the world. Three million systems have already been installed with support from the Bank and other development partners, providing electricity to 18 million people in the country.

Energy Access:

The Bank is supporting countries in their efforts to increase access to cleaner, more efficient cooking and heating solutions, with projects in more than 15 countries, including regional programs in Asia, Africa and Central America. 

Selected examples:

  • About 43,000 households got electricity through grid extension and off-grid renewable energy sources in Laos through the Lao Rural Electrification Project, taking access levels from 15 percent in the mid-1990s to about 90 percent today.
  • In Nepal, the Village Micro Hydro project has resulted in more than 1,000 small, local hydropower plants being built and run by communities in 52 districts to meet energy needs and power economic development in rural areas.
  • In Indonesia, about 6,000 households got access to clean cooking thanks to the Indonesia Clean Stove Initiative results-based financing pilot.

Last Updated: Apr 10, 2017






PHOTO GALLERY
More Photos »
Welcome