Energy

Energy is at the heart of development. Energy makes possible the investments, innovations, and new industries that drive jobs, inclusive growth, and shared prosperity on a more livable planet.

Yet 685 million people still live without electricity worldwide, and about 2.1 billion people rely on polluting traditional fuels and technologies to cook their meals.

Scaling up renewables and energy efficiency, and investing in electrification at scale, while phasing-down fossil fuels, is critical for providing clean energy.

Energy Shocks Hit the Poor the Hardest

Global shocks such as the COVID-19 pandemic, the war on Ukraine, and conflict in the Middle East have further slowed progress toward achieving universal access to affordable, reliable, sustainable, and modern energy by 2030 (Sustainable Development Goal (SDG) 7). Developing countries have faced the highest burdens as they have limited capacity to mitigate energy price volatility, leading to energy rationing in some countries and escalating poverty.

Renewables are Key to Green, Secure, Affordable Energy

Renewable energy can help countries mitigate climate change, build resilience to volatile prices, and lower energy costs. Solar and wind technologies are a game changer as solar and wind are abundant in many developing countries, cost-competitive, and a source of reliable power when combined with storage. Hydropower also provides clean, renewable energy, one of the lowest-cost sources of electricity for consumers. 

Solar mini-grids can provide high-quality, uninterrupted electricity to nearly half a billion people in underserved communities and be a least-cost solution to close the energy access gap by 2030.

Financing the Energy Transition

Energy consumption accounts for more than three-quarters of greenhouse gas emissions. Accelerating the energy transition requires financing the massive deployment of renewable energy and energy efficiency while gradually retiring fossil fuels.

To achieve energy transition and access for all, investments in developing countries must grow sevenfold to $1-2 trillion annually by 2030. Two-thirds of these investments will come from the private sector. For investors to come in, countries must strengthen power utilities that can transmit and distribute new renewable power and develop robust regulations and institutions to oversee the development of clean energy projects.

However, in developing countries, constrained fiscal space and lack of access to finance make costly upfront investments in energy efficiency and renewable energy out of reach. In addition, macroeconomic and political uncertainties discourage private-sector investors from supporting energy efficiency and renewable energy.

Last Updated: Jun 13, 2024

The World Bank Group aims to accelerate an equitable and just energy transition that protects people, communities, and the environment. As the world grapples with multiple crises, we focus on the next frontier in energy access to reach poor and vulnerable populations, particularly those affected by fragility, conflict, and violence (FCV).

We are scaling up our knowledge and financing to deliver faster, more effective energy solutions globally. This will help our clients transition to a clean energy future that meets growing demand, boosts growth, and lifts millions out of poverty.

The World Bank (IBRD-IDA) is one of the largest financiers of renewable energy and energy efficiency projects in developing countries.

Over the last five years—FY19-23, the World Bank (IBRD-IDA):

• Committed about $15 billion to enable renewable energy generation.
• Invested about $6.5 billion to support energy efficiency.
• Approved about $7.4 billion to support energy access.
• Connected or improved electricity for about 63 million people.

In Africa, innovative programs will provide energy access to about 200 million people in the next decade:

• The Accelerating Sustainable and Clean Energy Access Transformation (ASCENT) Program will put 20 countries in East and Southern Africa on the path to universal energy access, providing sustainable and clean energy access to 100 million people by 2030. The program provides $5 billion in IDA financing and will leverage $10 billion of additional private, government, and donor funding for clean-energy access over the next seven years.
• The Distributed Access through Renewable Energy Scale-up (DARES) project in Nigeria will provide over 17.5 million people with new or improved access to electricity through innovative financing to scale up private sector investments in clean electricity.
• The active energy sector portfolio across Western and Central Africa comprises 40 projects worth $8.67 billion. Twenty-two of the projects under implementation contribute to the clean energy transition. By the time all the projects close, about 45.9 million people will receive new or improved electricity services.

Scaling Up Clean Energy to Phase Down Coal

The World Bank has outlined a vision for how the global development community can support developing countries to overcome the critical barriers paralyzing the power sector.  “Scaling Up to Phase Down” serves as a roadmap to catalyze financing and sustain a virtuous cycle that unleashes urgently needed investments in power sector transition.

The energy transition is distilled into six steps—a “virtuous cycle”—that starts with government leadership, which translates to a supportive regulatory environment, increasingly capable institutions, and instruments to minimize risks, followed by transparent and competitive project allocation, which can deliver clean energy that serves urgent needs, including energy security, energy affordability, and jobs. Learn more…

Supporting a Just Transition Away from Coal

Transitioning the highest emitting countries away from fossil fuels, particularly coal—the world's most dominant and most carbon-intensive source of energy—is crucial for ensuring clean energy.

The World Bank has decades of experience supporting countries where coal mines and power plants are closing, wherever they are in the transition process. Since 1995, we have provided more than $3 billion to support coal transitions. We prioritize early engagement with communities, helping build stronger local and regional institutions, robust social protection plans, and advanced planning to repurpose coal lands and other assets and develop renewables. Learn more…

Ramping up Support to Reduce Methane Emissions

The global energy sector accounted for approximately 40% of methane emissions in 2021. Methane emissions from venting, leaks, and flaring in the oil and gas sector are currently estimated to be responsible for 25% of global human-made methane emissions. Deploying the full potential of methane reduction solutions in the oil and gas sector could avoid 0.1 degrees Celsius of warming by mid-century—equivalent to zeroing out the emissions of every car and truck in the world.

The World Bank supports countries' efforts to reduce methane emissions as an effective short-term measure to address climate change quickly. Learn more...

Critical Minerals

The demand for minerals and metals is rapidly increasing due to the energy transition and urbanization. The world will need to mine 6 to 13 times more critical minerals for batteries and electric vehicles by 2040. The energy transition creates a trillion-dollar market with tens of millions of jobs along global mineral value chains. The World Bank supports countries to unlock value-addition opportunities, improve governance, transparency, environmental and social performance, and private sector investment, which will benefit all people and support green, sustainable mineral supply chains. Learn more...

Resilient and Inclusive Supply-chain Enhancement (RISE) Partnership  

Launched in October 2023, the World Bank's RISE Partnership provides capacity building, technical assistance, and knowledge exchange to facilitate investment in the mining sector in low- and middle-income countries. RISE will support the establishment of diversified and inclusive supply chains for clean energy, skilled workforce development, and investment in strategic mineral value chain infrastructure. Learn more…

Last Updated: Apr 11, 2024

The World Bank supports countries to ensure that the transition to more diversified and cleaner sources of energy meets growing demand, brings economic growth, and creates jobs on a more livable planet.

Energy efficiency and renewable energy can mitigate climate change and ensure energy reliability and security. The World Bank is one of the largest financiers of renewable energy and energy efficiency projects in low- and middle-income countries. We work with partners, including the Energy Sector Management Assistance Program (ESMAP), to help achieve universal access to energy by 2030.

Below is a selection of our key investments and results:

Renewables

In the last five years:

• The World Bank has invested $15 billion to enable renewable energy generation. Almost two-thirds of this support is for transmission and distribution infrastructure to facilitate the integration of renewable energy, guarantees, as well as upstream support for enabling policies, regulations, and institutions to scale up private investments for renewable energy.
• In March 2024, the Bank launched a $2 billion Europe and Central Asia Renewable Energy Scale-up (ECARES) program—a 10-year, multi-phased initiative—to enhance energy security and affordability by scaling up renewable energy in emerging and developing economies in the region.
• The Decentralized Access with Renewable Energy Scale-Up Platform (DARES) initiative (launched in 2022) accelerates the pace of electrification in Africa to support the goal of universal access by 2030.
• In India, the Bank supported the government in establishing a sovereign green bond program—the first of its kind—to finance renewable energy and electrifying transport systems throughout the country.
• About 25 million people in Africa gained new or improved electricity access between FY18 to FY23 through increased support for renewable energy mini-grids, off-grid solar systems, and sustainable solar electrification for health care facilities and schools.
• The World Bank approved $268 million to support the new Tunisia-Italy electricity interconnector. The project will support renewable energy trade essential to Tunisia’s sustainable development, climate change strategy and increase the trade of clean electricity across the Mediterranean.

Solar and wind technologies are revolutionizing the power sector. They are a game changer for developing countries as solar and wind are abundant, cost-competitive, and a source of reliable power when combined with battery storage.

• Through the $311 million Regional Emergency Solar Power Intervention Project (RESPITE), the World Bank is helping increase grid-connected renewable energy capacity and strengthen regional integration in Chad, Liberia, Sierra Leone, and Togo.
• In Yemen, World Bank enabled over 91,000 households—21 percent of which were headed by females—to acquire subsidized solar energy systems that support healthcare, education, and water services for 3.2 million people.
• In Bolivia, a World Bank-supported renewable energy has connected some 20,200 people to the power grid in remote, underserved areas.
• In Bangladesh, the World Bank supports the largest off-grid program in the world through 2.41 million solar home systems, 1,300 solar irrigation pumps, 14 solar-based mini-grids, and 3 million efficient cookstoves. Around four million people in rural areas now have reliable access to clean energy through this program, which has created 30,000 jobs.

Across Africa, where half of the population has no access to electricity, the World Bank has scaled up support for renewable energy access and energy transitions. Over the past five years, we have approved:

• $7.4 billion in support of energy access, of which $4.3 billion went into on-grid access, and $2.4 billion into decentralized renewables, such as mini-grids and off-grid solar.
• In 2023, the World Bank approved $400 million for the Kenya Green and Resilient Expansion of Energy (GREEN) Program, which aims to help Kenya achieve universal access and 100 percent clean energy by 2030. 
• The World Bank and its partners developed the Sustainable Renewables Risk Mitigation Initiative (SRMI) to support developing countries to unleash renewables by reducing barriers to private investments. In Sub-Saharan, we have mobilized:
  • $2.2 billion of World Bank financing blended with $370 million of climate financing.
  • $1.2 billion in private financing to enable 1.4 GW of solar and wind with 1 GW of battery storage.

Energy efficiency

Energy efficiency is always faster and cheaper than building new generation capacity. The World Bank invested about $6.5 billion in FY19-23 to support energy efficiency, including direct investment in public infrastructure such as public buildings or street lighting.

• In Benin, we support energy efficiency by providing 24,670 new households access to improved cooking equipment and 25,000 households access to improved cookstoves. The country has reduced more than 113,000 tons of CO2 emissions due to improved efficiency of lighting and appliances.
• In India, reducing energy demand through measures—ranging from subsidized energy tariffs to deploying 366 million LED bulbs—will save 11,200 GWh of electricity every year.
• In Uzbekistan, where buildings account for 50% of energy consumption, the World Bank is supporting the country to improve the energy efficiency of public buildings with a $143 million concessional credit.

Energy access

Between FY19 and FY23, the World Bank approved about $7.4 billion to support energy access. Over the same period, the Bank improved access to electricity for about 63 million people. We are ramping up support and leveraging private investments to deliver impact at scale.

• The Accelerating Sustainable and Clean Energy Access Transformation (ASCENT) Program will put 20 countries in Eastern and Southern Africa on the path to universal energy access, providing sustainable and clean energy access to 100 million people by 2030. Over the next seven years, the program will provide $5 billion in IDA financing and leverage $10 billion of additional private, government, and donor funding for clean-energy access. The program is underway in Rwanda, São Tomé and Príncipe, Somalia, and Tanzania.
• In Rwanda, we helped the country reach near-universal electricity access, up from just 6% in 2009, by providing new or improved energy grid access to 230,000 households and off-grid energy access to another 150,000 households.
• In Tanzania, more than 4.5 million people gained access to electricity while more than 1,600 healthcare facilities and 6,000 educational institutions added new connections—emerging as one of the fastest rates of energy-access expansion in Sub-Saharan Africa over the past decade.
• In Western and Central Africa, more than 10.3 million people have received new or improved electricity services from ongoing projects.
• In Senegal, more than 13.2 million people have benefitted from improved electricity access and reliability.
• As part of the West Africa Power Pool Program, the World Bank supported the construction of the Ghana-Burkina Faso Interconnector, which significantly reduced the cost and increased the security of electricity supply to Burkina Faso while increasing Ghana’s electricity-export capacity.
• The World Bank’s mini-grid portfolio amounts to over $1.4 billion. It will support more than 3,000 mini-grids in 30 countries, bringing electricity to more than 380 million people by 2030 and enhancing sustainability and resilience to climate change.

Energy for clean cooking

Today, 2.3 billion people worldwide still cook with traditional polluting fuels and technologies, severely impacting health, gender, economic, environmental, and climate outcomes. Women bear the brunt and suffer from poor health, insecurity, and lost productivity.

• Between July 2015 and April 2024, the World Bank provided about $773 million for clean or improved cooking to support 105 million people across 34 access-deficit countries—in Africa and Asia.
• The Bank established the Clean Cooking Fund through ESMAP with a funding target of $500 million. It aims to leverage $2 billion in public and private investments to help 200 million people gain access to clean cooking.
• The Clean Cooking Fund has allocated $107 million to global support/regional support and direct support of 27 countries. The current portfolio has leveraged $210 million from IDA/IBRD, $311 million from private financing, and $10.81 million from carbon finance, directly benefiting more than 40 million people and 2,000 schools in gaining access to clean cooking solutions.

Just Transition away from coal

The World Bank aims to accelerate an equitable and just energy transition. Since 1995, the World Bank has provided more than $3 billion to support just transition away from coal and help governments close coal mines and power plants while providing livelihood opportunities for communities and protecting the environment.

• In South Africa, the Bank approved $497 million to help decommission South Africa’s Komati coal plant, the first of 12 in the country that will be retired by 2030 and repurposed for renewable energy. The project will create opportunities for workers and communities during the transition process. This support will benefit over 650 Komati workers and an estimated 15,000 people through community development and economic diversification.
• In Bosnia and Herzegovina, the Bank will provide $60 million to remediate and repurpose coal brownfields in 3 coal mining sites and attract new investment in the region.
• In 2023, the World Bank approved $1.5 billion in financing to accelerate India’s development of low-carbon energy, help scale up renewable energy, develop green hydrogen, and stimulate climate finance for low-carbon energy investments. The project will help India achieve its target of 50 percent renewable energy by 2030.

Methane reduction

The rapid reduction of methane emissions is one of the most impactful climate actions we can undertake in the short term to address climate change quickly. The World Bank supports client countries in the global effort to reduce methane emissions.

• At COP28, the World Bank launched the Global Flaring and Methane Reduction (GFMR) Partnership, a new $250 million fund focused on helping developing countries cut carbon dioxide and methane emissions generated by the oil and gas industry.
• IFC supported one of the world's largest gas flaring reduction projects in Iraq that helped avoid unnecessary flaring while supporting Iraq's energy transition and expanding energy access.
• In Egypt, GFMR supports the decarbonization of the energy value chain.
• In Bangladesh, the World Bank is helping reduce methane emissions and carbon dioxide by an estimated 7.7 million tons per year.

Battery and Energy Storage

The World Bank has mobilized approximately $850 million in climate financing for battery storage and energy storage deployment projects globally. 

• The World Bank financed 5.5 GWh of battery storage capacity in active projects, and an additional 3.9-gigawatt hours are in the pipeline.
•  The World Bank convened the global Energy Storage Partnership (ESP) hosted by ESMAP to foster international collaboration toward accelerating the deployment of energy storage globally.
• The Bank’s Energy Storage Program has helped  scale up sustainable energy storage investments and generate global knowledge on storage solutions, including:
  • Catalyzed public and private financing amounting to $725 million in Burkina Faso, Ethiopia, Maldives, Sierra Leone, Tanzania, Ukraine etc., amongst other countries and regions.
  • Supported over 14 World Bank lending projects (including six mini-grid projects) to deploy renewable energy and storage solutions and increase battery storage capacity by 2,527 MWh.
  • Helped finance India's largest battery project to date—a 120 MWh facility commissioned in November 2023 by the Solar Energy Corporation of India (SECI).
  • The Bank supports Small Island Developing States (SIDS) like the Maldives to embrace storage solutions, by installing more than 53.5 MW of solar capacity and 40 MWh of battery storage.

Utilities

Electric utilities are the critical link between power generation and distribution of electricity to homes and businesses. The World Bank supports countries to improve utilities’ performance through policy, regulatory, institutional, and governance reforms. We also assist utilities in strengthening their operational and financial performance. An upcoming World Bank report (to be released in the Fall of 2024) takes stock of current utility performance challenges in Bank client countries, assesses the threats and opportunities to utility performance that energy transition may create, and highlights solutions to support utilities in navigating the energy transition.

• In FY19-23, the World Bank approved about $8.2 billion to support utility performance improvement.
• In Rwanda, the World Bank has helped increase electricity access from 10 percent in 2010 to 54 percent in 2020 by improving the quality and reliability of electricity supply, and the capacity of the sector institutions, such as utilities.
• In 2022, the World Bank launched the Utility Knowledge Exchange Platform to help utilities, energy sector institutions, regulators, system operators, the private sector, and the World Bank identify best practices, improve operational efficiencies, stimulate businesses, and accelerate technological innovation.

Hydrogen

The World Bank supports countries to deploy clean hydrogen to decarbonize critical sectors such as transport, industry, agriculture, and mining. The Bank launched the Hydrogen for Development Partnership to catalyze financing for hydrogen investments in developing countries and approved $1.65 billion in concessional financing to ramp up clean hydrogen projects. This is the largest hydrogen engagement among all Multilateral Development Banks.

• In Chile, the World Bank approved $150 million to help develop the clean hydrogen industry—the first project of its kind globally. The project will finance clean hydrogen production, including electrolysis systems, compression, and storage, and provide technical assistance to foster the new industry. It will accelerate the energy transition, create jobs, and generate growth while mitigating climate impacts.
• In India, the Bank approved a $1.5 billion project to support the government's green hydrogen mission in five key sectors (fertilizer, refineries, steel, methanol, and transport). The first Low-Carbon Energy Programmatic Development Policy Operation—the first in a series of two envisaged operations—will support India in developing green hydrogen.

Hydropower

Hydropower is a clean, renewable energy source that is one of the lowest-cost sources of electricity for consumers. Since 2002, the World Bank has supported 131 hydropower projects in 68 countries, investing $17 billion.

• In Pakistan, World Bank support for Tarbela hydropower provides clean energy to millions of people and has saved the country $2 billion.
• In Vietnam, the World Bank helped develop the Trung Son hydropower plant, which has supplied 1 billion kilowatt-hours (kWh) of low-cost electricity since 2017, improving the livelihoods of 3,400 households and reducing greenhouse gas emissions by 1 million metric tons annually.

Tackling energy access gaps since the COVID-19 pandemic and beyond

The COVID-19 crisis highlighted the urgent need to address energy gaps and deploy renewable energy on a massive scale to mitigate climate change and ensure energy reliability and security. Since the pandemic, the World Bank has worked with governments, the private sector, and other partners to repurpose and accelerate energy operations to provide clean, reliable, and affordable energy to hospitals and other critical health facilities—this includes energy for testing laboratories, cold storage for medicine and vaccines, and solar-powered water pumps.

• In Nigeria, our response funded the electrification of priority public health facilities, including 100 isolation centers and 400 primary healthcare centers. Solar-hybrid mini grids are supporting emergency operations and equipment to test and treat COVID-19 patients.
• Through ESMAP, the World Bank has provided additional financing to sustainably electrify healthcare facilities and cold-chain during COVID-19, especially in FCV countries.
• In Haiti, this funding helped install solar panels and battery energy systems in regional and district hospitals.

In addition to these interventions, the World Bank also collaborates with partners to build knowledge capacity and provide training for stakeholders.

In June 2022, through ESMAP, we launched the Regional Network in Energy for Women to boost women’s participation in the energy sector and advance gender equity in the Middle East and North Africa.

Last Updated: Apr 11, 2024