Developing countries require substantial investments in their power sectors to sustain economic growth and reduce poverty. Investment is needed to rehabilitate and construct new generation capacity, expand transmission, including interconnections between countries, and to expand electricity distribution networks in new urban areas and into rural areas where feasible.
It is estimated that developing countries need an annual investment for electricity supply alone of US$165 billion through 2010, increasing at about three percent per year through 2030. Closing the electricity sector financing gap is primarily an issue of getting sector policy frameworks right.
Through its investment projects and its technical advisory activities, the Bank is supporting governments as they:
- improve corporate governance and commercialization of state-owned energy companies;
- establish competition in energy markets through market-opening and gradual liberalization;
- strengthen utility management and operations to underpin efficiency, quality of service, and financial sustainability;
- increase private sector participation in the energy sector;
- strengthen and expand the electricity networks to maximize the benefits of electricity trading; and
- support generation, transmission, and distribution projects through its full range of financial instruments (loans, guarantees, equity investment, etc.)