Annual Report 2000-2001 25700 .6 - SS ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ 'av, S -.I. , | I ! -3 ZM_~~~~~~~~~~~~~~~~~~~~~~~~l ;.)F CONTENTS _ TABLE OF CONTENTS __ ~iZEnergy Sector Management Assistance Programme TABLE OF CONTENTS List of Abbreviations and Acronyms Mission Statement i Donors and Members of the Consultative Group, Technical Advisory Group and ESMAP Team in 2000-2001 ii ESMAP in the World Iv O Making Energy Work for the Poor 3 0 Products and Services 8 O Portfolio at a Glance 2000-2001 10 0 Operational Review 14 O Portfolio Highlights 20 EnergyAccess in a Changing Rural Landscape 21 Delivenng EnvironmentallySustainable Energy 27 Developing Sustainable Energy Markets 37 O Impact of ESMAP Activities and Knowledge Dissemination 46 0 The Governance and Management 54 The Consultative Group 55 The Technical Advisory Group (TAG) 56 ESMAP Management, Staffing and Procedures 56 Improvements in ESMAP Systems and Business Processes 57 O Financial Review 60 Contributions Received 61 New Donors 61 Core and Thematic Funding 61 Project Funding 64 Expenditures 64 Funding New Projects and Cash Balance 64 Annex 1 66 Summary Proceedings of the April 18, 2000Joint Donors' Meeting for Trust Funded Energy Programs Managed by The World Bank Annex 2 73 Summary Proceedings of the May 7-8, 2001 Joint Donors' Roundtable meeting for Trust Funded Energy Programs Managed by The World Bank Annex 3 79 Summary Proceedings of the November 8-9, 2001 Intenm Consultative Group Meeting, Lisbon, Portugol Annex 4 87 Activities Completed, Launched and On-going in 2000-2001 Annex 5 95 Reports Published in 2000-2001 Annuol Report Z04t I Boxes Box 5.1 Access: The Char Montoz Experience - A Woman's Energy Service Enterpnse 22 Box 5.2 Village Power. Empowenng People and Transforming Markets 25 Box 5.3 Nicaragua. Workshop on Private Sector-led Mechanisms for Rural Energy Service Delivery 26 Box 5.4 Report of the Energy Environment Reviews Workshop 31 Box 5.5 India: Household Energy, Air Pollution and Health 32 Box 5.6 Pollution Prevention Training Clinics for Dhaka's Baby Taxi Mechanics 35 Box 5.7 Building Consensus Among Stakeholders for Reform 38 Box 5.8 Revision of Vietnam's Petroleum Low 44 Figures Figure 1.1 The Energy Poor By Night 3 Figure 4.1 Activity Count at Year-end 1999-2001 15 Figure 4.2 Total Year-end Values of Portfolio 1999-2001 15 Figure 4.3 Average Project Size 15 Figure 4.4 Regional Distribution of Portfolio 1998-2001 by Number of Projects 16 Figure 4.5 Thematic Distribution of Portfolio 1998-2001 by Number of Projects 16 Figure 4.6 Regional Distribution of Portfolio 1998-2001 by Value 17 Figure 4.7 Thematic Distribution of Portfolio 1998-2001 by Value 17 Figure 5.1 Global Pattern of the Disease Burden due to Air Pollution 30 Figure 6.1 ESMAP From new ideas to impacts 47 Figure 6.2 ESMAP: From new ideas to outputs 47 Figure 8.1 Graph of ESMAP's Receipts in 1999-2001 63 Tables Table 4.1 Activity Count During Calendar Yeor2000 18 Table 4.2 Activity Count During Calendar Year 2001 18 Table 5.1 Peru: Componson of Approaches to Micro-hydro in Remote Areas 23 Table 8.1 ESMAPReceipts 7999-2001 62 Table 8.2 ESMAP Donor Contributions (Core/Thematc) 1999-2001 63 Table 8.3 Receipts by Type of Funding in 2001 64 Table 8.4 ESMAP Expenses 1999-2001 64 Photo Credits Pages 2, 6, 7,14,18, 29, 30, 46, 54, 60, 61, 65, and 66 Dominique Lollement, The World Bank Group Page 3 Imoge by Craig Mayhew and Robert Simmon, NASA GSFC. Based on data from the Defense Meteorological Satellite Program Page 9 Paula-Mae Lewis, World LP Gas Association Page 19 and 52 Kazim Soeed, The World Bank Group Page 33 Winfried Rijssenbeek, The World Bank Group Page 34 Jitendra Shah and Mosami Kojima, The World Bonk Group Page 36 Richard Spencer, The World Bank Group Energy Sector Management Assistance Programme l gOi U afl IL aTR%% W0gl@r S@Wm?r o o ESMAP 2000-2001 Highlights 115 on-going projects in more than 37 countries 14 projects completed, 47 projects launched, 33 reports published Donors contributed $13.2 million to the progrom Introduction of the Technical PaperSeries with more than twenty published papers Launching of Four Call for Proposals Creation of a dedicated web section for Donors' access A New Energy Development Report for 2001: Energy and the Environment A New paper: Economic Development, Climate Change and Energy Security A New Business Plan for the period 2002-2004 Annual Report I C 4' i u"ISBIREVIATDONS, AND ACRON[YMS LIST OF ABBREVIATIONS AND ACRONYMS Energy Sector Management Assistance Programme AAA Analytical & Advisory Services ACR Activity Completion Report AFRREI Africa Rural and Renewable Energy Initiative AFR Sub-Saharan Africa Region AP Andhra Pradesh (India) ARPEL Asistencia Reciproca Petrolera Empresarial Latinoamericana ASTAE Asia Alternative Energy Program BBL Brown-Bag Lunch seminar BOT Build-Operate-Transfer CAS Country Assistance Strategy CDD Community Driven Development CDM Clean Development Mechanism CEE Central and Eastern Europe CG Consultative Group, CHP Combined Heat and Power CIDA Canadian International Development Agency CNG Compressed Natural Gas COP-6 Sixth Session of the UNFCCC Conference of the Parties COP-7 Seventh Session of the UNFCCC Conference of the Parties CSD9 Commission on Sustainable Development, Ninth Session CY Calendar Year DFI Development Finance Institution DFID Department for International'Development, UK DH District Heating DRIF Demand-Driven Rural Investment Fund DSM Demand Side Management E7 Organization of nine leading electric utilities from G7 countries EAP East Asia and Pacific Region ECA Europe and Central Asia Region EDR Energy Development Report EER Energy and Environment Review ESCO Energy Supply Company ESMAP Energy Sector Management Assistance Programme ESOP Employee Share Ownership Plan EU European Union FSU Former Soviet Union GDP Growth Domestic Product GEF Global Environment Facility GENES Gender & Energy Network GHG Greenhouse Gases IAP Indoor Air Pollution ICT Information and Communication Technologies IEPF Institut de l'Energie et de l'Environnement de la Francophonie IFC International Finance Corporation IMF International Monetary Fund IPCC Inter-governmental Panel on Climate Change IPP Independent Power Producer IRD Integrated Rural Development JIl Joint Implementation A An nual Repori SW ________ kW Kilowatt kWh Kilowatt per hour LCR Latin America and Caribbean Region Logframe Logical Framework LPG Liquefied Petroleum Gas LSMS Living Standards Measurement Survey LULUCF Land Use, Land-Used Change, and Forestry M&E Monitoring & Evaluation M&T Monitoring and Targeting MDGs Millennium Development Goals MIS Management Information System MNA Middle East and North Africa Region NGOs Non-Governmental Organizations NREL National Renewable Energy Laboratory (United States of America) OECD Organization for Economic Co-operation and Development OED Operations Evaluation Department, The World Bank PCF Prototype Carbon Fund PCD Project Concept Document PDS Project Data Sheet PPI Private Participation in Infrastructure PPIAF Public-Private Infrastructure Advisory Facility PRGF Poverty Reduction and Growth Facility PRSP Poverty Reduction Strategy Paper PV Photovoltaic PVMTI Photo-Voltaic Market Transformation Initiative Rul Rural Infrastructure Initiative RPTES Regional Program for the Traditional Energy Sector SAP Systems Application Products SAPP Southern Africa Power Pool SAR South Asia Region SIF Social Investment Fund SMEs Small and Medium Enterprises TA Technical Assistance TAG Technical Advisory Group of ESMAP TF Trust Fund TM Task Manager UN United Nations UNDP United Nations Development Programme URE Energy Regulatory Authority (Poland) US United States of America USAID United States Agency for International Development VPP Village Power Partnership WBG World Bank Group WCD World Commission on Dams WHO World Health Organization WSSD World Summit on Sustainable Development Energy Sector Management Assistonce Programme ESMAP promotes the role of energy in poverty reduction and economic growth -' in an environmentally responsible manner. Its work applies to low-income, emerging, and transition economies and contributes to the achievement of internationally agreed development goals o~~~~.~ I- ESMAP strives to expand the ( global knowledge base for addiressing energy issues Annual Report A,1~Aptq1 Zf~ - ~~~~~~~~~~~~~ / _ I1SSON STATEMENT MISSION STATEMENT Energy Sector Management Assistance Programme DD _ Dv LAL The Energy Sector Management Assistance Programme ESMAP is a global, technical assistance programme sponsored by a group ofdon6rs, The World Bank, and the United Nations Development Programmet (UNDP) and managed by The World Bank. ESMAP provides policy akdvice and other technical assistance to help'governments, public institutions and private businesses. Itfocuses on three strategic areas- the development of energy markets, the promotion of environnirentally sustainable energy production and uses,. and the increased access to reliable, efficient and affordable energy services by un-served or under-served populations. ESMAP. concentrates on energy, related issues not yet mainstreamedK4inI the op,erations of bila'eral or multilateral developmentjhinstitutiqns, and of the private sector. ESMAP 's a global knowledge 'partnership that-pi.JolvesHoca1 and interi2ationaI }~~~~n Jdcl dnd i te>rnaof na public institutions,; NG-6,s,,a'nd b,usinqsses iJ the formulation ar -implementation of 'khowIc4gFe activities. Through studies, pilot projects and. training, ESMAP strives .to expand the global, knowledge base for addressing; energy issues to the benefit of developing;and transition economies. Annual Report 2n.)Jt 2YoDX I DONORS AND MEMBERS OF THE CONSULTATIVE GROUP, TECHNICAL ADVISORY GROUP AND ESMAP TEAM IN 2000-2001 Energy Sector Management Assistance Programme CONSULTATIVE GROUP CHAIR OF THE CONSULTATIVE GROUP BELGIUM Richard D. Stern' General Administration for Development Nemat Talat Shafik2 Cooperation Jamal Saghir3 CANADA MEMBERS AT LARGE OF THE Canadian International Development Agency CONSULTATIVE GROUP Rufino Bomasang, Philippines DENMARK Ketane Sithole, Botswana Ministry of Foreign Affairs Duke Energy International, L.I.c. TECHNICAL ADVISORY GROUP Alfredo Mirkin FINLAND Andrew Barnett Ministry of Foreign Affairs Jan Moen Youba Sokona FRANCE Ministry of Foreign Affairs ESMAP MANAGEMENT AND ADMINISTRATIVE TEAM GERMANY Dominique Lallement, ESMAP Manager Bundesministerium fur Wirtschaftliche Jacqueline Ajala Zusammenarbeit und Entwicklung Henri Bretaudeau4 Maureen Cuffley ITALY Charles Feinstein4 Ministry of Foreign Affairs Joanne Fleming Nyra Guice THE NETHERLANDS Marjorie Puentes4 Ministry of Foreign Affairs, Climate, Energy and Josefina Regino-Suarez Environment Technology Division (DML/KM) Kazim Saeed NORWAY REPRESENTATIVES FROM Royal Ministry of Foreign Affairs CO-SPONSORING ORGANIZATIONS Thomas B. Johansson (UNDP) 5 SWEDEN Suresh Hurry (UNDP) 6 Swedish International Development Cooperation Susan McDade (UNDP)5 Agency Minorou Takada (UNDP)l Frannie Leautier (The World Bank Group)7 SWITZERLAND Jamal Saghir (The World Bank Group)' State Secretariat for Economic Affairs , Mr Stern retired as Chair of the CG on April 18. 2000 UNITED KINGDOM ~~~~~~~~~~~~~~~~~~~Mt Shafik succeeded Mr Stern as Chair of the Consultative Group on April 18, 2000 U N ITED K INGDO M Ms Sha fik delegated respons ibility for chairing the Consultative Group meetings to Mr Jmal Department for International Development Saghir, Chair, Energy and Mlning Sector Board, The Word Bank Group 4 Henri Bretaudeau retired In October of 2001, Charles Feinstein joined In January of2000, and Marjorie Puentes joined in July of 2000 Mr Johansson was replaced by Ms McDade as UNDP Representative to ESMAP Mr Hurry retired on December 20, 2000, and Mr Takada was appointed as acting liaison UNITED NATIONS DEVELOPMENT PROGRAM ME offiecer to ESMA'P (co-sponsor) Ms Leautier was replaced by Mr Saghir as Director of the Energy and Water Department THE WORLD BANK GROUP (co-sponsor) Annuod Repoi T,,txy) <1tCl I 2000 -2001 ES MAP IN THE WVO RLD O ESMAP Donor * Ongoing Project Ai New Project I * Completed Project ,,-~~~~~~~~~9 e-X w~~~0 0 AA,,-,,0 0 0 0 A 00*0* 00 00 0M O A&AOOO 0 . , 0 A 0000 &0&. 90: 00 ~ ~~~~~~ 0 Africa East Asia & Pacific Europe & Central Asia LtnAmericdg& The Caribb f,e W Ak@@@@@ l,Ais *oo** 1k Aoo* o o o o AsAsi2i*A00000 Middle East & North Africa North America 1,South Asia Global >i * AkA* o o o, 0 oo0,A * 0 El El= 0000_ MAKING ENERGY WORK FOR THE POOR Energy Sector Management Assistance Programme THE UNKAGES BElTVEEN\D \MENER¢(S of the richest groups have access to electricity, AN!D PO)VERTY AND E6CONOMWC against 270/o for the poorest. In Cote d'lvoire, ¢iil(BROWTH9 these figures are 710/o and 110/% respectively. There are also major disparities between urban Who are the energy poor? The map of the world and rural areas, with the rural areas far less well at night (see Figure 1.1) is now well known, but served than the urban areas. In Vietnam, only seeing it again is always a forceful reminder of 380/o of the rural population is served, 880/% of the disparities and inequities between those who the urban population. In Ghana, these figures have access to electricity for their minimum are 40/o and 620/o respectively. Finally, we should needs and those who do not. We must note note the significant disparities between the large that there is only a limited correlation between enterprises which have either access to the grid the countries' natural endowments for pri- or the capacity to have their independent or mary energy resources and the development of back-up generation, while SMEs are rarely able energy services to the poor. In some resource rich to do so. countries like Nigeria, rural access to electricity is only 40/o. Furthermore, we know that sustainable energy is indispensable for economic growth and hu- There are vast differences in access between man development. Lack of access to sustainable income groups. For example, in Vietnam, 760/o modern energy services limits the benefits from Figure 1.1 THlE ENERGY POOR BY NIGHT M_ _ j IL~~~~_ Annual Report 3 other services such as education and health, invest in the development of sustainable mod- and prevents the development of more produc- ern energy services, many countries and many tive activities. Lack of efficient lighting limits people will continue to be left behind. Gradually, students' study time; lack of electricity in schools it is becoming clearer that these strong linkages prevents access to additional education materials between energy and poverty reduction and eco- for teachers and students. Lack of reliable power nomic growth have to define the role of energy is a major deterrent to productivity increases, be in the achievement of the Millennium Develop- it at the household level or for small and medi- ment Goals. um-size enterprises, or be it to permit new larger scale investments. The Changing Environment for Fostering Sustainable Energy Solutions The link between energy and poverty is equally important regarding other sources of energy. Against this background, some key changes About half of the world's population still relies are taking place in the global energy and on biomass fuels for basic cooking and heat- development sector from which sustainable en- ing needs. However, few people use these fuels ergy solutions are emerging. efficiently and safely. Indoor air pollution is one of the leading causes of high morbidity and pre- A few years ago, the analysis of the structure of mature deaths in developing countries. Indoor energy demand was done largely by looking at air pollution is the cause of 2 million excess the consumption sector: households, industry, deaths per year, and represents 5% of the global agriculture, and services. Today, we are taking a burden of disease, more than tuberculosis, AIDS, comprehensive approach, between basic house- and malaria (WHO). Air-borne pollution from hold needs (such as lighting) to community and fossil fuels also has tremendous health effects on social needs (such as for health, education, and the poor, either in terms of respiratory diseases, transport) to productive needs for households, or premature mortality, or decreased IQ in chil- SMEs, or industry. The advantage of this new dren from lead ingestion. The cost to families, comprehensive approach is: households, and society of these high burden of * First, to look at a wider range of technical death and illness is enormous. In one ESMAP options to meet the demand, and study in Bangladesh, three-wheeler taxi drivers * Second, to be able to explore a wider range of understood for the first time that pollution was institutional and financial options to deliver causing them to miss up to one-third of their the services. work time a month-this for people who already live at minimal income levels. These options, for example, range from sustain- able biomass utilization to thermal generation Looking ahead, we have to be aware that the for grid or off-grid extensions, to mini-grids and growth in energy demand over the next 20 years hybrid systems, including a range of renewable will come mostly from developing countries, and energy options. that at the current rate of electricity connec- tions (as a proxy for modem energy), another Additional opportunities come from the remark- 450 million energy poor will be added. We also able reduction in the cost of certain technolo- have to be aware that while today's energy poor gies, in particular renewables, micropower, and are largely in the rural areas, by year 2020, 70% in the wider range of products offered, such as of the world population will be living in urban liquid fuels. areas, and 60% will be below poverty, and that many of those will be energy-poor. Therefore, We are also seeing major changes in the institu- unless a major international effort is made to tional landscape, with an increasing trend from 4 Energy Sector Management Assistance Programme monolithic public service provider to decentral- sions have failed to deliver sustainable energy ized customer-oriented service businesses. As services to the poor, decentralized systems a result, new business models are emerging. work but are not easy to set up. Possibilities for developing local manufactur- ing of energy products and local energy service Continued effort is needed to improve the policy providers are increasing. These in turn become and regulatory frameworks. New efforts are nec- significant employment and income-generat- essary to engage the poor as key partners and to ing activities in the demand markets, and help work in tandem with other sectors such as health secure the financial basis for further energy and education. Solving the problem of indoor air service development. New systems of conces- pollution is as much an issue of liquid fuel pric- sions and partnerships between the public and ing policy to enable fuel substitution as it is an the private sector are expanding. Today's clients issue of market adaptation of improved stoves. of the energy industry include a wide range of actors from individuals and local communities ESMAP and Energy Poverty to central government, and which must work in partnership with public policy makers and During the 2000-2001 period, ESMAP began to institutions and private service providers. respond to the trends in the global energy and development arena. The expansion of energy New financing options are emerging. The old access and reduction of energy poverty were debate on 'subsidies' is progressing, with an supported by developing new institutional and increased recognition that there is an economic financing models for rural service delivery, justification for certain types of subsidies, either fostering a more holistic approach to rural elec- from a welfare perspective, or to assist with trification focusing on its role in rural devel- transition situations, as in the economies of opment, quantifying the links between energy Eastern Europe and Central Asia. A key issue re- service delivery and development outcomes, and mains how to target subsidies to the poorest. For developing participatory processes as vehicles example, when subsidies are granted to a conces- for developing and propagating sector strate- sionaire for rural electrification, are we subsidiz- gies that can be implemented by a multiplicity ing the poor rural consumer or the manufacturer of stakeholders. During this period, the energy in the industrialized country? market development agenda has moved beyond the tools and mechanisms for sector reforms and With these emerging trends, three basic observa- towards ensuring the sustainability of reform tions are important: through greater consensus-building for reform * First, the poor are willing to pay for energy, and mitigating the social impact of reform. in particular in the less-served countries. The Stronger linkages were forged between the local poor spend up to one third of their dispos- and global issues concerning the environment, able cash income, i.e. US$10, for poor quality including indoor and outdoor air pollution as lighting mostly, when they earn US$1/day, well as the reduction of greenhouse gas emis- US$30/month. Some purchase lighting at the sions and climate change impacts. equivalent of US$35-45/kwh; * Second, the poor are part of the solution: Even ESMAP Business Plan 2002-2004 when the poor have low levels of education, they can quickly acquire manufacturing, tech- With the approach of the World Summit on Sus- nical, and management skills, and themselves tainable Development (WSSD) in Johannesburg, become energy service providers; and South Africa, in the fall of 2002, in which energy . Thirdly, we need to be realistic: We have a very will figure prominently, the ESMAP Business complex agenda. If traditional network exten- Plan 2002-2004 has been developed and has Annual Report 2X!Jj - I 5 gained the endorsement of ESMAP's donors. This New business lines which will form the core of Business Plan identifies the business lines which ESMAP's work are: constitute the framework for ESMAP activities. . Global Village Energy Partnership; The Plan will also define ESMAP's priorities . energy-poverty linkages; in the initial years of implementation of the . impact of reform on the poor; Summit's outcomes. * indoor air pollution; . methodologies for monitoring and evaluation The business lines which are already active and of multi-sector programming, and will continue to receive ESMAP support are: * knowledge transaction and dissemination. * service delivery mechanisms for rural energy access; Business lines which will be gradually developed . gender and energy; in the ESMAP portfolio are: . strengthening reform; . peri-urban energy access; . regional energy market integration; * governance and revenue distribution; and . energy and environment reviews; and . local and global environmental synergies. . mitigation of social and environmental impacts. 6 Energy Sector Management Assistance Programme 'a~ ~ 2 -U'. Annuol Report 7 ELECENTRE 'TOCOPIE RETARIAT PUBLIC AND SERVICES PRODUCTS AND SERVICES -, Energy Sector Management Assistance Programme ESMAP's mandate has evolved over time to meet the changing needs of its clients. ESMAP ESMAP's Knowledge Dissemination Instru- has operated in over 100 countries through over ments include: 520 activities covering a broad range of energy * Printed publications, including activity issues. At ESMAP's inception in the early 1980s, | final reports and a Technical Paper series these activities were almost exclusively Country * Two-pagers: Highlights from ESMAP Energy Assessments that served to fill the knowl- Projects edge gap on the energy demand-supply balance * The annual Energy Development Report in specific countries, and provide options to (EDR), in collaboration with The World address priority energy issues in an environment Bank Group of high energy price volatility. * The ESMAP Annual Report * Publications jointly published with other ESMAP provides technical assistance which organizations helps design and build consensus on policies * Electronic downloadable publications at for the sustainable development of energy ser- www.esmap.org vices. This technical assistance is directed to a * Publications stored in searchable CD wide-range of stakeholders: governments, NGOs, ROMs public and private institutions in developing and, * International or regional conferences transition economies. and roundtables * Training: Regional or national workshops - _- _ __ l and seminars * Brown Bag Lunch seminar series in The ESMAP's Technical Assistance; Strategic World Bank Group Advice, Pre-investment Work, Lessons l Learned, and Best Practice include: * Specific Studies * Advisory Services ESMAP will maintain these three main catego- * Pilot Projects ries of products and services to deliver its 2002- 2004 business plan. ESMAP's interventions are positioned at two points in the policy and project cycle: (1) up- stream (pre-investment) on issues that have a clear potential for key policy formulation and innovative energy investment, and (2) down- stream (ex post) through the evaluation and dis- tillation of emerging best practice, followed by aggressive knowledge dissemination. Annual Report X, c G I 9 J 0 AT A GLANCE 2000-2001 PORTFOLIO AT A GLANCE 2000-2001 Energy Sector Managemeni Assistance Programme PORTFOLIO AT A GLANCE AS OF DECEMBER 31, 2000 Breakdown by Thematic Area Number of Projects (Os a % US$ Volue) by Themotic Area .7.7%/ 1 Rural & Pen-urban 36.50/o Rural & Pern-urban 19.40/a Sector Reform 1 7 40/o Sector Reform 19.40/o Energy Deficiency 7.70%o Energy Deficiency 11.30/o Envfronment 19.60/ Environment 30.60%o :3.8% 0-\/14.7/ ° International Trade 14.7o11 International Trade 11.30/o 0 13% 14.7Other 0 30%o 6.5%/' Other 1.60/o Renewables 3.80/o 1.60 - Renewables 6.50/a Breakdown by Geographic Area Number of Projects (as a 0 US$ Volue) by Geogrophic Areo _ _ 11.10/a Middle East and Middle East and North Africa 1.80/1 North Africa 1.60/a South Asia 1 2.70/ South Asia 16.1%/a 180/o _ Africa 13 90/ Africa 21.00/o East Asia and Pacific 10.10/a 16.1/ East Asia and Pacific 16.10/a 8 . 7% / Eastern Europe and . Eastern Europe and in9 77 /o Central Asia 10.20/a Central Asia 11.30/a Global 8.70/a 290/0 Global 12.90/a Latin America and Latin America and Caribbean 41.50/a Caribbean 21.00/a Breakdown by Strategic Area Number of Projects (oso%US$ Volue) byStrotegic Area 0 80/a . / _ < °~~ ~ ~ 4.. 8%/ Market 48.60/o Market 35.50/o Other 0.80/a Other 4.80/a Access 24.20/a Access 1 9.40/ Environment 26.50/a o Environment 40.30/o Annual Report 2000 - 2001 11 PORTFOLIO AT A GLANCE AS OF DECEMBER 31, 2001 Breakdown by Thematic Area Number of Projects (Os a0% US$ Value) by Thematic Area Rural & Pen-urban 26.8%0/ Rural & Pen-urban 20.6% 1 5.60/o Sector Reform 20.2% 9 16.70/0 Sector Reform 19.0% 2% Energy Deficiency 15.6%0/ Energy Deficiency 16.7% Environment 19.3%/X Environment 23.8% 2.0% 8 9%/ International Trade 8.9% 4% .> International Trade 5.6% / Other 2.0% 5.6%/ Other 4.8% Renewables 7.2%/a Renewables 9.5% Breakdown by Geographic Area Number of Projects (as a0 US$ Value) by Geogrophic Area Middle East and Middle East and North Africa 1.1%/\ North Africa 1.6% 1 1% n /1 / South Asia 9.3%/1 South Asia 10.30/a 11/ . ijv.o-.- 1Africa 20.1%|/ Africa 21 4% East Asia and Pacific 10.0% / East Asia and Pacific 14.3% Eastern Europe and 21.4%/ Eastern Europe and 33.1% 13.4% Central Asia 13.0%0/ Central Asia 11.1% Global 13.4%0/ Global 19.8% Latin America and . Latin America and Caribbean 33.10/o Caribbean 21.4% Breakdown by Strategic Area Number of Projects (asa 0%l US$ Value) byStrategic Area l~~~~~ 27.% -2.4% Market 29.4%0/ Market 39.9% Other 7.9%/ Other 2.4% < i 3~iI)i. /Access 27.8%0/ Access 25.8% Environment 34.9%/a Environment 31.9% 1 2 Energy Sector Management Assistance Programme 13 71f - .1 'A , i I f,~ OPERATIONAL REVIEW This chapter presents the trends in the compo- launched annually in 1999-2001. A peak of 52 sition of the ESMAP portfolio during 2000 and new projects were added to the portfolio in 1999 2001 in the context of the 1999-2001 Business at the beginning of the 1996-1999 business plan Plan period. It also presents successes achieved period to foster portfolio renewal. As discussed through the use of seed funding, the status of later in this section, project closings have not project entry and exit processes, and closes kept up with the greater number of additions. with a presentation of the portfolio's disburse- ment patterns. Figure 4.1 Evolution of the ESMAP Portfolio . Activity Count at Year-end 1999-2001 (1996-1999 average indicated as blue line) The 1999-2001 business plan launched a period 150 ° ° - .......... of greater activity for ESMAP. As Figure 4.1 107 114 114 shows, ESMAP activities at year-end grew from 100 .. ......r°OOOO an average of 240/o from 86 activities for the . 1996-1999 period to 112 activities for the 1999- OOOOD (00 D D ....... 2001 period. Similarly, the ESMAP portfolio at 0: year-end grew 1 8% from an average of US$22.4 End 1998 End 1998 End 1998 million for 1996-1999 to an average of US$27.4 90 Projects 90 Projects 90 Projects million for 1999-2001 (see Figure 4.2). The greater increase in the average number of ac- tivities than the portfolio value brought the size of the typical activity down slightly during the Figure 4.2 1999-2001 period. However, the typical activity's Total Year-end Values of Portfolio 1999-2001 size remained in the vicinity of a quarter of a (1996-1999 average indicated as blue line) million dollars (see Figure 4.3). 30 .0. 27.8oOO0028 ODOODOD OOO X : r n ~~~~~~~~26.3 Through the 1999-2001 period, ESMAP has also 20.... 2 6..3 launched more activities every year. The aver- 20 j - _____ age number of new activities rose 280/o from an 10 ..o.. ..... 000 0 0000 average of 24 new activities added annually in I | 1996-1999 to an average of 33 new activities 0 ..... .... . ... . .. 1999 2000 2001 a~~~~~i u_*?iat c.iIW1~enlto Of Tho Poor? ."!_ - '- -kr'Figure 4.3 . S _ 2~2~t?§a7i 4 ~.'l¢.t ,t'-,5Average Project size _N <~.T2 Wi7>:~~- 300: . .0 . . .: 0 -0 . 243,177 r---- 245,820 238,812 | X | s ~~~~~~~~~~~~~250.oQ°O 0ooo 0 o C. OOOOOo00O O DD0 D IDO D O D D0000000 l~~~~~~~~~~~~~~~~~~~ _0 ...... .............. ~200: o ~ ~ ~ 0 ~ 0 0: L . 1998 1999 2000 2001 Annual Report 800 IJ71 I 15 EVOLUTION OF ESMAP PORTFOLIO (1998-2001) REGIONAL DISTRIBUTION OF PORTFOLIO 1998-2001 By Number of Projects Figure 4.4 120: 1o00 80: . * 4 t ; , |Latin America & Caribbean I*< -- - El Middle East & North Africa 60: Europe & Central Asia _____ U~~~~~~~~~~~~~ South Asia 40 i i U East Asia & Pacific &, , 2 0- I _ _ _ _ _ _ _ _ , o -Africa t 20 20 Global E z 0: g ~~~~. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ........................................... End 1998 End 1999 End 2000 End 2001 90 Projects 107 Projects 114 Projects 110 Projects THEMATIC DISTRIBUTION OF PORTFOLIO 1998-2001 By Number of Projects Figure 4.5 120: 80 - Other * International Trade 60 - H Efficiency _ _ _ _ N ~~~~~~~~~~~~~~~~Renewables 5g 40 * Rural & Peri-urban & _ _- 1 L 4 *l 1- l | *l | OEEnvironment 20- *- Sector Reform E z 0 . . . . . . . . . . . . . .. .. .. . . . . . .. . . .. . .. .. . . .. . .. . . .. . . . . . . . . . . End 1998 End 1999 End 2000 End 2001 90 Projects 107 Projects 114 Projects 110 Projects 1em___nr 1 6 __ Energy Sector Management Assistance Programme REGIONAL DISTRIBUTION OF PORTFOLIO 1998-2001 By Value of ESMAP Funding Figure 4.6 3 0*000,000 . . . . ..0 . ....... 25,000,000 o 20,000,000 *1 Latin America & Caribbean : Midddle East & North Africa 15,000,000 * {. o.Europe & Central Asia in ~ ~ ~ ~ ~ ~ IIUSouth Asia 10,000,000 U East Asia & Pacific 4- ~~~~~~~~~~~~~~~~~~Africa 5,000,000 Global .2 2 ~ 0 End 1998 End 1999 End 2000 End 2001 Total Value: Total Value: Total Value: Total Value: $21.7m $27.7m $28m $26.3m THEMATIC DISTRIBUTION OF PORTFOLIO 1998-2001 By Value of ESMAP Funding Figure 4.7 30,000,000:..... 25,000,000 : 20,000,000 o050 ,oooo °° Other U International Trade 15,000,000 . ] Efficiency 1 1 0 / _ _ _ U Renewables E0000,000 Rural & Peri-urban 4-- ° 5 000 000 o 0 0 000 oooo , Environment o0 | i - j Sector Reform ........................ . .... ......... ........................... .... .... . ................................ End 1998 End 1999 End 2000 End 2001 Total Value: Total Value: Total Value: Total Value: $21.7m $27.7m $28m $26.3m Annual Report t XtN Mi 17 - Portfolio Overview Table 4.1 Activity count during calendar year 2000 The distributional graphs show the evolution of the Ongoing projects on 1/1/00 107 ESMAP portfolio, by value and number of projects - - = - New projects launched 20 over the 1999-2001 period, with the 1998 figures _ = presented as the base. At the aggregate level, the Projects completed 11 ESMAP portfolio retained a consistent profile in Projects cancelled 4 the 2000-2001 period. The total year-end activity Not included earlier -4 count was 116 prpjects for 2000 and 114 for 2001 _ _ . - (see tables 4.1 and 4.2) and the US dollar value FAs of 12/31/2000 IL6J of the portfolio remained in the same vicinity: US$27.7 million at the end of 1999, US$28 million Table 4.2 at the end of 2000 and US$26.3 million. Activity count during calendar year 2001 |I Ongoi ng projects on 1 / 1 /01 116 ESMAP's Latin America activities have account- -- l ed for the greatest share of the portfolio hovering New projects launched 27 at a third of its overall value during the 1999- ! Projects completed 3 2001 period. The Africa cluster of the portfolio Projects cancelled 0 followed constituting a fifth of the portfolio. .= _ -= v _, - -, Among the thematic areas, the rural/renewable Completed projects not yet closed 26 energy activities dominated the portfolio con- IAs of 12/31/2001 114 stituting about a third of the portfolio's value. Following this cluster of activities were the The seed funding window has found many initial energy-environment and market development successes. Following the successful implementa- clusters each constituting a fifth of the portfolio tion of ESMAP's Energy Efficiency Operational value through the 1999-2001 period. Exchanges program, a proposal for develop- ing financial intermediation mechanisms for Seed Funding energy efficiency projects in Brazil, China and India received seed funding. The task manager One of ESMAP's challenges is to keep explor- used US$10,000 (allocated in October 2000) to ing cutting edge issues and approaches and developaproposalwhichhasalreadysecuredover encourage innovation. Therefore, in late 1998, US$2 million from the United Nations Founda- ESMAP opened a "seed funding" window to al- tion, nearly US$700,000 from the UK Department low potential proponents to explore new ideas by for International Development (DFID) through researching what has already been done and care- ASTAE and US$300,000 from ESMAP. fully design activities in consultation with possible partners in innovation. This window is also used to The links between governance and the distribu- develop proposals showing high promise after the tion of revenue from hydrocarbon resources in first stage of screening (see Format of ESMAP Call developing countries falls under the governance for Proposals in the Governance and Management and macro/fiscal stabilization strategic areas of section). This "seed funding" window offers up to the World Bank Group's energy strategy and has US$15,000 which are granted either on the basis of been identified as one of ESMAP's business lines short proposals outside of the regular cycle or after under its 2002-2004 business plan. A proposal the first proposal stage. Reporting obligations on for compiling best practices in this area of scarce the use of fund are based on a clear understanding analytical depth was developed with US$6,000 of what background research and consultation will in seed funding (allocated in May 2001), and has be conducted before submission to ESMAP. already secured US$225,000 from CIDA. 1 I Energy Sector Management Asststance Programme The impact of sector reform on the poor is an issue of great concern but few analytical tools exist to gauge this impact. With US$10,000 in seed funding from ESMAP, a proposal was devel- oped for a major undertaking: the development and testing of a template for measuring the im- pact of energy sector reform on the poor which is to be applied to countries just starting the reform .l process. This proposal has secured US$430,000 in support from DFID. Some ideas that have received ESMAP seed funding and are currently in process are: Energy . efficiency in water utilities, LPG sector improve- ment for domestic use in Nigeria, an assess- ment of the poverty alleviation impacts of rural electricity access in Mozambique, and a studyd and pilot for mitigating injuries from burns in households in Egypt. Entry and Exit of Activities from the Portfolio Efficient management of the ESMAP port- folio requires smooth entry of new activities and gradual exit of activities once concluded. ESMAP has improved its input process over the , 2000-2001 period through deeper engagement of 7 , proponents before they submit concept notes and full proposals. The pre-submission feedback pro- vided by ESMAP management to proponents has ; _ - helped reduce the number of iterations involved in fine-tuning the proposal to meet ESMAP stan- dards as well as donor expectations. The exit process has not improved as smoothly. The reconciliation of projects at the close-out stage has been slower than expected. This prob- lem is further compounded by the departure of a number of ESMAP task managers from the World Bank. Good progress on this problem of slow close-outs is expected during 2002. Annual Report MXQg I - 19 PORTFOLIO HIGHLIGHTS Energy Sector Management Assistance Programme ENERGY ACCESS IN A CHANGING electrification focusing on its role in rural RURAL LANDSCAPE development; * quantifying the links between energy service The rural energy landscape has been chang- delivery and development outcomes; and ing rapidly through the 1990s. The key drivers * developing participatory processes as vehicles of change have been the reform of centralized for developing and propagating sector strate- electricity sectors into decentralized systems, the gies that can be implemented by a multiplicity increasing introduction of private participation of stakeholders. (commercially oriented as well as community- based) in electric service delivery. These changes Innovative Institutional and Financing have necessitated not only the development of Mechanisms for Sustainable Rural Service new service delivery models but also new ap- Delivery proaches to rural energy investments, in particu- lar for electricity. However, the overall picture still Given the geographical diversity and varied is bleak: about half of the population in develop- institutional capacities in developing countries, ing countries continues to rely on traditional bio- a wide range of institutional and financing mass for its heating and cooking needs, and the mechanisms are needed for expanding access majority of the world's poor do not have modern to modern energy services. In some locations, lighting nor any affordable source of power. the grant of concessions (as adopted for off-grid power in Argentina) may be more suitable, while At the onset of the 1999-2001 Business Plan, in others it may be better to help build capac- ESMAP was also confronted with the lingering ity among communities which express a strong negative legacy of previous rural electrification interest in installing power systems.themselves. programs whose progress over the preceding ESMAP supported the development of the latter decades had not given the development com- approach in Laos9 where small rural communities munity very much to celebrate about. This was are very widely dispersed. Rural communities and evidenced in a 1995 review of the World Bank's entrepreneurs who make a decision to electrify, rural electrification projects in Asia (1975-1995) can avail of the technical assistance and business by the World Bank's Operations Evaluation De- development services provided by an off-grid partment which concluded that the "economic electrification unit of Electricite de Laos. returns [of these projects] have been consider- ably lower than expected and a wide range of Another approach, based on micro-finance, was expected indirect and external benefits have not successfully piloted by ESMAP for increasing ac- materialized"8. Two of the key problems were cess to solar electric equipment in Kenya. Rural identified as (i) purely government- or donor- consumers were invited to organize for group run supply-driven programs resulting in unsus- loans. Capacity was built among rural credit pro- tainable energy service delivery systems; and (ii) viders and private equipment suppliers who had insufficient attention to inputs other than energy been invited to become financing and technical resulting in low development impact. partners of the project. The loan groups were then able to purchase bulk packages of solar ESMAP is therefore focusing on providing prag- electric equipment through the group loans'°. matic intellectual leadership in this changing , sector concentrated in four broad areas during World Bank 1995 Rural Electrification ahard lookat costs and benefits Operations Evaluation Department, Pres Number 90 Washington, D C 2000-2001: OhThis experience is recorded in the ESMAP publication Laos Institutional Development for 2000-2001: ~ ~~~~~~~~~~~~~~~~~~~~~Off-grid Electrification, No 215/99 * developing new institutional and financing o Trhe experience is documented in the ESMAP publication Kenya Implementation Manual - Financing Mechantsms for Solar Electric Equipment (No 231/00) complete with sample models for rural service delivery; ~~~~~~~~loan agreements antd after-sales service contracts(N lo)cmeewihape mod el s for ruraI service delivery; onThe eoperience is documented in the Vietnam Renewable Energy Action Plan report fostering a more holistic approach to rural publishedjointlybyASTATE, ESMAP, the MinistryofIndustryofthe DemocraticRepublic o trno e h lstclofVietnam and EVN, the state power utility Annual Reporf~t~'OD 201 )0, 21 In Peru, technology transfer, local capacity To continue innovation in this area, ESMAP is building and awareness building were tied to the currently supporting pilot projects for two new establishment of a revolving fund for implement- energy service delivery mechanisms for rural ar- ing small hydro power plants in remote com- eas. These are (i) the women's energy enterprise munities. A consulting group offered not only in Char Montaz (a coastal island of Bangladesh) technical assistance and loans but also made a and (ii) the village power fund and incubator strong awareness building effort to convince service for renewable energy enterprises in the remote communities of the value of this offer- Philippines. ing. More than US$2.5 million was leveraged for the 1.2MW of micro-hydro installations es- The Char Montaz activity (outlined in Box 5.1) tablished under this activity. More than 15,000 involves the establishment of a women's energy people gained electricity access. The contrast of enterprise through capacity building and micro- this approach with the typical public sector-run enterprise development. In September 1999, programs in Peru is clear in Table 5.1. ESMAP commenced support for a pilot project haMotaz is a rural island in the Bay of Bengal off the Bangladeshi coast. The electricity gri issixhours' boat-ride away. The main economic activity on the island is fishing. After a survey and an interview process, PSL, a Dhaka-based development consultancy, selected thirty-three women for training in basic technical skills (soldering, lamp assembly, operation of a battery charging station, quality control, etc.), business and marketing skills. Some of the women were given accounting and book-keeping training. Within a few months, a women's co-operative was operational, offering its own brand of basic fluorescent lamps, the 8V or l 2V re-chargeable batteries which power the lamps, solar home systems, electricity through a diesel-generator micro-grid and basic electrical goods. The first year of operation has seen the women of the co-op sell 770 lamps (with a one-year service warranty) and 235 batteries, establish two battery-charging stations in locations convenient to their cu;stomers and establish a sales network among the area's shop-keepers. The women employed by the co-op have experienced a major transformation in their self-esteem and the gender roles in their households, not to mention a US$2 increase in their average daily incomes. The community has benefited from the simple lamps through an extension of their work hours: for tailoring, retailing and fishing at night. Lamps in households allow school children to study after dark. "Street lighting" is provided at the market place in a unique way: as all the shops are contiguous and each has its own lamps (at times more than one) and, as the quality of the lighting is exceptional, the whole market area is lighted. The Char Montaz women's energy co-op has demonstrated that rural women of less than high school level education can participate in the provision of modern energy services, with the right investment in their capacities. The co-op has also provided the first test of a model that may be replicated in other parts of the world for refinement and, subsequently, presented for scale-up. 22 Energy Sector Management Assistance Programme Peru: Comparison of Approaches to Micro-hydro in Remote Areas Failed Public Sector Approach Successful Community Approach Subsidies 100~Io For local Gov't: 700/o-750/o Subsidies 100%/0 For Privates: 00/% Appropriate Standards High Standards Low cost tehnology Technical Aspects Imported Equipment Local manufacturing Limited or no community participation Community participation (top down plans) Promotions critical (requires a lot of Promotion No promotion (top down plans)effort) High investment costs Low investment costs Cost No transaction costs High transaction costs Unit Cost US$4,000 to 6,000 per kW installed US$2;000 to 3,500 per kW installed with a Dhaka-based development consultancy, established. It is intended to develop (a) financ- Prokaushali Sangsad Limited (PSL), to incorpo- ing guidelines, (b) project evaluation', criteria, rate issues of energy access, micro-enterprise (c) fund design and mechanics, and (d) a pilot development, income generation and gender revolving fund for community-based energy in an innovative model. The objective was to projects. The "incubator" team first undertook build capacity among the community's women consensus building in the communities about to establish and run their own energy service the planning and execution of the pilot projects. micro-enterprise and become energy equip- Gradually, it has begun training of the com- ment manufacturers, i.e., to become 'energy munity in the basics of project evaluation and service providers' on the coastal island of Char development (technical, financial, economic Montaz. A second phase of ESMAP financing and management skills). Feasibility studies and was approved because the enterprise has not environmental assessments for the two, sites yet reached full financial sustainability and is have also been conducted. expanding into solar energy. The enterprise's business plan document will be used for raising A multiplicity of models led by non-public actors the funds. in the electricity sector were brought together at the Nicaragua Workshop on Private Sector-led The dual services of a revolving fund (for de- Mechanisms for Rural Energy Service Delivery livering financing) and an 'incubator service' supported by ESMAP (See Box 5.3).' (to deliver capacity building) to help develop rural energy enterprises are being combined in Three important features emerge across these two barangays of the Philippines. These sites, activities. The first is the importance, of robust selected after market surveys, are: the towns of financial planning at the project 'preparation Rapu Rapu (in barangay Binowawan) and Roxas stage and of tight financial management during (in * barangay Bagongbayan, Palawan). With the course of the activity. The financing mecha- ESMAP support, a Village Power Fund has been nisms can be considered successful only if the 23 enterprises and funds they are establishing are study and commercial activity, etc. As this view financially sustainable. of energy becomes the norm, the provision of energy services will increasingly be considered Another feature is that linking the new electric- part of the overall development package, inte- ity supply to productive uses, whether commer- grated into sectoral activities, in areas such as ag- cial or public, is crucial to the success of these riculture, education, health, telecommunications, pilots. If attention was not paid to the uses of water supply, small- and medium-size enterprise the electricity supply, the sustainability of the development, etc. In this sense, it is becoming commercial- or community-driven supply would more and more accepted that the provision of have been compromised. mbodern energy services- is key to achieve the Millennium Development Goals. Lastly, these activities were dependent on the existence of local technical and financial exper- The Village Power 2000 conference (see Box tise which could be transferred smoothly to the 5.2) was perhaps the most high profile develop- target communities. Local consulting firms and ment event to have focused on emphasizing this service entities were instrumental in the success vision of the role of energy services in develop- of the Peru, Kenya; Bangladesh and Philippines ment. Following the conference, ESMAP and activities. Efforts to expand rural electricity de- Winrock International have spearheaded the livery need to leverage the availability of such development of a Global Village Energy Partner- capacity in developing countries. Beyond the ship (an expanded version of the Village Power technical know-how transfer, such local con- Partnership) which focused on developing tools sulting firms bring indisperisable knowledge of and services to help achieve the Millennium the. sociology andlor political reality of rural Development Goals. communities, without which it is not possible to introduce innovation. ESMAP's support to key national workshops in South Africa (the People's Power Workshop, Sep- Emphasizing the Role of Energy Services in tember of 2000) and in Nigeria (Energizing Rural Transforming Rural Areas Transformation Workshop, March of 2001) has helped stress the view of modern energy as an ESMAP has been supporting activities that help enabling and transforming input rather than an propagate a new vision for the role of energy end in itself. Both workshops were conducted by in development. The emerging vision is focused AFRREI staff and led to quick follow-ups involv- on energy's role as an input to development ing policy advice by the World Bank Group to rather than an output in itself. This view has the governments of South Africa and Nigeria. most notably' been articulated as' 'Energy for- Rural Transformation' by the Africa Rural and Quantifying the Benefits of Rural Renewable Energy Initiative (AFRREI) managed Electrification by the World Bank with trust fund support from Denmark and Norway. For electricity services, ESMAP has also supported the development of this involves a shift in focus away from the analytical methods that help establish the value kilowatts, poles and wires which used to be con- of rural electrification for development. sidered the end products of electricity supply in rural areas. Electricity is an input to rural clinics Traditionally, the benefits of rural electrification for providing safe child deliveries or other medi- have been quantified in terms of how far the cal interventions, to the pumping of clean water, demand for electricity (measured in lumens) is to the motorization of small and medium enter- satisfied and how far costs are, saved by using prises, and lighting to households for night-time electricity productively. 24 _ I Energy Sector Management Assistance Programme Village Power 2000: Empowering People and Transforming Markets The focus of the Village Power 2000 conference was on exploring ways to advance rural transformation by improving access to sustainable modern energy services for: income generation, community needs in health and education, and home use. The conference and workshops took place December 4-7, 2000 at The World Bank Group headquarters in Washington, D.C., U.S.A. It was attended by 600 participants from 52 countries representing international financing institutions, intergovernmental organizations, governments, non- governmental organizations, and business and industry. During Village Power 2000, participants met in plenary and break-out sessions to hear presentations and discuss issues including: a new vision for rural transformation and poverty alleviation, renewable technologies for global markets, the linking of energy and rural development, the scaling-up of rural energy services, traditional fuels and household energy, methods to ensure equitable benefits from rural energy services, and specific issues related to gender and energy. Village Power 2000 also included specialized workshops that addressed a variety of issues related to renewable energies and sustainable development, including: micro-enterprise and introduction of technology to indigenous peoples, rural telecommunications and digital technologies, village power models and computer-based analysis for rural energy development, long-term world energy scenarios and the role of renewable technology, gender in energy, small wind energy, clean water delivery, and energy and poverty. James Wolfensohn, President of the World Bank, addressed conference participants and inaugurated a solar village set up in the World Bank atrium in conjunction with the Village Power conference. The conference closed with a call for commitment to scale up the delivery of modern energy services to the rural poor. This was summarized in a Village Power 2000 Communique which attracted the support of more than 30 organizations represented at the conference. The Communique called for the formation of a "Village Power Partnership" to achieve the following outcomes by the Year 2010 that would contribute to the Millennium Development Goals: * 30 countries have national-scale renewable energy based rural development programs; * 300 million people previously un-served have access to modern energy services; * over 50,000 new community systems have been installed (schools, hospitals, clinics); and * improvements in productivity, income, environment and quality of life from rural energy services are documented The event was sponsored by ESMAP, the World Bank's Rural and Renewable Energy and Rural Development Thematic Groups, Winrock International, the U.S. Agency for International Development, and the National Renewable Energy Laboratory, with Astropower, Bergey Windpower Company, Honeywell and Ormat as corporate partners. Coverage of the conference and workshops can be found at: www.iisd.ca/sd/vp2k/ Annual Report WO; W-90 25 These measures ignore the intangible benefits of ESMAP has supported the development of a more electrification such as the ability to study bet- thorough methodology for measuring the ben- ter, the quality of life improvements that come efits of rural electrification. The study conducted from entertainment (from video, TV, etc.), and surveys of 2,000 households in four barangays improved health (from heat for cooking, space of the Philippines and attached dollar values to heating/cooling, etc.). the benefits enjoyed due to the introduction of 1 Nicaragua: Workshop on Private Sector-led Mechanisms for Rural Energy Service Delivery The ESMAP workshop on private-led rural electrification for off-grid areas was held in Playa Montelimar, Nicaragua, November 28-29, 2000. It was jointly sponsored by ESMAP, The World Bank, the Comision Nacional de Energia (CNE) and Winrock International. A total of about 50 participants from Nicaragua and other Central American countries attended the 2-day event, including potential private sector service providers, potential investors, equipment suppliers; key government officials involved in rural development and energy; micro-credit and other rural financing institutions; and NGOs. At the event's conclusion, there was consensus that the workshop was successful in its objective of facilitating information exchange on the relatively new topic of off-grid national electrification programs, the changing roles of government and private sector in the implementation of sustainable rural electrification projects and prospects for renewable energy technologies as environmentally benign least cost solutions for remote off-grid areas. The workshop featured presentations from international experts & practitioners in private sector led off-grid electrification mechanisms, such as representatives from Soluz (Solar Home System Service provision in Dominican Republic and Honduras), EJSEDSA (off-grid concessionaire in Jujuy, Argentina) and ITDG (Peru), amongst others. Also included were presentations by delegates from Costa Rica, Guatemala, Honduras, El Salvador and Panama on the rural electrification programs of their respective countries. The workshop very effectively complemented the ongoing funded study on market-based options for rural electrification of off-grid areas in Nicaragua being carried out by The World Bank in collaboration with CNE. This study is intended to be a precursor to a potential Bank rural infrastructure operation. Accordingly, preliminary results of the INEC Surveys in the selected pilot cities were presented at the workshop, as well as the outlines of a project concept for private sector-led off-grid electrification in Nicaragua. Options such as potential off- grid projects, as well as the next steps that would need to be taken by all stakeholders were discussed during the workshop. GON representatives highlighted that rural electrification is a high-priority area for he government. A project is being prepared for The World Bank/GEF financing initiative. Since this workshop, ESMAP has sponsored an activity involving a World Bank team's support to CNE aimed at developing a policy and strategy, for mainstreaming renewable energy with requisite capacity building at CNE. Contributed by Kilian Reiche 26 Encrgy Sector Ncanagement Assistance Programme cheaper electricity as well as improved electricity shared goal of renewable energy development. services. The activity concluded that, under the The process identified 21 options for developing assumptions of the survey, the total net benefit renewable energy and selected four preferred of providing electricity to a typical, un-electri- options. The process also identified over one hun- fled rural Philippine household would be be- dred barriers to the development of renewable tween US$81 and US$150 per month, depending energy resources in Vietnam. This demonstrated on the household's number of wage earners and that the multiplicity of perspectives among the whether it runs a home-based business. different stakeholders can lead to the develop- ment of a more robust strategy than what would ESMAP is supporting the further development of have been possible if only leading national deci- this groundbreaking work to include the impact sion-makers, World Bank staff and international of electricity on women's time use, their burden consultants were involved. The participatory of household chores, and other socioeconomic approach has been highly successful in securing factors. A project to develop a complementary the interest of all stakeholders with enthusiastic approach to project monitoring and evaluation, support from the government"1. It is now being with special reference to gender issues, has been replicated in Cambodia to develop the Cambodia commissioned. The methods being used under Renewable Energy Action Plan. this project involve both quantitative techniques to assess the benefits of energy projects (paying DELIVERING ENVIRONMENTALLY particular attention to rural electrification), and SUSTAINABLE ENERGY participatory approaches for project development and monitoring that are integrated into all stages The "mainstreaming" of the environment agenda of project development and implementation. in development assistance for energy was one of the key desired impacts of the World Bank Participatory Processes and Consensus-building Group's Environmental Strategy for the Energy Sector, published in June of 2000 under the title With the increasing decentralization and private of "Fuel for Thought." The ESMAP Energy and participation in the delivery of energy services, Environment Review (EER) initiative both antici- many more stakeholders are involved in the ex- pated the "Fuel for Thought" agenda and is cur- pansion of access than before. This requires new rently spearheading its implementation. Energy ways of strategy-building and decision-making. and environment has been the fastest growing ESMAP has attempted to enrich the available segment of the ESMAP portfolio since 1999, now experience in this area joining forces with The accounting for over 30 activities and 32% of the World Bank-managed Asia Alternative Energy active portfolio by value. (ASTAE) program. Early concerns that the EER initiative would The Object-Oriented Project Planning method- not be client/demand driven and would be ology was chosen for the development of the implemented through a World Bank-led "push" Vietnam Renewable Energy Action Plan to ensure were, in hindsight, unduly pessimistic. ESMAP's strong stakeholder participation. This methodol- commitments made over the 2000-2001 period ogy is designed to identify the key barriers to (re- showed that there is no shortage of demand for newable energy) development by eliciting ideas energy-environment work amongst our clients. from stakeholders during brainstorming, create To a greater extent than assumed, govern- consensus among the stakeholders during work- ments are aware of the environmental problems shops, establish problem trees on the basis of the discussions, and maximize the capacities and The experience is documented in the Vietnam Renewable Energy Action Plan report published jointly by ASTAE, ESMAP, the Ministry of Industry of the Democratic Republic of experience of all stakeholders involved for the Vietnam and EVN, the state power utility Annual Report Wit, - AfO1 27 associated with energy production and use and . Making the poor - those who suffer most from have a corresponding set of priorities - the chief emissions exposure - become aware of the barrier to action in many cases is lack of human causal relationships between pollution and and financial resources. In other words, client their bad health. This is key to implementing governments do not just want to study energy- solutions at the end-user level - be they im- related environmental problems, they want to proved cookstoves (as in Nicaragua) or quality move quickly to solve them too. This had led 2-stroke engine lubricants (as in Bangladesh). to a change - compared to early expectations . Designing robust and often cross-sectoral based - in the character and composition of the EER intervention strategies that maximize cost-ef- portfolio. While there is still a need in a number fectiveness and target the welfare of the poor. of instances for multi-sectoral comparative as- * Evaluating the synergies and trade-offs be- sessments to set priorities, the greater demand tween local and poverty-targeted pollution has arisen for targeted interventions focused control measures on one hand, and strategies on specific and known but heretofore unad- that are aimed at reducing the global carbon dressed problems. On March 14, 2000, ESMAP emissions intensity of energy use on the other. conducted an in-house consultation with World Bank Group environment professionals about Indoor Air Pollution ESMAP's experience with EERs. The issues raised at this event are summarized in Box 5.4. Figure 5.1 illustrates that the relative health threat due to various forms of air pollution Tackling Local-to-Global Pollution Problems: (from Lvovsky, based on WHO and World Bank Common Themes estimates) vary widely across ESMAP client countries. Expressed using Disability Adjusted ESMAP's energy-environment work has spanned Life-Years as a measure, the disease burden in three broad themes: (i) indoor air pollution, (ii) Sub-Saharan Africa is high and principally at- urban and outdoor air quality, and (iii) green- tributable to environmental risks from tradition- house gas emissions and climate change. Perhaps al fuels use. While these traditional hazards are not surprisingly, the majority of EERs emphasize not as well catalogued in Africa as in other re- local issues with direct environmental health gions such as South Asia, a forthcoming ESMAP and poverty impacts. But the underlying ana- assessment suggests that indoor air pollution lytical challenges are similar across the range of in Africa ranks with water- and vector-borne activities and comprise: diseases as a public health threat - perhaps . Assessing in a credible and quantifiable way surprising in view of the common notion of the relative importance, in terms of environ- Africans cooking in wide open spaces, but this mental health and poverty impacts, of various simple view ignores the high smoke exposure pollution exposure patterns. rates of (principally) women tending inefficient . Tracing and apportioning among various open flames. sources the cause of the pollution problem: For indoor air the chief problem is normally A similar heavy weighting on traditional smoke from cooking with low quality biomass environmental health risks prevails in India but health damages are increasingly associ- and much of the Asia-Pacific region. Cook- ated with sources like kerosene lamp fumes; ing smoke exposure patterns are driven by the evaluating urban air quality involves tracking characteristics of the traditional housing stock a host of emissions to their source, including and cooking appliances, and population pres- road dust and vehicle tailpipe emissions, in- sures on limited biomass resources that have dustrial boilers and processes, and pollutants precipitated a movement down the household associated with the coal-power chain. fuels ladder toward straw, dung and other forms 28 J Energy Sector Management Assistance Progromme of low-quality biomass fuel. In this admittedly federal government's improved stoves program, uncertain analysis, only when one gets to China in this case focused on the effectiveness of vari- ,does the impact of modern fuels - coal is the ous stove designs in improving indoor air quality main culprit - begin to exceed the hazards ema- and not just for their wood conserving attributes. nating from the traditional sector. By contrast, Another component evaluated the operation of in Latin America modern pollution phenomena an innovative targeted-subsidy scheme to pro- primarily associated with road transport and mote the use of clean burning LPG by low in- urban development dominate. However, there come households. This work has served as an are pockets of exceptions including in parts entree for a follow-on ESMAP project in India of Central America and the Andean countries now well underway, the Access of the Poor to where there remains a high dependence on Cleaner Household Fuels project. The ESMAP woodfuels in poor households. study has broadened the dialogue with Indian energy and hydrocarbons sector authorities on a The ESMAP India: Household Energy, Air Pollu- whole range of fuels pricing and inter-fuel sub- tion And Health project (see Box 5.5) is represen- stitution issues, including the national voucher tative of a new generation of ESMAP activities subsidy schemes on kerosene and leakage effects designed to tackle the indoor air pollution (LAP) into upper-income households, and diesel fuel problem. Now in its second year of implementa- adulteration with subsidized kerosene. tion, the project uses household survey and rapid appraisal techniques to develop a picture for A similar heavy weighting on traditional en- energy and health policy-makers of the signifi- vironmental health risks prevails in India and cance of the IAP problem. A second component much of the Asia-Pacific region. Cooking smoke of the activity has been a re-evaluation of the exposure patterns are driven by the characteris- _~~IA _' ' .'' Woman making lamps in Bangladesh. Annual Repoi t PJ - MiB 29 tics of the traditional housing stock and cook- ated with road transport and urban development ing appliances, and population pressures on dominate. However, there are pockets of excep- limited biomass resources that have precipitated tions including in parts of Central America and a movement down the household fuels ladder to- the Andean countries where there remains a high ward straw, dung and other forms of low-quality dependence on woodfuels in poor households. biomass fuel. In this admittedly uncertain analy- sis, only when one gets to China does the impact The ESMAP India: Household Energy, Air of modern fuels - coal is the main culprit - be- Pollution And Health project (see Box 7.5) is gin to exceed the hazards emanating from the representative of a new generation of ESMAP traditional sector. By contrast, in Latin America activities designed to tackle the indoor air pol- modern pollution phenomena primarily associ- lution (LAP) problem. Now in its second year Figure 5.1 Global Pattern Of The Disease Burden Due To Air Pollution 7% ........ ~~~~~~~~~~~700,000 60/a ....00 .. ......o oa ...... ooo,ooooooooCooo 00 oo 600,000 5% ~ ~ 00~~oOft~O,oOOO ooooooooooooo 500,000 * n 40/a o 0 00000 00noOOO O OO O OO O ° °° ° 400,000 I oCL 2 2/...... ooo00 ,oo oooooo:200,000 ~ oooool 00 000 000000 0 000000 100,000 0 ...................................................................... Sub-Sarahan India Asia & China Latin Central Industrialized Africa Pacific America & Eastern countries & Caribbean Europe _ Disease burden due to traditional environmental risks as % of the total lt IDisease burden due to modern environmental risks as O/% of the total Total disease burden, DALYs per million people Traditional charcoal burning. 30 Energy Sector Management Assistance Programme Report of the Energy Environment Reviews Workshop Energy Environment Reviews (EERs) were conceived to specifically address the environmental impacts associated with energy production and consumption and occurring at the local, regional anrd global levels. Through ihe upstream analytical focus, EER work aims to: * ensure that fuel and technology choices are considered before they are "frozen" in the context of specific project designs; * maximize cost-effectiveness by examining pollution prevention/reduction options across the fuel supply and consumption chain, complementary to mitigation and end-of-pipe solutions; * expand local participation and capacity building among analysts and decision-makers; * stimulate the enactment and enforcement of effective environmental regulations; and * catalyze investment in both cleaner means of energy production and environmental mitigation. The objective of a stock-taking workshop held on March 14, 2000, was to assess the work performed by ESMAP and partners since the EER concept was designed in 1998 and to give recommendations on what should be done in the future. EER Status A snapshot of the ESMAP portfolio revealed that energy-environment work constitutes a significant and growing fraction of analytical assistance to clients - about 30% of ESMAP's activities now have a primary energy- environment focus. However, not all of this work was conceived or packaged as fitting the original EER concept of a large-scale and comprehensive environmental review. EERs can thus be broken down into three categories: * "Full-scale" EERs * Rapid Energy/Environment Assessments * Targeted Intervention EERs Presentations of on-going and completed work first covered the genesis, the key questions to be addressed and the methodologies. The material and discussions also turned to the institutional arrangements, on the involvement of key stakeholders, on the results obtained, and finally on the dissemination plans. Future Directions Two main characteristics of EERs have proved efficient and thus should remain in the future as part of the FER strategy: First, stemming from the broad scope of options analyzed in each country, it seems that the choice of not following the "one size fits all" approach was the right one. Second, it also seems that EERs should stay on course as a vehicle for upstream work and avoid slipping too far downstream. However, many questions were raised at the workshop. Among them the issue of how to assess demand: ESMAP must be responsive to the clients' specific demands for assistance, rather than try to fit EERs into a Bank framework (such as the Poverty Reduction Strategy Paper process). Only in that way will the country be able to maximize benefits from EER work. It was felt that aligning EER work with client-expressed priorities would in fact help in better targeting EERs towards poverty alleviation, one of the Bank's key challenges. In addition, there has been an obvious move away from central planning towards scenario analysis. This move is closely linked to the emphasis laid on the privatization process. So one question which is raised is: flow to direct environmentally-friendly investment in a privatizing energy sector? While EERs enable the discussion of environmental options analysis to commence in a country, the expectation is that investment will be taken by the private sector within a market framework. It is therefore incumbent to assess the responsibilities of environmental regulatory agencies. It must also be borne in mind that planning is still needed (of course, the degree of planning and intervention depends on the country): EERs should perhaps work at rehabilitating the environmental planning dimension in a reforming world. These factors could also be an answer to the question "Why do EERs?" even when there is no specific energy investment project planned in the country. Contributed by Helene Stephan Annual Report Mtxv 4 0t%'a I 31 3ndia: HIousehold Energy, Air PoIutiont and Health Recent studies have shown an extraordinarily heavy burden on public health-especially of children and women-of indoor air pollution (lAP] due to the use of traditional (biomass) cooking fuels. ESMAP's India: Household Energy, Air Pollution and Health activity that aims at identifying policies and interventions to alleviate the problem. What is Utie program expected to achiieve? o Facilitate political commitment to mitigating environmental health damages from household energy use and assist in the formulation and implementation of action programs in India at the local, state and national levels. o Enhance knowledge and create greater awareness amongst government officials, non-government organisations including those working with grassroots groups, scientists and professionals of the magnitude of the health damages from indoor air pollution and mitigation options. o Contribute to developing practical tools for measuring and predicting the levels of exposure and health impacts from household energy use that can be applied in program/policy analyses. Why is this program being carried out? Biomass fuels such as wood, crop residues and animal dunig account for half of India's total energy supply, including more than 80 per cent of household energy. Women exposed to biomass smoke during cooking inhale large quantities of harmful pollutants and suffer from alarming health problems. In fact, the health burden arising from the use of traditional household energy in India is among the largest in the world, accounting for an estimated 500,000 premature deaths in women and children. Developing and implementing national and state policies to address this problem requires an assessment of a variety of intervention measures across several sectors as well as efforts to sensitise the governmental and non-governmental sectors lo take up appropriate action programs. Program components The program consists offour components: Exposure assessment and modelling Data on actual exposure levels to indoor air pollution in rural households are very limited and costly to obtain. Developing low-cost tools to estimate exposure levels (and the associated health effects) could help in designing effective action programs. Household surveys to collect key socio-economic data as well as fuel use patterns, and monitoring of ambient concentrations of air pollution in the same households, have been carried out in Andhra Pradesh. An attempt has been made to develop a model to predict exposure to indoor air pollution using the survey's information. Examination of improved stove programs The vast majority of rural households in India rely on traditional biomass as a primary cooking fuel and will continue to do so for a long time. The Government of India's National Program of Improved Cookstoves introduced some 33 million biomass-based improved stoves into rural areas during 1984-2000. This component has examined best performing stove programs in six selected states with a view to drawing lessons and recommendations for designing future programs at the national or state level. Evaluation of the Deepam scheme In July 1999, the State of Andhra Pradesh launched an innovative targeted subsidy scheme to promote the uptake of LPG by low income households. Under the Deepam scheme, the connection fees for LPG are waived for participants of women self-help groups who belong to households classified to be below the poverty line. The program has focused especially on the rural poor. A detailed evaluation of the Deepam scheme was carried out involving focus group discussions and individual interviews. Public awareness raising and dissemination activities The program co-sponsored participation of Indian experts in the two international conferences: International Conference on Environment, Occupational and Respiratory Diseases held in Lucknow in October of 2000; and the International Conference on Biomass-based Fuels and Cooking Systems held in Pune in November of 2000. A series of newsletters highlighting various dimensions of indoor air pollution and mitigating strategies have been issued and circulated to researchers, academics, non-governmental organisations, grassroots groups and government officials in India and worldwide. A number of working group meetings and workshops have also been held to review and discuss study progress, findings and recommendations. As part of the program, a distance learning training course on indoor air pollution for policy makers and government administrators is being developed in collaboration with the World Bank Institute. Contributed by Kseniya Lvovsky 32 Energy Sector Management Assistance Programme Traditional indoor wood cooking, India. of implementation, the project uses household Urban Air Pollution survey and rapid appraisal techniques to develop i a picture for energy and health policy-makers of A key message, often lost in the process of the significance of the IAP problem. A second attacking urban 'air quality problems is that gross component of the activity has been a re-evalua- fuel consumption or even volumes of emissions tion of the federal government's improved stoves are not the indicators of primary importance in program, in this case focused on the effective- judging pollution severity; rather it is exposure ness of various stove designs in improving in- and resulting health impacts that matter. The door air quality and not just for their wood con- most critical pollutantF in most of Asia in terms serving attributes. Another component evaluated of public health impacts is fine particulate mat- the operation of an innovative targeted-subsidy ter. Fine particles have been shown in studies in scheme to promote the use of clean burning LPG a number of cities around the world to have sen- by low income households. This work has served ous health effects,'including premature mortality as an entree for a follow-on ESMAP project in and such nonfatal effects as respiratory symp- India now well underway, the Access of the Poor toms, exacerbation of asthma, and changes in to Cleaner Household Fuels project. The ESMAP -lung function. study has broadened. the dialogue with Indian energy and hydrocarbons sector authorities on'a Recent examples of ESMAP work to improve whole range of fuels pricing and inter-fuel sub- outdoor air quality in Asian cities have focused stitution issues, including the national voucher on two-stroke engine vehicle fleets. While ac- subsidy schemes on kerosene and leakage effects counting for only a fraction of total transport into upper-income households, and diesel fuel fuel consumption, the two- and three-wheelers adulteration with subsidized kerosene. are ubiquitous and account for 50 to 60 percent of the total vehicle population. Emissions of fine Annual Report 1=00) OW i. 33 particulates from these vehicles is particularly of air quality is providing policy recommenda- harmful because they occur near ground level, tions to the government on engine and lube oil close to where poor urban dwellers live and standards, vehicle taxation and fuels pricing. An work. Among the poorest and most impacted US$8 million World Bank loan project has been by this pollution are the vehicle operators them- prepared as a means to scale-up the techniques selves. Surveys conducted in the course of the demonstrated through the ESMAP activity. Bangladesh activity (see below) revealed that a large proportion of the vehicle drivers had never The ESMAP Bangladesh: Reducing Emissions received formal medical attention, and were not from Three Wheeler Two-Stroke Engine Taxis aware that their poor health was linked to vehi- project has identified over-application of low- cle emissions. Yet the emissions performance of grade and adulterated two-stroke lubricating oils their vehicles is critically influenced by mainte- as a major cause of high tailpipe emissions, and nance practices and decisions that the operators has led to quick action (See Box 5.6). Bangladesh and their mechanics take on a daily basis, often has recently banned the sale of straight mineral on the basis of incorrect beliefs about trade-offs oil for use in two-stroke engines, as well as in- between vehicle efficiency and air emissions. ferior lubricants for gasoline and diesel vehicles that have long been banned in the West. This The ESMAP Thailand: Motorcycle Fleet Upgrade is a-major legal breakthrough, and happened at to Reduce Air Pollution in Bangkok project aims lightning speed. A number of factors contrib- at reducing local air pollution from. motorcycles uted to this turn of events, most recently the in the Bangkok Metropolitan Area -- two-stroke ESMAP-funded mechanics training/ auto-clinic/ engines have been found to contribute up to lubricant-gasoline quality seminar, one of the 40 percent of the urban population's exposure most important recommendations of which was to damaging fine particulates. The activity fo- to ban straight mineral oil. cuses on upgrading/replacing the most polluting motorcycles in use, through a "rebate voucher"/ -I repair program. A clinic held in October of 2000, attracted some 300 motorcycle owners inter- -G l I i ested in the prospect of obtaining tune up and maintenance advice. Parallel work on analysis -' Reducing emissions from baby-taris in Dhaka. Motorcycle being tested at Bangkok clinic. 34 L Energy Sector Management Assistance Programme Im?t 1M Pollution prevention training clinics for Dhaka's baby taxi mechanics As part of a broader effort to reduce pollution in the Bangladeshi capital, about 400 baby taxi mechanics have been trained under the ESMAP Reducing Emissions from Three Wheeler Two-Stroke Engine Taxis project. The half-day training clinics included: engine maintenance, repair, and how to advise drivers on proper quality and quantity of lubricant oils to dramatically reduce emissions. The clinic is being conducted by the Society for Urban Environmental Protection, an environmental NGO, and Uttara Motors. Therc are an estimated 50,000 auto rickshaws in Dhaka, most of them using two-stroke engines. While these vehicles contribute to approximately 35 percent of particles and nearly half of hydrocarbons emitted by all vehicles, it is not feasible to ban two-stroke engine baby taxis overnight. The training of mechanics seeks to help reduce emissions from baby taxis sustainably and the burden of air pollulion on the poor, who are most exposed to it. Those who suffer the most are baby taxi drivers, who spend 10-1 5 hours a day on the streets in open vehicles, and are literally using their lungs to clean the air. The impor1ance of having well-trained and informed baby taxi mechanics cannot be over-emphasized. The mechanics are thc "gurus" to whom baby taxi drivers turn for advice on how to operate and maintain their vehicles. The mechanics are therefore in an excellent position to convince baby taxi drivers to follow good maintenance and lube oil practice, and point out that they can be part of the solution instead of contributing to the problem. The economic cost of health damage caused by emissions from baby taxis has been calculated to roughly Tk 60 crores (about US$12 million) a year. Good inspection and maintenance practice can help address the problem by reducing emissions by up to 35 percent. Another mitigation measure which need not cost any more to drivers is the use of the correct amount of lubricant designed for two-stroke engines. Currently baby taxis typically use as much as 10 percent four-stroke engine oil with their petTol. By using only 3 percent of quality two-stroke engine oil, they could even save money and at the same time reduce emissions significantly. Contributed by Jitu Shah and Masami Kojima Greenhouse Gas Emissions and Global guidance on least-cost sulfur and particulate Climate Change emissions control strategies for the power sector. Equally, the embedded hydropower expansion While the majority of EER work to date has been analyses have provided a forum for public de- motivated by local environmental concerns, the bate on project siting and social impact mitiga- global environmental concern of greenhouse gas tion measures. The third phase, presently on-go- emissions and climate change is also well rep- ing, examines the specific investment potential resented in the portfolio. Significantly, a good in seven environmentally beneficial energy sub- number of activities simultaneously address lo- sectors, including demand-side management cal, regional and global effects. In retrospect, the energy efficiency and renewable energy. The highly visible and at times acrimonious "local vs. latter pre-investment study is expected to lead to global" debate has been shown to have overstat- a Bank-financed wind, mini-hydro and biomass ed the conflicts in practice. The ESMAP Turkey: energy project, the first of its kind in Turkey. Key Aspects of Energy-Environment/GHG Strat- egy activity, for example, was largely motivated The ESMAP Central Asia Clean Transportation ,by a desire among decision-makers to compare Fuel Programfor Air Quality Improvement activ- different options to mitigate GHG emissions, and ity approached energy-transport-environment to examine the nature of commitments which interactions from the local side, but the out- Turkey might agree to take on in the context of comes will have important long-term impacts for accession to the UNFCCC and the Kyoto Protocol. climate change. The regional study examined the However, the modeling undertaken in the com- inter-linkages between vehicles, fuel quality and pleted second phase has also provided specific air quality in the eight countries of Central Asia Annual Repcrl VON r4ti 1 35 and the Caucasus. The ESMAP co-financed effort Mexico: Environmental Strategy for the Energy undertook detailed analyses of air quality, the Sector project has aimed at assisting in the de- current air quality monitoring system, character- velopment of a bottom-up energy supply and istics of the vehicle fleet, projections of transport demand forecast model and in the identification fuel consumption, and the downstream petro- of the links to a CGE macro model. Using the leum sector. The study makes recommendations bottom-up model, the ESMAP team has worked for improving air quality and vehicular emission with the Ministry of Energy to follow through monitoring systems, and for adopting improved on their interest in the identification of pricing fuel quality regulations and control in the com- policy options in order to eliminate subsidies in ing decade, with a particular emphasis on rapid the power sector, inter alia to evaluate impacts phase out of lead in gasoline and the possibility on GHG emissions. Using the CGE model, the En- of harmonizing fuel quality requirements in the vironment Ministry has concentrated on vehicle Region. The fuel quality upgrade measures will emissions standards and the improvement of ve- have a direct impact on the speed of introduc- hicle emissions performance. The EER has served tion of modern high-compression vehicles in the as a means to improve communication between region, and hence will strongly affect future auto Mexico's energy and environment ministerial engine efficiency and C02 emissions. The early authorities. And, significantly, it has served to results from the initiative were featured at the open the Bank's previously very limited dialogue lMF/The World Bank Group Annual Meetings in on some key energy sector issues. Prague in September of 2000. In retrospect, the 2000-2001 period was a time Dialogue on energy-environment issues has led of growth and maturation for ESMAP's energy to a re-building of links to basic and large-scale and environment portfolio. With the emphasis policy issues, such as sector reform. The ESMAP placed by ESMAP on energy and environment Cairo's mix of air pollution anid morning haze is a sight often repeated in many developing country cities. W,- 361K I " 36 __Energy Sector Management Assistance Programme sector work, it may be argued that environment for ESMAP's sustained engagement 'with recep-' has crossed the threshold from being viewed tive client countries for maximizing follow-up ,simply as an additional safeguard policy "con- activity and impact of ESMAP work. straint" on The World Bank Group's energy work to a new business development opportunity. The Mitigating the Social Impacts of Reform realization that the ability to provide solutions at the energy-environment interface is a source In the 1990's, ESMAP underwrote a great deal of comparative advantage in development as- of the build-up of knowledge capital on'the sistance is fully reflected in The World Bank sector reform agenda. As this body of knowl- Group's Energy Business Renewal Strategy, and edge has gradually been mainstreamed into the energy-environment is an anticipated growth energy and development community, ESMAP area for the Group's energy practice. has chosen to push the envelope in the new directions outlined in the ESMAP Business Plan Last this assessment become too optimistic, it is 2002-2004: particularly the impacts of reform worthwhile recalling that real progress in energy on the poor, and the mechanisms for mitigating and environment will only be measured by the adverse social and environmental impacts.- The- policy changes enacted and the investments cat- key questions include: how will then restructur- alyzed, and their effect on the quality of natural ing process affect those who currently 'enjoy systems and the social milieu - air, land, water service but will lose service due to constrained and the human environment. The lag time for access and/or affordability during restructuring these downstream effects to begin to take hold and beyond? Does the reform- process include may be significant, perhaps 3 to 5 years. And a the right social and environmental safeguards? related challenge is to get conventional energy Will the policy-makers and implementers, in the financing sources to take on an increasing share reforming sector have the capacity to deliver on of the support for EER-type work. But, if past poverty-related objectives? trends regarding ESMAP's long-run influence repeat, the forecast is for a decided up-turn in 'Leveraging' Support for Social Impact of the energy-environment portfolios of our clients Reform: Azerbaijan and partners. The World Bank has been supporting Azerbai- DEVELOPING SUSTAINABLE ENERGY jan's ongoing reform of the electricity sector. MARKETS ESMAP was approached for support in develop- ing a natural gas sector reform strategy which During the 2000-2001 period, ESMAP gradually complements the electricity sector's. reform. moved beyond the tools and mechanisms for the ESMAP leveraged this opportunity for partici- sector reform process and started supporting the pation in the Azeri gas'sector to introduce the sustainability. of reform. It began to leverage its following components to the acfivity: participation in processes of market-oriented re- . assessment of social and poverty impacts of form to put the social impacts of reform on the gas tariff reform; agenda. It has also supported the crucial consen- * identification and.planning of alternative fuel sus-building work that needs to take place for strategies for the rural poor, to whom it'is no sustainable market development. With these new longer economic to supply natural gas (as was facets in its market development work, ESMAP provided in SoViet tinies), and who will n'e,d to also continued to support innovation and intel- switch to such fuels as LPG, kerosene, electric- lectual leadership in market design, particularly ity and renewables, or back to woodfuels; in wholesale markets. This section discusses the . identification of solutions to the problem contours of this work and then presents a model of supplying' gas to refugees '(currently 120/o Annual Report A- 37 of the population-I million people-are technology by state-owned mining enterprises. Internally Displaced Persons); and Through intensive consultation with the project . assessment of environmental impacts of in- team, ESMAP was able to leverage its support for creased natural gas use, and identification of these objectives to include environmental regula- priority areas for conversion (e.g. fuel oil in tions for mining, including provisions for mine power, biomass in residential heating). closure, community consultation and mitigation systems for the social impacts of mining. Vietnam Building Consensus for Market A similar leveraging process took place at the Development: Consensus for Power Sector advent of ESMAP's Vietnam Policy Dialogue and Reform in Bangladesh New Mining Code activity. ESMAP agreed to finance a request for assistance initiated by the Through the 1990s, the Bangladesh electric Government of Vietnam. A new mining law was power sector has faced a number of fundamental to be prepared with a view to supporting the sus- technical, institutional and commercial chal- tainable development of the mining industry. The lenges. The performance of the electric power key objectives were: greater private investment, sector constituted a brake on economic devel- promotion of environmentally sound minerals opment; first, through the extremely high cost production (to arrest mining-related environmen- to the economy of energy not delivered (due, tal degradation), and mitigation of the damage in particular, to low efficiency); and second, caused by the use of rudimentary and inadequate due to the extremely low degree of access to dBanI g sensus n Skeh6ldems1f Rform Workshop on Power Sector Reform in Bangladesh A workshop on Power Sector Reform was held in Dhaka, Bangladesh from September 30 to October 2, 2000. In addition to key sponsorship from ESMAP, the workshop was also supported by Trade New Zealand, USAID and the World Bank Institute. Some 150 participants from Bangladesh attended the workshop representing the Government, the power industry, energy companies, academia, consumer organizations, as well as the media. Distinguished civil servants chaired the various sessions. In addition to a representative from the International ILabour Organization (HIO), experts from Bangladesh, Australia, Canada, Chile, India, Malaysia, New Zealand and the United States presented views on the sequencing an(d timing of reform, perspectives of stakeholders (particularly service providers) on reform as well as the international experience in miarket design, privatization, and competition in the power sector. Panel discussions gave stakeholders the opportunity to raise their concerns about reform. A full day was devoted to the financial, institutional and technical challenges confronting the power sector in Bangladesh where various stakeholders shared their views on the issues. During the second day, following a general presentation on the power reform process, the experience of various countries was discussed in terms of restructuring, unbundling and privatization together with their impact particularly on labor, service quality and tariffs. A special session was devoted to the various forms of regulation, and what Bangladesh's options are in this respect. Labor issues in the reform process-a real concern in Bangladesh-were discussed on the third day by representatives of labor organizations from Bangladesh and abroad including the ILO. The stakeholder consensus resulting from the workshop was manifested in a recommendation adopted at the workshop's conclusion calling, inter alia, for the institution of a competitive generation market, together with regulated transmission and distribution activities within a twelve-year period. The workshop was well covered by the written and electronic media, and made a genuine contribution to furthering power sector reform in Bangladesh as recognized by the participants who, in the final session, invited the decision makers to act. Conitributed by Marc Heitner 38 I Energy Sector Management Assistance Programme supply by the vast majority of the population. tariff schedules, uncertainties on taxes royalties, The World Bank supported the development of a accounting costing, and risk assessment). private power policy, a partial-risk guarantee for an IPP, and has worked closely with the Asian Therefore, despite the significant mutual long- Development Bank and other donors on sector run benefits, a "market failure" prevails in the restructuring. While the government had made development of regional power markets because progress on IPPs, consensus had yet to be de- the costs for each individual party to take the lead veloped on the scope of power sector reforms. In in developing a regional market on everyone's this context, the government requested ESMAP behalf are too high. Since ESMAP is particularly assistance to organize a technical workshop on well-positioned to address such inter-country power sector reform for high level government "market failure" due to its global mandate, it has officials as well as stakeholders from the labor taken the initiative in facilitating -inter-country unions, academia, and consumer groups. Box stakeholder consensus-building through discus- 5.7 summarizes the workshop's contribution to sions and knowledge generation in four parts bringing international expertise and best prac- of the world. In cooperation with other devel- tices to Bangladesh for stakeholder consensus- opment partners, (USDOE, USAID, UNDP, ADB, building for Bangladesh's power sector reform CIER, etc.) regional banks and economnic integra- process. Following the workshop, the Govern- tion organizations; ESMAP has been supporting ment of Bangladesh approached the World Bank regional integration activities in South Amnerica, for a technical assistance project for power the Mekong Delta, the Nile Basin and *West sector reform. The processing of this TA slowed Africa. Three of these are presented here. down during the election period of Fall 2001 but has resumed with a renewed Bangladeshi expres- The South America - Regional Electricity: Mar- sion of interest. kets Interconnection activity has been a col- laboration between ESMAP, USAID -and CIER Developing Consensus for Regional Power (Regional Electric Integration Commission) and Markets has conducted a two-phase study covering ten countries: Argentina, Bolivia, Brazil, Chile, Co- The regional integration of power markets can lombia, Ecuador, Paraguay, Peru, Uruguay, and potentially provide significant operational and Venezuela. The first phase has analyzed and investment savings, improved quality of service, shared the current restrictions to the develop- and reduction in local and global environmental ment of interconnections and international impacts. In South America alone, the reduction power trade amongst the countries of the region. of operating cost resulting from an integrated The second phase has developed options for operation could be about US$1,080 million per removing such restrictions and recommended year for the period 2001-2015. to the stakeholders an action plan towards the establishment of a competitive regional power- However, interconnection does not come easily, market. A third phase is being commenced to (i) as it requires harmonization of contractual, com- review the regulatory and commercial regimes in mercial and regulatory regimes. The barriers to each Mercosur and Andean country, (ii) draft le- power market integration have to do with poli- gal documents for harmonized legal, regulatory , cies (such as national self-sufficiency policies, and commercial regimes, and (iii) develop a draft: inadequate treatment of international trade in lo- agreement, MOU and terms of reference for the cal legislation), technical issues (lack of regional design of a regional market. transmission planning, lack of protocols), institu- tional issues (national utilities not keen to trade) The Greater Mekong Sub-Region (GMS) includes, and commercial/financial issues (inadequate Cambodia, the Lao PDR, Myanmar, Thailand" Annual Report gItsq@ 21Q 1 39 Vietnam, and the Yunnan province in China. Uganda). The first phase of the activity gener- Some preliminary estimates indicate that optimi- ated knowledge that demonstrated how, under zation at a regional level would result in reduc- current conditions, the best opportunities for tion of costs 'of about US$10 billion for the pe- power trade primarily exist at the sub-basin lev- riod 2000-2002. In collaboration with the Asian el, particularly in the Nile Equatorial Lake region Development Bank, the ESMAP Development of and the Eastern Nile. This knowledge was lever- a Regional Electricity Market in the Greater Me- aged to bring the stakeholders to the discussion kong Sub-Region project has shared knowledge table. The second phase of the activity is aimed and experience related to international trade at establishing a Regional Power Forum and to with the country representatives and started a create an enabling environment for power trade process to eliminate the barriers. Workshops and identify specific investments that can be have been conducted to build consensus towards realized at sub-regional levels. This knowledge, power trade, present the regulatory, commercial, generated with a high proportion of ESMAP and technical issues to decision-makers from the support, has already become the basis for some participating countries. During the fall of 2001, significant fund-raising by the Nile Basin coun- an Inter-Governmental Agreement was been tries under the broader Nile Basin Initiative. developed for signature by the ministers of the participating countries. In June of 2001, the 10 Nile Basin states jointly called a meeting of donors and development The ESMAP Nile Basin Power Trade activity was agencies in Geneva to launch the International conceived as a part of a larger development ef- Consortium for Cooperation on the Nile (ICCON) fort, the Nile Basin Initiative, and is being car- and raise financial support for the Nile Basin ried out with the participation of ten riparian Initiative. The donor community pledged US$140 countries (Burundi, D. R. Congo, Egypt, Eritrea, million in grants to implement a basin-wide Ethiopia, Kenya, Rwanda, Sudan, Tanzania and program of research, capacity building and ,cec 40 IEnergy Sector Management Assistance Programme technical assistance, and begin detailed planning of relevant to most developing countries and then investment programs, the first of which is expected analyzes the California market design and the to amount to about US$3 billion. The donors will origins of the crisis. work With the Nile states to secure the financing for this and future phases of investment. Creative Adaptation of the Single-Buyer Model: China In September 2001 and January-February 2002, the Nile Council of Ministers met and agreed In addition to the timely publication of the on a series of actions that has given impetus California paper, ESMAP also contributed to to launching the sectoral level activities. At the the development of an analytical foundation for sectoral level, in the Nile Equatorial Lakes region fostering competitive markets in China. Over the and Eastern Nile regions, projects to foster the past two decades, China has made impressive development of regional power trade will be progress in reforming and commercializing its implemented. power sector. All provincial power companies have been corporatized and are I operating as Designing Wholesale Power Markets private businesses. Although most investrments still require central approval, budget allocations The design of wholesale power markets was the have been phased out and subsidies eliminated. most visible frontier of power market develop- Electricity prices are generally in line with, or ment through the 2000-2001 period. The' power higher than, long-run mnarginal supply costs in crisis that hit California in the summer of 2000 most (notably the largest) grids. Private partici- brought not only wholesale markets but the pation in the power sector has been introduced entire power market deregulation agenda into with some 40 projects involving private develop- question. Policy-makers in developing countries ers, with an installed capacity of 28 gigawatts began to wonder whether the introduction of (in China's 300-gigawatt system), operating or private participation in their power sectors was under construction at the end of 1999. a recipe for greater difficulties than what their power sectors were already in. At that stage of reform, it was becoming clear in the late 1990's that the single-buyer dispatch The California Power Crisis: Lessons for mechanisms implemented at the provincial level Developing Countries had reached the limits of their usefulness-, par- ticularly in the more developed provinces. In To address the question marks emerging from the essence, the Chinese power sector was entering California experience for developing countries, the final phases of its shift to market principles. ESMAP and the World Bank's Energy and Min- The identification of the path to be followed ing Sector Board presented an analysis of the in these final phases, required careful analysis lessons of the California crisis for developing of the system as well as the options available. countries in a paper"2 published in April 2001. ESMAP's Designing competitive single-buyer The paper argued strongly against the impres- market structures activity provided support to sion that power sector reform is too risky for the Government of China for guiding the power developing countries and identified poor market sector through its evolution from discrete pro- design-rather than the very proposition of re- vincial systems to' a greater integrated market. fdrm-as the Achilles heel of the collapsed Cali- A three-stage approach was identified for devel- fornia power market. Wholesale markets based oping competitive inter-provincial pool markets on spot pricing are near-term options only for a handful of developing countries. Therefore, the The California Power Cris,s Lessons for Developing Countries April 2001 The World Bank Energy and Mining Sector Board and ESMAP [www worldbank orglhtmllfptenergyl paper lays out competitive market design options calexphtmll Annual Report l ;li L 41 through the introduction of a mandatory com- Catalyzing Action through Sustained and petitive single-buyer market (stage 1), wholesale Targeted Engagement competition (stage 2), and retail competition making the market fully competitive (stage 3). Changes in policies and drafting of decrees and The activity was focused on developing the laws require adequate resources and long term conceptual design and analytic framework for engagement-often not available together. Cata- different structural variants of the single buyer lyzing such changes presents an even greater power market model as building blocks for the challenge for ESMAP. Given ESMAP's focus on stage 1 competitive market. poverty reduction and its three-pronged strategy of helping to reduce energy poverty, to develop The proposed three-stage approach (which care- energy markets and to ensure environmental fully matches the evolution of the industry struc- responsibility, the effectiveness of ESMAP's ture with that of the market structure) would be policy advice activities often depends on tar- of interest to other countries interested in using geted, sustained and coherent engagement of a the single buyer mechanism more creatively as a client country's policy-makers and stakeholders. transition phase. The report introduces in detail ESMAP's work in Vietnam is an example of this. issues faced by post-reform power sectors (such as planning, transmission tariffs, stranded costs, ESMAP's continued technical assistance to the long term take-or-pay contracts of many Vietnam through a host of activities in the 1990's IPPs). It also describes the changes in the roles has helped stabilize Vietnam's ability to attract in- of the market participants and how the various vestment for oil exploration, supported the devel- functions are. performed13. opment of indigenous gas resources for building a modern gas industry, and helped put the electric- Designing a Wholesale Power Pool for ity sector on a path to becoming an effective and Thailand efficient input into Vietnam's growth. This con- tinued and committed support has proved to be a In a similar vein, ESMAP supported the genera- crucial catalyst for policy action and investments tion of knowledge and policy recommendations in Vietnam's energy sector. for the establishment of a wholesale power pool in Thailand. The Thailand Power Pool Study In late 1998, at a time of low petroleum prices, built capacity within the National Energy Policy the Government of Vietnam sought ESMAP Office (NEPO) to ensure that the design of the advice on what changes may be needed in power market and industry structure is capable of Vietnam's, petroleum contracts to maintain achieving long-term operational and investment competitiveness for attracting petroleum explo- efficiency goals. ESMAP supported the develop- ration. The ensuing policy advice from ESMAP ment of a market and industry structure for a brought awareness to the Government about the wholesale power market in Thailand. With the competitiveness of the fiscal terms for petroleum recommended blueprint for a future overall struc- activities and spurred the government to initi- ture of Thailand's electricity supply industry (in- ate a revision of the Petroleum Law. A decision cluding detailed treatment of generation, distribu- by the Prime Minister in June, 1999, established tion and supply, energy conservation, efficiency a Steering Committee and a Working Group for and diversity), a plan for transitioning to the new revising the Petroleum Law. The Government re- industry structure has also been recommended. As quested assistance from The World Bank/ESMAP in the China case, these materials are also useful , for decision-makers from other countries inter- " The policy discussions, technical studies, and market implementation trials that helped shape this advice are summarized in the report titled Fostering Competition in China's Power ested in identifying industry designs and reform Markets (World Bank Discussion Paper No 416) which has been published as a Joint ESMAP, World Bank and State Power Corporation of China report steps suitable for their electricity industries. 42 _ Energy Sector Management Assistance Programme tory, aimed at providing natural gas at the level of about 2.7 bcm/year for the next 20 years. This level of natural gas is sufficient for providing 3,600 MW of combined cycle power plants which represent about 60 percent of total power capac- ity in the country. ESMAP has played a catalytic role in advising and assisting the government of Vietnam, PetroVietnam and other agencies in resolving the complex issues involved in the de- velopment of this project. ESMAP's contribution to Vietnam's oil and gas sector came at a time when other sources of funding were not available to support the sec- ___ tor's needs, particularly for tailor-made capacity building at PetroVietnam. The rapid response and continuity of engagement brought by ESMAP to this sector paved the way for signifi- cant co-operation between the World Bank and PetroVietnam, thus increasing the Bank's abil- ity to give policy advice to the Government. At the time ESMAP support commenced, the World Bank lending to the energy sector in Vietnam Traditional indoor cookstove in Mongolia. was focused on the electricity sector with little leverage in the oil and gas sector. for the revision of the Petroleum Law into a modern legal and regulatory framework for the ESMAP's support in Vietnam has also been criti- petroleum sector and for enabling Vietnam to cal for the preparation of a new electricity law attract foreign investment to develop the hy- intended to facilitate key structural, governance drocarbon reserves. As detailed in Box 5.8, the and regulatory reforms in the power sector. The Petroleum Law was amended with a number of principal objective of these reforms is to enhance ESMAP recommendations in mid-2000. the efficiency and effectiveness of the power sec- tor to meet the needs of a growing economy and ESMAP's assistance in the gas sector has com- ultimately provide access to the entire popula- prised several elements of support to the PetroVi- tion. Through the ESMAP Vietnam: Power Sector etnam Gas Company (PVGC) including: (i) advice Regulation and Electricity Law activity, ESMAP on the design of fiscal terms for oil and gas explo- and other donors worked with the government ration and development, (ii) methods for enhanced for nearly four years to build consensus for the reservoir management, and (iii) how to introduce draft law and secondary regulations, and for gas in a safe and environmentally friendly way. the implementation of separate arms length On December 15, 2000, the Government of regulation for the power sector. Developing the Vietnam signed ground-breaking contracts with a consensus has required considerable effort and consortium of BP-Amoco, Statoil and ONGC for the use of innovative techniques that may be fol- the development of the offshore Lan Tay and Lan lowed for other sectors. These included: Do gas fields and a 400 kim submarine gas pipe- * a national steering committee with a clear line. At US$1.8 billion, the project is the largest mandate and a defined timetable for the ever private sector investment in Vietnam's his- preparation of legislation, Annual Report 2"J.2' A'' C - 43 Ij1~ k M LRevision of Vietnam's Petroleum Law Despite Vietnam's large potential for hydrocarbon production, the country has found it increasingly difficult to attract foreign investments in the upstream oil and gas sector after a peak in exploratory drilling in the early 1990s. The main factors contributing to this were understood to be (i) an out-of-date petroleum law, (ii) an inflexible fiscal system that did not adjust to lower international oil prices, (iii) inefficiencies in the bid award process, and (iv) delays in negotiating the first major gas deal. ESMAP had been involved in financing technical assistance to the Government of Vietnam on the design of fiscal terms for oil and gas exploration and development. In March 1999, the Office of the Prime Minister made an urgent request to the World Bank for assistance in addressing the lack of investment in the petroleum sector. In June, 1999, the Prime Minister of Vietnam established a group, the Petroleum Law Committee, for the revision and supplementation of the existing petroleum law. An ESMAP-IDA financed activity was developed and approved with the aim of addressing the first three factors identified above. ESMAP brought international expertise to this committee by October 1999 to develop a draft petroleum law and implementation decree, drafts of model contracts in accordance with international best practices, and a proposal for an improved award system for petroleum blocks. By January 2000, the steering committee had prepared a first draft of the revised petroleum law with the task team's assistance and stakeholder participation. In March 2000, the Standing Committee of the National Assembly of Vietnam decided to take up the Revised Petroleum Law for approval in the National Assembly meeting starting in May 2000. On May 17, 2000, the National Assembly passed 17 amendments to the country's petroleum law (including a substantial portion of the recommendations made by the task team) with the aim of attracting more foreign private investnient to the sector. Obtaining effective results for such an expeditious law revision required design and implementation of an activity that was integrated with the sectoral program, prompt response to client needs, and mobilization of quality professional resources. Contributed by Anil Malhtotrai . the use of a stakeholder roundtable, which was out of Vietnam on July 1, 2001), and the ongoing considered to be a breakthrough by all partici- support to the development of Vietnam's min- pants in clarifying underlying issues, and ing policy and commercial code make for a very * post-workshop meetings with the senior key successful ESMAP engagement in Vietnam. This stakeholders to help design next steps, and targeted engagement may be seen as a model to address differing viewpoints, particularly for high-impact involvement in demonstrably within the government agencies. receptive ESMAP client countries. These innovative techniques and the contin- ued support were effective in bringing the best policy advice to Vietnam's electricity sector and to build consensus around this advice. However, the po.'y follow through has been less than smooth with the Government finding it politi- cally difficult to implement the necessary rise in tariffs. In addition to these activities, ESMAP's very successful Vietnam Renewable Energy Action Plan activity, the highly effective Vietnam Lead Phase-out Initiative (with a significant push fromr ESMAP intellectual leadership, GOV phased lead 44 _ Energy Sector Management Assistance Progromme 45 1 r V OF ESMAP ACTIVITIES AND 6lKu [AtDGE DISSEMINATION IMPACT OF ESMAP ACTIVITIES AND KNOWLEDGE DISSEMINATION - Energy Sector Management Assistance Programme DEVELOPING A FRAMEWORK FOR vaccine availability;, small and medium size ASSESSING -ESMAP'S IMPACT enterprise income creation as a result, of power or lighting availability,; and reduced incidence of ESMAP is a vehicle for combining new ideas pulmonary or bronchial diseases as a result of re- with funding and expertise to generate and dis- duced indoor air-polltition from improved stoves seminate knowledge, develop capacity, provide and/or substitution of traditional biomass by LPG. technical assistance, build consensus, and acquire However, selecting these indicators and, more im- experience for improving the delivery of energy portantly, documenting them through monitoring services to un-served and underserved popula- systems and/or surveys is costly -both in terms of tions in developing countries (see Figure 6.1). human and financial resources. Therefore, ESMAP. management has been looking into documenting The upstream nature of ESMAP work (see the impact of the programme in several ways, e.g:, Figure 6.2) makes measurement of its impact - documenting indicative accounts; and- assess- difficult. The immediate products of ESMAP ing selectively the irnpact of ESMAP projects on activities-knowledge and capacity, as shown in policy development in some countries, on leverag- Figure 6.2-are difficult to quantify for judging ing World Bank or other financing, and leveraging ESMAP's success. The ultimate criterion for private sector investments. judging ESMAP's success would be that the pro- portion of the poor served with modem energy The framework for tracking ESMAP's impact services would be substantially increased, and that, as a result, there would be a substantial It is to be noted, however, that.given the 'com- improvement in energy-related poverty reduc' plex set of factors involved in- creating the tion indicators. Such indicators could include: downstream activities related to ESMAP aicti'vi- improved vaccination 'as a result of cold-chain ties, it is usually difficult to claim ,that ESMAP Figure 6.1 ESMAP: From New Ideas to Impacts. | Figure 6.2 ESMAP: From New Ideas to O'utputs. VJ_ .. Annual Repoi t M - 2,j. 47 was solely responsible for World Bank Group or ply estimates developed under this activity was partner investment operations, policy changes also used by private consultants (ERM, UK) for or public/private sector investments related to the market analysis feeding into the Bujagali its activities. Yet, in some cases, the connections hydropower project. between ESMAP activities and their downstream impacts are more easily discernible. Leveraging Financing from the World Bank Group and Other Sources Documenting Indicative Stories: In 2000-2001, ESMAP attempted to meet the challenge of mea- Pre-investment Work for Renewables in India: On suring its impact by collecting information from the request of the Government of India, ESMAP task managers of past ESMAP activities and en- commissioned a strategy paper titled "Opportu- ergy sector operational managers about down- nities for Commercialization of Nonconventional stream activities that followed ESMAP work. Energy Systems" in 1988 for integrating renew- The result is a collection of indicative stories ables into the Indian power sector. As a follow- that are now being categorized to form the basis up to this activity, in 1991 GOI requested feasi- of a more structured and systematic method of bility studies to be done for specific sites based capturing the impact of ESMAP activities. These on this strategy. In response, ESMAP commis- categories that have emerged to date and the sto- sioned two activities with the aim of making a ries associated with them are being presented in significant number of mini-hydro and wind farm this section: swift, high-impact response to calls sites ready for investment consideration in col- for technical assistance, knowledge generation laboration with water and power state ministries and "venture capital" for promising new en- in five Indian states. The ESMAP team developed ergy service delivery concepts, and intellectual standardized cost estimates for this cohort of leadership in energy and development. sites. It also built capacity among ministry staff for computer-based analysis of cost data as well Successful Technical Assistance as water and wind flow data. The strategy pa- per and the pre-investment studies provided the Uganda Energy Strategy: In 1999-2000, the conceptual basis and operational framework for Government of Uganda engaged in the prepa- a joint World Bank/GEF project in late 1992. ration of its rural energy strategy. The key The "India Renewable Resources Development documentation available was the ESMAP Rural Project" is implemented by the India Renewable Electrification Strategy study which developed Energy Development Agency (IREDA). Under this the rural energy consumption data and recom- project, IREDA has sanctioned solar PV projects mendations that formed the foundations of the with a combined capacity of 4.2 MWp. Of this, rural energy strategy and the design of the Rural nearly 1 MWp has been installed through some Electrification Fund. 40,000 individual systems. Fourteen wind power projects were financed through this project, with In late 1999, ESMAP also funded a workshop a total capacity of 49.9 MW. The project has (documented in the ESMAP technical report: directly financed 19 small hydro projects with Uganda Power Sector Reform and Regulation a total capacity of 43.5 MW. Total World Bank/ Strategy) which built the awareness and support GEF support for the renewable energy compo- among key policy-makers and parliamentarians nents was US$141 million. for the sector reform strategy. The knowledge brought to bear at this workshop also increased The fact that knowledge generated by ESMAP the Ministry of Finance's interest in the valu- was available for free circulation to all par- ation of its liabilities, particularly guarantees, ties significantly brought down the barriers under the reform program. The demand-sup- for stakeholder involvement in the project. The 48 - Energy Sector Management Assistance Programme private sector took ESMAP's work further and and US$17 million into transmission, and the found over 100 possible sites for mini-hydros, wholesale price of power dropped from US$18/ .wind farms, and photovoltaics that were con- MWh in 1994 to US$14/MWh in 2000. sidered for investment. In addition, the ESMAP activity had a catalytic effect on the thinking of INTELLECTUAL LEADERSHIP IN the energy policymakers of the Indian states, ENERGY AND DEVELOPMENT particularly the staff of the State Electric- ity Boards, which cleared the way for a major Energy and Development Report 2001 project focused on renewables. The Energy and Development Report series, ini- Case Studies on Options for Renewables: In tiated in 1999 as a joint publication of ESMAP 1996, ESMAP funded case studies of options in- and the World Bank, has' become a widely read volving renewables for electric power in China. "flagship" product and an effective means for The wind and photovoltaics studies were used disseminating ESMAP's knowledge and lessons as the foundations of the US$205 million China learned. Because ESMAP has taken a leading Renewable Energy Development Project includ- role in the early implementation of Fuel for ing US$13 million from the World Bank, US$27 Thought: An Environmental Strategyfor the.En- million from the GEF, and the balance from ergy Sector, the Energyaand Development Report commercial banks and private investors. 2001 will report on progress in implementing,the energy-environment strategy paper's agenda. Techniques for financing Photovoltaics: An ESMAP concept paper on techniques for finaric- Fuel for Thought was presented to the World ing photovoltaics (December 1996) elicited a Bank's Executive Directors on July 20, 1999 US$1.5m pledge from the World Bank and the following an extensive period of consultation Rockefeller Foundation leading to a pledged within the Bank Group and with external stake- investment of US$30 million for the Solar De- holders. It examined the size and scope of the velopment Corporation, which is a non-profit challenge facing developing countries - and the global investment fund run by a management world at large - as continuing economic growth, consortium for investing in firms involved in and associated with it, energy consumption, led rural PV in developing countries. to increasing environmental impacts. In looking at the Bank's record, Fuel for Thought found that. Power Sector Reform in Bolivia: In March of more time than initially estimated was needed 1993, the Bolivian government sought ESMAP to achieve results on environmental and social assistance in designing reforms for the electricity issues; that commitment from borrowers to stay supply industry. By May of 1993, the ESMAP- the course to achieve real changes was often funded activity had commenced with the first missing and that the Bank Group's commitment workshop for key electricity industry players and to energy efficiency and the environment was World Bank experts to review the situation and not what it should or could be. options for reform. In September of 1993, the draft electricity law developed by ESMAP-fund- Fuel for Thought identified six strategic ed local and international technical experts was objectives towards which the Bank would work, presented to the government and was passed by which were to: parliament in December 1994. The objectives of * facilitate more efficient use of traditional fuels the law were to attract private sector capital and and their substitution by modern fuels in rural increase efficiency through competition. The Bo- and peri-urban areas; livian power sector has since attracted US$250 * protect human health of urban residents from million of private investment into generation air pollution due to fuel combustion in residen- Annual Report ft -?tJ r 49 tial, transport, industrial and power sectors; * promote environmentally sustainable develop- ESMAP Dissemination Mission ment of energy resources; ESMAP's dissemination activities will identi- . mitigate the potential impact of energy use on fy and evaluate both ESMAP-generated and climate change; relevant external knowledge, with the aim . develop capacity for environmental regulation, of both contributing to the build-up of the monitoring and enforcement across all levels obal cowledg to to the the of governance; and global knowledge stock and to the timely delivery of specific knowledge products to * make the Bank more responsive to addressing thoe o w decly bnefgt prSMct wl the adverse environmental impacts of energy those who will directly benefit. ESMAP will sector. h promote information/opinion exchange, sector. K and will facilitate reaching of eonsensus for The basis of EDR 2001 will be The World Bank follow-up action. Group's management's report to the Bank's Executive Directors, submitted at the end of September 2001, combined with perspectives The World Wide Web offers an important means from informed outsiders on how they consider for ESMAP to disseminate its work and has in- the Bank has performed since the publication of creasingly proven to be the first point of entry Fuel for Thought. to external first-time audiences. In the period 2000-2001, ESMAP published 33 reports total- KNOWLEDGE DISSEMINATION ing more than 240 reports in English, French, Russian, and Spanish, thr6ugh three.series: the Consistent with both the guidance of the ESMAp annual Energy Development Report, the formal donor community and the needs of our clients, publications series, and. the technical report the period of 2000-2001 saw the continued ex- series. Through this window,-ESMAP is able to pansion of ESMAP's commitment to knowledge reach an array of client countries, other develop- dissemination. ESMAP's dissemination strategy ment institutions, NGOs, the private, sector and explicitly acknowledges ESMAP's dual role in communities at large. both providing timely delivery of knowledge products tailored to a specific client's require- _ _ _ E m_ _ _ ments, and its contribution to the build-up of the flWdrw*.@oi.zs stock of global knowledge on' energy and devel- opment. The strategy also recognizes the need to Enag9y Soctor Dmgmnt AtsisuncoPmgmm.NO maximize cost savings and distribution efficien- E: cES I A UR: cies by increasing accessibility of electronic dis- tribution channels. Developments have included the preparation of the first ESMAP knowledge product that will be disseminated in CD-ROM PromOtng Energy Solulons ForEconomlc Dovalopmant database format to complement traditional forfMAPP print means. In addition, ESMAP is preparing _______________ a compilation of all electronically available M ."=tc.uo. s* ESMAP reports on a master searchable CD-ROM. The CD will be distributed directly to end-users and intermediary institutions who then become re-printers and distributors of the products at the l local level. , , 50 I Energy Sector Management Assistance Programme and in October 2000 in Montevideo, Uruguay) Energy * World Energy Forum on Regulation (May 21- Services 24, 2000, Montreal, Canada) forthe *Co-sponsored the Biomass Conference (June, WrdsPoor 20000 in Sevilla, Spain) * Distributed Generation (October 2000, San Diego, California, U.S.A.) -Co-sponsored the Gender and Energy Work- - _ 1 t > 1 | shop (December 2000, Durban, South Africa) _ 1 . jR F , 1|= 11 .... * Village Power 2000 (December 4-7,. 2000, * ] i !!!Washington, D.C., U.S.A.) * Accelerating Grid-based Renewable Pow- er Generation Conference (April 2001, Washington D.C., U.S.A.) . Infrastructure Forum (May 2-11, 2001, Washington, D.C., U.S.A.) L *; .1A, A A Dc * Africa Policy and Planning Workshop: Women _._LJ1 ~ ~ ~ D1- R- 1 | ErgadeeomnRor2000 in Energy Developmient (September 14, 2001, Washington, D.C., U.S.A.) * Biomass Workshop (November 15-16, 2001, The Energy and Development Report 2000 (EDR).: Washington, D.C.) "Energy Services for the World's Poor," followed Expansion of the ESMAP web site, www.esmap.- in the tradition established in the 1999 joint org, has grown apace with the ever-expanding ESMAP/World Bank review of energy after the demand for "just-in-time" information. The site financial crisis. The EDR 2000 has been well now includes regular news features on results received in the development community, and from ESMAP project field activities, and contin- has served as a catalyst for re-directing energy development assistance towards the alleviation . of energy poverty. The report brings together survey papers and case studies that focus on - three broad themes: understanding the chal- r e tit.o Hy'dr'o Pows.r i cZlpn onrc lenge of expanding access to energy for low-in- M y r Don Co'ntr,'. come households and communities; facilitating technological and commercial innovations in serving the poor, through market structure and regulatory reform; and reducing financial, legal, regulatory and tax barriers to better services for low-income households and areas. ESMAP also intensified its outreach efforts most visibly through co-sponsorship of key conferences for the exchange of international experience and follow-up action planning. These A glIID(l included: A A, * Energy Efficiency Operational Exchange Work- XC 1., ,' shops (April 2000, Washington, D.C., U.S.A., 0.'., --, - . Annual Report gXti _______t 51 ues to update readers on the important ESMAP The ESMAP Technical Paper series was started events such as the semi-annual ESMAP Call for in year 2000 as a service to the energy and de- Proposals and status of proposal evaluation. velopment community. ESMAP Technical Papers As of April 2002, formal ESMAP publications, are informal publications that are only lightly technical papers, Semi-Annual Status Reports of edited and are not subjected to detailed ESMAP Projects, and ESMAP Annual Reports are now peer review. available online in PDF format, and a number of them are also available on CD-ROMs. Links are They are a vehicle for capturing and disseminat- now posted for easy access to the relevant web ing significant work - both by ESMAP and oth- sites of ESMAP donor and other partners, and ers - that might not otherwise become known. a number of partners have instituted reciprocal Examples include high quality consultants' cross-links back to ESMAP. reports which, as intermediate products, do not substitute for final ESMAP project reports but In many cases, ESMAP support has gone be- still deserve stand-alone distribution, as well as yond co-financing and has involved the active final outputs of work conducted by other multi- involvement of ESMAP staff and task managers lateral or bilateral programs that warrants wider in the conceptualization, design, organization distribution. The current number of Technical and content delivery of the event. This active Papers total over twenty publications in the participation has enabled ESMAP to positively period 2000-2001. influence the agenda and substance, and has also raised the program's profile. ESMAP booths ESMAP's management recognizes that much is at the conferences are ready points of literature still to be done to improve knowledge dissemina- distribution, and also increase awareness and tion. This is one of the business lines which will demand for ESMAP's knowledge outputs. be pursued over the next business plan period. 52 _ Energy Sector Management Assistance Programme Annual Repolt 53 I~~~~~~~~~~~~~~~~~~~~~~~~~~~ I it G N A 1NM A E I~.I GOVERNANCE AND MAWNAGEMENT THE CONSULTATIVE GROUP Proceedings of the April 2000 CG are attached as Annex 1. The Governance structure of ESMAP includes a Consultative Group (CG) composed of a chairper- The World Bank's Energy and Mining Sector son, representatives of donors, and members "at Board commissioned an external review. of the large" from regions receiving ESMAP assistance. four above mentioned Bank-managed energy trust funded programs. The terms of reference instructed Mr. Richard Stern, Chair of the CG since July the reviewers to focus on the following key areas: 1997, retired as Chair on April 18, 2000 in prepa- (a) examine the effectiveness of the programs; (b) ration for his eventual retirement from the Bank ascertain and confirm if the programs were prop- at the end of the year. Ms. Nemat Talaat Shafik, erly coordinated and managed; (c) verify if the Vice President of Private Sector Development & programs' objectives were clear and in-line with Infrastructure (PSI), succeeded him as Chair. In the Bank's evolving priorities in the energy sec- June of 2001, Ms. Shafik appointed Mr. Jamal tor and; (d) formulate recommendations to Bank Saghir, Head of the Energy Mining Sector Board management and donors on the continuation of and Director, Energy and Water Department, to these programs and on possible ways to improve act as Chair on her behalf until further notice. their coordination and effectiveness. There were no changes in the composition of the The draft report of the study was submitted to CG Members at Large. Mr. Rufino Bomasang, the Energy and Mining Sector Board in mid- President & CEO of PNOC Exploration Corpora- 2000 detailing the need for greater collaboration tion of the Philippines, and Mr. Kethane Sithole among the programs. One of the study's key of Botswana, continued in this role. recommendations was to combine the Consulta- tive Group meetings of the respective programs. The Annual Meetings of ESMAP's Consultative This recommendation was accepted by the Sector Group were held on April 18, 2000, and May Board and led to the May 8, 2001 Joint Business 8, 2001 at the World Bank's headquarters in Strategy meeting, where each program manager Washington D.C. An Interim CG meeting was held outlined the business strategy for the reporting on November 8-9, 2001, in Lisbon, Portugal. period and demonstrated the programs, funding needs. The Summary Proceedings of the May 8 At the April 18, 2000 meeting, the CG reviewed meeting are attached as Annex 2. the progress made in implementing the strat- egy outlined in the 1999-2001 Business Plan, On' November 8-9, 2001, ESMAP held an interim which had been unanimously endorsed at the . CG meeting in Lisbon, Portugal. This- meeting November 1999 Interim CG meeting. A Joint was held primarily to report on the delivery of Roundtable Discussion preceded the CG meet- the 1999-2001 Business Plan and to introduce ing on April 13, 2000. This was a particularly the draft 2002-2004 Business Plan. Management significant roundtable as it brought together provided an in-depth analysis of the 1999-2001 the partners of the four Bank-managed energy Plan by demonstrating how the Plan's strate- trust funded programs, which in addition to ES- gic framework on access-environment-market MAP are the Asia Alternative Energy Program linkages helped refocus the Program on the (ASTAE), Africa Rural and Renewable Energy sustainable energy-poverty reduction paradigm. Initiative (AFRREI), and Regional Program for ESMAP's strategy was also recognized as highly the Traditional Energy Sector (RPTES). The influential in shaping The World Bank Group's theme of the Roundtable was Energy, Poverty Energy Business Renewal Strategy. The CG and Environment, and each program contributed commended ESMAP on achieving the overall significantly to the discussions. The Summary objectives of the 1999-2001 Business Plan. Annual Report 2M a :1I 55 The draft 2002-2004 Business Plan was well re- meeting, the CG concurred with the Chair and ceived and the CG members discussed each pro- Sector Board and agreed by consensus to the posed business line at great length as a prelude expanded role of the TAG. The TAG will act on its to prioritization of the business lines according expanded role in 2002. to donor preferences. It was decided that each donor should rank the business lines according During the reporting period the members of the to their funding priorities. This identified strong TAG maintained frequent contacts with ESMAP's support for the following themes: energy-poverty management team, and held meetings with linkages, indoor air pollution, impact of reform several task managers, providing advice and on the poor, methodologies and M&E for multi- guidance. Mr. Jan Moen, completed his report on sectoral energy work, knowledge dissemination Introducing Competition into the Electricity Sup- and program governance. After the round of ply Industry in Developing Countries: Lessons from comments and feedback by donors following Bolivia, which was published in August of 2000. the Lisbon meeting, the Business Plan has been finalized and published. The Summary Proceed- ESMAP MANAGEMENT, STAFFING ings of the November 8-9 meeting are attached AND PROCEDURES as Annex 3. ESMAP's staffing policy in 2000-2001 has been THE TECHNICAL ADVISORY GROUP focused on maintaining a highly skilled and effi- (TAG) cient small administrative team while the project task management continues to be exercised by The Technical Advisory Group comprised four staff from all operational or research units of the members in 2000-2001: Messrs. Alfredo Mirkin Bank Group. The administrative team includes (Moderator), Andrew Barnett, Youba Sokona and six full-time and two part-time staff. A Lead Op- Jan Moen. The TAG's mandate is approved by the erations Coordinator joined the team in January CG through the terms of reference for the TAG, of 2000, with particular strengths in the energy- and its line of authority is exercised through the environment area, and a Team Assistant joined Chair of the CG. in July of 2000 to strengthen the administrative, portfolio reporting, and knowledge dissemination On October 11 of 2000, ESMAP Management functions. ESMAP project task managers come submitted a letter to the CG requesting an amend- from increasingly diverse units, which illustrates ment to the TAG's terms of reference to extend ESMAP's success in building up the complemen- the maximum length of service from four to six tarity between energy and other services such years. This amendment was approved by the CG. as health, water, and environment. During the Messrs. Bamett and Sokona, whose terms were period, the complementarity with other programs scheduled to expire in November of 2000, agreed has also been strengthened, including the co- to continue as TAG members for a third term. sponsorship of several activities: Biomass Con- ference in Sevilla, Spain, June of 2000; Gender Another recommendation resulting from the re- and Energy Workshop in Durban, South Africa, view of the externally funded energy programs December of 2000; Gender, Energy and Poverty was to extend the mandate of ESMAP's TAG to Methodology, ASTAE-ESMAP, on-going. ASTAE, AFRREI and RPTES. The Sector Board and Chair of the CG also agreed with this recom- mendation and on March 9, 2001, Ms. Shafik, CG Chair, forwarded a copy of the review and rec- ommendations to the CG requesting their views on this recommendation. At the May 8, 2001 CG, 56 I Energy Sector Management Assistance Programme IMPROVEMENTS IN ESMAP SYSTEMS Between January and May of 2000, this system Q AND BUSINESS PROCESSES was designed in-house by the ESMAP staff and programmed by The World Bank Information ESMAP Portfolio Management System Systems Group. Since roll-out in June of 2000, this system has become the ESMIAP team's re- During the 2000-2001, ESMAP revamped the pository for all information relevant to any spe- management of its portfolio with the roll-out cific ESMAP-funded project (basic project infor- of the ESMAP portfolio management system in mation, financial data, implementation details, mid-2000. By the end of 2001, the new portfo- status of publication, original proposal process, lio management system had been mainstreamed etc.). Pertinent information on each trust fund into the ESMAP team's day-to-day work and (basic cataloguing info, details of all allocations has become a crucial tool for the delivery of and disbursements to projects, all received and ESMAP's services. expected tranches of funds, etc.) is also avail- able. The system also provides up-to-the-minute Objective and functionality. The key objective aggregate snapshots of the project portfolio and was to develop a system that: of ESMAP trust funds at the touch of a mouse to . manages all relevant information about the ESMAP team, task7managers, and donors. ESMAP-funded activities and trust funds; • helps optimize ESMAP's business processes Instant monitoring tools. Riding on this infor- (including through improved information for mation resource have come monitoring tools management decision-making); and that allow ESMAP to more accurately gauge . makes this information available to ESMAP the progress of its projects as well as manage its partners in a user-friendly manner. own effectiveness as a trust-funded program. For r i g ! |~~~~~~~~~~~~Ei -,vR9,.kieitf&, X P ,,~~~ ~ A jh*x.b ,e: T s sJ Q I POJ02 SliileiingIhemrn5ketiot Ecud Ouwind S141.0G0 $141, ______________l_- hosueehods in Ecuador PU7599 Vlap,ge Por Ps LC Rysenkova S1 40.0W 550A __________ A- ~~~~~~Laf 1Pnwta aend fg Ca(1ea ; 1i. . { 4eg} t {* t | sNFFI 2~ii ZN. r4-9 if . t- . 'c Pc424 UK Coxe Chld TF Gtobai Llbmant $148286 $75 P078 ~ ~ ~~~. ____rol _ ERF ~ . R 251 Xl~0 J iX Annual Report I - 001 57 example, status reports flag funding over-runs as ESMAP donors have pass-worded access to the well as implementation delays. ESMAP can also portfolio management system through the ES- do much better financial planning with system MAP website (www.esmap.org) from their respec- reports that instantly provide a snapshot of tive countries. This feature was acclaimed as a ESMAP's financial position (with funds already very useful resource by donors at the Interim CG allocated for projects, funds that will be required meeting held in Lisbon in November of 2001. The for approved projects in the future, tranches that Summary Proceedings are attached as Annex 3. have been received from donors and tranches that are expected from donors in the future). One group that has gained particularly from the ESMAP can instantaneously generate a set of availability of this online information is the ES- reports which buttress key management deci- MAP Technical Advisory Group (TAG). The TAG sions such as how a new call for proposals can is composed of four integational experts located be designed based on the available and expected in the UK, Norway,c Senegal and Argentina. The funding resources tied to thematic or geographic group presents its report on ESMAP performance areas. Such simple monitoring tools were highly to the CG at each meeting. For this purpose, it time-consuming exercises for ESMAP in the past. conducts consultations with ESMAP manage- ment as well as internal deliberations before CG Efficiency in producing standardized reports. In meetings and twice during the rest of the year. addition to these archival and monitoring capa- This international collaboration has been ren- bilities, the system has reduced the time taken to dered much more efficient due-to the accessibil- compile standard reports such as the semi-annu- ity of very detailed ESMAP' project and finding al updates of progress in each active project. The information on the World Wide Web. time taken to format, design and generate the semi-annual progress updates document (once Remaining link., Questions about the status of all updates and financial information have been commitments and disbursements for a given collected) has been reduced from weeks taken ESMAP project have traditionally been a typi- for the July-December 1999 and January-June cal and frequent query from task managers to of 2000 documents to l day taken for the docu- ESMAP finance and budget staff. The remaining ments July-December of 2000 onwards. part of this portfolio system's development is the smooth and accurate upgrade of disburse- Gains from user-friendly information sharing. ment and commitment info on a monthly basis. The ESMAP portfolio management system is not -This main reason for this missing link is that the only constantly available for all ESMAP staff to World Bank is still stream-lining the handling access but is also available to all ESMAP task of information related to trust-funded programs managers and any World Bank Group staff mem- on its institution-wide information system. The bers who need to learn more about ESMAP's ESMAP team is committed to establishing this projects. This introduces efficiencies by reduc- link during 2002. ing the time spent by ESMAP staff members responding to queries from -task managers be- Change in the format of the Call for cause task managers can access the information Proposals on their own screens. The same applies to new donors and World Bank Group staff members In response to feedback from proponents about who want to learn about ESMAP: they are able the time and effort required for participating in to view the ESMAP portfolio in a comprehensive ESMAP calls for proposals, ESMAP introduced presentation through the system. an abbreviated format for the decision cycle for its November 2000 call for proposals. In the past, ESMAP's two-stage application process 58 I Energy Sector Management Assistance Programme invited short concept notes and log-frames in nents. While the two-stage format was retained, the first stage, delivered reviewers' feedback to one-on-one feedback sessions were conducted proponents through decision memos and invited with proponents after the reviewers' feedback proponents of approved projects and good can- was published in the first decision memo. Ever didates (with design issues) to submit full pro- since, the attempt has been to eliminate the posals. Most often, the second stage had been a mismatch between the review panel's expecta- bottleneck because full proposals often did not tions from a full proposal and the key messages fully take note of the key issues raised by the understood by each proponent from the feedback review panel in the decision memo. This caused provided in written form. Efficiency gains have delays and frustration among proponents who been realized through this new format since the have often had to go through multiple iterations November 2000 Call. with ESMAP management before a proposal is considered ready for funding solicitation. For the November 2000 Call for Proposals, the application process was streamlined to allow more effective delivery of feedback to propo- I!1 1ji lProposalfor ESMAP ProJects' '- t@ http IA,,.. worldb.,nk orSt,,,I/pd/..n.*p/p,opo.. htm, )L = ---- --r,.- - - -, = -,-=r~ =-=-- 3-.=' -=;1; _,r,5 _: -F , t r ^ Comast emb Srv-_ 0Nm 5ho7.yrdi~ - ~ 9i*.oro of,M!; 5N W.b 5Itiiw ry!w @ f hTWAE,Tdj'sLk _Z E; THEWORLDBANKGROUP AWorldF,zoof Pceo,,y E ne;V ~~~~~~~~~~~Call'for K fin m em W :\ / Prop:osals . Asss¶aee A, .., b.I1~11 II Of ESMAP E ~~~~~Propramrne " F J1st 1O SA Promoting Energy Solutions For Economic Development Projects General Call for Proposals The Energy Sector Management Assistance Progranmme (ESMAP) is a global technucal assistance partnershlp sponsored by the World Bank Group and the UNDP which provides grants for upstream actities on sustamable energy development in developmg and transition economies / ESMAP mainly supports (a) Techmcal Assistance (specific stucdes, advisory services, pilot projects). and (b) Knowledge Generation and Dissemnation (traming, workshops and seminars, conferences and roundtables, publications) ESMAP is soliciting proposals for activities in the three areas of its strategic focus: - expanding access to modem energy (ncluding renewable sources) or improved traditional energy supply partcularly to the unserved poor in rural and pen-urban areas - addressmg the energy and environment nexus at the local, regonal and/or global levels, and - promotng the development of efficient energy markets (mcluding demand-side energy efficiency) at the national and intemational levels through poicy reform, effective institutional arrangements and active pnvate sector participation LWhle this is a general call for proposals, ESMAP woulddspecially welcome proposals related to Afnca and proposals deabng with access issues As before, proposals for mnovative cross-sectoral actvties (in partcular, vwth rural, transport, urban, water, health, f 3 http I/wv., ,,omonIo net/me,,,bn-s,r-,i,s/ ~- -- - 1,-_ '- - - -- '-r::--~.~.---Au RptH-- v _ 0 -I Annual Repoit 2AWiti- B3 59 '0 B- tANCIAL REVIEWV FINANCIAL REVIEW J Energy Sector Management Assistance Programme CONTRIBUTIONS RECEIVED process of reimbursing the World Bank in 2002 for the Technical Advisory Group expenses in- ESMAP receipts from its donors totaled some curred for the year 2000 and 2001 in the amount US$8.2 million in 2001 and US$5.0 million in of US$142,800. 2000. The contribution in 2001 marks an in- crease of about 63% from 2000 and about 81% As in previous years, contribution from the compared to 1999. This year, eight donors, in ad- World Bank and from UNDP (US$1,032,400 dition to the World Bank made cash transfers to in 2001 compared to US$877,500 in 2000) are the Programme through trust funds. The World considered as core, since they are not linked to Bank's contribution of US$1.0 million in 2001, any specific project. Including these, core con- an increase of about 21% compared to 2000 and tribution totaled about US$3,452,500 in 2001, decreased by 13% in 1999. The World Bank's or over 42% of total receipts. Germany, Finland, share of total contributions, decreased by 12% Denmark, Norway, the new donor-Duke En- compared to 1999 and increased by 260/o com- ergy International, L.L.C.-provided their entire pared to 2000. Table 8.1 shows actual receipts by ESMAP contribution as core funding. Sweden's individual donor for the period 1999-2001. contribution beginning 2001 are all core funds and Sida will continue to provide project-spe- NEW DONORS cific funding if funds -are available. United Kingdom provided core funding along with proj- ESMAP management continued to pursue new ect-specific funding carrying restrictions on the opportunities to interest new partners notably use of their contributions in identified recipient from the private sector. A new private sector countries. Other donors provided either thematic donor, Duke Energy International, L.L.C., from funding or project funding. the United States joined the Programme in the year 2000. However, past donors from the pri- vate sector did not renew their contribution for the last two years. Discussions with other donors, notably the United States, explored possibilities of partnerships, including co-financing when no direct contributions could be foreseen. During the latter part of 2001, ESMAP management was able to finalize a commitment from the United Nations Foundation that they will become one of the ESMAP donors, channeling funds via their cooperation with the United Nations En- vironment Programme. Fund raising efforts will continue in the coming year with the objective , ) of mobilizing the additional resources needed to implement ESMAP Business Plan 2002-2004. CORE AND THEMATIC FUNDING Core contributions from donors other than the World Bank totaled US$2,420,100 in 2001 and US$2,397,700 in 2000 including UNDP. There was an increase of US$464,100 compared to the core resources mobilized in 1999. UNDP is in the Annual Repott NN4sWu I 61 ESMAP Receipts, 1999-2001 1999 *' -- .2000 00Tota I Percentage of iF . ,.,. .Tota Donor ~ ~ ~ ~ ~~~~us$ oo~~~~~~~) - ~~~Receipts Core World . | 1 Bank 1,172 0 820.3 1,032.4 3,024.7 3,024.7 17.1 ] 30 Belgium ]° 0.0 Jf 0.0 0. °° 0. If 0. [00| Canada ||536.7 If| 1346 [1255.9 1[ 927.2 |f 0.0 ||5.2 ||0 |Germany || 359.8 If| 80.1 ||72.4V2 | 512.3 If 512.3 ]f .9 [ |Finland ] 90.0 |f 0.0 ||.168.7 ||258.7 ||258.7 jf 1.5 [13 Nether- 1 1 11i lands J 413.1 1,008.6 4,468.8 5,890.5 0.0 33.3 [ Denmark] ||o J° | 234.3 f| 2-4. [| 469.1 ]| 469.1 If 2.6 [1 5 |Norway ||643;1 ]| 507.7 [|5-76.5 [|1S727.3 ]| 1,727.3 ][ 9.8 [|17 Switzer- ; 1 l [ 1 11 1 10. [0. ] 11 111. I [landz 1000___ oo0000[ [|Sweden |-398.8 oj| 1,010.7 f| 487.4 ]f 1,896.9 || 1,439.9 ]| 10.7 [|14 | [|France 0.0° || 260.3 ]f° 0.0 260.3 j10.0' ] 1. 15 f ca j United Kingdom 880.3 |213234 |1. | . 122 Private Sector 10 5 025 301 | Further payment of US$142 8 against 2000 and 2001 TAG expenses expected n 2002. 21 The received amount in 2001 may increase from US$72 4 to US$119.1 because of overpayment on the agreed contribution under the Letters of Agreement dated December 1 S, 1997 and December 28, 1998. The reason for the overpayment was that the payment of DM 396,000 made in December 16, 1998 was made to the Bank rather than to UNDP which should have been credited under the UNDP/ESMAP Project Document The World Bank German Executive Director's office is assisting in resolving this issue. 62 1 Energy Sector Manogement Assistance Programme Figure 8.1 ESMAP Receipts 1999-2001 Germany 3% Denmark 3% / Belgium 00 France 1% Belgium 0% Canada 5% Canada 50/0 Denmark 30/o France 1% Finland 1% Germany 3%/ Netherlands 33% t_ Norway 10%/ /UNDP 1%/o Norway 10% Switzerland 00/0 qqqqMMW W;Private Sector 10/ Finlandla n d_ 1Sweden 110/% Private Sector 1%/1 Switzerland 00/% UNDP 1% United Kingdom 13% VWorld Bank 16% Thematic contributions increased in 2001 to Biomass Programme and Household and Rural US$4.5 million from US$1, with all tranchesire- Energy Activities Fund. Total core and thematic ceived from the Netherlands. These contributions contributions, excluding contributions from the were from the four trust funds under the Bank/ World Bank and the UNDP for 1999-2001 are Netherlands Partnership Programme, Bolivia shown in Table 8.2. Table 8.3 shows all contribu- Country Programme Phase 11, Bolivia National tions received in 2001 by type of funding. * Core/Thematic ESMAP Donor Contributions, 1 999-2001 Year Total of which, of which, Core as %0 Core plus Donor a/ Core Core plus of Total Donor Thematic as 0/| Contributions ($Mr) Thematic Contributions of Total Donor ($m) ($m) (0/0) Contributions l l 999 ( 3.22 1.96 Jl 2.37 j 60.9% 0 L 73.60/o 41 2000 15 4.13 1l 2.40 3.41 58.10/% [ 82.6% 2001 7.14 2.42 6.89 3 33.90/o 96.5%0/ Total 14.5 6.8 112.7 3 46.80/0 87.40/ al Does not Include World Bank and UNOP Annual Repoit MM, X r 63 Core and Thematic Funding a level of activity considerably lower in 2000 than in 1999 (one CG meeting instead of two, no X : Receipts by Type of Funding in 2001 in-depth review similar to the Bolivia program review in 1999). Consequently, governance costs A(millios US$) were reduced by 46% in 2000. Dissemination WB Contribution 1.032 costs decreased by US$6,000 in 2000, despite an increased level of activity reflecting some incre- UNDP °0.000 ment of revenue-'from the sale of some ESMAP | Core J1 2.420 publications and increased in 2001 by. 5201o from Thematic 4.469 in-house brown bag lunch conferences and a 1Project : ll 0.256 number of ESMAP reports published. |Country Program ||i0I| Total 8.177 FUNDING NEW PROJECTS AND CASH BALANCE PROJECT FUNDING i During 2001, ESMAP approved 22 new projects Project specific funding totaled US$256,000 in with a cumulative cost of US$2.7 million. Out 2001 compared to US$731,100 in 2000. ESMAP of this total cost, ESMAP had provided funding is in dialogue with CIDA regarding finance for of US$2.4 million. Seven projects from the year two activities: the Energy from Landfill Gas: Best 2000 were funded in 2001 with a cost of US$1.2 Practice, Dissemination, and Future Program in million. There were projects whose budget costs the LAC Region and Petroleum Revenue Manage- ment at a total cost of about US$1 million. Given the continuing gap between financing needs and . ESMAP Expenses, 1999-2001 1 core or thematic resources, additional funding (thousands US$) will continue to be mobilized from donors, on a case by case basis, for promising projects after LW 1999 2000 2001 they reached the necessary stage in the evalua- Project Costs 5,059 6,9 5,445 tion process. WorePogm 11 22 40 EXPENDITURES Program 334 . Management Expenditures in 2001 totaled US$6.3 million, a Knowledge 49 43 82 decrease of US$0.93 million over expenditures Dissemination in 2000. Project funding decreased in 2001 Governancei || 270 147 321 by US$1.25 million. Work program develop- of which TAG 135 62 166 ment costs were increased from US$22,000 to of which CG 135 85 155 US$40,000. Program management costs, which a7 4 were reduced by 65% in 1999, were further cut of which funded 52 by 400/o in 2000. This reflects to a larger extent by Donors 4,758 6,367 5,281 a stricter accounting discipline under which staff of which funded from the ESMAP management team are able from World Bank 1,172 820 1,032 to charge their time to specific projects when I budgetwIiI working on the substance of such projects, and' by the UNDPe 120 5 further administrative efficiency gains. The con. I sultative group and technical advisory group had ncludes Review of Proposals 64 Energy Sector Management Assistance Programme have been decreased or dropped amounting After taking into account, the expenditures and to US$1.1 million due to no project funding receipts, cash balances in ESMAP trust funds and -was raised from the donors or the further UNDP accounts on December 31, 2001 amounted development of the project was terminated once to US$9.4 million (of which US$101,024 in it became clear that the objectives were no lon- UNDP accounts) compared to US$10.5 million in ger achievable. 2000 (of which US$305,365 in UNDP accounts), and US$13.1 million at the end of 1999 (of During the year 2000, ESMAP approved 30 which US$627,279 in UNDP accounts). The cash new projects with a cumulative cost of US$5.2 balance not allocated at the end of 2001 amount- million. Out of this total cost, ESMAP had pro- ed to US$3,868,503 of which US$1,513,491 in vided funding of a total of US$2.3 million. core funds. ESMAP have approved projects that have not Of the US$101,024 in UNDP accounts on been fully funded in the previous years amount- December 31, 2001, about US$91,000 will be ing to US$930,000 and approved new projects in returned to Denmark as these funds were the 2002 amounting to US$2 million. Overall, there remaining contributions earmarked for the Dan- is a total of US$2.9 million required to finance ish Secondment Staff that were not utilize. The the remaining partially funded projects and new remaining balance of about US$10,000 will be approved projects in 2002. returned to Germany and Sweden. Ultimately, these UNDP accounts will be closed in 2002. | ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~.i A -W r. ,t , ' , ' ,' Manual Source of Energy. ArnruaI Report Stoig) -___8 65 AN N EXES Energy Sector Management AE 1 81 . . .~~~~~~~~~~~~' Mr. Jorge Borrego of the Ministry of Economy and Energy of the Government of Portugal, welcomed the ESMAP CG on behalf of his government. He signaled that Portugal was considering joining ESMAP as a partner to contribute its energy and development experience from Africa and South America, in particular. He stressed that it is crucial to build capacity in developing countries to enable them to adapt rather than adopt solutions. Retrospective Review: Evaluating the Execution and Relevance of the 1999-2001 Business Plan ESMAP Presenitation on Evolution of the 2002-2004 ESMAP Business Plan: Mr. Charles Feinstein, ESMAP Lead Operations Coordinator, outlined the environment in which the 2002-2004 business plan has evolved. He elaborated on external factors including the issuance of the Millenium Development Goals (MDGs), the recent downward trend in private participation in infrastructure, the World Com- mission on Dams recommendations and the climate change negotiations. He also outlined internal World Bank factors: the PRSP process, the implementation of Fuelfor Thought, the external review of the Bank's trust funded energy programs, the development of the World Bank Group's Energy Business Renewal Strategy, the Bank's environment strategy and the Extractive Industries Review. ESMAP Presentation on the 1999-2001 Plan's Implementation: Ms. Dominique Lallement, ESMAP Manager, introduced a stock-taking of the 1999-2001 plan's implementation by stating that the Access-Environment-Market strategic framework had helped refocus the program on the sustainable energy-poverty reduction paraidigm. She observed that the thematic areas adopted under the business plan had been less useful as an intellectual framework. She emphasized that ESMAP had contributed to the consensus that the global challenge of delivering sustainable energy services to the poor re- quires the combination of multiple institutions, financing mechanisms, efficient markets and a variety of technologies to work in efficient markets. Among areas of strength in the plan's implementation, she counted the refocusing of the ESMAP portfolio onto the strategic priorities mentioned above; en- gendering of the portfolio; the enhanced relevance of ESMAP work to World Bank Group operations; the managerial effectiveness and transparency achieved during the plan period. Among areas of weak performance, she mentioned the effective brokerage of ESMAP-generated knowledge; capacity build- ing through ESMAP projects; systematic capture of innovative ideas; restructuring and expansion of the Africa portfolio; greater outreach through partnerships; and constrained resource mobilization. TAG Commentary: On behalf of the TAG, Mr. Andrew Barnett endorsed the retrospective review pre- sented by ESMAP management. He commended the business plan document as a sourcebook for new members of the CG for its comprehensiveness and its frankness about areas of strength and weakness in ESMAP's performance. He pointed out that ESMAP's positioning among the other trust-funded energy programs needs to be made clearer to the Bank's clients. He voiced concern about the lack of progress on the Africa portfolio and about ESMAP's wide reach restricting its ability to deliver focused impact. The TAG recognized ESMAP's restrictions as: a low level of funding (currently around US$8 million annually), project-tied funding and the consideration of proposals mainly from World Bank task managers. The TAG emphasized that it values ESMAP very highly, however, and sees the ESMAP CG as one of the few forums at which energy donors meet. On this basis, the TAG recommended that the knowledge partnership of the CG be strengthened through information sharing about the bi-lateral activities of each CG member. Ideally, the CG could reptesent a multi-lateral knowledge broker about energy and development. It recommended that the dissemination of ESMAP knowledge be targeted to a differentiated audience (policy-makers, consultants, community leaders, etc.) while underlining that 82 Energy Sector Management Assistance Programme this is not possible without additional resources from the donors. The TAG also pointed out that the ESMAP CG, and the development business at large, need to respond to changes in the global energy business more swiftly. In the ensuing discussion, donors commended ESMAP for its transparent treatment of its own work. Donors placed very high emphasis on the need to clarify the links between energy and development to non-energy decision-makers, particularly in the context of the International Development Goals. ESMAP was acknowledged as the most suitable source for such work. The need to develop measures for improving the quality of ESMAP's Africa portfolio was acutely highlighted. ESMAP management pointed out that the strategic alignment and internal coordination among ESMAP's Africa activities is more the issue than the quality of Africa-related proposals. While the limited financial benefit that CDM can bring to Africa was acknowledged, its spin-offs effects (particularly capacity building of an- alytical skills that have multiple uses) were recognized. ESMAP was commended for having achieved a significant impact on the World Bank's energy practice but its marginal influence on the country level operations of the UN agencies and on intergovernmental processes, e.g., CSD-9, was pointed out. The CG recognized the need for better networking among the CG members to share knowledge about their bi-lateral activities in developing countries and allow better co-ordination with ESMAP work. Immediate Deliverable: ESMAP will develop a 10-20 page document that concretizes the links between energy and poverty reduction in the context of the Millennium Development Goals. Developing the 2002-2004 Business Plan: Prioritization and Financing ESMAP Mission Statement: The CG discussed how to make ESMAP's mission statement more relevant to the current political environment. Consensus developed around the following draft: ESMAP promotes the role of energy in poverty reduction and economic growth in an environmentally responsible manner. Its work applies to emerging and transition economies and contributes to the achievement of internationally agreed development goals. Duration of Plan Period: The CG agreed that the business plan should span three years. The Proposed Business Lines: The CG members discussed each proposed business line at length, and sought clarifications where necessary, as a prelude to a prioritization of the business lines according to donor preferences. The results from this discussion are summarized in the business lines matrix (An- nex 1). Some key conclusions are stated here. There was consensus that ESMAP can provide intellec- tual leadership and initiative in the Village Power Partnership (VPP). Donors emphasized the need for further defining this role before funding pledges can be made. ESMAP has a limited role in direct CDM capacity building. DFID suggested that as part of the development of ESMAP as a source of knowledge on energy issues, a specific component of this be to follow up the recommendation of the G8 Renew- able Energy Taskforce to improve the sharing of information on renewables. There was no support from other donors on any G8 link. There was general agreement of the importance of developing the role of ESMAP as a source of knowledge and communication between donors. ESMAP needs to con- ceptualize the specific products that can be used to deliver these business lines with particular focus on Africa where possible. The market development business lines enjoy broad donor support. Gender Annual Report -NOV) 83 should be subsumed as intrinsic capacity building work under all the business lines. The secretariat function does not have to be restricted to the G8 taskforce follow-up. ESMAP has to continue its role as a source of knowledge but also of communication between donors about their bi-lateral activities. Regarding the need for mechanisms to include non-World Bank Group proposals and, possibly, task managers in the mainstream ESMAP proposal process, the CG requested that ESMAP propose some options to the CG. Financing Priorities of Donors: In presenting the trends in donor contributions, Mr. Feinstein pointed out that contributions to ESMAP had climbed back to the US$8m per year level in 2001. As donors indicated their planned contributions to ESMAP for the 2002-2004 period, the tally summed to US$18 million (with a possibility of increasing to US$23 million considering indications of donors not present at the CG) against the business plan's revised cost of US$35 million. It was decided that each donor should rank the business lines according to their funding priorities for this US$18 million. This identified strong support for the following themes: energy poverty linkages, indoor air pollution, impact of reform on the poor, methodologies and M&E for multi-sectoral energy work, knowledge dissemination and governance. Participation of the Private Sector in ESMAP: Mr. Saghir presented an overview of trends in the global energy business particularly the downward trend of foreign direct investment and the uncer- tainty felt by major energy companies many of which are reconsidering their investments in develop- ing countries. He also pointed out the need to understand the impact of new developments such as the emergence of multi-utilities and the issues related to their regulation. He said that the signal from international energy firms is that there is a greater need for communication between them, the World Bank and the donor community. In the ensuing discussion, the need for collaboration between the pri- vate sector and the development community on issues of investment climate and risk was highlighted. Many of these issues (including governance, payment systems, political risk, etc.) were recognized as broader than the energy sector and also applicable to the local private sector in developing coun- tries. The potential of local private firms for small-scale energy service provision was recognized as untapped. Caution was recommended regarding fund mobilization from the private sector for ESMAP core funding but there was consensus that creative mechanisms should be contemplated for rules of engagement with the private sector without raising conflict of interest issues. The CG expressed inter- est in learning more about the World Bank's experience with the private sector. Immediate Deliverables: . By end-January, ESMAP will arrange a meeting of at least 10 key VPP stakeholders to define the long-term business plan and governance for VPP and to test commitment to a substantial capital fund for VPP. . The World Bank will present a report about developments in the global energy-related private sector at the next CG meeting. . ESMAP will propose options for including non-World Bank Group proposals and, possibly, task managers in the ESMAP proposal process. . The CG members will provide their comments on the discussion draft of the business plan to ESMAP by December 15, 2001. . ESMAP will update the business plan according to these comments and will circulate the final version for 'no-objection' by the end of December, 2001. In the absence of any objections, the business plan will be considered final by January 1 5, 2002. 84 Energy Sector Management Assistance Programme Governance Issues Extended Terms of Reference for the TAG and possible new meinbers: The draft terms' of reference (TOR) for an extended TAG were circulated by the TAG. The TAG recommended that a new TAG mem- ber should be selected as soon as possible to allow for sufficient overlap among outgoing and incom- ing TAG members. The CG expressed its support for extending the TAG according to the circulated TOR but pointed out that it is crucial to maintain explicit complementarity between ESMAP and the other trust-funded programs. The CG also recommended 'that a gradual, phased' approach be taken if the, creation of a common CG for all trust-funded programs is envisaged. UNDP reiterated its commitment.,. 'to finance the TAG's ESMAP activities, however, it will not be supporting TAG's activities related to,' other trust-funded programs. The donors supporting the other programs agreed with the principle thaf the respective TAG expenditures be suppo'rted by each program. It was concluded that ESMAP and will continue to provide logistical support to the TAG's additional activities. Immediate Deliverable:: The CG members will provide their comments on the above-mentioned TOR to ESMAP by December 15, 2001. Frequency and Location of CG Meetings: The CG decided that the joint meeting of the trust funded en- ergy programs should be held annually and should not last longer than three days. Each program should present its progress report at the CG in separate business meetings and, in a year or two, there could possibly be only one consultative group on energy. The CG also expressed'its preference for creatively sharing knowledge among donors about bi-lateral energy-related activities in developing countries. The next joint meeting of the trust funded energy programs will be held in May of'2002,'in Copenhagen. 'An informal farewell was given to Ms. Lucie Bertrand of the E7 as this was her last ESMAP'CG' * meeting before her retirement. Annual Report ftw &0 8 5 h , .~~~~~~~7 86 ________ _____ - - =1- -- t = 3 = - , r ____ - -- - = - - a-! = ~~~~~, ~~, ~ ~ a-- a aex E I E E E ~ ~ _ _ _ __- 8 __ __ __ __ __~~C __ 8 K ~ La C) 'iW Ci4) C ~ 0 (0 - m (0 (0 ( N () 0 ( 0 CT) 'En LO) CZ!(0 - -. F C:~~~6 ) -..) 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C- 0 U- ' 0 (N 0 ':~~~~~~~~~ 0C 'a a) C.') 94 Energy '4 M m t co j~~~~~ CT CD mo I O uj O1 Os v q lI 6 -22' d2 [ Os2~v iit J a s O w' O Li' .AO E O ~ ~ o ' 't sm ~ 'O O Ossl CD 2 a' EE-~ 2') .~ ,~ .a > E.> Els Os ' co " a ~ . Z C,~~(- C)U Li co co~ co ' ' 94 Energy Sector M~~~~~~~~~~~~~~~~~~~~~~~~angm t AsisacePosrmm ANNEX 5 REPORTS PUBLISHED IN 2000-2001 Formal ESMAP Publications REGION/COUNTRY ACTIVITY/REPORT TITLE DATE NUMBER SUB-SAHARAN AFRICA (AFR) Africa Regional Commercializing Natural Gas: Lessons from the 01/00 225/00 Seminar in Nairobi for Sub-Saharan Africa and I Beyond | Africa Gas Initiative - Main Report: Volume I 02/01 1240/01 First World Bank Workshop on the Petroleum 09/01 245/01 Products Sector in Sub-Saharan Africa Ministerial Workshop on Women in Energy 10/01 250/01 Angola Africa Gas Initiative - Angola: Volume 11 02/01 240/01 Cameroon Africa Gas Initiative - Cameroon: Volume III 02/01 240/01 Comoros - Energy Assessment (English and French) 01/88 ,In Search of Better Ways to Develop Solar 05/00 230/00 Markets: The Case of Comoros 2 Congo ,Africa Gas Initiative - Congo: Volume IV 02/01 240/01 C6te d'lvoire Africa Gas Initiative - C6te d'lvoire: Volume V 02/01, 240/01 Gabon Africa Gas Initiative - Gabon: Volume VI 02/01 i 240/01 Kenya Implementation Manual: Financing 1 07/00 231/00 Mechanisms for Solar Electric Equipment i Zimbabwe Rural Electrification Study 03/00. 228/00 EAST ASIA AND PACIFIC (EAP) China Fostering Competition in China's Power 416/01 Markets WB Discussion Paper Philippines Strengthening the Non-Conventional and Rural 08/01 243/01 XEnergy Development Program in the Philip- ipines: A Policy Framework and Action Plan SOUTH ASIA (SAS) India Greenhouse Gas Mitigation In the Power 02/01' 237/01 Sector: Case Studies From India Pakistan Clean Fuels I 10/01 246/01 Annual Report 2000 - 2001 95 Formal ESMAP Publications REGION/COUNTRY ACTIVITY/REPORT TITLE DATE NUMBER EUROPE AND CENTRAL ASIA (ECA) Central Asia and The Caucasus Cleaner Transport Fuels in Central Asia and the 08/01 242/01 Caucasus Eastern Europe Increasing the Efficiency of Heating Systems 08/00 234/00 in Central and Eastern Europe and the Former Soviet Union (English and Russian) Turkey Energy and the Environment: Issues and 04/00 229/00 Options Paper LATIN AMERICA AND THE CARIBBEAN (LAC) Bolivia Introducing Competition into the Electricity 08/00 233/00 Supply Industry in Developing Countries: Lessons from Bolivia Final Report on Operational Activities Rural 08/00 235/00 Energy and Energy Efficiency Oil Industry Training for Indigenous People: 09/01 244/01 The Bolivian Experience (English and Spanish) Brazil Rural Electrification with Renewable Energy 07/00 232/00 Systems in the Northeast: A Preinvestment ,Study Mexico Energy Environment Review 05/01 241/01 Nicaragua Modernizing the Fuelwood Sector in Managua 12/01 252/01 and Le6n Peru Rural Electrification 02/01 238/01 GLOBAL Privatization, Competition and Regulation in 02/00 226/00 the British Electricity Industry, With Implica- tions for Developing Countries Reducing the Cost of Grid Extension for Rural 02/00 227/00 Electrification Undeveloped Oil and Gas Fields in the 02/01 239/01 Industrializing World Best Practice Manual: Promoting Decentralized 10/01 248/01 Electrification Investment Peri-Urban Electricity Consumers-A Forgot- 10/01 249/01 ten but Important Group: What Can We Do to Electrify Them? 96 Energy Sector Management Assistance Programme Technical Reports l , , X~~~~~~~~, , .i REGION/COUNTRY ACTIVITY/REPORT TITLE DATE NUMBER SUB-SAHARAN' AFRICA (AFR) Kenya. ,80 005/00. Kenya 4 Field Performance Evaluation of Amorphous 08/00 005/00 Silicon (a-Si) Photovoltaic Systems in Kenya:- Methods and Measurement in Support of a Sustainable Commercial Solar Energy Industry The Kenya Portable Battery Pack Experience: 1 05/01 012/01 Test Marketing an Alternative for Low-Income Rural Household Electrification Swaziland Solar Electrification Program 2001 2010: Phase 12/01 019/01 1: 2001 2002 (Solar Energy in the Pilot Area) i , Uganda . . Report on the Uganda Power Sector Reform 08/00.. i 004/00 and Regulation Strategy Workshop WEST AFRICA (AFR) LPG Market Development i012/01 017/01 EAST ASIA AND PACIFIC (EAP) j ^ China . Assessing Markets for Renewable Energy in '08/00 003/00 Rural Areas of Northwestern China Technology Assessment of Clean Coal 05/01 011/01 I Technologies for China Volume I-Electric Power Production Technology Assessment of Clean Coal Technol- 05/01 ogies for China Volume II-Environmental and Energy Efficiency Improvements for Non-power jUses of Coal Technology Assessment of Clean Coal 12/01 . 011/01 Technologies for China Volume III-Environ- - mental Compliance in the Energy Sector: Methodological Approach and Least-Cost .. T *Strategies Thailand . } DSM in Thailand: A Case Study 10/00 008/00 'Development of a Regional Power Market in 12/01 015/01 the Greater Mekong Sub-Region (GMS) Vietnam Options for Renewable Energy in Vietnam 07/00 001/00 SOUTH ASIA (SAS) Bangla,desh VVWorkshop on Bangladesh Power Sector Reform 2/01 018/01 Annual Report 2000 - 2001 97 Region/Country Activity/Report Title Date Number LATIN AMERICA AND THE CARIBBEAN (LAC) Regional Electricity Markets Interconnections 12/01 01 6/01 - Phase I Identification of Issues for the Development of Regional Power Markets in South America GLOBAL Impact of Power Sector Reform on the Poor: 07/00 002/00 I A Review of Issues and the Literature Best Practices for Sustainable Development of ! 08/00 006/00 Micro Hydro Power in Developing Countries Mini-Grid Design Manual 09/00 007/00 Photovoltaic Applications in Rural Areas of the 11/00 009/00 Developing World | Subsidies and Sustainable Rural Energy Services: Can we Create ,Incentives Without Distorting Markets? 12/00 010/00 Sustainable Woodfuel Supplies from the Dry 06/01 013/01 Tropical Woodlands Key Factors for Private Sector Investment in 08/01 01 4/01 Power Distribution 98 Energy Sector Management Assistance-P'rogramme Annual Report The World Bank 1818 H Street, NW Washington, DC 20433 USA Tel 1.202.458.2321 Fox 1.202 522 3018 Internet: www.worldbank.org/esmap Email: esmap@worldbank.org ,~~~~4