Energy Report: Renewables and Energy Efficiency Up By 120 Percent

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WASHINGTON, November 30, 2005—The World Bank Group(WBG) Progress on Renewable Energy and Energy Efficiency Annual Report, released today, shows that the World Bank Group’s financial support for renewable energy and energy efficiency rose to US$748 million in fiscal year 2005 (July 2004 - June 2005), compared to US$339 million the previous fiscal year. Total commitments since 1990 have now exceeded US$9 billion. 

The report presents the progress made by the WBG in the year following its commitment to increase support for new renewable energy (RE) and energy efficiency (EE) by an average of 20 percent per year from 2005 to 2009.   The commitment was made in Bonn, Germany, in June 2004, at the International Renewable Energies Conference, and later endorsed by the World Bank Board of Executive Directors.

“The results achieved in FY05,” said Jamal Saghir, Director, Energy and Water at the World Bank, “demonstrate how the potential of renewable energy and energy efficiency can be tapped to offer clean energy services to meet the Millennium Development Goals (MDGs).   The results are indicative of the positive role we are playing in creating a new investment framework for climate change, clean energy, and sustainable development.”

The World Bank Group’s RE and EE portfolio

The FY05 progress report provides an overview of support for renewable energy and energy efficiency by the six regional energy units of the World Bank, the International Finance Corporation (IFC), Multilateral Investment Guarantee Agency (MIGA), Carbon Finance operations, Energy Sector Management Assistance Programme, and the Asia Alternative and Sustainable Energy Program.

The FY05 portfolio comprises US$449 million for hydropower with capacities greater than 10 MW per facility, US$212 million for other new renewable energies, and US$87 million for energy efficiency.

According to Anil Cabraal, Lead Energy Specialist in Energy and Water, who is guiding the implementation of the expansion of this sector, “A major emphasis in the coming years will be to assist our partner countries in undertaking strategic planning work to integrate renewable energy and energy efficiency into long-term development strategies and to support project development.”

Each dollar of World Bank Group financing for projects in these sectors leveraged an average of nearly five dollars from private investors, governments, and others, according to the report.

The commitment of US$748 million for RE and EE is 2.2 times the commitment made in fiscal year 2004 of US$339 million for RE and EE.  By organizational unit, the commitments were as follows:

·         International Bank for Reconstruction and Development (IBRD) and International Development Association (IDA), including Global Environment Facility (GEF) co-financing and carbon funds, $568 million. 

·         International Finance Corporation (IFC), including GEF co-financing and carbon funds, $90 million.

·         Multilateral Investment Guarantee Agency (MIGA), $91 million

World Bank Group commitments for renewable energy and energy efficiency are 26 percent of total energy sector commitments in FY05 of $2.8 billion.  This can be contrasted with International Energy Agency (IEA) forecasts of OECD investments in the energy sector from 2001-2010, where 8.3 percent of total investment is expected to be for renewable energy.

With US$299 million in commitments for new RE and EE in FY05, the WBG has exceeded the 20 percent scaling up target committed at the 2004 Bonn Conference of US$251 million.

Measuring the FY05 Progress in New RE and EE Lending Against the Baseline

(millions of U.S. dollars)

In FY05, forty renewable energy and energy efficiency projects in 28 countries were supported. The initiatives ranged in size from just over half a million dollars for the Yemen Rural Electrification and Renewable Energy Development Project, to US$137 million in Bank financing and a GEF grant for the first phase of the Renewable Energy Scale-up Program in support of China’s commitment to increase its share of renewable energy use from 7 percent of generation capacity today to 15 percent by 2020.

The report looks at the project portfolio, technical assistance, analytic and advisory activities, and highlights the principal approaches that the WBG takes to support the expansion of RE and EE. Regional and institutional perspective on FY05 accomplishments are discussed, as well as the efforts to build global partnerships, disseminating knowledge, strengthening in-house staff capacity, and a look at the lessons learned.

For more information and for the report, please go to:

http://www.worldbank.org/re

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