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Multilateral Financing for Biofuels

Multilateral Financing for Biofuels. Judy Siegel President, Energy and Security Group. Presentation Overview. World Bank Inter-American Development Bank Areas for Collaboration with IFAD. The World Bank Group. World Bank Group. World Bank and Clean Energy.

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Multilateral Financing for Biofuels

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  1. Multilateral Financing for Biofuels Judy Siegel President, Energy and Security Group

  2. Presentation Overview • World Bank • Inter-American Development Bank • Areas for Collaboration with IFAD

  3. The World Bank Group

  4. World Bank Group

  5. World Bank and Clean Energy • WB is actively supporting clean energy technology solutions that bring about a truly diverse bioenergy mix, not focused solely on fuels • Since 1990, The World Bank Group committed more than US$11 billion to RE/EE in LDCs • Support for RE/EE rose to 1.4 billion dollars in FY 2007, reaching 40% of total energy sector commitment • Committed $2.5 billion for new RE/EE from June 2004 to December 2007 • Exceeding their Bonn commitment 1.5 years ahead of schedule

  6. World Bank and Biofuels • Bank has long held a view of conditional & cautious support for biofuels • Consistent since their assessment 3 years ago, on the commercial viability of biofuels for transport in developing countries • Bank acknowledges in some cases, biofuels do promise benefits such as: • Lower greenhouse gas and local air pollution emissions, • Energy diversification • Economically least cost compared to conventional fuels. • Bank’s approach to biofuels has been cautious, due to manifold environmental & economic impacts accompanying large scale development • Sustainability concerns include: • Biofuel production impact on the cost of staple food grains • High lifecycle GHG emissions associated with intensive cultivation of some biofuel feedstocks and fuels processing • Ecological impact of land-use changes • Competition for scarce water resources; biofuel production in some cases channels water away from other productive activities.

  7. Benefits and Costs of Biofuels • Benefits and costs of biofuel development are largely site and circumstance specific • There is a crucial need for more research to: • Inform the development of biofuels • Determine range of technologies/feedstock best suited to varying economic, environmental and social endowments • Bank supports expanded R&D in sustainable biofuels, especially: • Second generation fuel production systems, to include cellulosic materials and agricultural wastes that do not compete with food • Realizing the potential of second generation feedstock to utilize marginal lands for production without bringing about large land-use and water use changes • Enabling developing countries and small-scale farmers to profit from the resulting technologies • Also concerned about trade, standards and certification issues • Particularly as they affect developing countries

  8. The Way Forward for The World Bank • Given the many uncertainties regarding biofuel benefits/costs, The Bank will continue to be cautious • Will put more emphasis into R&D leading to a better understanding of a more effective strategy for biofuels. • Will support governments to assess economic, environmental, and social benefits and the various options available for enhancing energy security, before making large scale decisions and reforms • Current wisdom on biofuels can be enriched by doing country and region-specific analyses of agriculture, land- and water-use and trade impacts • More feedstock-specific studies of energy balances and lifecycle GHG and the development of new processing technologies would also add to understanding of the potential of different biofuels • More emphasis and investment needs to be directed towards improving that state of R&D of second generation fuels to make them economically viable and competitive with other fuel alternatives in the future. • Will need to involve the private sector

  9. Inter-American Development Bank

  10. IDB Jatropha Activities • IDB has a couple of private sector projects on jatropha in the pipeline, but none approved yet • IDB also has a: • A small study being developed on jatropha in Haiti • Larger study with Fundacion Getulio Vargas (FGV) of Brazil looking at range of feedstocks

  11. Areas for Multi-lateral Collaboration with IFAD • Joint research on feedstock development and processing • Assessment of biofuels development on: • Cost of staple food grains, GHG emissions, impact of land use change, water impacts, etc. • Pro-poor impacts of biofuels development • Including opportunities for rural off-farm employment and enterprise development • Policy development • Trades, standards, certification issues • Land ownership • Project co-financing • Above activities needed at national and regional levels

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