World Bank – Roger Morier +1-202-473-5675
IFC – Lucie Giraud +1-202-458-4662
MIGA – Mallory Saleson +1-202-473-0844
WASHINGTON, October 2, 2008 – The World Bank Group today announced an 87 per cent increase in funding for renewable energy (RE) and energy efficiency (EE) projects and programs in developing countries in the past fiscal year. Total RE and EE commitments for the year ended June 30, 2008 reached nearly US$2.7 billion.
The commitments by the World Bank Group, including Carbon Finance operations and co-financing support from the Global Environment Facility (GEF), were made up of the following:
- US$1.192 billion for Energy Efficiency;
- US$476 million for New-Renewable Energy including wind, solar, biomass, geothermal, and hydropower projects that will produce up to 10 MW per facility; and
- US$1.007 billion for hydropower projects with capacities of more than 10MW per facility.
The renewable energy and energy efficient investments made up 35 percent of total Bank Group energy commitments for the year (up from 13 percent per year on average in the early 1990’s) with 95 projects in 51 countries, as well as two cross-border projects.
“Concerns about energy security, climate change, and increasing energy prices make many renewable energy and energy efficiency measures and applications very attractive in a number of different settings ” said Jamal Saghir, World Bank Director for Energy, Transport, and Water. “This is reflected in the increased demand for investment and also for technical assistance to strengthen regulatory frameworks providing incentives to climate change-friendly applications.”
In 2004, at the International Renewable Energies Conference in Bonn, Germany, the Bank Group committed to increase its financial support for new renewable energy and energy efficiency projects by 20 percent per year. From then until the end of FY 2008, the WBG more than exceeded that goal each year, committing close to US$3.7 billion to such projects, compared with the agreed commitment goal of US$1.3 billion.
IFC (International Finance Corporation) also raised its private sector investments in alternative source of energy significantly. “The private sector plays a critical role in addressing the challenges of global warming since more than 80 percent of all current investments related to climate change come from non-government owned companies and investors,” said Rashad Kaldany, IFC’s Vice President for Infrastructure. “IFC doubled its investments in renewable energy and energy efficiency last year as we are committed to helping developing countries tap into sustainable sources of much needed energy.”
MIGA, the Bank Group's political risk insurance arm, is also working to help countries move onto a lower carbon path. "MIGA is committed to helping investors and developing countries reduce the harmful practices associated with global warming by supporting investments into projects that exploit renewable energy resources, support energy conservation, and increase efficiency," said Acting Executive Vice President of MIGA, James Bond. "This year, for example, we provided $88 million in political risk coverage for a geothermal power project in Kenya, which will help alleviate the country's severe power shortages while offsetting greenhouse gas emissions."
World Bank Group Commitments for Renewable Energy and Energy Efficiency in FY 2008
Source of funds
Commitments in FY08 (millions of US dollars)
New Renewable Energy
Hydro > 10MW
- Carbon Finance
- Own Funds
- Carbon Finance
Note: Some columns may not add up exactly due to rounding
High energy prices and acute power shortages have led to an increased demand for energy efficiency projects. Projects that comprehensively increase energy efficiency on both the supply and demand sides, for example through improved capacitors, automated meter reading systems and efficient lighting measures, are being implemented in a number of countries, including China, Pakistan, Argentina, Ukraine, Burundi and Zambia.
As examples of the innovative projects being supported by the Bank Group, the Kureimat solar-thermal hybrid project in Egypt will demonstrate the operational viability of hybrid solar-thermal power generation technology and contribute to the replication of integrated solar combined cycle power generation technology in Egypt and elsewhere. In Bangladesh, the World Bank approved carbon emissions reduction agreements with Grameen Shakti, a renewable energy company, and IDCOL Ltd., an infrastructure financing organization, to purchase carbon emissions reductions from over 1 million solar home systems that will displace kerosene lighting.
The growth in IFC's clean energy portfolio in FY08 was indicative of a shift from small, donor-supported, niche-market investments to an increasingly diversified and global market for clean energy across all sectors. In FY08, IFC's Financial Markets Group had nine clean energy financing investments in five countries, including some of the largest and most rapidly growing emitters of greenhouse gases -- Brazil, China, Russia, Turkey and Ukraine. These projects will provide commercial lenders with more than $280 million for dedicated credit lines for clean energy activities, an approach originally developed with donor funds more than a decade ago. These projects help address the diverse, profitable, but smaller scale investment opportunities otherwise difficult to capture.
Share of Renewable Energy and Energy Efficiency (as percent of total WBG energy lending)
The World Bank Group’s Bonn Commitment
At the Bonn International Conference on Renewable Energies in 2004, the World Bank Group made a commitment to accelerate its support for new renewable energy and energy efficiency. The WBG committed to increase its financial commitments for new renewable energy and energy efficiency at a growth rate of 20 percent per annum between fiscal years 2005 and 2009, compared to a baseline commitment of US$209 million (equal to the average of the previous three years). This baseline methodology was selected to allow a meaningful interpretation of investment trends that would balance the “lumpy” nature of investments in the energy sector.
New Renewable Energy
Project components that promoted the following technologies were classified as new renewable energy: solar energy for heat and power, wind energy for mechanical and electrical power generation, geothermal and biomass energy for power generation and heat, and hydropower of 10 MW or less per installation.
Energy efficiency comprises supply side and end-use thermal and electricity efficiency improvement activities. Examples include efficiency improvements in industry, transport, buildings, and appliances; power generation rehabilitation, loss reduction in transmission and distribution, and improvements in the efficiency of heating systems. Hydropower rehabilitation projects are classified as energy efficiency when energy output is increased as a result of the investment with no increase in rated capacity of the installation.
Hydropower Greater Than 10 MW
The World Bank considers hydropower, regardless of scale, to be renewable energy. For reporting purposes, hydropower projects in which the installed capacity at a single facility exceeds 10 MW are reported separately. Run-of-river hydropower, and hydropower projects with dams are included here if the capacity exceeds 10 MW.
For more information about the World Bank Group’s commitment
to renewable energy and energy efficiency, please visit:
For information on World Bank Group projects, please visit
http://www.worldbank.org/projects, http://www.ifc.org, and http://www.miga.org