Over 1.2 billion people are without access to electricity worldwide, most of them concentrated in about a dozen countries 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 a year.
Energy is a major contributor to global greenhouse gas emissions. The policy measures with the greatest potential to contain greenhouse gas emissions and keep global warming below two degrees Celsius are expansion of energy efficiency and a shift towards renewable energy.
The World Bank Group supports the Sustainable Energy for All initiative, and is committed to work towards accomplishing the initiative’s three goals by 2030: a) universal access to electricity and clean cooking fuels; b) doubling the share of the world’s energy supplied by renewable sources from 18% to 36%, and c) doubling the rate of improvement in energy efficiency. Eighty-five countries have opted-in to this initiative, and many public, private and non-governmental actors are supporting its implementation.
The Bank Group’s Energy Sector Directions Paper, endorsed by its executive board in July 2013, lays out future engagement in the energy sector and describes how the WBG will help client countries secure the affordable, reliable, and sustainable energy supply needed to end extreme poverty and promote shared prosperity. The paper is consistent with the WBG’s engagement in Sustainable Energy for All.
Expanding access to modern energy services is central among the directions. In countries with low energy access, the priority will be providing affordable and reliable energy. Grid, mini-grid, and off-grid solutions will all be pursued for electricity. Our engagement in cleaner cooking and heating solutions will grow. The Bank Group supports development of energy systems based on least-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 Bank Group also provides financing and advice to countries on oil and natural gas extraction, production, processing, transmission and distribution.
The WBG will scale up efforts to improve energy efficiency (EE), and support all forms of renewable energy (RE), including wind, solar, geothermal, hydropower of all sizes, biogas and sustainable forms of biomass energy. It will focus on long-term energy planning, and promote market solutions—supported by the right policy, regulatory and contractual frameworks—and increase the leverage of our financial resources.
The WBG 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. 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.
The WBG acknowledges the global challenge of balancing energy for development with its impact on climate change and will help client countries realize affordable alternatives to coal power. It will provide financial support for greenfield coal power generation projects only in rare circumstances. Considerations such as meeting basic energy needs in countries with no feasible alternatives to coal and a lack of financing for coal power would define such rare cases. The “Criteria for Screening Coal Projects under the Strategic Framework for Development and Climate Change” will apply.
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. Over the last four years, low-carbon generation lending made up 94% of total WBG generation lending. More than two-thirds of 2014 energy lending went to Sub-Saharan Africa and South Asia, the two regions with the largest energy deficit.
Energy Access. Between 2012 and 2014, Bank Group financing brought new or improved electricity to over 35 million people. In Rwanda, IDA support helped the Government of Rwanda provide nearly one million Rwandans with electricity between 2009-2012, 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 PV panels—thanks to a major project partly financed by the Bank’s IDA.
Energy Efficiency. Among the energy efficiency projects is financial and analytical support for a $104.3 million Green Energy for a Low-Carbon City in Shanghai, featuring EE/RE measures in buildings, clean energy from renewable and natural gas, 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 EE options, and serves as a knowledge clearinghouse for best practices on energy-efficient urban development.
Renewable Energy. Projects 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 by 63 MW low-cost power to utilities in Mali, Mauritania and Senegal. In South Africa, IFC is investing $143 million and coordinating $264 million in parallel loans for construction of two concentrated solar power projects. In Indonesia, the Bank is helping boost geothermal power generation capacity in South Sumatra and North Sulawesi, to add 150 MW of capacity, thereby displacing coal-based power generation.
World Bank Group Financing for Energy by Type, Fiscal Years 2010-14 (Revised US$ Millions)
Gas fired generation
Coal and Oil
Policy and Institutional
For more information, please see: www.worldbank.org/energy
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