March 3, 2006—The World Bank this week hosts one of the year’s largest gatherings of energy professionals as government ministers, policy makers, industry leaders, academics, civil society representatives, and Bank staff meet during Energy Week 2006. The theme of this year’s event is “Clean Energy for Development”, with the almost 1,000 attendees focusing in large part on how to build on the G8 Plan of Action adopted at the Gleneagles Summit last year. That plan outlined the way forward on clean energy, climate change, and sustainable development. In addition, plenary sessions will address issues such as: - energy security – how to ensure an affordable, sustainable, and reliable energy supply for developing countries;
- anti-corruption in the power sector – an analysis of the different types of corruption and necessary actions to contain it;
- energy for growth and poverty reduction in Africa – the impact of high oil prices, electricity access, and regional integration.
World Bank President Paul Wolfowitz will deliver the opening keynote address. The opening session will also be addressed by Agnes Van Ardenne, Minister for Development Cooperation of Netherlands, and Syda Bbumba, Minister of Energy from Uganda and Chair of the Forum of Energy Ministers of Africa. Other notable participants include Chakib Khelil, Algerian Minister of Energy and Mines; Claude Mandil, Executive Director of the International Energy Agency; Neil Stansbury, Leader of the Infrastructure Initiative at Transparency International; and Chris Mottershead, Senior Advisor on Climate Change, BP. Relevant Theme Jamal Saghir, Director of Energy and Water at the World Bank, said the theme of Clean Energy for Sustainable Development is particularly apt this year given the increasing attention being paid to climate change. “As economies develop and they require more energy for their continued economic growth, especially in middle income countries such as China, India, Mexico, and Brazil, the question becomes: as you grow, how can you move to a cleaner environment built on cleaner energy and newer technology?” Saghir said. Energy Week at the World Bank can be thought of as a giant brain-storming or think-tank session. Participants will hear debates about current issues in energy, but also take part in workshops and discussions designed to promote new ideas. “The objective is to pick up ideas that will be food for thought” for the upcoming 14th Session of the Commission on Sustainable Development (CSD-14), to be held at the United Nations in New York in May,” Saghir said “In the next two years, in my view, energy will be taking up more and more of the development agenda. We haven’t seen this for years and we are very happy to see that it is once again on the front page of the development agenda.” Promoting Clean Energy Development Renewable energy and energy efficiency is at the core of Bank support in this area. The Bank Group made a commitment at the Bonn Conference in 2004 to increase financing for new renewable energy and energy efficiency by 20 percent annually, over next five years The Bank Group’s financial support for renewable energy totaled US$748 million in the financial year ending 2005, (26 percent of energy sector commitments), compared to US$339 million in the previous financial year. Nevertheless the Bank believes much remains to be done, both in terms of moving toward more, and cleaner energy, but also in terms of providing energy access to the poorest in the world. Currently 1.6 billion people around the world lack network electricity in their homes and 2.6 billion people rely on traditional biomass fuels. Four out of five people without electricity live in rural areas of the developing world, mainly in South Asia and sub-Saharan Africa. In 2004, the richest 20 percent of the world’s population consumed 58 percent of total energy, while the poorest 20 percent consumed less than four percent. The World Bank strongly believes that modern energy services to the poor are essential for achieving targets set out in the Millennium Development Goals – the international set of targets on poverty reduction to education and health to be reached by the year 2015. For example, 1.6 million women and children die prematurely from indoor air pollution caused by burning solid fuels in poorly ventilated spaces. Some 40 new million new cases of chronic bronchitis are caused by exposure to soot and smoke every year. Impact of High Oil Prices on Poor Countries Rising energy prices, in particular the increase in the oil bill, has been severe for some countries, especially those which combine high energy intensities with a heavy reliance on imported oil as the main source of energy. For these countries, even the relatively modest hike in oil prices between 2003 and 2004 has implied increases in their oil bills of between 1.5 and 5 percent of GDP. Poor people in developing countries spend up to a quarter of their cash income on energy and price rise increases hit them hardest. For example, a study by the Bank in Yemen showed raising petroleum prices to border prices in Yemen in 2004 would have increased household expenditure of the poor by 14.4 percent compared to the only 7.1 percent for the well-off. The Bank provides lending support to oil-importing countries through development policy lending, including supplemental financing. The Bank’s development policy lending supports policies aimed at helping vulnerable countries cope with rising oil prices, for example, adjusting domestic price policies, targeting pro-poor cash transfers, and diversifying out of oil.
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