Sustainable Energy at the World Bank: Policies and Experiences

1. Sustainable Energy at the World Bank: Policies and Experiences Anil Cabraal Lead Energy Specialist Energy and Water Department The World Bank Norway-World Bank Seminar May 26, 2005

2. Why Sustainable Energy? • Livelihoods: Improving livelihoods with lower cost modern energy and promotion of income-generating activities. • Environment & health: Spurring environmentally sustainable growth, without contribution to climate change. • Energy security: Broadening portfolio options for energy resources and reducing dependence on fossil fuels.

3. Energy Access Challenge • 1.6 billion without access to electricity, 1.4 billion depending on biomass for fuel • Asia – 800 million • Africa – 525 million • Business as usual - by 2030: 1.4 billion remain without electricity access, 1.6 depend on biomass fuels • Universal access will never be reached in Africa and Asia

4. WBG Sustainable Energy HighlightsWBG Renewable Energy and Energy Efficiency Commitments, 1990–2004: US$8.275 billion

5. 70% 60% Commitments 50% Projects 40% 30% 20% 10% 0% 1990 - 92 1993 - 95 1996 - 98 1999 - 2001 2002 - 04 Bank Energy Sector Support Targeted at Poverty Alleviation • $40 billion in WBG energy sector investment since 1990. • Share of energy commitments to address poverty issues is increasing • FY02–04, ~40% of energy projects and ~60% energy sector financial commitments directly supported poverty alleviation objectives

6. WBG Support for Sustainable Energy:Some Lessons Learned Identify opportunities: support countries in identifying and assessing opportunities through analytical work. Learning effects reduce costs for follow-on projects. Create enabling conditions first: favorable commercial and policy environment, markets, institutions, and financing. Subsidy design: well-designed and applied subsidies are beneficial in making economically sound RE investments financially viable

7. Development Principles • Respect country development priorities. • Support sustainable energy for its development value – not for its own sake. • Focus on least cost, technically and institutionally viable technologies that can be sustainable in the country context. • Engage government, private and non-governmental sectors. • Be environmentally and socially sound.

8. The World Bank Group Commitments • Integrate renewable energy and efficiency into key country assistance planning. • Commit to an average 20% per year growth of our new renewable energy* and efficiency investments over the next 5 years. Larger scale hydropower will be supported. • Commit to building up our corporate resources – staff and knowledge. • Commit to strengthening our partnerships with the global community. *Target applies to solar, biomass, wind, geothermal, and hydro (up to 10 MW).

9. IFC Carbon Finance Facility Energy Sector Management Assistance Program Asia Sustainable and Alternative Energy Program (ASTAE) Africa Energy Trust Fund(APTESI) Global Gas Flaring Reduction Initiative World Bank Carbon Finance Business Working in Partnership

10. Together We can Meet this Challenge • Governments, private sector, civil society and international agencies in partnership must: • Understand and respond to countries development priorities. • Adopt good principles for donor assistance. • Address governance and market concerns. • Raise political profile to mobilize financing. • Impart knowledge and learning.

11. Thank You!