The Bank Group is preparing an updated energy sector strategy. It is needed, as the current framework dates back to 2001. Based on an Approach Paper, the new strategy will also draw on consultations with over 2,100 participants from government, civil society, the private sector, and academia, among others, in 56 face-to-face meetings held around the world, as well as over 170 written submissions. A summary of the input has been posted on our website. The draft strategy is current being examined by a committee of the Board of Executive Directors of the World Bank. As a result, the planned posting in late April of the strategy document on the Bank's website has been postponed.
What is the energy challenge in developing countries?
Over 1.4 billion people are still without access to electricity worldwide, almost all of whom live in developing countries. This includes about 550 million in Africa, and over 400 million in India. Access to electricity must be environmentally and socially sustainable.
About 3 billion people use solid fuels—wood, charcoal, coal and dung—for cooking and heating. Every year fumes and smoke from open cooking fires kill approximately 1.6 million people mostly women and children, from emphysema and other respiratory diseases.
How much would it cost to give everyone access to electricity?
To deliver universal access by 2030, new capital investment of about $35-40 billion a year is needed. This is in addition to worldwide annual investments of about $450 billion just to sustain energy services at current levels.
How much is the Bank financing for energy?
During fiscal year 2010, the World Bank Group provided loans for a total of $13 billion in the energy sector, the highest-ever annual amount.
World Bank Group Energy Financing for FY10 | Figures in $US Millions
How much of this is low-carbon energy and how much in fossil fuels?
The Bank Group’s lending for low-carbon energy projects and programs reached 42 percent of all energy financing in fiscal year 2010. This record amount represented a 62 percent increase over 2009 to more than $5.5 billion, an all-time high.
Lending for fossil fuels the same year was $5.2 billion, of which $3.75 billion was for one coal power plant project in South Africa. This was unusually high; in fiscal 2009, fossil-fuel projects accounted for $2 billion, a level more consistent with previous years.
Since 2003, the Bank Group has invested about $17 billion in low-carbon projects, of which $14.2 billion have been in renewable energy and energy efficiency. Excluding large hydropower, new renewable energy investments alone contributed $4.9 billion. Financing of renewable energy and energy efficiency projects and programs in developing countries rose to a record $3.6 billion in fiscal 2010.
World Bank Group Financing for Energy Efficiency & Renewable Energy | Figures in $US Millions
What is the Bank Group’s position on financing for coal?
About 72% of South Africa’s and 70% of India’s electricity comes from coal-fired power stations, as does 49% of the electricity generated in the US. But the world knows that burning coal, as well as other fossil fuels, produces about 70% of the planet’s greenhouse gas emissions. Here is the challenge: given these numbers, experts agree that the world cannot, at present, provide affordable access to electricity to 1.4 billion people without relying to some extent on coal. But investing in coal alone for electricity—when considered in light of population growth projections—would push human-caused climate change deeply into a catastrophic zone. That’s why we have strict criteria for financing of coal projects, limiting our financing to cases in which a country has no other options to respond to urgent demands for electricity, and providing several other conditions have been met and the process reviewed by an external advisory committee.
What happens when people don’t have electricity?
The number of people without access to energy in sub-Saharan Africa is projected to rise to 90 to 100 million in 2030. Without access to energy service, the poor will be deprived of the most basic of human rights and of economic opportunities to improve their standard of living. People cannot access modern hospital services without electricity, or feel relief from sweltering heat. Food cannot be refrigerated and businesses cannot function. Children cannot go to school in rainforests where lighting is required during the day. The list of deprivation goes on.
Are Bank energy projects reaching the poor?
Since 2003, the Bank has enabled countries to generate or make more reliable almost 55GW of energy.
A review of IBRD and IDA projects shows that 24 million people from low income countries have been connected to energy for the first time.
Since 2003, for the poorest countries —many of them in Africa — the Bank has helped build, and assure reliable delivery of almost 55 gigawatts (GW) of electricity. These include low-income households and higher-income households.
A review of World Bank (IBRD and IDA) energy projects shows that they have connected 24 million people in low-income developing countries to energy for the first time by building 27,000 miles of transmission and distribution networks.
Millions worldwide have benefited from Bank Group energy financing. Women can earn an income by keeping a corner store or village eatery open at night. Mothers in childbirth after dusk and their newborns have a better chance at survival. Medicines and perishable food can be kept cool in a refrigerator. Children can read and study at night. Factories that otherwise would be closed, can stay open, providing jobs and a path out of poverty.