Fact Sheet: The World Bank Group & Sustainable Energy for All
A summary of the World Bank’s contributions to the Sustainable Energy for All initiative, both planned and underway.
GOAL #1: Achieving universal access to energy
The International Energy Agency estimates that achieving universal access to modern energy services by 2030 will cost $48 billion a year. The World Bank Group is providing more than $1 billion a year to over 60 countries that is directly focused on expanding access, both by extending the grid and through off-grid solutions for remote areas. The Bank Group’s financial instruments, such as partial risk guarantees, reduce risk associated with energy projects to leverage private investment for access, while its policy and strategic guidance help governments create conditions that attract companies that bring new business models, innovative finance, or new energy and energy efficiency technologies.
Since Rio+20, 61 countries have opted in to the Sustainable Energy for All initiative, and businesses, investors, and donors have committed $50 billion to it. The 61 countries, 25 of them in Africa, account for about 80% of global population without access to electricity. The Energy Sector Management Assistance Program (ESMAP), administered by the World Bank, has completed six of a total of 40 “rapid assessment” country studies undertaken by all SEFA partners (others supporting these assessments are the African Development Bank, Asian Development Bank, InterAmerican Development Bank, European Commission, and the United Nations Development Programme) each of which reviews a specific country’s electricity and household fuels’ access gaps, as well as their status on renewable energy development and energy efficiency practice. ESMAP will deliver a technical assistance program for energy access in five developing countries.
GOALS #2 & #3: Doubling renewable energy share & improvement rate of energy efficiency
The Bank Group’s two major financing vehicles, IBRD for middle-income and IDA for low-income countries, contributed about two-thirds of the Bank Group’s total $49.2 billion in financing for energy projects and programs between 2007-12. Of total Bank Group energy financing during this period, 43% was for renewable energy and energy efficiency, while a large part of the remainder went to transmission, distribution and policy reform. This finance usually produces matching volumes of investment from public and private sectors, as well as from multilateral and bilateral donors. The goal is to double the current leveraging of this lending, raising it from $1 to $2 for every $1 of Bank financing.
The Bank’s ESMAP, which helps low and middle-income countries develop and implement sustainable energy policies, is developing a Global Geothermal Development Plan with several partners to explore and develop geothermal potential in developing countries. This will include Africa’s Rift Valley, where geothermal power could potentially deliver clean electricity access in up to 13 countries. ESMAP will also bring its Energy Efficient Cities Initiative to urban policymakers to help them implement building standards, transport and traffic regulations, as well as municipal tax incentives that scale-up energy efficiency efforts in cities, where over 70% of the world’s population will live by 2050.
The International Finance Corporation’s clean energy investments have increased substantially since 2007, with renewable energy now accounting for over 70% of its power business. IFC is working with other parts of the Bank Group to provide guidance to countries on policy incentives such as feed-in tariffs, renewable portfolio standards, and reverse electricity auctions to help renewable energy companies become competitive. It also encourages countries to abandon costly subsidies to power producers relying on fossil fuels.
The Bank and IFC are among 10 partners in the Global Lighting and Energy Access Partnership, or Global LEAP. This collaboration aims to replicate the success of Lighting Africa by catalyzing markets for off-grid lighting across Asia. Meanwhile, successful Lighting Africa pilot programs will be extended to new markets in Tanzania, Ethiopia, Senegal, and Mali, with the goal of reaching 250 million people with off-grid lighting products by 2030.
Flaring of gas associated with oil production has dropped by 20% worldwide, from 172 billion cubic meters (bcm) in 2005 to 140 bcm in 2011. This has reduced CO2 emissions by 85 million tons, roughly the equivalent of emissions from 16 million cars. The Bank and its partners in the Global Gas Flaring Reduction Partnership (GGFR) will step up flaring reduction efforts over the next four years through activities to develop gas infrastructure and markets. A major goal is to increase use of previously flared gas to expand access to electricity and cleaner household fuels.The Bank is working through the Africa Clean Cooking Initiative and the Clean Cooking Initiative in East Asia to raise awareness on clean cooking issues and to help governments design programs to scale up the dissemination of clean cooking stoves and modern fuels. Bank financing has connected millions of households to biogas and natural gas in China, Nepal, Colombia, and Armenia, while facilitating transitions to more efficient household fuels in Cambodia, Laos, and nine African countries.
The Bank Group and four regional multilateral development banks manage the Climate Investment Funds (CIFs), which include the Clean Technology Fund and Scaling-Up Renewable Energy Program for Low-Income Countries, and the Strategic Climate Fund. About $5 billion, or 75% of total capitalization of the CIFs, is supporting projects targeting the Sustainable Energy for All goals. CIF investments include development of concentrated solar power in the Middle East and North Africa, South Africa, China, and India; geothermal energy in Indonesia and East Africa; access expansion using sustainable energy in Honduras, Nepal, Kenya, Liberia, Tanzania, Mali, and Ethiopia; and financing energy efficiency and smart grid technologies in Mexico, Turkey, Vietnam, and Ukraine.