Access to affordable, reliable and sustainable energy is vital to ending extreme poverty and promoting shared prosperity. Modern energy services can help improve the quality of life for millions around the world and are key to promoting economic development.
Around 1.2 billion people worldwide—roughly the population of India—are still living without access to electricity with most concentrated in Africa and Asia. Another 2.8 billion rely on wood or other biomass for cooking and heating, resulting in indoor and outdoor air pollution attributable for 4.3 million deaths each year.
The World Bank’s engagement in the energy sector is aimed at supporting developing countries to secure the affordable, reliable and sustainable energy supply needed to end poverty and promote shared prosperity. We assist countries to pursue environmentally, financially, fiscally and socially sustainable energy sector development.
The UN’s Sustainable Energy for All (SE4All) Initiative, co-led by the World Bank, aims to accomplish three goals by 2030: universal access to electricity and clean cooking fuels; doubling the share of renewable energy in the global energy mix (from 18% to 36%), and doubling the energy efficiency improvement rate.
Eighty-five countries have opted in to this initiative, and many public, private and non-governmental actors support its implementation. The World Bank is working with many countries to help achieve these goals. In doing so, we aim to take a long-term holistic approach, emphasizing the need to build strong financial, operational, and institutional frameworks for sustainable 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.
The World Bank acts as a knowledge hub for SE4All, leading numerous agencies in major collaborative projects to monitor and report on energy development outcomes.
This led to the Global Tracking Framework, a suite of indicators and an accompanying data platform, which make it possible to track progress of all countries in the world towards the energy access, energy efficiency and renewable energy goals.
Another recent project, Readiness for Investment in Sustainable Energy (RISE), provides indicators that compare the investment climate in countries across the three focus areas of the SE4All initiatives.
Expanding access to modern energy services is a cornerstone of the World Bank’s energy objectives, as laid out in the Bank Group’s Energy Sector Directions Paper.
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.
The Bank Group 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.
We are scaling up efforts to improve energy efficiency, and support all forms of renewable energy. The World Bank is helping countries develop national and regional gas markets and where it makes economic sense, use natural gas as a lower-carbon energy source. We also focus on long-term energy planning, and promote market solutions—supported by the right policy, regulatory and contractual frameworks—to increase the leverage of our financial resources.
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 Sustainable Energy for All Technical Assistance Program to help countries reach the 2030 goal of universal energy access, the Global Geothermal Development Plan, Lighting Africa, Lighting Asia, and Renewable Energy Resource Mapping, Energy Efficiency Guidance Notes and the Energy Subsidy Reform Technical Assistance and Delivery Facility.
We 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. The Bank Group will only provide financial support for green-field coal power generation projects in rare circumstances.
World Bank Group energy financing including IBRD, IDA, IFC and MIGA guarantees, totaled $43 billion over the five years since 2010, of which more than $19 billion was for energy efficiency and renewable energy projects. In the four years to FY14, low-carbon generation lending made up about 90% of total lending. Out of an almost record lending total of $9.445 billion, over two-thirds of the World Bank Group’s energy financing for FY14 was concentrated in regions facing the largest energy deficits—Sub-Saharan Africa and South Asia. It was also another very strong year for Bank Group renewable energy financing with a total of $3.6 billion in investments.
Energy Access. The World Bank is aiming for a minimum increase of 50% in lending for projects/project components resulting in direct electricity connections over the next three years. In FY14, there were 23 active projects worth $1.2 billion and between 2012 and 2014, Bank Group financing took new or improved electricity supply to over 35 million people. In Rwanda, IDA support helped the government provide nearly one million Rwandans with electricity between 2009 and 2012, a threefold increase. Schools and health centers achieved a 70% increase in electricity connections. In Bangladesh, more than 1.4 million low-income rural households in Bangladesh now have electricity—delivered by solar panels—thanks to a major project partly financed by the Bank’s IDA.
Energy Efficiency: In FY14, there were 87 energy efficiency projects/project components in the Bank’s portfolio for a total of $4.6 billion. The World Bank is providing financial and analytical support for a $104.3 million Green Energy for a Low-Carbon City in Shanghaiproject, featuring energy efficiency and renewable energy measures in buildings, clean energy from renewable and natural gas and energy-efficient vehicles and public transport. Similar initiatives are under way in eight other Chinese cities. ESMAP also provides assistance to city governments in developing their energy efficiency options, and serves as a knowledge clearinghouse for best practices on energy-efficient urban development.
Renewable Energy. Projects in this area include support for concentrating solar plants in North Africa, off-grid household solar in Mongolia, wind farms in Turkey, and geothermal power in Kenya. Support for hydropower has included financing for the Bujagali run-of-river hydropower project, now meeting half of Uganda’s electricity needs and that has nearly eliminated blackouts. Two IDA credits supported the Felou hydroelectric project, increasing low-cost power to utilities in Mali, Mauritania and Senegal by 63 MW. The Bank is helping boost geothermal power generation capacity in South Sumatra and North Sulawesi in Indonesia with the aim of adding 150 MW of capacity, thereby displacing coal-based power generation.
A recent analytical product that brings the energy and extractives industries together is “Power of the Mine: A Transformative Opportunity for Sub-Saharan Africa.” The report suggests that mining companies—with their large demand for power—can become anchor customers to national electricity utilities, in turn helping take electricity access to millions of energy-deprived people and enterprise consumers in Africa.
World Bank Group Financing for Energy by Type, Fiscal Years 2010-14 (Revised US$ Millions)