Focus on Bridging Biggest Access Gaps First, Bank Officials Urge at Energy Conference
Minister’s Panel emphasized need for scaled-up private capital to achieve goals of Sustainable Energy for All initiative
February 2, 2012
Efforts to achieve universal access to energy by 2030 need to focus on countries and regions such as sub-Saharan Africa where the access gap is biggest, senior World Bank officials told a global conference on sustainable energy in January.
We need a change that increases energy production, transmission and distribution, and the deployment of off-grid technologies, not on the order of 10 or 20 gigawatts, but hundreds of gigawatts. || Vijay Iyer, Director, Sustainable Energy Department, The World Bank
“In low-income countries, expanding access has to be our priority,” S. Vijay Iyer, Director of the World Bank’s Sustainable Energy Department, told a panel at the World Energy Future Summit in Abu Dhabi on January 17. “We need private financing on a scale not yet seen. We need a change that increases energy production, transmission and distribution, and the deployment of off-grid technologies, not on the order of 10 or 20 gigawatts, but hundreds of gigawatts.”
Iyer and Andrew Steer, the Bank’s Special Envoy for Climate Change, both addressed the meeting, which was attended by over 3,000 delegates from 148 countries. The Summit was opened by Chinese Premier Wen Jinbao, Republic of Korea Prime Minister Kim Hwang-sik, and UN Secretary General Ban Ki-moon.
It highlighted the Sustainable Energy for All (SEFA) initiative launched by the UN Secretary General last September. SEFA calls for a global collaboration among governments, civil society and the private sector to deliver on three overall goals by 2030: universal access to electricity and clean cooking fuels, doubling the share of the world’s energy supplied by renewable sources, and doubling the rate of gain in energy efficiency.
Country-led action needed
Sustainable Energy for All (SEFA) is gaining momentum as a major convening platform for governments, the private sector and international institutions. || Andrew Steer, Special Envoy for Climate Change, The World Bank
“SEFA is gaining momentum as a major convening platform for governments, the private sector and international institutions,” said Andrew Steer, who is also a member of the Secretary General’s High-Level Group on SEFA.
To make progress quickly, Steer and Iyer urged that SEFA efforts focus on country-led action, starting in those nations whose governments have already shown strong commitment to achieving the sustainable energy goals through sound policy incentives, planning and institution-building.
“Let’s not start from scratch,” Iyer said. “Instead, let’s build on what is working, and learn from countries that are making gains, but which still face a large access gap.” He cited Ghana—which has tripled electricity coverage from 25% since 1990—as an example of progress that can be achieved with sustained country-led efforts.
Specifically, the Bank officials urged building on local programs for electrification, clean cooking and lighting, starting with about a dozen “Accelerator Countries” that would commit to starting, scaling up and accelerating new and existing programs on access.
Mobilize private capital
Delegate participating during the interactive session of the World Future, Energy Summit held at Abu DhabiTo make the leap to universal access to modern energy services by 2030, a Ministers’ panel at the Abu Dhabi conference emphasized the need for scaled-up private sector financing to achieve the three SEFA goals. Altogether, new capital investment of about $40 billion will be needed every year. This is in addition to worldwide annual investments of about $450 billion just to sustain energy services at current levels.
Some of this must come from increased public and concessional funding—especially for the poorest countries—but most of the energy transition will have to be funded by capital markets.
To attract this financing, the World Bank is ready to support governments in creating the right policies and investment climate, Iyer said. These include effective public finance mechanisms such as power purchase agreements, feed-in tariffs and other risk mitigating instruments.