63224 Modernizing Energy Services for the Poor: A World Bank Investment Review – Fiscal 2000–08 December 2010 Douglas F. Barnes Bipul Singh Xiaoyu Shi World Bank Energy Sector Management Assistance Program (ESMAP) Copyright © 2010 The International Bank for Reconstruction and Development/THE WORLD BANK 1818 H Street, N.W. Washington, D.C. 20433, U.S.A. All rights reserved Manufactured in the United States of America First printing 2010 ESMAP reports are published to communicate the results of ESMAP’s work to the development community with the least possible delay. The typescript of the paper therefore has not been prepared in accordance with the procedures appropriate to formal documents. Some sources cited in this paper may be informal documents that are not readily available. The findings, interpretations, and conclusions expressed in this paper are entirely those of the author(s) and should not be attributed in any manner to the World Bank, or its affiliated organizations, or to members of its Board of Executive Directors or the countries they represent. The World Bank does not guarantee the accuracy of the data included in this publication and accepts no responsibility whatsoever for any consequence of their use. The Boundaries, colors, denominations, other information shown on any map in this volume do not imply on the part of the World Bank Group any judgment on the legal status of any territory or the endorsement or acceptance of such boundaries. The material in this publication is copyrighted. Requests for permission to reproduce portions of it should be sent to the ESMAP Manager at the address shown in the copyright notice above. ESMAP encourages dissemination of its work and will normally give permission promptly and, when the reproduction is for noncommercial purposes, without asking a fee. CONTENTS Acknowledgments .............................................................................................................................. vii Acronyms and Abbreviations .............................................................................................................. ix Executive Summary ............................................................................................................................. xi Financial Instruments and Energy Access .................................................................................. xvi Lessons Learned from Portfolio Review and Successful Projects ................................................... xvi 1. Energy Access and Development ................................................................................................. 1 What Is the Energy Transition and What Are the Benefits? ............................................................ 2 Energy Access Linkages to the Millennium Development Goals .................................................... 5 Who Are the Energy Poor? ........................................................................................................ 7 What Are the Key Dimensions of Energy Access? ........................................................................ 9 World Bank Support for Promoting Energy Access ..................................................................... 13 Conclusion ............................................................................................................................ 15 2. Measuring Investments in Energy Access ................................................................................... 17 Defining Energy Access Investments ......................................................................................... 18 Review Procedures and Definitions ........................................................................................... 19 Business Warehouse and Portfolio Review Differences ................................................................ 20 Comparison with Investment Figures from the Clean Energy Investment Framework ..................... 21 Conclusion ............................................................................................................................ 23 3. The World Bank Energy Access Portfolio .................................................................................... 25 Overview of Energy Access Investments .................................................................................... 26 Thematic Patterns of Investment in Energy Access ...................................................................... 28 iii Access to Household or Community-Wide Electricity .................................................................. 28 MODERNIZING ENERGY SERVICES FOR THE POOR: A WORLD BANK INVESTMENT REVIEW — FISCAL 2000–08 Energy Access Policy and Capacity Building .............................................................................. 38 iv Household and Community Energy: Cooking, Heating, and Lighting Efficiency ........................... 39 Energy Efficiency and Productive Uses ...................................................................................... 41 Conclusion ............................................................................................................................ 43 4. Infrastructure and Development: Outcomes and Measurment Issues ....................................... 45 Energy Access and Large Infrastructure Projects: Measurement Issues ......................................... 45 Indicators of Energy Access Project Impacts .............................................................................. 50 Conclusion ............................................................................................................................ 51 5. Modernizing Energy Services for the Poor.................................................................................. 53 General Trends in Energy Access Investments............................................................................ 54 Financial Instruments and Energy Access .................................................................................. 55 Lessons Learned from Portfolio Review and Successful Projects ................................................... 56 Conclusion ............................................................................................................................ 57 Annex 1. Access Investment Comparisons with Clean Energy Investment Framework (CEIF) Report Updates ............................................................................................................... 59 Annex 2. The World Bank Energy Access Investment Portfolio: Fiscal 2000–08 ........................... 63 References ........................................................................................................................................ 73 General References ................................................................................................................ 73 World Bank Project References................................................................................................. 76 Boxes Box 1.1: Making the Switch: An Example of the Benefits of Electric Lighting ..............................4 Box 1.2: The World Bank’s 1996 Rural Energy and Development Action Plan for Broadening Access ...............................................................................................14 Box 1.3: Energy for the Poor Initiative ..................................................................................15 Box 2.1: Energy Portfolio Review Coverage ..........................................................................20 Box 3.1: Financing Solar Home Systems ..............................................................................33 Box 3.2: Insuring PV System Quality and After-Sales Service ..................................................35 Figures Figure E.1: World Bank Energy Access Investment by Region and Type, FY2000–08 ...................xiii Figure E.2: World Bank Energy Access Investments by Fiscal Year, FY2000–08 ............................xv Figure 1.1: The Energy Transition for Cooking and Lighting ........................................................3 Figure 3.1: World Bank Energy Access Investments by Fiscal Year, FY2000–08 ...........................26 Figure 3.2: World Bank Energy Access Investments by Region and Type, FY2000–08 ..................26 Figure 3.3: World Bank Energy Access Investment by Type, FY2000–08 .....................................28 Tables Table E.1: Energy Project and Energy Access Investments, FY2000–08 ..................................... xiv Table 1.1: Electricity Access in the Developing World, 2005 ....................................................10 CONTENTS Table 1.2: Populations Reliant on Biomass for Cooking and Heating by Region, 2004 ..............13 Table 2.1: Examples of Energy Access—Direct and Indirect Assistance ......................................18 v Table 2.2: Comparison of Energy Investments: Annual Report Compared to Energy Access Review............................................................................................22 Table 3.1: Energy Project and Energy Access Investments, FY2000–08 .....................................27 Table 3.2: World Bank Investment in Electricity Access by Region and Category, FY2000–08 .....29 Table 3.3: Energy Access Policy Development and Capacity Building, FY2000–08 ....................38 Table 3.4: World Bank Cooking Fuels and Household Energy Efficiency Assistance, FY2000–08 .........................................................................................................40 Table 3.5: World Bank Investment in Productive Use and Energy Efficiency, FY2000–08 ............42 Table 4.1: Typical Medium and Large Energy Infrastructure Projects ..........................................47 Table 4.2: Residential Electricity Use in Malawi, 2005: Estimates from Living Standards Measurement Study ..............................................................................................48 Table 4.3: Residential Electricity Use in India, 2005: Estimates from the India Human Development Survey .............................................................................................49 Table 4.4: Energy Access Investments with Estimated Access Related Generation and Transmission, FY2000–08 .....................................................................................50 Table 4.5: Energy Access Output Indicators Underreported Reported in World Bank Projects, FY2000–08 .........................................................................................................51 Table A2.1: Example of Differences in Project Classifications: Energy Access Review versus the Clean Energy Investment Framework .......................................................60 Table A2.2: Comparison of Energy Access Review and Clean Energy Investment Framework Figures, 2003–08 ................................................................................61 ACKNOWLEDGMENTS T his paper was commissioned by the Energy Richard Hamilton (consultant, ECA). In addition, Sector Management Assistance Program Varun Nangia provided assistance in comparing (ESMAP) as part of its ongoing efforts to assess energy access investment summaries from the and improve the World Bank Group’s efforts in Clean Energy Investment Framework (CEIF) and support of scaling up access to modern energy. this report. The report was prepared by Douglas Barnes who In addition to the written comments, many valuable is a senior World Bank consultant; Bipul Singh, an contributions were made during the peer review operations analyst with ESMAP; and Xiaoyu Shi, meeting by Kyran O’Sullivan (Senior Energy World Resources Institute. A previous report that Specialist, AFTEG), Noora Arfaa (consultant, formed the basis of this one had contributions from SEGOM), Jonathan Coony (Senior Energy Specialist, Grayson Heffner with feedback and comments SEGES), Natalia Kulichenko (Senior Energy from Ede Jorge Ijjasz-Vasquez and Dominique Specialist, SEGEN), Mark Moseley (Senior Counsel, Lallement. LEGPS), Dana Rysankova (Senior Energy Specialist, AFTEG), Ashok Sarkar (Senior Energy Specialist, This report has undergone an extensive peer SEGEN), Xiaoyu Shi (Operations Analyst, SEGES), review process, and the valuable comments that Dirk Sommer (Senior Infrastructure Specialist, were received as a result of this review have C3PDR), Xiaodong Wang (Senior Energy Specialist, helped to significantly improve the quality of the EASIN), and Xiaoping Wang (Energy Specialist, final report. In this respect, those who provided LCSEG). written comments were extremely helpful for completing the final revisions of the report. Written As task manager of the project, Ashok Sarkar comments were received from Mac Cosgrove was instrumental in keeping the project on track Davies (Lead Energy Specialist, SASDE), Kyran through organizing meetings, and providing written O’Sullivan (Senior Energy Specialist (AFTEG), and comments and guidance for completing the final Mudassar Imran (Senior Energy Specialist, AFTEG). report. In addition, Lucio Monari, manager of vii Additional written comments were provided by SEGEN, provided guidance and support during both MODERNIZING ENERGY SERVICES FOR THE POOR: A WORLD BANK INVESTMENT REVIEW – FISCAL 2000–08 the preparation of this work and its final revisions. to thank Rohit Khanna, ESMAP Program Manager viii He has been an instrumental figure in the World and Istvan Dobozi, Lead Energy Specialist, SEGES for Bank supporting work on energy access and poverty their support during finalization of this report and its reduction for many years. Finally, we would also like publication. ACRONYMS AND ABBREVIATIONS AFR Africa Region AMADER Agence Malienne pour le Développement de l’Energie Domestique et de l’Electrification Rurale APL Adjustable Program Loan BRAC Formerly known as the Bangladesh Rehabilitation Assistance Committee, BRAC is an NGO that works internationally through its economic and social programs CDM Clean Development Mechanism CEIF Clean Energy Investment Framework EAP East Asia and Pacific Region EC Electric Cooperative ECA Eastern Europe and Central Asia Region EDC Electricité du Cambodge ENV Environment ESMAP Energy Sector Management Assistance Programme (World Bank) GDP Gross domestic product GEF Global Environment Facility GoE Government of Ethiopia IBRD International Bank for Reconstruction and Development ICR Implementation Completion Report IDA International Development Association IDCOL Infrastructure Development Company Limited FEMA Forum of Energy Ministers in Africa ICR Implementation Completion Report IEA International Energy Agency IEG Independent Evaluation Group IFC International Finance Corporation IHDS India Human Development Survey ix kgoe Kilograms of oil equivalent MODERNIZING ENERGY SERVICES FOR THE POOR: A WORLD BANK INVESTMENT REVIEW – FISCAL 2000–08 klmh Kilolumen-hour x kWh Kilowatt-hour LA District Heating and Energy Efficiency Services (a sector code) LB Mining and Other Extractive Industries (a sector code) LC Oil and Gas (a sector code) LCR Latin America and Caribbean Region LD Power (a sector code) LE Renewable Energy (a sector code) LPG Liquefied petroleum gas LZ General Energy (a sector code) MDG Millennium Development Goal MIGA Multilateral Investment Guarantee Agency MNA Middle East and North Africa Region MW Megawatt MWp Megawatts-peak NGO Nongovernmental organization OBA Output-Based Aid PAD Project Appraisal Document PBS Palli Bidyut Samity (a locally organized rural electric association in Bangladesh) PV Photovoltaic RDV Rural Development REB Rural Electrification Board (Bangladesh) SA, SAR South Asia Region SF Social Fund SHS Solar home system SIL Sector Investment Loan TA Technical assistance TR Transportation WBG World Bank Group WHO World Health Organization EXECUTIVE SUMMARY T oday’s levels of energy services fail to meet energy service quality. These costs are bad enough the needs of the poor. Worldwide, 2,5 billion for poor people in urban areas, but they become people rely on traditional biomass fuels for especially prohibitive in rural areas, where remote cooking, and 1.5 billion people have no access to locations and low density of demand raise the costs electricity. Unless investments in providing modern and reduce the profitability for prospective energy energy services are expanded significantly, this providers. A second problem is the lack of technical number is expected to actually increase over the capacity to support energy access. Regulatory and next 30 years (IEA 2002). This lack of access to pricing issues appropriate for developed countries high-quality energy services is a situation that are often nonexistent or sometimes misapplied. The entrenches poverty, constrains the delivery of social training, technical assistance, and capacity building services, limits opportunities for women and girls, needed to support energy access schemes add to and erodes environmental sustainability at the local, the costs, with the result that energy companies must national, and global levels. Ignoring the situation charge high connection fees and monthly rates that will undermine economic growth and exacerbate the are unaffordable to the poor. Finally, energy access health and environmental problems now experienced issues often involve a cross-sectoral solution. For in many parts of the world. example, energy programs to improve productivity require availability of credit and development of Providing high-quality energy services to the poor markets for energy goods and services. sounds as if it should be a relatively easy problem to solve. However, international organizations This study focuses on the World Bank’s role in have experienced difficulties in the past developing energy access investments for the period between programs that produce improvements in sustainable fiscal years 2000 and 2008. Developing and energy access. There are several reasons why transition countries face huge investments in the energy access problem been so vexing. First, energy access in order to meet their commitments energy is an expensive business, and poor people to achieving the Millennium Development Goals sometimes cannot afford the investments necessary (MDGs). The purpose of this review is to create xi (a cookstove or electrical connection) for improved a tractable definition of energy access through MODERNIZING ENERGY SERVICES FOR THE POOR: A WORLD BANK INVESTMENT REVIEW — FISCAL 2000–08 which it is possible measure and report the World and developing approaches for addressing biomass xii Bank investments that reach the poor either directly energy problems. through physical investments in infrastructure or more indirectly by means of policy, technical assistance, This report focuses on the World Bank’s portfolio of and other kinds of support that are part of World energy access-related projects approved during most Bank projects. of the past decade (FY2000–08). The objectives of the review were to compile an up-to-date data base on energy access-related assistance commitments Focus of Study and review current trends and patterns of energy access-related assistance. We also wanted to The term energy access has various connotations examine to the greatest extent possible the lessons to energy development specialists. For this review, that could be learned across regions, focusing on we define energy access as relating both to physical policy and project design recommendations. Finally, proximity to energy infrastructure and to the policies it was important to establish a solid methodology and frameworks supporting the transition to better, for measuring energy access in order to provide a reliable, and more efficient use of electricity and baseline for future reviews of the investment portfolio. modern fuels. This viewpoint frames energy access as a development process—sometimes referred to Review and analysis of energy access and poverty as the energy transition—that starts with reliance on investments by the World Bank face several low-quality energy sources (straw, dung, candles) and difficulties. The most basic difficulty is how to finishes when high-quality energy sources, such as measure investments in energy and poverty. Many commercial fuels or electricity, are available. Access Bank projects have direct impacts on energy access, to these higher-quality energy sources allow for for example, cookstoves delivered or electrical services (lighting, communication, cooling, pumping), connections made. However, just as many have which are not available at lower rungs of the energy indirect impacts as well, such as policies formulated, ladder. This development process requires investment institutional capacity created, or training provided. in physical energy infrastructure, supportive A balanced rural energy program should include investment in energy access policy development and both direct investment in infrastructure, supportive capacity building, and indirect assistance through investment in capacity for planning and maintaining policies and investment undertaken on an energy the infrastructure, and indirect investment at the sector-wide basis. sector level accruing from other energy infrastructure investment. Our experience is that the barriers and obstacles to providing energy access fall within several main We encountered several difficulties in identifying the categories, some more tractable than others. The energy and energy access-related items contained Bank has been successful in addressing several within the different investment and assistance obstacles, such as the management and targeting instruments offered by the World Bank. It was quite of necessary subsidies and the development of easy to classify such projects as rural electrification, different business models for rural energy providers. but much more difficult to evaluate the contributions Other problems, notably targeting community- to energy access of multipurpose loans that contain and household-level energy access solutions and quite varied project components. As a consequence, monitoring long-term access outcomes, have been in this review we concentrate on those projects more of a challenge for World Bank energy access directly reaching the poor or supporting capacity practitioners. Areas that have been identified for building expected to benefit energy-deprived which improvements are needed include monitoring populations. The reason for this is that assessments project outcomes for cross-country comparability of energy access should include both physical EXECUTIVE SUMMARY investments in infrastructure and also those that FIGURE E.1: World Bank Energy Access Investment by xiii support such investments as planning, operational Region and Type, FY2000–08 capacity, and policy. (US$ millions) We would like to point out that the figures South Asia, 694 presented in this study are quite different from those of the Clean Energy Investment Framework Middle East and because of the different definitions and emphases of North Africa, Africa, these two studies. The purpose of the Clean Energy 100 1,080 Investment Framework (CEIF) report is to broadly classify projects or large project components into Latin America and categories, such as low carbon, transmission and Caribbean, 400 distribution, oil, gas, coal, thermal generation, and other types of energy investments. As a result, the CEIF report undertakes classification on a broader level according to its interest in carbon Eastern Europe and East Asia and Central Asia, 603 Pacific, 1,069 production and climate change (see Annex 1 for a detailed review of differences), which includes Productive uses and total generation and transmission investments. In efficiency, 994 Access policy, 924 addition, this access review is restricted to World Bank investments as reported in the World Bank annual report (World Bank, various years), and the CEIF report includes not only those investments, but also investments from the International Financial Cooking and Corporation (IFC) and the Multilateral Investment biomass Guarantee Agency (MIGA). energy, 164 Overview of Energy Access Investments Household electricity, 1,866 During the last eight years, there has been an increasing emphasis on infrastructure lending partly as a consequence of the Infrastructure Action Plan (World Bank 2003). In addition, Africa was singled out as a priority region because it has fallen behind lending is regionally diverse with Africa, Eastern the rest of the world in its infrastructure development. Europe, and South Asia all above US$4 billion for This emphasis on infrastructure is evident in the the period. These three regions together accounted total value of all World Bank projects with energy- for more than 65 percent of the total value of related investments approved during fiscal 2000–08 projects, with Latin America and Caribbean, East (Table E.1). Asia and Pacific, and the Middle East and North Africa accounting for the remaining 20 percent. The total energy investments were about US$20 billion, and the investments per year typically were Lending for energy access increased, along with total less than US$2 billion through fiscal 2006. Since energy lending (Figure E.2). This study estimates that time, lending has increased significantly to close that total World Bank investments in energy access to US$5 billion in 2008 (Figures E.1 and E.2). The during fiscal 2000–08 have been about US$4 MODERNIZING ENERGY SERVICES FOR THE POOR: A WORLD BANK INVESTMENT REVIEW — FISCAL 2000–08 xiv TABLE E.1: Energy Project and Energy Access Investments, FY2000–08 (millions) Energy projects Energy access investments by type Total energy % access Productive Total energy access of energy Access Cooking and Household uses and Projects investments* investments investments policy biomass energy electricity efficiency Region Africa 141 4,658 1,080 23 345 36 687 12 East Asia and Pacific 80 3,510 1,069 30 65 1 621 381 Eastern Europe and 140 4,605 603 13 52 9 2 540 Central Asia Latin America and 85 1,846 400 22 207 36 125 31 Caribbean Middle East and 20 1,161 100 9 22 77 1 0 North Africa South Asia 53 4,431 694 16 230 4 430 30 Total 519 20,213 3,949 20 924 164 1,866 994 Fiscal year 2000 41 1,765 448 25 6 26 187 228 2001 45 1,817 246 14 40 0.6 33 171 2002 47 2,166 520 24 143 0.8 339 37 2003 45 1,249 169 14 24 14 122 8 2004 48 1,054 254 24 103 8 110 33 2005 69 1,992 326 16 52 8 253 13 2006 75 3,176 476 15 110 12 269 85 2007 66 2,031 359 18 238 0.4 84 35 2008 83 4,963 1,151 23 206 95 467 383 Total 519 20,213 3,949 20 924 164 1,866 994 Source: World Bank’s Business Warehouse and project review. * The difference from the Business Warehouse commitments is caused by adjustments in sectoral codes on some projects, as discussed in the text and detailed in Chapter 2. ** For projects not reviewed, commitments are based on the Business Warehouse with no adjustments. Accordingly, the grand total of the Bank’s energy commitments reflects the Business Warehouse records. Totals may be off because of rounding. billion, or approximately one-fifth of the total energy- The regional percentages of lending for energy related investments. As indicated above, the lending access during the last eight fiscal years also follow reported in the CEIF report for the period 2003–08 a similar pattern. East Asia has many long-term for World Bank investments is US$6.04 billion, rural electrification programs, and Africa has which includes total investments in generation and begun to make infrastructure as a priority for transmission which, for methodological reasons, lending. Together these two regions received more were not included in this report (see Chapter 4 and than half the energy access-related commitments Annex 1). (Figure E.1). East Asia and Pacific also have the EXECUTIVE SUMMARY The main types of investments in energy access FIGURE E.2: World Bank Energy Access Investments by xv Fiscal Year, FY2000–08 also have been classified by this review. They (US$ millions) include policies to support energy access, rural electrification, facilitating the household energy 6000 transition to modern fuels, and improving energy Energy Access efficiency and productive uses of energy. Policies Total Energy 5000 to support the provision of modern energy access include institutional development, some types of 4000 energy policy reform, capacity building, and electricity master planning. To promote electricity in rural areas, (US$ millions) 3000 there were investments in rural electrification via grid extension, off-grid community and household systems, and electricity funds for providing onlending 2000 for communities, nongovernmental organizations (NGOs), or the private sector. To encourage 1000 household to use better fuels for cooking, there was assistance to communities, small businesses, 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 and households to transition from traditional fuels to modern fuels, including promotion of liquefied Source: Portfolio review. petroleum gas (LPG) or kerosene for cooking and the development of more sustainable supplies of biomass energy and improved cookstoves. Finally, there was support for productive uses and energy efficiency highest rate of lending for energy access—at about that reached households, businesses, and local 30 percent—followed by Africa and Latin America communities, including improved energy efficiency in and the Caribbean, which are at the 20 percent district heating and support to small and medium-size level of investments in access (Table 3.1). Eastern enterprises. Europe and Central Asia, along with the Middle East and North Africa, have low levels of lending On an aggregate level, physical investment in for energy access, but this is not surprising, since electricity access accounted for almost half the total most the access investments in these regions are value of energy access-related assistance approved for improving service rather than initiating new over the period, with more than US$1.8 billion in customers. However, South Asia at 16 percent of investments (Figure E.1 and Table E.1). Supportive energy investments lags behind the other regions investment in energy access, including policy where significant numbers of people are still without development and capacity building, accounted for access to electricity. This is somewhat a surprising, about one-quarter of investments in energy access, since South Asia, along with Africa, has the largest along with similar figures for energy efficiency number of households without access to electricity and productive uses of energy. Most of the energy services, which is probably true for other energy efficiency investments were in the Eastern Europe services as well. However, as indicated, the policy and Central Asia region. Finally, the support for environment for rural energy in South Asia is quite promoting the transition to modern cooking fuels challenging. Also, as will be indicated later, a large was quite small at less than 5 percent of lending. proportion of investments in South Asia have been In general, these figures represent significant for generation and transmission projects, which investments in energy access. The main area that are not counted in Table E.1, but are necessary lags behind the rest involves promoting the transition conditions for electricity access. to more modern forms of energy for cooking. MODERNIZING ENERGY SERVICES FOR THE POOR: A WORLD BANK INVESTMENT REVIEW — FISCAL 2000–08 The lending for energy access increased along with resources. As a result, obtaining these funds for rural xvi total energy lending (Figure E.2). This study estimates energy projects in small countries can sometimes be that total World Bank investments in energy access difficult. during fiscal 2000–08 to be about US$4 billion, and it is approximately one-fifth of the total energy- Energy access projects also have a very high rate related investments. of using grant funds. Most grant funds available for energy access projects involve a specialized Developments in the energy access lending portfolio review procedure. Examples are the Public- of projects or project components have been quite Private Infrastructure Advisory Facility, the Global promising. Assistance to Africa—the region with the Environment Facility (GEF), and the Carbon Funds. lowest access rates in the world—is both significant Obtaining such grants requires an inordinate amount and growing in terms of the size of investments and of time preparing proposals and satisfying multiple the breadth of the issues covered. Africa is also the financing windows. Mobilizing the extra preparation region with the greatest reliance on biomass energy financing and undertaking the range of tasks needed and “traditional” fuels; at present, it is receiving to prepare an energy access project makes for a about one-third of the total World Bank investments protracted and complicated project preparation for energy access. process. Energy access project development would benefit greatly from introducing more streamlined or In conclusion, progress in scaling up energy access simplified procedures. in developing countries has been significant, but significant challenges remain. Of course, the World As evidenced by the high level of grant funds in Bank is but one player in promoting energy access the World Bank’s energy access investments, these in developing countries. It is clear that coordinated various grant funds to support energy access have approaches between international donors and the been very important for promoting energy access. countries themselves will be necessary to tackle the However, it would be much easier if there were a challenge of providing modern energy services to dedicated grant fund for addressing the development the world’s poorest populations. Nevertheless, from of energy access for the poor in developing this review it is apparent in the coming years that a countries. Applying for such grant funds to support greater focus on problems of energy access and its energy access would more directly address the issue role in development will be necessary. of alleviating energy poverty without the trappings of environmental, global warming, or privatization issues. This is not to say that the other issues are not Financial Instruments and Energy Access important, but it would make the application process for grants more streamlined and more directly The main financial instrument utilized for energy related to an issue that is of great importance to the access investments is World Bank International World Bank, and that is to alleviate poverty. Development Association (IDA) funds. This is because energy access projects are mostly directed toward poor households. However, IDA is a general poverty Lessons Learned from Portfolio Review alleviation fund, and allocations are made based and Successful Projects on country size, population, and level of poverty. For larger countries, this is not such an issue, but There are several lessons from both this portfolio for scaling up energy access in small countries, it review and the successful project that have emerged has significant limitations. In small countries, IDA from this review. The first is that at the beginning funds generally are dedicated toward one sector per of many energy access projects there is a period of year, and energy has to wait its turn for available high levels of technical assistance in which the Bank EXECUTIVE SUMMARY assists governments in developing custom strategies to deal with providing energy to their poorest xvii populations. The second is that both public support and private investments are important in many projects, but they take a different form depending on the country and its political realities. The third is that many projects have very low levels of monitoring and evaluation, so it is difficult to judge the development effectiveness of the projects and whether they support the MDGs. High Levels of Technical Assistance For new countries that are politically committed to develop better access for their poorest populations, an initial period of analysis and strategy development is necessary. For instance, there is often a need to develop new institutions to implement a rural energy or electricity access program—and this is true whether the main program is going to be for grid or off-grid electricity. As an example, in the early Bangladesh rural electrification program, the Rural Electrification Board was developed to Grid rural electrification in Vietnam (World Bank, Hanoi) handle the entire rural electrification grid expansion program. This meant that the government had to be committed to both financial and institutional support for the program, which was a novel way of doing encourage better cooking fuels. At the beginning business for a country that in the past had relied of this process, laws must be changed, sometimes almost exclusively on state-run utilities for electricity institutions have to be created or altered, and provision. When it came time in that last loan to techniques to develop well-targeted subsidies that do support off-grid electrification, the task was given not destroy business incentives have to be studied to an entirely different agency that would dedicate and implemented. These are not easy tasks, and they staff to developing and supporting mostly renewable require a significant commitment by governments energy options. The business models of these two to undertake strategies and projects to help their enterprises are quite different, so different public poorest populations gain access to high-quality support mechanisms were necessary. energy services. The Bangladesh model is but one option in a The good news is that after this initial high level wide variety of institutional, legal, and regulatory of technical assistance to prepare the political, approaches to providing energy access to poor institutional, and financial landscape for energy populations. Most countries have to develop an access, much of the World Bank’s investments in approach that coincides with their social-political repeat projects are much easier to implement and realities. This is the case whether the projects are for are highly cost effective. In fact, it was somewhat grid or off-grid expansion of electricity, promotion surprising that the World Bank investments in energy of energy efficiency, or development of ways to access have been concentrated in countries with MODERNIZING ENERGY SERVICES FOR THE POOR: A WORLD BANK INVESTMENT REVIEW — FISCAL 2000–08 repeat projects. Vietnam is a very good example the hands of private sector companies that produce xviii of this. The first loan in 2000 spawned a series of electricity equipment or construct and maintain the investments over the decade to take the country to electricity lines. an over 90 percent electrification rate today. The interesting feature of these series of loans is that they are not repeat projects in the sense that they are Monitoring and Evaluation Needs the same, but in that they keep defining and solving Improvement implementation problems and issues that come up as the program evolves. The lesson is that there are Monitoring and evaluation of the impacts of energy significant levels of technical assistance to set up access projects is also still at a very basic level in the framework for energy access investments that most energy access projects. Projects often do not should not be underestimated in countries that want quantify the physical targets to be met, unless they to embark on energy access programs, but this can are expansion projects with specific goals. Besides be followed by a stream of projects that are easier to the usual physical way of measuring impacts, few implement over subsequent years. projects measure the social or economic impacts in a comprehensive way. One significant exception to this is the Vietnam rural electrification project, which has a Public and Private Investments in comprehensive monitoring and evaluation instrument Energy Access associated with it, which was actually financed through independent trust funds outside the project. Given The rural access agenda is often thought to be a the current climate and interest in energy access public agenda, but this is only partially true. The issues, a better job needs to be done in tracking both review of World Bank projects actually challenges this the impact of the projects themselves and the yearly idea. There seems to be a need for public-private progress in meeting the energy access goals. partnerships in many projects. To be sure, there are some purely public rural electrification projects in the portfolio, but there is also a large amount Conclusion of investment in what might liberally be called the private sector. Taking the case of three large projects This review of World Bank energy access investments in the portfolio, the Bangladesh rural electrification reveals both strengths and weaknesses in program is based on publicly supported electricity approaching the goal of alleviating energy poverty distribution businesses that are called cooperatives. and achieving the MDGs in developing countries. For the off-grid program, microcredit organizations Progress has been made for World Bank financing are selling photovoltaic (PV) solar home systems for both energy and energy access during the last (SHSs) and making three-year loans to recover the decade. Significant commitments have been made costs of the systems with competitive interest rates. for addressing energy access issues in Africa, where In Vietnam, the latest project involves support for the need is probably the greatest. Many highly local electricity companies that collect revenue and diverse, innovative, and significant advances have maintain local system lines. The goal is to develop been made in project design, including innovative incentive frameworks to make these small private subsidy models and private-public partnerships. The and sometimes semipublic businesses work more increasing amount of investments going to off-grid effectively. In Peru, the investments are actually going electrification compared to a decade ago is clearly a mostly to private distribution companies to promote step in the right direction. Likewise, there have been electricity expansion in a way that is more financially problems as well. Cooking energy issues are widely viable for the involved companies. Even investments discussed within the World Bank and at international in purely public electricity companies often end up in forums, but more needs to be done to promote EXECUTIVE SUMMARY World Bank lending in the areas of biomass energy and interfuel substitution. Also, project monitoring xix and evaluation has been modest at best; there is a real need to improve the assessment of project impacts on the poor. Energy sector reform projects still address energy access issues in a modest way, and the links between the benefits of reform and energy poverty need to be more clearly delineated in the project documents. Much progress has been made both through investments by international development agencies and the countries themselves. Of course, the World Bank is but one player in promoting energy access in developing countries, and it is clear that coordinated approaches between international donors and the countries themselves will be necessary to tackle the challenge of providing modern energy services to the world’s poorest populations. The number of people Cooking with Ecofogon stove, Nicaragua (PROLEÑA/ with electricity increases every year is keeping ahead Nicaragua) of population growth, and some notable progress is even being made in the development of a new generation of improved biomass stoves. However, the rapid expansion of populations in developing countries of slums means that the task of dealing with energy and patterns of increasing urbanization in the form poverty will be a challenge for many years to come. 1 ENERGY ACCESS AND DEVELOPMENT E nergy services for the poor have become a First, energy is an expensive business, and poor significant issue for those involved in energy people sometimes cannot afford the investments and development. This lack of access to high- necessary—such as a cookstove or electrical quality energy services is a situation that entrenches connection—for improved energy service quality. poverty, constrains the delivery of social services, These costs become especially prohibitive in rural limits opportunities for women and girls, and erodes areas, where remote locations and low density of environmental sustainability at the local, national, demand raise the costs and reduce the profitability and global levels. Today’s levels of energy services for prospective energy providers. A second problem fail to meet the needs of the poor. Worldwide, 2.5 is the lack of technical capacity to support energy billion people rely on traditional biomass and solid access. Regulatory and pricing frameworks and fuels for cooking (WHO 2009) and 1.5 billion policies appropriate for developing countries are people do not have access to electricity (IEA 2006). often nonexistent or sometimes misapplied. The Unless investments in providing modern energy training, technical assistance, and capacity building services are expanded significantly, this number is needed to support energy access schemes add to expected to actually increase over the next 30 years. the costs, with the result that energy companies must Ignoring the situation will undermine economic charge high connection fees and monthly rates that growth and exacerbate the health and environmental are unaffordable to the poor. Finally, energy access problems now experienced in many parts of the issues often involve a cross-sectoral solution. For world. example, programs to improve productivity stemming from modern energy access require availability of Providing high-quality energy services to the poor credit and development of markets for goods and sounds as if it should be a relatively easy problem services. to solve. However, international organizations have experienced difficulties in the past developing For this review, we define energy access as relating programs that produce improvements in sustainable both to physical proximity to energy infrastructure energy access. There are several reasons why and to the policies and frameworks supporting the 1 the energy access problem has been so vexing. transition to better, reliable and more efficient use of MODERNIZING ENERGY SERVICES FOR THE POOR: A WORLD BANK INVESTMENT REVIEW – FISCAL 2000–08 electricity and modern fuels. This viewpoint frames trends and patterns of energy access-related projects. 2 energy access as a development process—sometimes In addition, based on the analysis of the energy referred to as the energy transition—that starts with access portfolio, it is important to extract program, reliance on low-quality energy sources (straw, dung, policy, and project design recommendations to candles) and finishes when high-quality energy stimulate practitioner discussion and guide future sources, such as commercial fuels or electricity, are project preparation. This activity also should be available and being used by households. Access to useful as a baseline for future reviews of the World these higher-quality energy sources allow for services Bank’s growing energy access portfolio. like lighting, communication, cooling, pumping, and others that are not available to poor households at Before turning to the portfolio analysis, we examine lower levels of the energy transition because of the the main issues involved in energy access and high cost of the infrastructure necessary to deliver energy poverty, and what has been accomplished by the services. To achieve service availability for poor international development agencies. households, this development process requires direct investment in energy infrastructure, supportive investment in energy access policy development and What Is the Energy Transition and What capacity building, and indirect assistance through Are the Benefits? policies and investment undertaken on an energy sector-wide basis. The search for energy access solutions that will improve the lives of those in developing countries This report focuses on the World Bank’s portfolio must take into consideration the energy transition. of energy access-related projects approved during The transition to modern energy progresses from a particular timeframe: the past nine fiscal years biomass fuels used in traditional ways toward (FY2000–08). The objectives of the review are to biofuels used more efficiently in modern cookstoves compile an up-to-date data base on energy access- or to diesel, kerosene, and LPG fuels (for heat, related assistance commitments and to review current cooking, lighting, and power). Ultimately this transition leads to gas and electricity produced locally or distributed by a distribution network (Figure 1.1). The energy transition can be smoothed and sustained by programs and investments that emphasize both affordability and efficiency. For cooking, gains in efficiency can be made in small steps. For example, a farmer using wood for cooking may be able to afford an improved biomass stove long before being able to afford modern commercial fuels, such as LPG. For lighting, the differences in efficiency are so large that the recommended path is to move quickly from candles or kerosene to some form of electric lighting. At each stage of development, the primary problem is matching the energy supply and service level to people’s income and expressed needs. For cooking, the great inefficiencies in the fuels Retailing kerosene stoves and lamps, Hyderabad, India that are used by poor people are interlinked with (Douglas Barnes) the problems of biomass energy collection, the ENERGY ACCESS AND DEVELOPMENT // CHAPTER 1 it is not measured in monetary terms. In addition, FIGURE 1.1: The Energy Transition for Cooking and Lighting 3 this biomass energy use syndrome means a life of Efficiency of Cooking poor health that is burdened by unpaid work and LPG (kg) drudgery. The resulting environmental pressure also Kerosene pressure (kg) often leads to degradation of nearby forests and Natural gas (cubic meter) community land. Kerosene wick (kg) Biogas (cubic meter 60% methane) The transition to better stoves, along with efforts Efficient charcoal (kg) to promote petroleum cooking fuels, can provide Charcoal (kg) many benefits to households dependent on the Coal (kg) inefficient use of traditional cooking fuels. They Efficient fuelwood (kg) include avoided health costs associated with the Fuelwood (kg) use of unventilated biomass stoves and thus offer Dung (kg) society an economic benefit. The avoided illnesses Leaves and grass (kg) and deaths that might be attributed to the use of Crop residues (kg) improved stoves or petroleum cooking fuels may be 0.0 5.0 10.0 15.0 20.0 25.0 30.0 significant. Among women and children worldwide, Megajoules per kilogram or cubic meter indoor pollution accounts for an estimated 1.5 million premature deaths each year (WHO 2006c). Efficiency of Lighting In India alone, the comparable figure is 400 000 Fluorescent 20 watts (WHO 2007; World Bank 2002b). Studies in both Fluorescent 10 watts India and Nepal reveal that nonsmoking women exposed to biomass smoke have death rates from CFL Philipps 15 watt L11 chronic respiratory disease comparable to those CFL Philipps 9 watt lamp L3 of heavy smokers who are males (Modi and others Fluorescent 40 watt 2005). Incandescent 100 watt Incandescent 60 watt The costs involved in treating illnesses caused by Incandescent 25 watt indoor pollution, which must be borne by public Kerosene pressure health facilities, may also be significant. The easy Paraffin candle conclusion is that the unvalued time spent collecting Kerosene hurriucane fuelwood could easily pay for an improved stove Kerosene wick that saves fuel and thus collection time, along with 0 10 20 30 40 50 60 any expense for purchased biomass. Although more costly, the transition to LPG for cooking would Kilolumen-hours per kilowatt-hour also have even greater benefits than adopting an improved biomass cookstove. The World Health Organization (WHO) recently developed some economic valuation methods for assessing time use of traditional biomass stoves, and the resulting savings from fuel collection and cooking, avoided indoor pollution and its consequences for human health costs, and environmental benefits (Hutton health. Many of the problems are either long term and Rehfeuss 2006; Hutton and others 2006; or somewhat invisible to policy makers, but they WHO 2006a). They found that for a typical are very real in terms of time spent by consumers South Asian household, the benefits of switching in dealing with cooking fuels. Women spend time exclusively to improved stoves or from biomass to collecting biomass supplies, which is a cost even if LPG amounts to about US$30 per year. Thus, the MODERNIZING ENERGY SERVICES FOR THE POOR: A WORLD BANK INVESTMENT REVIEW – FISCAL 2000–08 benefits clearly outweigh the costs, but delivering 4 BOX 1.1: Making the Switch: An Example of the Benefits of high-quality stoves and fuels to poor people in Electric Lighting ways that are affordable is not so easy, as will be illustrated later in this report. Making the switch to higher-quality, more efficient electric lighting can enable households to read and study during evening hours, increase productivity, and The transition to better lighting by switching from raise incomes and quality of life. Compared to candles or kerosene lamps, which households without electricity commonly use, electricity converts energy into kerosene lamps or candles to electricity is even lighting more efficiently. A candle or kerosene wick lamp emits about 12 lumens more dramatic than those for adopting better stoves (a measure of brightness), a hurricane kerosene lamp 32 lumens, and a 60-watt or cooking fuels (Box 1.1). Kilolumen-hours are a lightbulb 730 lumens. Using a single 60-watt lightbulb four hours a day, a measure of lighting. The figures demonstrates that household consumes about 260 klmh of light per month. By contrast, burning lighting with kerosene or candles produces far less a hurricane kerosene lamp four hours a night yields only 4 klmh per month but, than 1 klmh of lighting per kilowatt hour of energy depending on prices, can cost somewhere between one-quarter and as high as compared to more than 10 klmh for incandescent the same cost as electric lighting. The energy poor in Africa spend about US$17 billion a year on fuel-based lighting sources, such as kerosene lamps, that are lamps and about 60 klmh for florescent lamps. costly, inefficient, and provide poor-quality light while polluting and posing fire Thus, the immediate benefit of electrification comes hazards. through improved lighting, which promotes extended hours of study and reading and other household Source: Lighting Africa; Nieuwenhout, Van de Rijt, and Wiggelinkhuizen 1998; chores (Barnes 1988; World Bank 2002a, 2004; O’Sullivan and Barnes 2007. Barkat and others 2002; Barnes and Floor 1996), and in turn contributes to better educational achievements (Khandker, Lavy, and Filmer 1994; Khandker 1996; Gordon 1997, Khandker and over US$10 a household per month, depending on others 2008). Lighting can also benefit many other household income and other factors. household activities, such as sewing by women and social gatherings after dark. These are just two components of the transition to modern energy services. The others would include For households that first received electricity either moving from manual to mechanized irrigation, from the grid or from renewable energy sources, the moving from human to motorized transportation, most immediate change is a transition from kerosene transitioning from battery-operated radios and or candles for lighting to the use electric lights televisions to those involving plug-in service, and (Box 1.1). The reason is that kerosene lamps and sewing with mechanical machines or ones powered candles, the usual alternative to electricity in rural by electricity. We have presented the efficiency gains households, provide inadequate light for reading above as examples, but many others are possible. (Nieuwenhout, Van de Rijt, and Wiggelinkhuizen 1998). The significantly higher levels of lighting that It is also true that household assets and amenities electric lamps provide enable comfortable reading, offer a general reflection of a household’s which can improve education and school attendance. quality of life. It should be recognized that asset As a result of this reasoning, many of the World ownership is really a means to an end. For Bank projects on rural electrification used a method instance, the ownership of a television is for both involving willingness to pay and consumer surplus to entertainment and receiving important news and evaluate the benefits of rural electrification. Recently communications. Bicycles, cars, and motor scooters these methods were the subject of a major review facilitate transportation to and from markets, social by the World Bank’s Independent Evaluation Group gatherings, and places of employment. Table or (World Bank IEG 2008). The study confirmed that the ceiling fans are not only essential for cooling off in a benefits of lighting from transitioning from kerosene hot climate like India’s, but they are also important to electricity are quite large and generally are well for keeping away bugs and insects. The conclusion is ENERGY ACCESS AND DEVELOPMENT // CHAPTER 1 The degree of these changes and the costs of achieving them can and should be the subject of 5 continued work, but the real challenge has been in developing and implementing programs that can effectively address the barriers to assisting household to move toward better fuels and appliances that provide these many benefits. Energy Access Linkages to the Millennium Development Goals The MDGs set in 2000 at the United Nations Millennium Summit outlined several time-bound goals in the areas of poverty, health, education, and the environment (Modi and others 2005). Although there was no direct reference to energy in the formulation of the goals, the need for access to energy, particularly modern energy, to improve overall welfare is well recognized in the development community. Hence, the World Bank has been promoting growth and development in the energy sector as part of a strategy toward achieving the MDGs. In this section, we will concentrate only on the main MDGs with fairly straightforward connections with energy. Girl studying with electric light (National Rural Electric Cooperative Association, International, NRECA) that the energy transition can facilitate development through improvement in many different areas that are important for quality of life. The benefits include improvements in the following: • Education. • Health. • Entertainment and communication. • Comfort and protection. • Convenience. Woman watching television in rural Vietnam (World Bank, • Productivity. Hanoi) MODERNIZING ENERGY SERVICES FOR THE POOR: A WORLD BANK INVESTMENT REVIEW – FISCAL 2000–08 preservation, which enhances farm productivity and 6 health and nutrition. Increasing evidence shows that electricity is instrumental in improving the MDG of universal education (Barkat and others 2002; Asaduzzaman, Barnes, and Khandker 2010; Barnes 1988; Khandker and others 2008; World Bank 2002a; World Bank 2008a). The superior lighting provided by electricity creates a better atmosphere in the home, which can result in more time for studying in the evening and better school attendance. Not as well established, but intuitively feasible, is that electricity in villages and schools will help both the school environment where modern Student and small solar lamp in Bolivia (Deutsche teaching equipment, such as projectors, printers, Gesellschaft für Zusammenarbeit, GTZ) and copiers, can be used and also can assist in retaining teachers in the community. Teachers are not as likely to want to live in communities without The importance of energy in achieving the MDGs is electricity. Some schools may even have more evident for the goals of eradicating extreme poverty modern heating and cooling systems that will make and hunger. Modern energy is important for home their educational atmospheres more attractive to and business enterprise development in several children. different ways (Cabraal and Barnes 2006). One is that household lighting allows income generation The promotion of gender equality and empowerment during the evening hours. This is important because of women is also an important MDG. Energy actually even households making one additional dollar a frees up the time available to women and girls from day can have a significant impact on welfare. The what have been called survival or menial activities. use of small machines can also improve household productivity, which can also enhance household income. In fact, small enterprises to provide local high-quality energy services can result in locally owned businesses and greater local employment. One common misunderstanding about the use of energy by the poor is that they pay proportionately more for their rudimentary energy services than more wealthy households that are using modern fuels, such as LPG and electricity. Once poor households have access to more modern energy or energy devices, they may actually even be able to reduce or at least maintain their level of energy expenditures while receiving far greater benefits from modern energy sources. In the field of agriculture, energy for irrigation can help improve food production and therefore promote better nutrition. In addition, access to modern energy opens the door to better food Computer lab in North Vietnam (World Bank, Hanoi) ENERGY ACCESS AND DEVELOPMENT // CHAPTER 1 Family have to eat and without modern energy efficiency, and energy crops can make exploitation they spend much time gathering firewood, fetching of natural resources more sustainable. There is 7 water, cooking, and processing food by hand. In some recent evidence that the inefficient combustion this regard, more modern energy allows for clean of traditional fuels have some impact on climate, cooking fuels and stoves that can reduce exposure especially because the daily cooking routine gives off to indoor air pollution and the improve health for significant amounts of black carbon. all in the family. Other already-mentioned activities that can have beneficial impacts for women and girls Many other linkages to the MDGs exist, but the involve education, improved productivity, and safety. primary ways in which energy affects the MDGs For instance, high-quality lighting encourages better are fairly evident from much of the recent work education, street lighting can improve the safety of on the impact of energy on development. The women, and modern energy services offer scope for strongest linkages involve improving incomes to home enterprises that are typically run by women. reduce poverty, removing indoor pollution from households to improve health, and creating a better Decreases in child mortality and improved maternal environment for both studying and teaching to health are also directly related to modern energy encourage better school attendance and improved services, both in the home and in health clinics. education. These impacts are especially significant There are several ways that energy contributes to for women and girls, since they are the primary improving health and reducing child mortality. In cooks and collectors of traditional energy in most the home, indoor air pollution is one of the main developing countries. Thus, it is clear that improving contributing causes of respiratory disease, which energy access has some clear benefits for achieving accounts for up to 20 percent of the 11 million child the MDGs. deaths each year (WHO 2006a). The gathering and use of traditional fuels for cooking exposes young children to indoor air pollution, which can contribute Who Are the Energy Poor? to respiratory illness. Electricity can also contribute to lower child mortality (World Bank IEG 2008) The MDGs implicitly indicate that a vast number of through direct means, such as better water supplies people in developing countries have no access to that typically involve some form of water pumping, basic infrastructure services, including those provided and more indirect means, such as mass media by energy. In fact, there is still a debate over whether campaigns for heath programs promoted through poor people lack access to modern energy services radio and television. because they are poor and whether energy can help lift people out of poverty. The basic question is how The goal of ensuring environmental sustainability is much energy consumption is adequate or whether also directly related to improved access to modern there a level of energy consumption that a household energy. It has already been mentioned that modern requires to maintain a bare minimum livelihood. This energy can help increase agricultural productivity concept has been grappled with by many involved through the use of machinery and irrigation. Over in energy issues with diverse points of view and the long term, this actually takes pressure off of methodologies (Krugman and Goldemberg 1983; the environment because it means a reduced need Pachauri and Spreng 2004; Foster, Tre, and Wodon to expand the quantity of land under cultivation, 2000; Saghir 2005). This issue goes along the thus reducing pressure on ecosystem conversion. same rationale of specifying a minimum expenditure In addition, the use of traditional fuels, such as (called an expenditure poverty line) that a household fuelwood, straw, and dung, for cooking can in some needs to remain or become nonpoor. Just as the cases contribute to erosion, reduced soil fertility, expenditure poverty has been defined in quite a and deforestation. Fuel substitution, improved few ways, energy poverty can be defined in several MODERNIZING ENERGY SERVICES FOR THE POOR: A WORLD BANK INVESTMENT REVIEW – FISCAL 2000–08 ways. Therefore, we will discuss several alternate goods and services that households use. The Bravo 8 measures of energy poverty line before discussing the measure goes into considerable detail to quantify approach taken in this paper. a household’s direct energy needs, considering variations in energy sources and their efficiencies, One of the simplest measures of the energy poverty urban and rural areas, and climate conditions. For line focuses on a household’s ability to cook using instance, for rural households in Bangladesh, with its modern fuels and access electricity for lighting tropical climate, the direct energy need according to (Modi and others 2005). The minimum energy need the Bravo measure is 329 kgoe per capita per year. according to this measure is 50 kgoe per capita Since we are concerned only with a household’s per year (40 kgoe for cooking and 10 kgoe for minimum energy requirement, the direct energy electricity). This measure is clearly very basic and needs proposed by the Bravo measure are more does not include energy use for other purposes, such than enough to satisfy the basic minimum needs as transport and heating or cooling. for rural households in Bangladesh. Goldemberg (1990) goes even further to consider a wider range A second measure of energy poverty emphasizes on of energy-using activities. the proportion of household expenditure spent on energy expenditure (Pachauri and Spreng 2004). These measure of energy poverty, even after The rationale for this expenditure-based approach taking into account energy source efficiencies and is that poor households spend a large part of their climate conditions, are too general to be applied, total expenditure on energy, because some basic unaltered, to a specific country, since they do not forms of energy expenditure (cooking, for example) consider country-specific information, need patterns, are absolutely necessary. A cutoff point of 10 percent and common practices. For example, energy for of total expenditure is frequently mentioned in the heating and cooling, preservation of food, or literature as the energy poverty line and, applying recreation is hardly considered a basic need for a that to our data, we get an energy poverty line rural population in Bangladesh. All in all, we feel expenditure of about Tk 1,003.60 per capita per that these two measures do not appear to reflect year. A criticism of this approach is that it focuses on adequately the market conditions that govern the energy expenditures, not on energy content. Since delivery of energy services to rural households in energy expenditure can vary by the region, the price Bangladesh. and type of energy used, and the type of appliances used, it cannot consistently represent the actual Another measure calculates the energy poverty line energy content and is much more representative of a based on the types of energy used by households wider basket of goods and services. at or below the overall expenditure poverty line already estimated for a country (Foster, Tre, and Some approaches to measuring energy poverty Wodon 2000). The basic assumption behind this line are more complex and rely somewhat more measure is that poor households in terms of per on the technical provision of energy services. One capita expenditure are also likely to be energy- such approach was developed by Bravo and others poor. That is, the energy poverty line is related (1979), and will be referred to as Bravo measure more to consumption expenditures than to technical from now on. The Bravo measure classifies human requirements. The steps involved in developing this energy needs into two groups: direct and indirect. measure are fairly simple. The expenditure poverty Direct energy includes provisions for cooking, line is determined first, following one of the standard lighting, heating and cooling, preservation of food, techniques. Next, households are selected whose hot water, ironing, and pumping of water, plus per capita total expenditure falls within a certain recreation and social occasions. Indirect energy range (10 percent is most commonly practiced) of needs refer to energy that is embodied in additional the expenditure poverty line. Finally, the average per ENERGY ACCESS AND DEVELOPMENT // CHAPTER 1 capita energy consumption for these households is we take a somewhat more conservative view that calculated, which is the energy poverty line for the investments need to more directly impact those who 9 sample. Expenditure poverty line measure yields, are considered energy poor. from our data, a poverty line energy consumption of 232 kgoe per capita per year. What Are the Key Dimensions of Energy The definition that we propose in this paper is Access? fairly practical and is as follows. Since energy is a necessary commodity, a household tries to The lack of access to high-quality energy services maintain at least some basic minimum level of around the world is a situation that contributes to energy consumption, which is the energy poverty poverty, constrains the delivery of social services, line. In an attempt to determine that basic minimum limits opportunities for women and girls, and often energy requirement, our approach investigates erodes local environmental sustainability. However, how a household’s demand for energy changes the investment needs are quite large. Developing with the change in other major welfare indicators, and transition countries face significant investments such as income. We can estimate the household’s in energy access in order to meet their commitments or a community’s basic minimum energy demand to achieving the MDGs. The International Energy in two ways. One way to observe that change is Agency (IEA) estimates that developing and transition to examine the energy demand function. However, countries as a group face cumulative investment for households that are energy poor and are requirements in their energy sectors (oil, natural gas, only meeting their basic needs for energy, the coal, electricity) of US$2.4 trillion (in 2000 dollars) relationship between energy uses and these factors for the period 2001–10 and US$3.2 trillion for the should be quite weak. These households try to period 2011–20 (IEA 2004). maintain their basic need for energy, regardless of the status of their education. asset level, or A substantial amount of analytical work has community goods. been carried out by the World Bank and other development organizations concerning the primary Practically speaking, this means that depending ways to address the issue of energy poverty. Some on the level of income in the country according to recent accomplishments by World Bank energy recent surveys (Khandker and coauthors 2009) about practitioners include the following: 40–50 percent of the population can be considered energy poor. This means that about one-half of • Identifying and documenting best practices in most populations have access to modern energy rural electrification. and can afford to purchase it while the other half • Mobilizing expanded investment from both the are dependent on more traditional forms of energy. public and private sectors. This is a somewhat more conservative definition of • Developing frameworks to regulate new energy poverty than has been utilized in the World institutional arrangements for the provision of Bank’s Clean Energy Investment Framework (World modern energy, including private electricity Bank 2006a), which has taken a broader view of distributors serving rural and periurban energy assistance as it relates to the energy poor that populations. includes all aspects of energy infrastructure, such • Developing methodologies and case studies as transmission and generation, as an investment to demonstrate the benefits of targeted energy in energy access. As will be indicated later, this is service investments for the poor. a difference in emphasis, since such investments • Improved understanding through surveys and are necessary conditions for investments in energy other research on how the poor meet their access (see Chapter 4). In this paper, however, energy needs in the rural and periurban context. MODERNIZING ENERGY SERVICES FOR THE POOR: A WORLD BANK INVESTMENT REVIEW – FISCAL 2000–08 • Regional strategies to scale up energy access, somewhat difficult to estimate. For instance, how 10 focusing mainly on electricity. much of an investment in a power plant is really an investment in energy access? Such difficult questions This analytical work provides the framework for the will be addressed, although they cannot be fully later operational review of World Bank projects. resolved. However, the main areas identified as a priority for addressing energy poverty and energy access involved several important areas. They include Electricity Access expanding rural electrification programs in many Most of the 1.5 billion people without electricity developing countries, giving greater attention to the access live in rural areas (Table 1.1). Projections policy reforms necessary to address energy for the show that, given today’s energy policies and periurban poor, and refocusing on the problems investment trends in energy infrastructure, as involved in the use of traditional fuels for cooking. many as 1.4 billion people will still lack access to Finally, it is also important to address the more electricity in 2030. In some regions—Sub-Saharan upstream investments necessary for the expansion of Africa in particular—rural electricity access is at a energy access to the poor. These are issues that are very low starting point compared with the urban highlighted as important in the transition to higher- population. A large urban-rural disparity also exists quality fuels and appliances for poor households in in South Asia, where less than one-third of the rural developing countries. population has access. Four out of five people without access to electricity live in rural areas of the The focus to this point has been on the direct developing world, mainly in South Asia and Sub- investments in energy access. However, indirect Saharan Africa. investments are also necessary that are in a sense necessary conditions for energy access. Rural The rate of improvement in electricity access varies electrification programs must have adequate considerably among regions. Rapid progress in generation and transmission in a country. The use electrification in East Asia, especially China, account of LPG for cooking requires the available of an LPG for most of the global gains in electrification since supply. Even off-grid electricity requires a regulatory 1970. According to the IEA, electricity has been framework and a supply system that make the extended to 700 million Chinese since 1970. In use of renewable electricity possible. The indirect contrast, the population without electricity access in investments necessary to support new energy access Africa has more than doubled over the same period, or improvement in the quality of energy services is and in South Asia has grown by one-third. Excluding TABLE 1.1: Electricity Access in the Developing World, 2005 Population without electricity % of population % of rural population Country or region (million) with electricity with electricity Developing Asia 930 72.8 65.1 Sub-Saharan Africa 547 25.9 8.0 North Africa and the Middle East 48 85.8 77.5 Latin America and the Caribbean 45 90.0 65.6 Developing countries 1,569 68.3 56.4 Source: IEA 2006. ENERGY ACCESS AND DEVELOPMENT // CHAPTER 1 East Asia and Pacific, the number of people without others 2007). Extending the grid to rural industries or electricity increased steadily from 1970 to 2000. commercial consumers can also promote economic 11 growth while increasing revenue that can be used to maintain lower prices for residential and other Approaches to Grid Rural Electrification rural consumers (Cabraal and Barnes 2006). Giving A myriad of problems—technical, institutional, priority to major load centers and productive facilities managerial, and financial—can combine to create helps improve financial viability. conditions where efforts to extend access have a net negative impact on a country’s development agenda. In Bangladesh, India, and Pakistan, Approaches to Off-Grid Rural Energy for example, the combined effects of low tariffs, Off-grid electricity is also necessary because the unmetered service connections, poor collection expansion of grid electricity will require decades practices, and weak overall operating performance to reach remote populations. In the short and have created a growing financial crisis in the energy medium terms, the only way to reach many of these sector. In Pakistan, operating losses in the main power company consume 1.4 percent of gross domestic product (GDP), an avoidable fiscal drain equivalent to 75 percent of the national education budget (World Bank 2005c). These problems, however, are not without solutions. In a recent, The Challenge of Rural Electrification, Barnes (2007) illustrates how a variety of countries have successfully addressed the problems of rural electrification. The results point toward a set of characteristics that characterize successful rural electrification programs. In addition, today some countries are facing issues of how to deal with problems in the last stages of their rural electrification programs. In Brazil, China, and Mexico, the remaining rural households are in very remote areas that are a real challenge to reach through traditional grid expansion. Therefore, these countries require innovative ways to reach the remote and very poor people without creating a financial strain on the companies involved in the program. Although their institutional forms vary, as a general rule successful grid extension programs require financially and technically strong utilities. To ensure sustainability, distribution companies must address the issue of increased technical losses and low revenues in creative ways. In Tunisia, for example, the utility reduced the capital costs of rural grid extension by shifting engineering standards and by using capital Solar home system, Brazil (Innovation for Development subsidies provided by the government (Cecelski and and South–South Cooperation, IDEAAS) MODERNIZING ENERGY SERVICES FOR THE POOR: A WORLD BANK INVESTMENT REVIEW – FISCAL 2000–08 households without electricity is through single world—namely North Africa; East Asia, including 12 households systems and small electricity providers, China; the Middle East; and Latin America—the level using both renewable and conventional energy of urban energy access is nearly universal. About sources. Although these approaches to electricity 95 percent of population growth over the next 30 provision may sound straightforward, in practice they years will occur in urban areas. Thus, fast population have been difficult to implement. growth and urbanization, coupled with rising demand for electricity, are exerting tremendous pressure on Off-grid household programs in Bangladesh and Sri infrastructure and creating strong demand for new Lanka demonstrate that it is possible to implement investment. In the Middle East and North Africa, large-scale, off-grid projects that complement for example, the World Bank expects demand for strong grid-electrification programs. Off-grid electricity to grow by an average of 6 percent a year projects in both countries have taken advantage of to 2010 (World Bank 2004b). Unless appropriate private sector institutions, NGOs, and microfinance steps are taken to meet that growing demand, the institutions that operate in rural areas. They also urban poor will surely lose ground in access to have required centralized institutional support. In electricity. Bangladesh, through grants and loan support to microfinance organizations and NGOs, the number In urban areas, extending electricity access to the of household photovoltaic systems has exceeded poor is a matter first and foremost of getting the 150,000. In Sri Lanka financing is provided though policies right. The infrastructure is generally already microfinance institutions, banks, and leasing in place in most of the large urban centers of the companies for renewable energy systems that are world, except Africa, so energy companies need to provided by the private sector and NGOs. Today, make relatively fewer new capital investments. Even off-grid SHSs and village microhydropower grids with the lower capital costs and higher incomes provide electricity to 3 percent of all Sri Lankan in urban areas, however, poor people still often households. cannot afford the connection fees or monthly rates. As a consequence, supportive policies are Small grid systems have varied widely, from needed that make service expansion to the urban microhydropower to locally generated private poor sustainable. The problem of reaching poor distribution. To grow and thrive, such systems often people in urban areas generally requires a change require external technical and financial support. in the mindset of urban utilities, since serving Cambodia’s experience illustrates the potential for poor populations often calls for special policies, countries where large-scale grid extension is not investments, and innovative technical and financial feasible in the foreseeable future. In addition, there solutions. are very successful small community grid electricity systems in Nepal and Sri Lanka that rely on local In recent years, there have been several international microhydropower. Off-grid electricity has the forums to address the issue of periurban electricity drawback of high cost compared to grid electricity problems (Rojas and Lallement 2007). The findings in urban areas, but there does appear to be a of this work include that the poor pay extremely high significant willingness to pay for energy services prices for electricity—often to illegal entrepreneurs. in many remote or rural areas where access to Safety issues are often ignored by such entrepreneurs, conventional energy services is lacking. and service levels are often very poor. The solutions to these problems are not insurmountable. They include involving NGOs or smaller bill-collecting Periurban Electricity and Urban Poverty agencies. However, implementation has been lagging Almost 85 percent of the world’s urban population behind in many countries, and there is a need to has access to electricity. Indeed, in some parts of the address these issues more directly. ENERGY ACCESS AND DEVELOPMENT // CHAPTER 1 Populations Dependent on Traditional Fuels All these people must contend with the disadvantages Households’ use of modern energy and efficient of traditional fuels. Cooking and heating with such 13 appliances for heating homes and cooking fuels as biomass are far less efficient than cooking with food has significant environmental benefits. The such modern fuels as kerosene or LPG. As indicated, environmental consequences of biomass use, first the net calorific value of wood, for example, is four put before the international community several times lower than that of kerosene and LPG. Women decades ago as the “other energy crisis” (Eckholm and children must spend hours gathering biomass 1975) involve indoor air pollution and degradation fuels. The recent instability in the price of petroleum of local commons. Fuel collection leads to a fuels actually in some cases has caused households to deterioration of the local environment and depletion switch back to traditional fuels. Quite a bit of work is of biomass, meaning ever longer walks to collect actually going on recently to bridge the gap between fuel. In India, the time spent collecting fuel per the inefficient use of traditional fuels, such as wood, household is estimated at nearly one hour per straw, and dung, by promoting improved stoves. Stove day. (World Bank 2004a) In Haiti, for example, programs around the world have had an uneven the overall decline in forested areas resulting history, but there are some recent developments from charcoal production for urban use is well involving more durable efficient biomass stoves that documented (Stevenson 1989; Lewis and Coffee are encouraging for the future. 1985). Large gaps also remain in access to modern fuels, World Bank Support for Promoting such as kerosene and LPG. Nearly 2.4 billion Energy Access people in developing countries still rely on wood, agricultural residues, and dung for cooking and The World Bank assumed a leadership role for energy heating (Table 1.2) and, as indicated earlier, 3 billion and poverty with the 1996 publication of the strategy people rely on solid fuels that include coal (WHO document Rural Energy and Development: Improving and UNDP 2009). Without greater efforts these Energy Supplies for Two Billion People (see Box 1.2) numbers are forecast to grow to 2.5 billion by 2030 and the 2000 publication of Fuel for Thought: (IEA 2006). Environmental Strategy for the Energy Sector. These TABLE 1.2: Populations Reliant on Biomass for Cooking and Heating by Region, 2004 Country or region Millions % of population China 480 37 Indonesia 156 72 India 740 69 Rest of Asia 489 65 Brazil 23 13 Rest of Latin America 60 23 North Africa 4 3 Sub-Saharan Africa 575 76 All developing countries 2,528 52 Source: IEA 2004, 2006. MODERNIZING ENERGY SERVICES FOR THE POOR: A WORLD BANK INVESTMENT REVIEW – FISCAL 2000–08 The work on energy and development that emerged 14 BOX 1.2: The World Bank’s 1996 Rural Energy and Development Action Plan for Broadening Access from energy sector in the early 2000s included four business lines. One of the business lines was helping The 1996 rural energy study provides a comprehensive review of progress in the poor directly, through facilitating access to broadening energy access. After an extensive review of rural energy issues and modern fuels and electricity, and promoting energy- obstacles, the strategy recommended the following actions: efficient and less polluting end-use technologies. The other energy business lines included improving • Development of regional, country, and local ownership and commitment to macroeconomic and fiscal balances; promoting efforts to broaden energy access. • Systematic inclusion of rural energy in Bank assistance programs. good governance and private sector development, • Promotion of best practices and innovation in project design and including transparent and propoor regulatory implementation. mechanisms and removal of barriers to private • Dissemination of innovations and best practice. participation; and protecting the environment, • Establishment of partnerships with donors, NGOs, and other organizations. through the removal of barriers to renewable • Implementation of special initiatives on Africa. energy, through investment in energy efficiency, and • Improvement of the Bank’s capacity to deal with rural energy issues. promotion of clean fuels. Broadly speaking, these • Monitoring of progress on achieving objectives. business lines are still intact today. Source: World Bank 1996. Part of the reason for the renewed support for the World Bank to become involved in infrastructure reports reflected on the remarkable global progress was the difficulty in getting businesses to serve the during the 1970s to 1990s when access to electricity poorest populations. The obstacles already have and modern fuels was extended to more than 1 billion been reviewed here, but they are worth repeating. people worldwide. However, the work also identified The difficulties in developing energy services for both fairly significant gaps in the international commitment poor and remote populations include low incomes, to continue extending both modern and renewable poor affordability, low business volumes, and others. energy services to the world’s poorest populations. However, during the last 10 years many new models for serving these populations has been development In the last decade since these studies, the World both from the traditional energy companies, small Bank has become increasingly active in the area and medium-size enterprises, and NGOs. As a of energy and poverty reduction. However, in the consequence, many of the recommendations of the late 1990s and early in this century, the World late 1990s that were passed over during the decline Bank reduced its commitment to the energy sector in infrastructure lending at the turn of the century because of a misperception that private companies have now grown with the success of many innovative would take over most necessary investments in the programs. energy sector, which was reflected in a decline in overall World Bank energy lending. As time passed, More recently, the World Bank has deepened its it became clear that public and private approaches commitment to assisting the poor with energy to investment in infrastructure were necessary. By needs by developing a possible new initiative. This beginning of the new century there was a renewed program addresses the financing needs of energy commitment of the World Bank to energy lending. access for the poor that has been identified as a In 2001 the World Bank energy sector set the tone priority for the World Bank ever since the work on for continued energy sector investments with a new Rural Energy and Development (Box 1.2; World strategic approach. This was followed in 2003 by the Bank 1996), Fuel for Thought (World Bank 2000), “Infrastructure Action Plan” (World Bank 2003) that and more recently the Clean Energy Investment clearly outlined a plan of action to reengage in the Framework (World Bank 2006a). This initiative investment in infrastructure. would move from sector work to project support ENERGY ACCESS AND DEVELOPMENT // CHAPTER 1 and would provide the necessary financing for BOX 1.3: Energy for the Poor Initiative 15 both short- and long-term assistance to help alleviate energy price shocks for the poor and Recently the World Bank Group developed a proposal to establish a Vulnerability to improve energy access and reduce the long- Financing Mechanism to coordinate the provision of rapid assistance to the poor term vulnerability of the poor to unstable prices in developing countries to cope with high oil prices or the combination of high (Box 1.3). oil and food prices. The goal is to set up a multidonor trust fund that will finance social safety net programs through project financing or direct budget support. The trust funds would be used to develop short- and long-term programs. Most international development agencies are now fully committed to the alleviation of energy poverty and Short-Term Programs promoting energy access in developing countries. Past In the short term, by providing rapid assistance to help protect the poor in the investments in such programs as rural electrification countries that are most seriously affected by high and volatile energy prices. and renewable energy for rural areas have yielded This assistance will be provided to countries implementing or expanding cost- both significant achievements in progress in countries effective safety net programs. The measures will be to increase the income of the that are committed to such programs and new models poor or reduce their consumption expenditures without resorting to inefficient or untargeted subsidies through support for capacity building and financing for intervention that are applicable to countries of projects. The mechanisms will include targeted cash transfers, workfare around the world. Of course, these investments programs, targeted measures that reduce expenditures by poor households, and must be complemented by the development of technical advice to set up the associated delivery mechanisms. supporting infrastructure in most countries. This study will review the level of past investments that directly Medium-Term Programs and indirectly support energy access and will make Loans, credits, and grants will be provided directly to beneficiary countries over recommendations for a way forward. a three-year period to develop and implement multiyear programs (energy investment projects and enabling sector policies) to enhance energy access and also reduce vulnerability to future energy price shocks. This will be done through the deployment of renewable energy technology, including hydropower, the Conclusion expansion of energy access (using grid extension, as well as off-grid and minigrid applications), and the diversification of sources of energy supply diversification. This chapter examined progress by the World Bank’s energy access practitioners in addressing the Source: World Bank 2008a. practical sector problems associated with energy and poverty alleviation. This provides a background to the central focus of this study, which is a review of investment and find effective ways for delivering the World Bank’s energy access investment portfolio improved energy services. for the period FY2000–08. Although considerable strides have been made during the past 10 years, an There is reason for optimism, even among countries enormous energy access challenge still lies ahead, about to embark on providing electricity to their along with room for improvement. In particular, we poorest populations. With strong government note the significant differences in extending access commitment and effective institutions to implement to modern energy. In East Asia and Pacific and Latin programs, electrification and other forms of modern America and Caribbean, significant progress has energy can provide rural people enormous social been made over the past decade, and near-universal and economic benefits. To be sure, they cannot access is anticipated within another generation. In solve all development problems. However, there other regions, particularly Africa and South Asia, cannot be progress without modern energy. Effective progress is slow or even stalled. Clearly, in order solutions are available that can facilitate progress to meet the MDG challenge, it will be necessary toward greater and more equitable access to to significantly scale up the pace of energy access modern energy. 2 MEASURING INVESTMENTS IN ENERGY ACCESS A ny review of energy access and poverty to identify energy access investments at the project investments by the World Bank offers several component level rather than at the project level, methodological challenges. Basically three since this is a much more accurate measure of different types of investments relate to energy poverty. investments in energy access. The first involves projects that have direct impacts on energy access, including rural electrification, The review concentrates on those projects directly improved energy efficiency of households, and reaching the poor or supporting capacity building access to high-quality cooking or heating fuels. expected to benefit energy-deprived populations. The second involves factors that guide such direct The reasoning is that assistance to energy access impact investments, which includes policies, support includes both physical investments in infrastructure for institutional capacity development, and training and supportive investments in planning, operational to deliver the services properly. Finally, other capacity, and policy. For those large infrastructure infrastructure investments are, in essence, necessary projects supporting energy access more indirectly, conditions in order to extend energy services to the we have developed a way to allocate the proportion poor. This latter type would include portions of such of the investments supporting energy access. As projects as generation or transmission. a consequence, this review is a very detailed and accurate review of the direct and, in some cases, Another challenge in measuring energy access is indirect support investments in energy access. that many World Bank projects have multiple goals, Energy access is broadly considered to include and only subcomponents deal with energy or energy any activities that directly or indirectly promote, access. For instance, it is quite easy to classify such facilitate, or enable modern energy services to projects as rural electrification if they are entirely households, communities, or local institutions. dedicated to improving energy access. It is much Because of the difficulty in measuring them, the more difficult to evaluate the contributions to energy upstream investments that are necessary conditions access of multipurpose loans that contain varied for improving energy access through networks, such project components, some of which do not even as generation and transmission, are not estimated 17 deal with energy. Thus, in this review we decided in the tables in this chapter. Rather, they are MODERNIZING ENERGY SERVICES FOR THE POOR: A WORLD BANK INVESTMENT REVIEW — FISCAL 2000–08 examined in a later chapter in this study that deals though they still may burn biomass fuels, such as 18 with measurement issues (Chapter 4). Thus, this straw or dung. review of energy access not only covers the physical aspects of access to modern energy services, but As indicated, some investments in energy access also the technical assistance, support for institutions enhance the prospects for or the conditions of energy and policy reforms, and indirect access and poverty access without actually delivering a connection benefits resulting from sectorwide lending instruments or cookstove. In our review of the Bank’s lending and large-scale energy infrastructure. portfolio, we found many components that support the actual investments in infrastructure providing energy access. Capacity building is often necessary even Defining Energy Access Investments before an energy access program can begin. This may come in the form of assistance to households or The focus of this study is on energy investments that communities, or it may involve setting up an institution support new delivery or improvement in the quality to provide support services for public companies, of energy services for households, communities, businesses, or NGOs that are involved in one way or local enterprises that are without access to a or another in providing energy access. Finally, there specific type of energy (Table 2.1). This means that may be a need to support the development outcomes the production or transmission of energy services is of energy access projects, which might include such not considered energy access, unless all or part of activities as enabling the availability of microcredit to that energy reaches the households, communities, invest in income-producing uses of energy. or local enterprises. Any type of fuel can qualify as long as it meets the criteria of improving the energy The study carefully considered whether to include use of households according to transition described generation and transmission as an energy access earlier—that is, a transition from “traditional” investment. This is not an easy issue because, although to “modern” use of energy. With this approach, generation and transmission investments are necessary, modern energy access can include the provision of they are not sufficient conditions for electricity access energy-efficient and clean-burning cookstoves, even in developing countries. Because of the difficulties TABLE 2.1: Examples of Energy Access—Direct and Indirect Assistance Access investment type Purpose of investments or grants Classified or not classified as energy access investment Direct • Cooking and biomass energy • All investments in new or higher-quality energy for households • Household electricity • All investments in energy for new or improved productive uses and small • Productive uses and energy efficiency enterprise development • Community social support centers, such as • All investments in new or higher-quality energy for communities schools and health clinics Indirect • Improvements in access policy and technical • All investments facilitating improved investment climate for energy access assistance • Only incremental energy investments in supporting infrastructure necessary • Power plants, transmission, and other to reach new households or improve quality to existing households (could infrastructure that supports development of not include in tables because of mixing of funds, but see Chapter 4 for greater energy access discussion) None • Energy services for factories, buildings, and • Not classified as an investment in energy access other entities that already have access to high-quality energy services Source: Portfolio review. MEASURING INVESTMENTS IN ENERGY ACCESS // CHAPTER 2 involved in estimating the exact contribution of the Business Warehouse (see Annex 2 for a list generation and transmission, for this review we of projects relating to energy). The Business 19 decided to keep a narrower definition of energy Warehouse is the investment data base for the access results in a slight underestimation because of World Bank, and it includes data on project loans the exclusion from the analysis of investments in large (from the International Bank for Reconstruction generation and transmission projects without energy and Development, or the IBRD), international access components. However, we analyzed the impact development assistance (from IDA), grants (from of including a portion of generation and transmission the GEF), Social Funds (SFs), the Carbon Fund, (see Chapter 4), as contributing to energy access. The Loan Guarantees, and others. However, it does not results are significant, but not large, since they would include MIGA or investments that are part of the result in a 2–3 percent increase in the overall energy portfolio of the IFC. Thus, this review is restricted to access investments. However, it was decided to limit the investments of the World Bank. this analysis to those energy access investments that can be estimated directly from the project component This Business Warehouse investment data base of World Bank investment loans. classifies projects according sector type and the approving sector board. For each project, there is Finally, the technical assistance grants within an identification of the investment percentage that projects are counted as energy access investments, relates to energy. In fact, there are many nonenergy but general sector work conducted either by the projects containing energy access activities, energy anchor or Regional energy operations especially in the areas of the Environment (ENV), are excluded. This is because it would be very Rural Development (RDV), and Transportation (TR). difficult to track these investments in an objective For instance, rural development projects might or satisfactory way from 2000 to 2008. Thus, include generators for schools, irrigation pumps the framework for the analysis of energy access for water supply, or other energy investments. The investments is all the World Bank investment opposite is also true. An Energy Sector Board may projects from 2000 to 2008. have rural development components that have little or nothing to do with energy. Review Procedures and Definitions The projects that were selected for this review include all that have even the smallest energy component This review focuses on the World Bank’s approved in them. Thus, the project data base has projects in projects and operations for fiscal 2000–08. One which 100 percent of the investments are for energy unique feature of this review of World Bank project and others with as little as 10 percent or 20 percent investments is that it not only has examined all energy investments. After identifying projects with projects regardless of sector, but it has also broken energy related activities, a detailed analysis of Project down the project investments according to project Appraisal Documents or their equivalents (Box 2.1) components. It would be methodologically difficult was conducted down to the component level. In to have an accurate picture of project investments many instances, even at the component level, without the details that comprise the components allocation of energy and nonenergy investments was of the projects. As a consequence, this review has necessary. developed a fairly precise way of categorizing energy access investments. The main types of energy investments found in the World Bank project document included four main The source of the primary data for this review is themes. The first theme includes policy work and the investment projects of the World Bank that capacity building that supports the provision of are contained in its investment data base called modern energy access. For policy work and capacity MODERNIZING ENERGY SERVICES FOR THE POOR: A WORLD BANK INVESTMENT REVIEW — FISCAL 2000–08 electrification investments; off-grid rural electrification 20 BOX 2.1: Energy Portfolio Review Coverage investments; and electrification funds. The energy access portfolio review relies on data available in the Project Appraisal Documents (PADs), Implementation Completion Reports (ICRs), Staff Appraisal The third theme consists of the World Bank’s general Reports, and program documents from the World Bank’s Business Warehouse. assistance to communities, small businesses, and The review covers formal lending and grant projects, including investments, households for cooking. Seven categories of activities adjustment loans, sector reforms, and emergency operations approved by the fell into this class. On the biomass supply side, the Bank’s Board of Directors between July 1, 2000, and June 30, 2008. The portfolio review covers all operations, regardless of the Sector Board, containing projects or project components included reforestation one or more energy-related components. The main sector codes are as follows: activities, sustainable community-managed forest management systems, and improvement of forestry, • District Heating and Energy Efficiency Services (LA). agricultural, and pastoral production. On the • Mining and Other Extractive Industries (LB); Oil and Gas (LC). demand side relating to forestry, components • Power (LD). involved the provision of energy-efficient cooking • Renewable Energy (LE). stoves. Finally, some project components covered • General Energy (LZ). cooking fuels and interfuel substitution, both for improving the household quality of life and for The investment data base of the World Bank classifies projects according to both sector type and the approving sector board.* As expected, most energy-related reducing pressure on biomass resources. components fall under the Energy and Mining Sector Board, but projects were also found under ENV, RDV, and TR. In addition, we also found that some Finally, quite a few Bank energy projects were projects under the Energy Sector Board have nonenergy codes. For this review, involved with productive uses and energy efficiency we followed the project classifications found in the Business Warehouse, but that reaches households and local communities. in some cases made adjustments in the case of our energy access estimates. The portfolio review identified six categories of such However, all adjustments are fairly minor in scope. assistance, including the following: investments on Source: World Bank Business Warehouse and this portfolio review. energy efficiency innovations in buildings and heat *Many nonenergy projects comprise energy access activity (such as reforestation) supply; provision of fuel-saving technologies for aspects, especially in the areas of ENV, RDV, and TR. building isolation; energy efficiency investments for energy access; expansion and upgrade of power grids for productive uses; education and training on building, the review identified seven categories energy use for productive purposes; and productive generally focused on planning, policy, reform, strategy uses of investments for energy access. development, and capacity building at all levels. The categories include strategy development, rural The advantage of having investment figures for the electrification master planning, policy frameworks above themes at the project component level is that for the biomass energy sector, rural energy strategy, classifying project components is easier, and a more heating sector reforms to promote energy efficiency accurate picture of energy access investments by the in buildings, technical assistance for project World Bank emerges. However, it was necessary to management, capacity building for private sector deviate somewhat from the Business Warehouse, as enterprises, capacity building for energy sector public is indicated in the next section. agencies, and capacity building for local communities. The second major theme involves investments Business Warehouse and Portfolio Review in electricity access infrastructure. Investment in Differences electricity infrastructure was a principal modality of Bank assistance. For this type of direct investment, The definitive source of information on lending and there were four distinct categories: grid-based assistance for energy is the World Bank’s Business periurban electrification investments; grid-based rural Warehouse. The Business Warehouse keeps track MEASURING INVESTMENTS IN ENERGY ACCESS // CHAPTER 2 of all energy investments, regardless of sector. FY2006–08. Second, it reclassifies some energy- However, the categories used by the Business related investments that were classified as public 21 Warehouse are not sufficient to identify the type of administration, law and justice, and the forestry energy access assistance contained in each project sector in the Business Warehouse as energy sector and project component. The Business Warehouse investments. This is to avoid underestimating the uses general categories, such as the oil and gas Bank’s contribution in energy sector. or power sector. At this level of aggregation, it is difficult to separate out those activities that involve The energy sector codes in the Business Warehouse large-scale energy supply or infrastructure projects actually determine the proportion of investments going from those focused on delivering energy access to to energy in the World Bank’s investment portfolio. households and communities. Therefore, this review However, strictly following the sector codes of Business of energy access assistance is based on the projects Warehouse will underestimate the Bank’s contribution identified in the Business Warehouse. With this list of in energy sector. For instance, some forestry work also projects, the individual project components in Project has been reclassified as work on the energy sector if Appraisal documents were examined to determine the project is related mainly to energy. As an example, whether or not they were directed toward improving a project in Senegal has classified the local forestry energy access. These project components were then management under the forestry sector, when the categorized according to the categories defined forestry management is for the production of fuelwood. in the previous section to arrive at an overall level Finally, we exclude the work on nonenergy mining of World Bank financing. In this way, the figures (such as copper or other minerals), since we are mainly presented in this study are more accurate down to interested in how energy access relates to the portfolio the level of the project component.1 of energy projects. The implication of these adjustments is that the energy access figures are slightly higher than The figures in this study are similar, but somewhat those found in the Business Warehouse. different from those presented in the World Bank annual report (World Bank, various years). This In the aggregate, all these adjustments are rather review covers all investment and adjustment projects small, and they actually improve the assistance of the World Bank, including the IBRD, IDA, GEF, figures presented in this report. These adjustments Carbon Fund, and Loan Guarantees projects.2 The have the effect of increasing somewhat the World Bank annual report also uses the data in amount of energy assistance shown in the report in the Business Warehouse when reporting the World comparison to the amount reported in the World Bank’s energy assistance. However, the energy Bank annual report. assistance data reported in this review differ from the data in the annual report in two ways (Table 2.2). First, this review includes information on GEF, Comparison with Investment Figures from Carbon Fund, and Loan Guarantee projects. The the Clean Energy Investment Framework World Bank annual report presents information on IBRD and IDA projects for FY2000–05, along The figures compiled for energy access under the with IBRD, IDA, and Guarantee projects for Clean Energy Investment Framework (CEIF update 1 Some very small changes between the time the project appraisal documents are published and the time the projects are approved have been made. For example, the commitment of one guarantee project in the Lao People’s Democratic Republic was decreased by 16 per- cent, together with another when that project’s entire financing package was finalized. However, as indicated, mostly this reclassification was very minor, and it was aimed at improving the figures on energy access. The total combined effect of these three factors increases the investment amount by approximately 1.45 percent, and actually provides a more accurate picture of energy access investments. 2 As indicted previously, this review does not include IFC and MIGA projects. MODERNIZING ENERGY SERVICES FOR THE POOR: A WORLD BANK INVESTMENT REVIEW — FISCAL 2000–08 22 TABLE 2.2: Comparison of Energy Investments: Annual Report Compared to Energy Access Review Carbon Special IBRD and Grand total from Total in World Bank Total in Access FY offset GEF Guarantees financing IDA Business Warehouse annual report Project Review* 2000 0.0 56.0 60.3 13.5 1572.4 1702.1 1572.4 1764.6 2001 0.0 6.3 244.0 2.5 1530.7 1783.5 1530.7 1817.1 2002 3.5 32.6 115.0 5.9 1974.6 2131.6 1974.6 2166.0 2003 0.0 40.5 75.0 1.5 1088.5 1205.4 1088.4 1249.4 2004 8.3 45.4 30.0 0.0 966.5 1050.2 966.5 1053.6 2005 35.4 57.0 253.9 1.4 1568.8 1916.5 1822.7 1992.3 2006 18.4 34.5 0.0 0.0 3030.3 3083.2 3030.3 3176.0 2007 54.5 115.1 160.0 5.6 1624.0 1959.2 1784.0 2031.0 2008 20.7 92.3 0.0 21.9 4180.4 4315.4 n.a. 4963.5 Source: World Bank Business Warehouse 2000–2008; World Bank, various years. * The total of the project review includes the adjustments from the reallocation of investments. reports) are based on a different definition from level has been undertaken for determining energy those analyzed in this study. The term energy access access. The purpose of the CEIF report is to broadly for this report relates to the physical proximity of classify projects or large project components into people to infrastructure and to the policies and categories, such as low carbon, transmission and supporting technical activities that are geared toward distribution, oil, gas, coal, thermal generation, and encouraging people to move to cleaner, more other types of energy investments. As a result, the efficient, and in general more modern fuels. This CEIF report undertakes classification on a broader definition frames energy access as supporting the level according to its interest in carbon production transition from low-quality or inefficient use of energy and climate change (see Annex 1 for detailed sources to higher and more efficient uses. The CEIF review of differences). In addition, this access review has the dual purpose of tracking clean energy and is restricted to World Bank investments, as reported energy access investments, with the focus on how in the World Bank annual report (World Bank, to support investments in developing countries that various years), and the CEIF report includes not reduce risks from climate change and achieve low- only those investments, but also investments from carbon growth. These two quite different focuses the IFC and MIGA. actually lead to different ways of classifying energy access in the Bank’s lending portfolio. The difference in the financial figures reported in this review and those of the CEIF are mainly due The differences in the calculations of energy to the treatment of generation and transmission access are based on the underlying purposes of as energy access in the CEIF updates and their these two reports. The goal of this energy access qualified exclusion in this study. The issues involved review is to classify the various components that in estimating generation and transmission are make up or lead to energy access, including rural detailed in Chapter 4 of this report. According electrification, biomass energy, heating reforms and to the CEIF review, total World Bank investments building efficiency, and promotion of modern fuels, in energy access between 2003 and 2008 were such as LPG for cooking. Accordingly, a thorough US$6.04 billion, while the figures from this review review of World Bank projects at the component say US$2.75 billion. As indicated, most of this MEASURING INVESTMENTS IN ENERGY ACCESS // CHAPTER 2 difference is due to generation and transmission this category. As a result, this review adopts a more investments. accurate way to account for the World Bank’s energy 23 access investments through the review of not only every project, but of every energy project component Conclusion from 2000 to 2008. This component-level review of formal project In the next chapter, using the method described in documents allows for much a more accurate this section, we review the World Bank’s energy portrayal of the status of energy access in the Bank’s access lending. It must be kept in mind that the energy lending portfolio. This review found that it figures in the next chapter represent the direct is quite common for energy access to be part of a lending in energy access and the supporting indirect project, for instance, an improved stoves component lending, such as policy reform and institutional in a rural development project, in which only there support. Thus, policy reform that supports energy is only a very small investment in energy access access is included in this review of investments. They compared to the larger project. Another example do not include necessary upstream investments, such is that including a US$200 million transmission as power plants and transmission lines; this issue loan with a US$5 million dollar rural extension is addressed in a later chapter. This detailing of component would lead to an overestimation of investments in energy access at the component level World Bank assistance to energy access. However, should provide a reasonably accurate picture of both in other cases the entire project may involve energy past achievements and future directions of World access. Many rural electrification projects fall into Bank lending. 3 THE WORLD BANK ENERGY ACCESS PORTFOLIO T he World Bank has made some significant This review covers the World Bank’s energy access achievements in promoting energy access in lending over the period for fiscal 2000–08. The developing countries. In many countries, the levels of investments over this period increases continued lending for rural electrification programs significantly as the World Bank became more through a series of projects has contributed greatly involved in the energy sector and energy access to providing electricity access for many people. shared in this improved investment climate. The For instance, from 1987 through the present day, focus of this review is projects and investments the Lao People’s Democratic Republic has had a that involve energy-related assistance that reaches series of four rural electrification projects that have communities and households in developing significantly increased access to electricity. Likewise, countries. The center of attention of this review is in Vietnam a series of four projects has increased on those that either have no energy services or electricity access levels from 60 percent to more have only access to poor-quality services. This is than 95 percent today. These are countries that achieved by first presenting an overview of total have been committed to providing electricity to their energy and energy access investments by the rural populations. However, in other regions and in World Bank. This is followed by a discussion of other areas of rural energy, the achievements have thematic areas of access investment, including been less dramatic. At present, the World Bank is policy and capacity building, direct investments just beginning to address the massive challenges to promote a transition to modern energy for in Africa. In South Asia the policy environment for households or communities, and energy for rural energy has been quite challenging, despite productive uses and energy efficiency. Because government commitments to move forward on investments in generation and transmission are energy access issues. Also, ways to provide financing necessary conditions for energy access, we describe for biomass energy and cooking fuels are only now a provisional approach to quantifying how such being addressed. Thus, the challenges are many, indirect assistance might reach the energy poor in but the successful programs can provide a path to a Chapter 4. greater achievements in the future. 25 MODERNIZING ENERGY SERVICES FOR THE POOR: A WORLD BANK INVESTMENT REVIEW — FISCAL 2000–08 Overview of Energy Access Investments FIGURE 3.1: World Bank Energy Access Investments by 26 Fiscal Year, FY2000–08 During the last nine years, an increasing emphasis (US$ millions) has been placed on infrastructure lending partly as a 6000 consequence of the Infrastructure Action Plan (World Energy Access Bank 2003). In addition, Africa was singled out as Total Energy a priority region because it has fallen behind the 5000 rest of the world in its infrastructure development. This emphasis on infrastructure is evident in the 4000 total value of all World Bank projects with energy- (US$ millions) related investments approved during fiscal 2000–08 3000 (Table 3.1). The total energy investments were about US$20 billion, and the investments per year typically 2000 were less than US$2 billion through fiscal 2006. Since that time, lending has increased significantly, rising to close to US$5 billion in 2008 (Figure 3.1). 1000 The lending is regionally diverse with Africa, Eastern Europe, and South Asia all above US$4 billion for 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 the period. These three regions together accounted for more than 65 percent of the total value of Source: Portfolio review. projects, with Latin America and Caribbean, East Asia and Pacific, and Middle East–North Africa accounting for the remaining 20 percent. Lending for energy access increased along with total FIGURE 3.2: World Bank Energy Access Investments by energy lending (Figure 3.1). This study estimates Region and Type, FY2000–08 that total World Bank investments in energy access (US$ millions) during fiscal 2000–08 were about US$4 billion— South Asia, approximately one-fifth of the total energy-related 694 investments.3 Middle East and The regional percentages of lending for energy North Africa, Africa, access during the last nine fiscal years also followed 100 1,080 a similar pattern. East Asia and the Pacific has many long-term rural electrification programs, and Latin America and Caribbean, 400 Africa has begun to make infrastructure a priority for lending. Together these two regions received more than half the energy access-related commitments (Figure 3.2). East Asia and Pacific also has the Eastern Europe and East Asia and highest rate of lending of energy access at about 30 Central Asia, 603 Pacific, 1,069 percent followed by Africa and Latin America and the Caribbean, which are at the 20 percent level of Source: Portfolio review. 3 As indicated above, the lending reported in the CEIF report for the period 2003–08 for World Bank investments is US$6.04 billion. This includes total investments in generation and transmission, which for methodological reasons were not included in this report (see Chapter 4 and Annex 1). THE WORLD BANK ENERGY ACCESS PORTFOLIO // CHAPTER 3 TABLE 3.1: Energy Project and Energy Access Investments, FY2000–08 27 (US$ millions) Energy projects Energy access investments by type Cooking Total energy Total energy % access and Productive invest- access of energy Access biomass Household uses and Projects ments* investments investments policy energy electricity efficiency Region Africa 141 4,658 1,080 23 345 36 687 12 East Asia and Pacific 80 3,510 1,069 30 65 1 621 381 Eastern Europe and 140 4,605 603 13 52 9 2 540 Central Asia Latin America and 85 1,846 400 22 207 36 125 31 Caribbean Middle East and 20 1,161 100 9 22 77 1 0 North Africa South Asia 53 4,431 694 16 230 4 430 30 Total 519 20,213 3,949 20 924 164 1,866 994 Fiscal year 2000 41 1,765 448 25 6 26 187 228 2001 45 1,817 246 14 40 0.6 33 171 2002 47 2,166 520 24 143 0.8 339 37 2003 45 1,249 169 14 24 14 122 8 2004 48 1,054 254 24 103 8 110 33 2005 69 1,992 326 16 52 8 253 13 2006 75 3,176 476 15 110 12 269 85 2007 66 2,031 359 18 238 0.4 84 35 2008 83 4,963 1,151 23 206 95 467 383 Total 519 20,213 3,949 20 924 164 1,866 994 Source: World Bank’s Business Warehouse and project review. Note: For projects not reviewed, commitments are based on the Business Warehouse with no adjustments. Accordingly, the grand total of the Bank’s energy commitments reflects the Business Warehouse records. Totals may be off because of rounding. * The difference from the Business Warehouse commitments is caused by adjustments in sectoral codes on some projects, as discussed in the text and detailed in Chapter 2. investments in access (Table 3.1). Eastern Europe the other regions where there are still significant and Central Asia, along with Africa and the Middle numbers of people without access to electricity. This East have low levels of lending for energy access, is somewhat surprising, since South Asia, along with but this is not surprising, since most the access Africa, has the largest number of households without investments in these regions are for improving service access to electricity services, which is probably rather than initiating new customers. However, South true for other energy services as well. However, as Asia at 16 percent of energy investments lags behind indicated, the policy environment for rural energy in MODERNIZING ENERGY SERVICES FOR THE POOR: A WORLD BANK INVESTMENT REVIEW — FISCAL 2000–08 South Asia is quite challenging, but the Government 28 FIGURE 3.3: World Bank Energy Access Investment by Type, of India, with World Bank assistance, has made FY2000–08 major investments in generation and transmission (US$ millions) during recent years. Productive uses and efficiency, 994 Access policy, 924 Thematic Patterns of Investment in Energy Access The main types of investments in energy access also have been classified by this review. They Cooking and biomass include policies to support energy access, rural energy, 164 electrification, the household energy transition to modern fuels, and improvements in energy efficiency and productive uses of energy. Policies to support provision of modern energy access include Household electricity, 1,866 institutional development, some types of energy policy reform, capacity building, and electricity master Source: Portfolio review. planning. For promoting electricity in rural areas, there were investments in rural electrification through grid extension, off-grid community and household systems, and electricity funds for providing onlending efficiency investments were in the Eastern Europe and for communities, NGOs, or the private sector. Central Asia region. Finally, support for promoting For encouraging households to use better fuels the transition to modern cooking fuels was quite for cooking, there was assistance to communities, small at less than 5 percent of lending, In general, small businesses, and households to transition these figures represent significant investments in from traditional fuels to modern fuels, including the energy access. The main area that lags behind the promotion of LPG or kerosene for cooking and the rest clearly involves promoting the transition to more development of more sustainable supplies of biomass modern forms of energy for cooking. energy and improved cookstoves. Finally, there was support for productive uses and energy efficiency that would reach households, businesses, and local Access to Household or Community-Wide communities, including improved energy efficiency Electricity in district heating and support to small and medium- sized enterprises. The main categories of electricity access are grid rural electrification, off-grid electrification, periurban On an aggregate level, physical investment in electricity provision, and rural energy funds. The electricity access accounted for almost half the total majority of the financing for electricity access was value of energy access-related assistance approved invested in rural electrification programs. Rural over the period, with more than US$1.8 billion in electrification involves about 70 percent of the investments (Figure 3.3 and Table 3.1). Supportive financing for electricity access (Table 3.2). The investment in energy access, including policy off-grid electricity projects comprise just under 20 development and capacity building, accounted for percent of investments in electricity access; this is about one-quarter of investments in energy access, especially the case in Africa. This is influenced by the along with similar figures for energy efficiency low level of infrastructure in Africa, so most attempts and productive uses of energy. Most of the energy to provide electricity must face the fact that grid THE WORLD BANK ENERGY ACCESS PORTFOLIO // CHAPTER 3 TABLE 3.2: World Bank Investment in Electricity Access by Region and Category, FY2000–08 29 (US$ millions) Grid rural Off-grid Region Grid periurban electrification electrification Rural energy fund Total Africa 76.6 381.4 150.5 78.2 686.8 East Asia and Pacific 19.0 562.7 31.1 8.3 621.2 Eastern Europe and Central Asia 0.0 1.2 1.0 0.0 2.2 Latin America and Caribbean 0.0 79.0 46.4 0.0 125.4 Middle East and North Africa 1.0 0.0 0.0 0.0 1.0 South Asia 33.9 287.3 83.9 24.6 429.8 Total 130.5 1,311.6 313.0 111.1 1,866.3 % of Total 7 70 17 6 100 Source: Business Warehouse and project review. expansion is not possible in many regions. There Bank has several important rural grid electrification were significant programs for off-grid energy access projects in most regions of the world where electricity in Bangladesh, which was part of the grid electricity access is a priority, and some of the main projects project, and in Nepal and Sri Lanka. In East Asia, the are reviewed in this section. Philippines is attempting to reach very remote areas with a project that involves the participation of the The IEG’s statement is no truer than for a series private sector in providing rural electricity services. of projects in the East Asia and Pacific region. In Vietnam during the last decade, the World Bank has To summarize, rural electricity has been following been engaged with multiple projects, and the rate of both the traditional path of grid expansion and, rural electrification has improved from 60 percent in more recently, off-grid electrification and electricity 1998 to 86 percent in 2006, and now is well over funds. There are many promising new approaches 90 percent. The East Asia and Pacific region had the to rural electrification, but at present, the grid highest levels of investment in rural electrification with expansion projects through either government-run several large projects in Vietnam. Two projects alone electricity companies or some form of local electricity (Rural Energy Project and Second Rural Energy Project) organizations are the predominant investments in represent about US$370 million of the more than providing new electricity access. In this section, we US$560 million invested in the region. At its inception, examine in some detail many of the larger or more the Rural Energy Project, which was initiated in 2000, successful programs that have been promoted by was expected to provide electricity to about 450,000 investments in electricity access. households and to include 278 of the poorest communes in the country. At completion of the project in 2005, this goal was exceeded in the project area by Regional Grid Rural and Periurban Electrification 39 percent, and a total of 4.5 million new households Projects had access to electricity as part of both the World The World Bank IEG (2008) recently stated that Bank project and other government programs. “where the Bank has had a series of dedicated projects, it has made a significant contribution to With continued engagement of the electricity increases in (rural electrification) coverage.” The authorities, new issues were identified by the end of MODERNIZING ENERGY SERVICES FOR THE POOR: A WORLD BANK INVESTMENT REVIEW — FISCAL 2000–08 the first project. Many of the electricity distribution resource degradation. Currently, about 17 percent 30 companies in Vietnam were very small, so the Rural of the population lives in areas with electricity (that Electrification Plan (Second Rural Energy Project) is, areas with some form of electricity supply for was launched in 2005 with funding for scaling up residences and businesses) and less than 2 percent local reform activities. The major objective was to of Ethiopia’s rural population have access to the ensure reliable electricity delivery at the retail level grid. In a country with more than 85 percent of its by converting the small local electricity management population living and working in the rural sector, this companies to more formal local distribution utilities. lack of modern energy severely restricts social and These entities own about two-thirds of the low- economic development. voltage distribution in Vietnam. Another problem the country faced was that the medium-voltage networks The Government of Ethiopia launched its Universal bringing electricity to these local distributors was Electricity Access Plan in 2005 with a budget of fairly weak. Thus, a new project was initiated in about US$1.0 billion. It is designed to provide 2009 to deal with these medium-voltage distribution electricity to most rural towns and villages over issues. With the continued engagement of the World a 10-year horizon through extension of the grid. Bank, over 10 or more years, access to electricity The initial objective was to provide electricity to has improved dramatically, and there are now plans approximately 50 percent of rural towns over five to deal with “the last mile” of electricity lines in the years, with a long-term view to connecting virtually upcoming years. all towns and villages to the grid in a 10-year horizon. The Electricity Access Rural Expansion In Africa the challenges in scaling up energy and Project I was launched in 2006 to help implement electricity access result mainly from extremely low the first stages of the Universal Electricity Access access to electricity over most of the countries in the Plan. The project planned to bring electricity to rural region. Since electricity is necessary for economic towns and villages with about 1 million inhabitants growth, scaling up electricity access is one of the who currently live in areas without any significant priority areas for the region. Several activities can be supply of electricity. The Electricity Access Rural highlighted. One major sectoral activity is the Action Expansion Project II (US$130 million) complements Plan for Energy Access Scale-Up in Africa. Under the the earlier project. It is planned to bring grid and off- project, the outreach efforts on a variety of energy grid full electricity access to 295 towns and villages, issues have been supported by Africa’s energy policy and will provide limited services, such as lighting or makers through the Forum of Energy Ministers in electricity to schools and clinics benefiting a total Africa (FEMA). One innovative project under the population of 1.8 million inhabitants. scale-up activity has involved the development of a sectorwide approach to resolving energy issues In Latin America, the rural electrification programs that takes a larger view of issues and facilitates are well advanced compared to other parts of the coordination of donors. world. However, many countries are either gearing up to serve their “last mile” customers or to extend One of the larger programs to improve access to service to people living in very remote areas. electricity in Africa is in Ethiopia, which accounts This is the case for Peru where the government for US$260 million out of a total of about US$380 was committed to expanding electricity coverage million of World Bank financing in this areas. in rural areas both in the high mountains of the Ethiopia is one of the most populous countries in Andes and in the jungles along its border with Sub-Saharan Africa and also one of the poorest. Brazil. However, Peru was encountering several Although the country has abundant resources and problems. An existing government program that was good potential for development, poverty is prevalent perceived by the electricity distribution companies and often linked to environmental and natural to be promoting electricity in ways that were not THE WORLD BANK ENERGY ACCESS PORTFOLIO // CHAPTER 3 financially sustainable. The second problem was locally organized rural electric associations called that after privatizing electricity distribution and Palli Bidyut Samities (PBSs). A PBS is an autonomous 31 selling off many concession areas, many of the organization registered with the REB, and it owns, concessionaires were returning their franchises to operates, and manages a rural distribution system the government because of poor returns on their within its area of jurisdiction. Its members are its investments. As a result, the government initiated a consumers, who participate in its policy making World Bank—and GEF-assisted Rural Electrification through elected representatives in its governing body. Project in August 2006 to assist local distribution The REB’s role is to provide PBSs with assistance in companies in reaching rural populations using well- initial organizational activities, training, operational targeted subsidies. The aim was to finance projects and management activities, procurement of funds, that would be financially sustainable after receiving and acting as a liaison between PBSs and the bulk a subsidy of a substantial part of the capital costs power suppliers, such as the Bangladesh Power (World Bank 2006c). The project objective is to Development Board and the Dhaka Electric Supply provide financing for investments in subprojects to Authority. supply new electricity service to about 160,000 rural households, businesses, and public facilities, such as The first PBS was established in 1980 to operate schools and health clinics (serving about 800,000 in Dhaka, and as of 2007 a total of 70 PBSs are people), using both conventional grid extension and working in some 46,000 villages in 61 districts and renewable energy sources. The project promotes serving more than 7 million rural customers all over an improved strategy to promote the involvement Bangladesh (REB 2007). Since the inception of the of public and private distribution companies and REB, rural electrification has grown significantly— to broaden the involvement of additional actors in starting from less than 10 percent connectivity in project development. 1977, 61 percent of villages have received electricity by 2007. Under the REB’s program, about 800,000 From the start of the project, distribution companies new rural customers get electricity every year, which working in rural areas have shown a great deal of is an extraordinary accomplishment for a poor interest in the project. The number of responses for country like Bangladesh. REB consumers are mostly the first two rounds of financing was high enough to domestic users of electricity, although the REB also disburse 40 percent of the total available funds. After serves industrial and commercial customers, and only a few years, disbursements are moving along provides connections for irrigation pumps. There also quite well. As a result, there have been discussions was an off-grid component of this project, which is on replenishment of the funds, both from the described later in this chapter. Government of Peru and the World Bank. The grid periurban projects are a very small part of South Asia lags behind some of the other regions in electricity access financing. Many of the projects are supporting rural grid electrification, but it has one of actually part of larger rural electrification projects the Bank’s most successful and innovative programs. that have a component for providing electricity to The Rural Electrification and Renewable Energy towns with existing grids or multisectoral projects. Development Program in Bangladesh accounts One example of a project focusing initially on for about US$200 million of the total World Bank towns and expansion of electricity coverage at investments of US$387 for the period. The project the periphery of urban areas can be found in was implemented by the Rural Electrification Eritrea. In this country, the urban-rural access gap Board (REB) of Bangladesh, and it is actually the is particularly high, with just 3 percent of rural fourth project in a series of loans that have taken households electrified compared to 86 percent of place periodically since 1980. The REB supports urban households. The Eritrea Power Distribution and implementation of rural electrification through Rural Electrification Project includes access-related MODERNIZING ENERGY SERVICES FOR THE POOR: A WORLD BANK INVESTMENT REVIEW — FISCAL 2000–08 components that will extend access to electricity to with through the development of a rural energy 32 some 30,000 new households, including creation fund that is meant for local communities, private of a Rural Electrification Fund to catalyze additional companies, or NGOs. This is a quite different model donor funding and a capacity building component from providing investments to traditional electricity to assist the Eritrea Electricity Company in planning companies. future rural electrification investments. Total access- related assistance under this project is US$14.5 One example of a very successful project involving million. grants and investment funds for renewable energy is in Nepal. Off-grid power generated by Periurban and slum electrification is a growing area microhydropower plants provides a large number of concern for the development community, and of rural households with electricity for lighting, more projects may be implemented in the future. The milling, and other needs. Such systems not only treatment of periurban electrification issues in most help in poverty alleviation, but also have direct cities that already have mature electricity companies local environmental benefits by reducing diesel often must be treated differently. The reason is that consumption and the use of dry cell batteries. Aside these areas have a high concentration of poverty, from environmental benefits, the microhydropower and they are often areas that have high informal plants also help promote different local electricity- losses of electricity. based enterprises and create employment at the village level. They also help children’s education, as well as adult education programs, by providing Off-Grid Electrification and Rural Energy Funds high-quality lighting into the night, allowing Extending the national grid to remote rural areas increased hours of study. Presently only about 600 remains a challenge in many developing countries. MW of the 43,000 MW of economically viable Complementary off-grid solutions using renewable hydropower power potential have been developed. energy applications can bring the benefits of These abundant and locally available renewable electricity service to many more low-income rural energy resources can be developed with appropriate households. For the past several decades, the World technologies. Generating and storing electricity Bank has financed the extension of grid electricity derived from these rich local energy resources can systems in the rural areas of many developing countries, working largely through electricity distribution companies. The pace of this extension has been slow, however, often lagging behind population growth. Reaching remote populations requires innovative, cost-effective solutions that complement national grid extension efforts. To this end, the World Bank has supported various off-grid programs since the early 1990s, most of which have been based on renewable energy technologies and supply schemes. In Asia and Latin America and the Caribbean, these programs have emphasized the involvement of the private sector and community-based NGOs. In this section, we review several of the main projects that have involved predominantly off-grid electrification. In many cases, off-grid electrification is also dealt Solar lighting in a retail store, Sri Lanka (Dominic Sansoni) THE WORLD BANK ENERGY ACCESS PORTFOLIO // CHAPTER 3 provide lighting for people outside the small grid the Nepal Village Micro Hydro Carbon Offset area, which brings potential health, education, Project. The project provides assistance to reduce 33 social, and economic benefits to these people. greenhouse gases by replacing kerosene for lighting and diesel fuel for agro-processing, as well as other Microhydropower development in Nepal has a productive use applications. This is one of the first long history, and in 2003 the World Bank, under examples of support of household energy through its Power Development Project, has been providing the carbon funds of the World Bank. investments of US$70 million for improving rural access to electricity services. The project supports the Another example of a successful off-grid electricity development of microhydropower minigrids to meet project in South Asia is from Sri Lanka. In Sri the electricity and motive power needs of the rural Lanka the Renewable Energy for Rural Economic people of Nepal through the provision of subsidy Development (RERED) Project was launched in assistance and program technical support that is 2002 to promote both off-grid electricity and implemented by Alternative Energy Promotion Centre, microhydropower production of electricity for both Nepal, under the Ministry of Environment, Science grid and off-grid purposes. The project built on and Technology, which has been promoting clean the experience of the Energy Services Delivery energy technologies throughout the country with Project financed by the World Bank and GEF significant contributions to sustainable development from 1997 to 2002. This earlier project provided by reducing greenhouse gas emissions. Much of rural energy access through SHSs, small grid- the program is implemented through communities connected hydropower projects, and off-grid village and NGOs, while the primary beneficiaries are hydropower systems. The project’s main focus rural communities. Special considerations are given was for commercializing rural energy grid and to vulnerable groups, such as women, Dalits, and off-grid options with an emphasis on renewable indigenous people. technologies. This was implemented by financing and grant mechanisms for SHSs and other solar This project provides a subsidy that covers energy applications in rural areas through private approximately 35–55 percent of the total investment companies, NGOs, and microfinance institutions for a plant. In addition, the project also provides (Box 3.1). The idea was to make long-term technical training, market information, and business funding more available for energy projects, as development support services to the users, mostly households in rural Nepal, some of which have organized themselves into communities that own the microhydropower plants and that are responsible BOX 3.1: Financing Solar Home Systems for their upkeep. Participating communities also are required to provide cash or in-kind contributions to The most popular solar home system (SHS) financing model under Sri Lanka’s Renewable Energy for Rural Economic Development Project is consumer credit support the projects. The demand from communities through the microfinance institutions that work closely with solar companies. has been quite high, and available funding has been Through their dealer networks, the solar companies sell SHSs and offer increased from its original level. It is anticipated that operation and maintenance services. The business model is structured through 15,000 kW from 750 microhydropower plants will a memorandum of understanding between the microfinance institution and the be installed between 2003 and 2010, providing solar company, key features of which are a buyback scheme and identification access to electricity to an estimated 142,000 of the consumer service responsibilities of the two parties. Following this model, households. the Sarvodaya Economic Enterprises Development Services—the project’s key partner in SHS financing and a recognized leader in off-grid energy services delivery in remote rural areas—financed more than 60,000 systems during Because of the success of the earlier project, more 2002–06. recently in 2007 to support the work of the original project, there have been new funds allocated from Source: Govindarajalu, Elahi, and Nagendran 2008. MODERNIZING ENERGY SERVICES FOR THE POOR: A WORLD BANK INVESTMENT REVIEW — FISCAL 2000–08 well as microcredits for small consumers. The 34 project provides technical assistance for business development, feasibility studies, and regional trade shows, as well as longer-term financing for developers through the participating credit institutions. At the time of its implementation, because this was quite a new concept for the World Bank, the way the project was administered in the early stages was adjusted. However, the model is now well established and works quite well. The administrative unit of the Development Finance Corporation of Ceylon Bank manages the credit program. The administrative unit monitors suppliers’ compliance with global technical specifications and service standards for Solar lantern and cooking in India (unknown) SHSs and solar lanterns—thus providing the basis for consumer education and protection—and investigates unresolved consumer complaints.4 The administrative unit also approves loans contingent projects. The subloans have a maximum maturity of on evidence of installation or design approval by a 10 years and do not exceed the useful economic life chartered engineer (for village hydropower systems). of the equipment financed. Since 1997, the off-grid Beyond its quality assurance role, the administrative component of the credit program has received about unit facilitates stakeholder discussions to solve US$38 million in IDA and GEF support, including implementation problems. Quarterly stakeholder some US$3 million in technical assistance. meetings are organized to welcome new members, discuss innovative approaches and procedures, In Bangladesh a different approach was taken. and review ongoing assignments and project As indicated in a previous section, the Rural performance.5 Electrification and Renewable Energy Development Project represents US$190 million out of a total The success of this program has resulted in an of US$280 million in World Bank energy access extension of the project in 2007. Currently, the investments in South Asia. The project contains program comprises 11 partner credit institutions: financing for two different approaches to rural 5 commercial banks, 2 licensed specialized banks, electrification. One that has already been described 2 leasing companies, 1 finance company, and is a large grid electrification component. The 1 microfinance institution. The approved credit second approach concerned the initiation of an institutions can refinance up to 80 percent of their off-grid electricity fund in an existing development loan amounts. The loans are repayable in 15 years. bank. This fund is similar to the one described These credit institutions in turn offer households, above in Sri Lanka. community-based organizations, and private developers subloans with which to finance SHSs, The off-grid electrification component of the village hydropower systems, and minihydropower Bangladesh Rural Electrification and Renewable 4 Suppliers are granted free market entry, provided that the systems they sell meet project specifications and honor warranty and service requirements. 5 Minutes of these meetings are posted on the project website (www.energyservices.lk). THE WORLD BANK ENERGY ACCESS PORTFOLIO // CHAPTER 3 Energy Development Project has succeeded beyond using a declining balance method. They also are expectations. The delivery of SHSs to new customers responsible for maintaining quality and providing 35 has reached an unprecedented rate of more than after-sales service (Box 3.2). 7,000 rural households per month. Since the beginning of the program in 2003, more than Although the initial project phase focused mainly 270,000 SHSs have been installed, far surpassing on SHSs, IDCOL recently expanded available the expected 50,000 by 2008. Given that the financing to include biomass electrification, biogas original target was met three years early at a cost cooking fuel, and other rural energy services. The savings of about US$2 million,6 the World Bank GEF-financed grants for SHSs are provided on a has increased its funding for an additional 70,000 declining scale—from US$90 per system initially systems, and the loan has been extended as well. to US$50 today—which encourages commercial In addition, other donor agencies have begun to market development. The private operators use a finance the program. For instance, the German small portion of the grant—from US$20 initially to Agency for Technical Cooperation and the German US$10 today—for institutional development, while Agency for Financial Cooperation have also come the rest is directed toward capital cost buy-down. forward with funding for the project. The investment program is complemented by a strong cost-shared technical assistance program that The rural energy fund has been quite successful, so features awareness-building training for participating it is important to understand how it works. The fund organization staff members and consumers.7 IDCOL is administered by the Infrastructure Development covers 80 percent of training costs, while the Company Limited (IDCOL), a nonbanking financial institution. IDCOL offers participating organizations—microfinance institutions and other NGOs and private sector institutions that meet program eligibility criteria—both credit and GEF BOX 3.2: Insuring PV System Quality and After-Sales Service grants with which to purchase SHSs (Asaduzzaman, Various stakeholders play important roles to ensure quality standards for the Barnes, and Khandker 2010. The participating Rural Electrification and Renewable Energy Development Project in Bangladesh. organizations sign an agreement with the IDCOL The private operators purchase PV panels, batteries, and other components that provides for refinancing up to 80 percent of approved by the Technical Standards Committee. Vendors submit required the loans. Among the participating organizations documents, warranties, and product-testing certificates to the committee is Grameen Bank and BRAC, the largest and most for its examination and approval. Once it approves a vendor’s products, the participating organizations can buy them directly from the vendor and set up successful NGOs in the country. IDCOL offers the their own terms of purchase and payment. Most vendors, eager to cooperate participating organizations soft loans with a 10-year with the private operators, offer delayed payment terms to facilitate higher maturity and 2-year grace period at an annual sales volumes. The private operators arrange for user training in operation and interest rate of 6 percent. Households must make a maintenance, regular after-sales service, and the timely handling of customer down payment covering at least 10 percent of the complaints. IDCOL routinely inspects the installed systems and shares its findings system costs. On receipt of the down payment, the with the private operators, who agree to correct any problems. Representatives participating organizations enter into a sale or lease from all private operators—16 at present—participate in monthly operations committee meetings, where they share progress and work together to solve agreement and install the systems. The participating problems. Finally, IDCOL and the committee conduct joint technical audits to organizations extend households credit on various verify whether vendor-supplied equipment meets their stated standards. terms and conditions, with tenors ranging from 1 to 5 years at annual interest rates of 8–15 percent Source: Govindarajalu, Elahi, and Nagendran 2008. 6 Planned IDA/GEF program funding was US$18 million, including US$2.87 for technical assistance. 7 Issues range from SHS configuration and positioning, installation, and maintenance to guidelines for system monitoring and inspection and microcredit marketing methods. MODERNIZING ENERGY SERVICES FOR THE POOR: A WORLD BANK INVESTMENT REVIEW — FISCAL 2000–08 participating organizations contribute the remaining cofinanced by IDA and GEF to bring affordable and 36 20 percent. In addition, IDCOL provides logistical reliable grid-based electricity within the reach of support and implements a media campaign to rural consumers. This is to be done in a way that is promote the use of SHSs throughout the country.8 uniquely Cambodian, with government-supported private sector development of rural and renewable Many more SHS customers have been reached as electricity markets. In addition, there are investments a result of using existing service delivery channels for institutional development, strengthening of the put in place by the project’s key participating capacity of sector institutions, and creation of a rural organizations, including such microfinance electrification fund to support the development and institutions as Grameen Shakti (Grameen energy strengthening of rural electricity enterprises. Overall group, which is part of Grameen Bank) and BRAC. the project will reach 100,000 households through The project has operated on the premise that such minigrid systems and 12,000 SHSs. Total access- organizations, having already gained the confidence related assistance is US$25.6 million, including GEF of rural residents, can function as trusted sources grant financing of US$5.75 million for renewable of SHS delivery; those trained as SHS vendors can energy-based, off-grid electrification. function even more efficiently. In addition, their collection history has been strong enough to develop In Africa, rural energy funds were developed a credit line. The main challenge—overcome by through several projects in West Africa. Probably the investing in initial technical assistance—has been to most successful of the various projects is the Mali ensure that the participating organizations gained Household Energy and Universal Access Project. sufficient training in SHS technology, supplier The periurban grid projects, in many cases, have selection, and after-sales service. involved multisector approaches to electricity access, and have focused on improving both access and In Cambodia, the development of a rural energy the quality of service. The project was designed to fund came out of the realization that there was increase access to basic energy services for isolated already a group of private entrepreneurs that were low-income populations, as part of overall efforts serving small towns and villages. Cambodia has to achieve economic growth and reduce poverty one of the lowest electrification rates in Asia, with reduction. only 12 percent of households connected. Electricity costs are among the highest in the world, reflecting In Mali, barely 1 percent of the rural population has Cambodia’s recent turbulent history and lagging access to electricity. Most rural households meet their investment in infrastructure of all types. There is no lighting and small power needs with kerosene, dry national grid, since Electricité du Cambodge only cell, and car batteries, with an average household serves the Phnom Penh area, and rural towns are expenditure of US$4–10 per month. More than half supplied through isolated systems. The idea was to the 5,700 villages of Mali have a school or health continue encouraging these entrepreneurs, but make clinic or both, but most communities are without any it possible to both improve their service and lower form of modern energy. The Mali Household Energy their costs. and Universal Rural Access Project is designed to increase access to basic energy services. The The Cambodia Rural Electrification and Transmission project places primary emphasis on electricity, but in Project provides an integrated approach to power addition has addressed such issues as deforestation sector development in the country. The access-related and the use of traditional energy for cooking. investments include a rural electrification component Overall IDA financing is US$35.65 million with an 8 For details, visit www.idcol.org. THE WORLD BANK ENERGY ACCESS PORTFOLIO // CHAPTER 3 additional US$3.5 million GEF grant. The energy seeking private equity, first through expansion of the services delivery component of the project envisioned initial publicly financed extensions, and in the future 37 the creation of private sector electricity services for through cofinancing of the initial investment. more than 41,000 rural households, enterprises, schools, health clinics, and water supply projects. Energy for Rural Transformation is also providing “indirect” access to the benefits of electricity through Decentralized energy supply investments using the electrification of rural schools, health clinics, and renewable energy in minigrid and household water supply. These cross-sectoral investments are configurations will be facilitated by a GEF-financed being implemented by the relevant ministries which, Rural Electrification Fund operated by a new apex under the program, have developed standardized rural energy agency called Agence Malienne designs for solar PV systems, along with long-term pour le Développement de l’Energie Domestique maintenance arrangements. The maintenance et de l’Electrification Rurale (AMADER). Despite contracts require the presence of solar suppliers in an initial slow start, the project implementation is the local district, which has the related benefit of now progressing well. By 2006 about 13 private extending solar PV sales outlets more deeply into operators had their rural electrification business rural areas. Phase I has provided GEF grants for plans approved by AMADER to allow a cumulative both institutional and household PV installations. number of connections of about 14,500 households. Many of the approved projects are what is called Overall, Phase I installed 1.4 MWp against a target of multifunctional platforms. They are diesel engines 0.32 MWp. Even so, most of these were institutional that rest on a standard platform and that can be installations, with household sales falling below connected to equipment for cereal grinding mills, expectations. For this reason, a PV Target Market battery charging, dehusking, water pumping, Approach was piloted under Phase I, which will be welding, and carpentry equipment. They can also scaled up in Phase II. This target approach will seek involve electricity generators for small grid systems to achieve significant sales of PV systems by focusing that can power public lighting and sometimes on those most likely to want and to be able to finance rural households. This is an innovative way to the purchase of those systems, in contrast to a generic provide packing of rural electricity service to remote market development approach initially promoted communities. Uganda is taking a somewhat different approach to providing rural energy under the Energy for Rural Transformation Program. Energy for Rural Transformation is being implemented in three phases. The first phase or project, which closed in February 2009, succeeded in establishing a new framework and supporting initial investments for access expansion that emphasizes private sector participation. Phase II will support a scale-up built on the Phase I foundation. Phase III will maintain the Phase II momentum toward a large-scale access rollout program. ERT helped establish a Rural Electrification Fund, operated by a Rural Electrification Agency, which is engaging the private sector as operators of publicly financed grid extension. The Rural Electrification Agency is also Solar home system in Qinghai, China (World Bank, Beijing). MODERNIZING ENERGY SERVICES FOR THE POOR: A WORLD BANK INVESTMENT REVIEW — FISCAL 2000–08 under Phase I. The key features of the target approach that promotes various types of energy access 38 are active oversight by the Rural Electrification projects. This study identified four general categories Agency; the use of grassroots NGOs, community- of such support for energy access. The types of based organizations, and finance institutions; capacity activities that went into these categories were as building for solar PV dealers; the use of microfinance follows: investments in rural electrification master institutions; and an enhanced capital subsidy, plans, policy frameworks for biomass energy, the including both GEF and IDA components. development of rural energy strategies, and heating sector reforms. As shown in Table 3.3, the total Notwithstanding the country’s commendable support for this type of work was close to US$1 progress on reforms and private investment, Uganda billion for the years 2000–08. There were some has suffered chronic power shortages over the past regional differences, but by far the category that three years. The lack of adequate and reliable power received the largest amount of investments was is consistently cited as being among the top five support for public sector capacity building. constraints for Uganda’s economic growth. Electricity service quality, availability, and reliability have Capacity building and strategy development are been major impediments to sustained investment mainly in dedicated energy access projects, which and growth. While Energy for Rural Transformation have already been reviewed in this report. The has been successful in attracting private investors nature of this work involves the support of studies for small power and independent grid projects, essential for promoting energy access. Capacity equity co-investments for grid extension have not building and proper policies are crucial to promoting come forward, at least partly because of the power energy access in developing countries. Policies that shortage situation. are geared mainly toward urban areas can actually hinder the provision of high-quality energy services to people without access to electricity or high-quality Energy Access Policy and Capacity cooking fuels. In some cases, significant taxes that Building have been levied on imported solar panels or other electrical equipment must be addressed. In many Policy development and institutional building often parts of the developing world, there are significant are prerequisites for having a successful program taxes on LPG, which is a common fuel used for TABLE 3.3: Energy Access Policy Development and Capacity Building, FY2000–08 (US$ millions) Local community Private sector Public sector TA and project Region capacity capacity capacity management Other Total Africa 26.8 31.6 240.2 35.6 11.1 345.4 East Asia and Pacific 8.8 13.6 33.3 9.5 0.7 65.8 Eastern Europe and Central Asia 6.3 1.3 23.3 21.7 0.0 52.5 Latin America and Caribbean 11.4 5.0 170.6 17.2 1.7 207.5 Middle East and North Africa 0.0 0.0 21.9 0.3 0.0 22.2 South Asia 16.5 0.0 184.2 29.9 0.2 230.8 Total 69.7 53.2 673.3 114.1 13.7 924.1 Source: Portfolio review. THE WORLD BANK ENERGY ACCESS PORTFOLIO // CHAPTER 3 cooking. Countries face many problems related 400,000 household connections to the grid, mainly to energy, but it is important to have policies and in periurban areas. The goal was to increase the 39 institutions in place that will support rather than electrification rate from 15 percent to 20 percent work against the promotion of access to high-quality overall. World Bank investments for access-related energy services by those who need them the most. components in this project were US$12 million. These sector reform projects that lay the groundwork Private sector lead approaches would seem for energy access projects comprised more than difficult in Africa, but several projects in the US$600 million or two-thirds of the total work on regional portfolio stress private sector-led business capacity development and policy support for energy models for urban and rural electrification. An access. Most grid and off-grid rural electrification example is in Mozambique, where only about projects have a section in them on institutional 6 percent of households located mostly in the development and policy reform as well, but of course capital Maputo have access to electricity. The the main financing in these projects is for the actual government plans to supplement the traditional implementation of infrastructure development. In main grid expansion approach by encouraging addition, it should be remembered that this review private sector participation and forming public- covers only project investments; it does not cover private partnerships. The Mozambique Energy sector or grant funding by the energy regional Reform and Access Project will support this process programs and by ESMAP . through institutional development, investments in grid-based periurban electrification, financing for Some sector loans have supported energy access independent grids in rural areas, and development in a fairly substantial way. One project is the Kenya of a renewable energy program. A strategy of Energy Sector Recovery Project. The project deals building private sector capacity to provide energy with many of the underlying reasons why energy access recognizes the limited capacity of state access and high-quality electricity service was not supported electric utilities, as well as the difficulty available in the country. In Kenya the reality is that in mobilizing investment for both grid extension or only about 15 percent of households and just 4 off-grid energy development. This project has faced percent in rural areas have access to electricity. many implementation challenges, but it illustrates The project contains four major components. The that energy access issues can be directly addressed first one is to support the restructuring of Kenya as an issue in sector reform projects. Power and Light through capacity building and the development of policies to make the company financially viable. This was considered necessary for Household and Community Energy: both the provision of high-quality service to existing Cooking, Heating, and Lighting Efficiency customers and for supporting future expansion programs that are only now being assessed. The The energy transition for cooking and other biomass second component was for developing feasibility energy-related activities has been identified as a studies for possible importing of LPG to deal with policy priority for the World Bank since the late household energy issues, and also the development 1990s. These types of projects, however, have been of renewable geothermal electricity generation. The perceived to be very difficult to finance for a number third component was to support power generation of reasons. According to one line of thinking, which, as indicated, indirectly supports energy household energy for cooking is considered a type access. The final component was for upgrading of activity more appropriate for rural development and reinforcing the electricity distribution networks, projects than for the energy sector. Biomass energy which is directly related to energy access. Under is also often collected from the environment, so it this component, there would be an additional does not show up in national accounts of energy MODERNIZING ENERGY SERVICES FOR THE POOR: A WORLD BANK INVESTMENT REVIEW — FISCAL 2000–08 expenditures. Therefore, the value of these projects around US$4 billion—about 4 percent of lending for 40 is sometimes invisible to national policymakers. As energy access and less than 1 percent of total energy a consequence, countries sometimes do not want lending—was invested in promoting the transition to to borrow for modernizing cooking practices, but more modern cooking fuels (Table 3.4). Certainly this would rather spend investment dollars on large may be to the result of a variety of good reasons but, infrastructure projects, such as grid electricity, energy given the dimension of the problem, this is one area generation, or others. of energy access lending that should be considered underfunded. The regional lending patterns are also Notwithstanding the difficulties in making investments quite distinct. In Africa both improved cookstoves in improving cooking patterns in developing and improved forest management have been countries, there are several reasons that cooking supported. In Latin America, programs have focused energy should be more of a priority for the World on better cookstoves as well. Finally in North Africa Bank investments. A significant amount of World and the Middle East, the transition to modern fuels, Bank and international sector work has identified such as LPG and gas, has been the primary focus of the transition to more modern forms of energy investments in household energy. for cooking as a significant priority both for environmental and health reasons. Cooking with Several interesting projects have supported the biomass energy in traditional stoves is documented access to better household fuels for cooking. to be associated with significant health issues in The Benin Energy Services Delivery APL (2004) developing countries (WHO 2006c, 2007). The is a multisector project that involves electricity literature on the relationship between indoor air development, rural electrification, and biomass pollution caused by cooking smoke is growing yearly, energy. Besides improving the electrification generally substantiating past work that respiratory rate from 22 percent to 30 percent, this project illness is not only a major cause of illness and death dedicated US$7.2 million of IDA financing to in developing countries, but is also related to the use support sustainable biomass use for cooking energy. of traditional fuels for cooking. This activity includes fuelwood supply management systems, community-based sustainable forest and From fiscal 2000 through fiscal 2008, only US$164 natural resource management, and production million out of total energy access investments of and marketing of 30,000 improved fuelwood TABLE 3.4: World Bank Cooking Fuels and Household Energy Efficiency Assistance, FY2000–08 Improved Efficient Community forestry cookstoves and Interfuel Region Reforestation forestry production lightbulbs substitution Total Africa 0.2 9.8 11.4 10.1 5.1 36.6 East Asia and Pacific 0.0 0.0 0.0 1.1 0.0 1.1 Eastern Europe and Central Asia 0.0 0.0 0.0 0.0 9.1 9.1 Latin America and Caribbean 0.0 0.0 0.0 36.6 0.0 36.6 Middle East and North Africa 0.0 0.0 0.0 8.9 68.3 77.2 South Asia 0.0 0.0 0.0 0.9 3.4 4.3 Total 0.2 9.8 11.4 57.6 85.9 164.7 Source: Portfolio review. THE WORLD BANK ENERGY ACCESS PORTFOLIO // CHAPTER 3 and charcoal stoves for urban households use. The highlights of the project involved the This project was recently approved for additional development of sustainable community-managed 41 financing. forests over an area of close to 400,000 hectares, which supplied more than 370,000 tons per year The Senegal Sustainable and Participatory Energy of sustainable fuelwood to local markets. This Management Project is regarded by many as a was accomplished through establishing incentives best practice for dealing with household energy- for sustainable forest plans. Rural people profited related issues in Africa. This project was initiated from selling sustainable fuelwood to traders; it was before 2000, so it is not covered by this study. estimated that participating villages gained about However, because it has been a reference for many US$40,000 over the period of the project. More projects that followed, it is relevant for this review. than 30 percent resulted from women-led economic The background is that in Senegal, forest-based activities. The project also encouraged a transition traditional fuels, such as firewood and charcoal, are to kerosene and better wood stoves, which helped the main household fuels used for cooking purposes about 250,000 families in the principal urban and (World Bank 2005a). The use of charcoal is mainly periurban areas of Senegal. in urban areas. Over the years, the charcoal industry in Senegal has resulted in a gradual loss of forest cover, which has degraded the ecosystem’s carbon Energy Efficiency and Productive Uses sequestration capacity, and a significant transfer of wealth from the rural communities to a few city- Energy efficiency and productive uses can also be based fuelwood traders. These negative impacts characterized as improving energy access, since it have disproportionately affected rural women and has a direct impact on households, communities, children. and small enterprise. These investments include improvements in buildings efficiency, installation of The project adopted a comprehensive approach by efficient equipment, and the enhancement of the tackling both the supply and demand of fuelwood energy delivery network itself. These improvements through mapping forest resources, preparing were generally for apartment buildings and improved participatory and sustainable forest management quality of heating vital for life in cold climates. The plans, and training communities on how to portfolio review identified close to US$1 billion in implement them. The idea was to protect more than investments, and financing was mostly in energy 300,000 hectares of forests in the Tambacounda efficiency (Table 3.5). Countries in Eastern Europe and Kolda regions, and provide a buffer zone and Central Asia and East Asia and Pacific had around the Niokolo-Koba National Park. On the significant investments in both building energy demand side, the project is promoting interfuel efficiency and fuel-saving technologies. In this substitution and the use of improved stoves for section, we review projects in both regions that cooking. Finally, the institutions were strengthened exemplify the type of investments necessary to by engaging civil societies that have an interest improve energy efficiency in buildings. in improving the lives of women and improving economic opportunities at the village and regional In East Asia the China Heat Reform and Building levels. Villages agreed to protect forests in the Energy Efficiency Project is designed to improve projection zone by adopting a resource management the efficiency of buildings through a combination plan. In return they were allowed to take control of of technology demonstrations, along with the the production and marketing of traditional biomass development of frameworks for regulating building fuels in ways that were sustainable. By 2004 about energy efficiency and capacity building for 20 percent of Senegal’s fuelwood consumption was organizations charged with managing the sector. derived from such sustainably managed forests. Some highly complex issues had to be faced in MODERNIZING ENERGY SERVICES FOR THE POOR: A WORLD BANK INVESTMENT REVIEW — FISCAL 2000–08 42 TABLE 3.5: World Bank Investment in Productive Use and Energy Efficiency, FY2000–08 (US$ millions) Building energy Building fuel-saving Power and TA and productive Region efficiency technology productive uses purposes Total Africa 4.3 0.0 0.0 8.0 12.3 East Asia and Pacific 213.4 165.0 0.0 2.8 381.2 Eastern Europe and Central Asia 499.0 40.9 0.0 0.0 540.0 Latin America and Caribbean 13.7 0.0 9.7 7.6 31.0 Middle East and North Africa 0.0 0.0 0.0 0.0 0.0 South Asia 21.0 5.7 3.1 0.2 30.0 Total 751.5 211.6 12.8 18.6 994.4 Source: Business Warehouse and portfolio review. developing the project. Many existing building In Russia the Municipal Heating Project launched practices, such as the pricing of heat, billing, and in 2002 aimed to improve heat supply and also to metering, all worked against energy efficiency. In ease the financial burden associated with the supply addition, several institutions involved in promoting of district heating on municipal governments. The better housing did not necessarily coordinate breakdown of the Soviet economic system in late with one another. This included the heat supply 1991 and the transition to a market economy proved industry, the organizations responsible for housing particularly difficult for infrastructure services in development, and the government. Finally, there was Russia, and the heating sector was no exception. The little knowledge of the best international practices in old infrastructure for heating in Russia was designed supplying heat to residential buildings. The project without regard for energy efficiency, and municipal objective was to introduce new practices to improve heating was considered a public service. This project the incentives for introducing building efficiency. was designed to address some of these difficulties by improving the operating efficiency of district The China heating project involved three main heating systems through investments to save energy components geared toward improving heating and reduce heat losses, improving cost recovery by efficiency in the project areas. The first component introducing commercial practices, and by supporting aimed to demonstrate ways to improve building government efforts to target subsidies better for low- insulation, improve the heat supply system, and income households. These actions aimed to improve introduce incentives for consumers to reduce their standard of living in eight major cities by improving energy consumption through proper pricing and the quality and reliability of heat supply and by metering of heating consumption. In addition to supporting the redirection of subsidies toward low- these practical operational measures, another income households. component addressed the policy issues surrounding the reforms necessary to support the whole process. The project contributed to a favorable environment Finally, several provinces were identified to test out for heating reform in Russia. The Russian government the impact of both the policies and the operational considered housing and communal reform to be changes to see how the various measures could very important. In 2006–08 housing and communal be adjusted for the implementation of a national reform was as one of the country’s top development program. priorities. In the city Mytischi, which participated in THE WORLD BANK ENERGY ACCESS PORTFOLIO // CHAPTER 3 the project, the provision of high-quality heating promising. Assistance to Africa—a region with the and domestic hot water services was accompanied lowest access rates in the world—is both high and 43 by a reduction in costs to produce and transport growing both in terms of the size of investments and heat. In Mytischi District, the project resulted in the breadth of the issues covered. Africa is the region both upgrading the heating systems and creating with the lowest electricity access rates and the highest an efficient way to administer and finance district reliance on biomass energy and “traditional” fuels. heating operations. The result was that both At present, it is receiving about one-quarter of the electricity and natural gas consumption decreased total World Bank investments for energy access. By by about one-third. Finally, the project also resulted contrast, South Asia is a region with the next greatest in more comfortable levels of heat for those in need for energy access investments. It had much buildings included in the program. lower levels of financing for energy access than either Africa or East Asia and the Pacific. Although it The productive use of energy is extremely important is well understood that South Asia faces significant for energy projects to promote development. The policy sector challenges concerning energy access, reason is that the provision of infrastructure, such as the investment amounts seem to be below what is electricity, requires that people pay for the service. required for a region with a very high poverty rate If electricity can be used in a way that generates and significant populations dependent on traditional income, it will be more affordable to households. forms of biomass energy. However, many large Another benefit is that the service can be provided power projects in the region would contribute to at a more reasonable cost because of economies alleviating energy poverty; such contributions are of scale. A significant amount of sector work has discussed in the next section. been done in the World Bank on promoting the productive use of energy. However, the World In conclusion, there has been significant progress in Bank project investments in this type of activity are scaling up energy access in developing countries, quite low at only US$30 million over a period of but significant challenges remain. Of course, the nine years. This can be explained by the fact that World Bank is but one player in promoting energy much of the support for productive uses involves access in developing countries, and it is clear that technical assistance, which is not as expensive as coordinated approaches between international capital goods. However, this is an area in which donors and the countries themselves will be more attention can be focused on how to include necessary to tackle the challenge of providing productive uses of energy in project operations. modern energy services to the world’s poorest populations. Nevertheless, in the coming years a greater focus on problems of energy access and its Conclusion role in development will be necessary. Some developments in the energy access lending portfolio of projects or project components are quite 4 INFRASTRUCTURE AND DEVELOPMENT: OUTCOMES AND MEASURMENT ISSUES S ome practical difficulties exist in measuring estimating the development impacts. This was not all energy access investments and their done as part of the previous chapter because these impacts. The reason is that increasing energy figures are very imprecise. However, the examination access though large distribution systems generally of both issues is important for assessing energy requires a simultaneous expansion of generation access investments in developing countries. and transmission. Attributing all costs involved in large-scale generation and transmission of energy would be misleading because much of that energy Energy Access and Large Infrastructure will go to industry, commercial establishments, and Projects: Measurement Issues governments. For instance, most cost-benefit work on rural electrification requires an estimate of the Most of this study deals with the direct financing marginal electricity costs, which are the incremental of energy access infrastructure, along with policies costs to provide electricity service, including and technical assistance to support such activities. generation and transmission, to new consumers. However, some energy projects can have an Thus, leaving out the cost of generation and indirect impact on energy access. For instance, transmission for providing improved energy access adding rural consumers to rural electrification grid would also be somewhat misleading. Likewise, systems requires some upstream investments in including all costs of such investments would be a generation and transmission. Therefore, it is quite very distorting. For community or smaller renewable likely that some of the World Bank investments in energy systems, this is not an issue because transmission and generation support energy for generation and distribution are all contained within poor people as well. Estimating the portion of such household or village systems. It is mainly an issue a large infrastructure investment flowing to poor with large network projects. people requires assumptions about the rate of rural electrification, a country’s poverty level, and In this chapter, the study evaluates how to apportion average consumption levels of electricity by the investments in large infrastructure projects to poor. The beneficiaries of such financing would be 45 energy access and also how projects have fared in poor people with an electricity connection and those MODERNIZING ENERGY SERVICES FOR THE POOR: A WORLD BANK INVESTMENT REVIEW — FISCAL 2000–08 new households that can be connected to electricity households use very modest amounts of electricity. 46 service because of the investments. The benefits of In most household energy studies, the estimate of this part of such investments would be the economic electricity use in poor households ranges from 30 opportunities and livelihood improvements resulting to 50 kilowatt-hours of electricity per month. In from a new secure and affordable energy supply. addition, for most developing countries, it is mainly the poorest households that have no access to A large share of total World Bank lending over electricity or other modern energy services, either the last three fiscal years involves energy sector, because of affordability issues or lack of physical structural adjustment, and emergency loans. There is access. considerable controversy about the impact of these lending instruments on the poor (Lampietti, Banerjee, In addition, a general rule of thumb is that and Branczik 2007; Victor 2006; Eberhard and residential electricity consumption in most countries others 2005; Bacon 2002; Besant-Jones 2006). The is around 30 percent of total electricity use (see general conclusion from the literature is that sector Africa in Table 4.1). The implication is that two- reforms should take into consideration the impacts thirds of generation and transmission investments of rising prices on the poor and develop policies are for purposes other than residential electricity. As to mitigate such adverse impacts and to make sure indicated, these investments may go to productive reform encourages rather than discourages providing enterprises with trickle-down impacts on the poor, services to the poor. This is an indication of the but they are very difficult to measure. In addition, equity issues involved in service delivery changes, much of the residential electricity is used primarily and a reminder that how these issues are treated is by higher-income urban households. Finally, for important for the success of reform. many poor countries, a high percentage of their populations do not have access to electricity at Since it is virtually impossible to know the indirect all, and therefore do not consume any at all. The impact of economic growth on poverty without implication is not that these investments should sophisticated econometric modeling, we relied not be made, since they are necessary for the on simple assumptions about poverty and energy development of the electricity sector and therefore access in order to impute the portion of investments are important for the country. However, there is a flowing to the poor from some typical large energy need to ensure that a strong access program is in projects. One approach for calculating upstream place in these countries, so that the benefits of these infrastructure development investments for energy projects ultimately reach the poor. access is to assess the share of electricity going to poor households for a country or area covered by To illustrate the extent of the indirect impact of an investment project. This share is calculated by upstream investments on alleviating energy access multiplying the number of poor or rural households and poverty for this study, we have chosen to review with access to electricity by the average electricity a list of typical large energy loans (Table 4.1). consumed by these households, and comparing From this list, we examine the implications of the those figures with electricity consumption across all Southern Africa Power Market II Project for energy sectors. Stated simply, this is the share of electricity access and the India Power Grid II Project, both flowing through the infrastructure investment that of which deal with high-voltage transmission of reaches the poor. electricity. The Africa Power Market Project involves the implementation of the Malawi-Mozambique Using this estimation approach, we find important electricity interconnection to increase access to but modest amounts of investment flowing from diversified, reliable, and affordable supplies of large-scale generation and transmission projects energy and to expand Malawi and Mozambique’s to the poor. The main reason for this is that poor opportunities to benefit from bilateral and regional INFRASTRUCTURE AND DEVELOPMENT: OUTCOMES AND MEASURMENT ISSUES // CHAPTER 4 TABLE 4.1: Typical Medium and Large Energy Infrastructure Projects 47 % poverty Bank Direct % residential rate (< 1.25 % access to Total bank energy energy electricity con- per capita per electricity Country FY Project name financing financing access sumption day 2005 2005 Africa 04 Southern Africa Power Market 178.5 178.5 0.0 30 51 37 China Rural/ 03 Yixing Pumped Storage Project 145.0 145.0 0 28/12 26/2 99 Urban India 02 Power Grid II 450.0 450,0 0 20 65 Indonesia 03 Java-Bali Power Sector 141.0 141.0 0.0 24/18 80 Ethiopia 03 Energy Access SIL 132.7 132.7 130.0 38 39 15 Ukraine 05 Hydropower Rehabilitation 106.0 106.0 0.0 21 3 100 Turkey 04 Renewable Energy 202.0 101.0 0.0 24 3 100 Poland 04 Hard Coal Social Mitigation 200.0 100.0 0.0 25 0.1 100 Source: Portfolio review and Business Warehouse; poverty data from World Bank PovcalNet for 2005. The poverty line is defined as US$1.25 per capita per day or US$38 per capita per month. power trading in the South African Power Pool. This two-fifths of the population. It is interesting that is a crucial project for improving regional trade and for those that have electricity, the monthly kilowatt- encouraging better efficiency of electricity distribution hour monthly usage of electricity is quite high in the region. It also makes it possible to expand compared to other African countries. Electricity is energy access in the region. very inexpensive in Malawi, so it is very common to use it for cooking in urban areas. As of 2005, For estimating the share of the investment that more than 87 percent of residential electricity was might reach poor households, we take the case of being used by the highest income quintile. Because Malawi. Malawi is fairly typical of many countries in of the low amount of electricity being used by the Sub-Saharan Africa. Only 26 percent of households lower income groups, even if there is a dramatic in Sub-Saharan Africa have electricity, and most expansion of electricity, the combination of low of them live in urban areas. In addition, the new prices and heavy use by high-income groups households getting an electricity connection in means that most of the investments will not reach the region are quite poor and will use what are the poorest households. The poorest 60 percent considered subsistence levels of electricity. For of the populations consume only about 5 percent Malawi, a Living Standards Measurement Study was of the total residential electricity use in the country. completed in 2005, so it is possible to estimate the Because residential electricity use is only 30 percent electricity going to poor households at the time of of total regional electricity use, this would mean the project (Table 4.2). The majority of electricity only about 1 percent of the electricity investments being consumed in Malawi is in the urban areas. are going to the poorest households in Malawi. According to the 2005 study, only about two-thirds This is mainly because of the low levels of electricity of urban households in the country have electricity, access in the country. and less than 3 percent of rural households have it. As a consequence, most of the residential A similar analysis for India demonstrates the electricity in Malawi is consumed by the highest importance of electricity access levels for assessing MODERNIZING ENERGY SERVICES FOR THE POOR: A WORLD BANK INVESTMENT REVIEW — FISCAL 2000–08 48 TABLE 4.2: Residential Electricity Use in Malawi, 2005: Estimates from Living Standards Measurement Study Low Low middle Middle High middle High Average Lilongwe households Households in income class 28,282 28,282 28,282 28,282 28,282 141,408 Lilongwe urban electricity users 0 0 1,768 7070 24157 32995 % with electricity 2.1 4.2 12.5 38.5 91.7 29.8 Electricity use of users (kWh/mo) n.a. n.a. 374 210 861 695 Electricity expenses of users US$/mo n.a. n.a. 12.19 6.17 26.54 21.41 Other urban households Households in income class 36,270 35,931 36,193 36357 35970 180720 Other urban electricity users 2,036 3,064 7,937 15706 30030 58773 % with electricity 7 9 26 47 86 35 Electricity use of users (kWh/mo) 68 65 121 164 448 295 Electricity expenses of users US$/mo 2.14 2.09 3.74 4.90 13.11 8.69 Rural households Households in income class 473,393 474,152 473,541 473,970 473,475 2,371,416 Rural areas electricity users 262 0 910 3867 32586 37624 % with electricity 0.13 0.07 0.19 0.90 7.62 1.78 Electricity use of users (kWh/mo) 144 n.a. 126 137 324 299 Electricity expenses of users (US$/mo) 1.33 n.a. 1.17 1.27 3.00 2.77 Total households Electric use (kWh/month (000)) 175 198 1,734 4,589 44,807 51,504 % kWh used in income group 0.3 0.4 3.4 8.9 87.0 100.0 Source: O’Sullivan and Fitzgerald 2007. Note: Income class is roughly in quintiles for the country; n.a. stands for not applicable because too few households are in the income class. the benefits going to poor households. With so little of investments for generation and transmission reach access to electricity in Africa, it is not unexpected far more households than in Malawi. Residential that investments for improving generation and electricity use in India is about 21 percent of total transmission are necessary, although in the short electricity use in the country, and the lowest four term they do not reach the poorest households. income classes for both urban and rural areas use For India, there was a recent national survey that about 6 percent of total electricity consumed in provides electricity use by income class (Table 4.3). India. For a US$450 million transmission project Instead of examining regional patterns, we will such as Power Grid II, the investments that should assume that generation and transmission projects be classified as electricity access would be about have benefits for the whole country. The figures in US$26 million. the table represent the total electricity consumed by all households in various income deciles for Another way to approach this problem is through urban and rural areas. Because of the large rural examining the marginal cost of generation and electrification distribution program, the distribution transmission that is involved in investing in energy INFRASTRUCTURE AND DEVELOPMENT: OUTCOMES AND MEASURMENT ISSUES // CHAPTER 4 TABLE 4.3: Residential Electricity Use in India, 2005: Estimates from the India Human Development Survey 49 % residential class Cumulative % class Monthly rupees Monthly residential % class of total of total national of total national Income decile expenditures in class kWh in class residential kWh kWh kWh Urban Lowest 687,118 271,575 3.0 0.6 1 2 773,305 302,624 3.3 0.7 1 3 845,642 324,748 3.6 0.7 2 4 1,013,784 387,994 4.2 0.9 3 5 1,143,479 425,834 4.7 1.0 4 6 1,104,347 406,594 4.4 0.9 5 7 1,350,049 486,685 5.3 1.1 6 8 1,540,920 551,349 6.0 1.3 7 9 1,658,888 587,280 6.4 1.3 9 Highest 2,185,761 746,256 8.2 1.7 10 Rural Lowest 667,611 313,773 3.4 0.7 1 2 581,084 278,211 3.0 0.6 1 3 663,502 317,210 3.5 0.7 2 4 729,344 344,059 3.8 0.8 3 5 852,516 396,198 4.3 0.9 4 6 898,480 422,452 4.6 1.0 5 7 1,038,660 485,408 5.3 1.1 6 8 1,250,463 565,820 6.2 1.3 7 9 1,588,974 702,178 7.7 1.6 9 Highest 1,932,941 821,689 9.0 1.9 11 Grand total 22,506,867 9,137,935 100 21 21 Source: Desai and others 2005 access. Many studies have been completed on the Thus, if the average cost of connecting a new marginal costs of generation and transmission as household to the grid is US$500, it would require a component of rural electrification projects. The an equivalent investment of about US$50–100 in findings vary, but generally electricity generation and new generation and transmission. The implication high-voltage transmission are estimated to be around of these figures is that the investments necessary to 10–20 percent of total marginal investment costs in support energy access are quite large. rural electrification. This simply means that for every new electricity connection in a country with no spare The indirect flow of access-related benefits from generation and transmission capacity, new marginal large infrastructure investment is hard to measure, investments must be in generation and transmission. but likely to be modest in scale. As indicated in MODERNIZING ENERGY SERVICES FOR THE POOR: A WORLD BANK INVESTMENT REVIEW — FISCAL 2000–08 50 TABLE 4.4: Energy Access Investments with Estimated Access Related Generation and Transmission, FY2000–08 (US$ millions) Total energy Total energy Total energy access plus Total generation Total energy access plus 5% of access plus 7.5% 10% of Total energy and transmission access generation and of generation and generation and Fiscal year investments investments* investments transmission transmission transmission 2000 1,765 432 448 470 480 491 2001 1,817 839 246 288 309 330 2002 2,166 536 520 547 560 574 2003 1,249 24 169 170 171 171 2004 1,054 149 254 261 265 269 2005 1,992 708 326 361 379 397 2006 3,176 1,897 476 571 618 666 2007 2,031 1,050 359 412 438 464 2008 4,963 2,071 1,151 1,255 1,306 1,358 Total 20,213 7,707 3,949 4,334 4,527 4,720 % of total 100 38 20 21 22 23 Source: Portfolio review. * The generation and transmission investments include transmission, thermal generation, large hydropower generation, and renewable energy generation. Table 4.4, allowing 10 percent of generation Indicators of Energy Access Project Impacts and transmission investments to be included as energy access only improves the overall estimates This study has compiled a list of all the project output from 20 percent to 23 percent of total World indicators, including new households reached by the Bank investment lending. In fact, other categories projects and the number of existing households that of benefits from such projects are much more can take advantage of improved service (Table 4.5). important and tangible, such as economic efficiency It should be cautioned that the reporting for output and economic growth. Without the expansion of indicators for the projects is highly inconsistent. Many generation and transmission, the expansion of the projects should have reported households affected by electricity grid and therefore access to electricity is the project, but no information was given in the project difficult. In fact, it would be very hard to justify the appraisal documents. Thus, we present these indicators expansion of electricity service in countries where with the caveat that they are probably a minimum there are significant shortages of electricity supply. rather than a comprehensive list of indicators. However, the more salient point is that it is better According to this review, close to 8 million households to make sure that expansion of electricity access received new access to energy, and more than 2 is not slighted or ignored in countries with large million took advantage of improved energy services as generation and transmission needs. This will result a result of the projects from 2000 to 2008 (Table 4.4). in projects in which the investment benefits can be spread more equitably to people in both poor urban There are several reasons for reporting these figures, and rural areas. one of which admittedly is likely to be low estimates INFRASTRUCTURE AND DEVELOPMENT: OUTCOMES AND MEASURMENT ISSUES // CHAPTER 4 TABLE 4.5: Energy Access Output Indicators Underreported Reported in World Bank Projects, FY2000–08 51 New households Existing households Cooking stoves and Hectares of forest affected affected CFLS disseminated affected Cooking and biomass energy 306,000 0 1,058,500 1,657,000 Efficiency cookstoves and lightbulbs 6,000 0 808,500 1,116,000 Improved forestry production 0 0 250,000 541,000 Interfuel substitution 300,000 0 0 0 Household electricity 7,535,440 2,289,200 570,000 1,000,000 Grid periurban 113,150 400,000 0 0 Grid rural electrification 5,289,854 1,881,200 570,000 1,000,000 Off-grid electrification 2,112,436 0 0 0 Public sector capacity 20,000 8,000 0 0 Productive use and efficiency 109,400 106,100 0 0 Building energy efficiency 15,400 106,100 0 0 Efficient cookstoves and lightbulbs 94,000 0 0 0 Grand total 7,950,840 2,395,300 1,628,500 2,657,000 Source: Portfolio review and Business Warehouse. of project impacts. The first is that it is a good investments are shared among a variety of sectors, accomplishment to reach so many households, and accurately measuring their impacts is often but it should be kept in mind that the necessary imprecise and judgmental. However, without investment requirements are still quite large. investments in projects, such as generation Approximately 320 million households worldwide are and transmission, there would not be enough still without electricity service. The second is that it electricity to expand energy access. Complicating gives an indication of where most of the World Bank matters further, the project documents of large investments in energy access have had an impact; infrastructure investments are hazy when specifying rural grid electrification and off-grid electrification the project development outcomes and indicators of are clearly the main areas of the investment development impact. Two conclusions emerge from portfolio. Finally, this does illustrate that the projects the project review. In energy access, which is the in general need to do a better job of developing subject of this review, better methodologies need to proper output indicators for projects that do not be applied to the actual impacts of such projects on involve direct investments in household infrastructure, development. The current investments in upstream and developing better systems for monitoring and projects are necessary conditions for improving evaluating the impacts of projects. energy access, but there should be a more explicit commitment to ensure that this expansion actually takes place. The reason is that without such Conclusion complementary investments, most benefits will not reach the poor except indirectly through the very Large infrastructure investments are necessary hard-to-measure impacts on economic growth and conditions for energy access. Many of the costs consequent growth in economic opportunities for and benefits involved in large infrastructure poor households. 5 MODERNIZING ENERGY SERVICES FOR THE POOR T he present and future need to make modern listed in the World Bank’s Business Warehouse. energy services available to the rural and urban The approach developed is not perfect, but a poor presents a unique challenge in which the component-by-component review of all World Bank World Bank can play a significant role. Addressing energy investments represents a method that is quite the complex problems of these populations requires stringent. the strengths of diverse institutions, groups, and individuals. This would include international lending The work on energy access is of increasing agencies, NGOs, local communities, and private importance for the World Bank, which reflects the entrepreneurs. Two main issues have emerged from linkage between energy access and achieving the this review. There is a need to take advantage of MDGs. This is reflected in several ways. First, there innovative and successful emerging approaches has been an acceleration of direct investment in for promoting energy access and development in both grid and off-grid electricity access. These conjunction with addressing the inherent complexity investments now comprise close to half the total of energy access issues. There is also a need for energy access portfolio. Grid electricity investments improved ways to track energy access investments in include the actual investments in wires, poles, and the World Bank’s lending portfolio and their impacts. transformers to provide electricity to both rural and This is necessary to understand both the strengths periurban households. The off-grid systems include and weaknesses of present approaches, and also to both electricity generation from small sources (for establish a baseline for measuring future progress. example, PV, wind, local hydropower, and diesel generators), as well as the local distribution system. This review develops a comprehensive approach These and other off-grid investments were supported to analyzing energy access investments in the by direct investments, the development of rural World Bank project portfolio. This is a significant energy funds, and supporting policies and technical step toward developing a monitoring system for assistance. evaluating both individual investments and the overall developmental impact of the World Bank’s Historically, the World Bank has been involved in energy access projects. It should be kept in mind rural grid electrification systems. It is only in the that this review does not cover sector work. Rather, last 10 years that the level of investment for off- 53 it is strictly a review of project investments that are grid electricity solutions has been comparable to MODERNIZING ENERGY SERVICES FOR THE POOR: A WORLD BANK INVESTMENT REVIEW — FISCAL 2000–08 the direct investment in traditional grid extension. projects in China and the Philippines are attempting 54 This trend reflects the mainstreaming of early rural to reach their most remote populations without electrification sector work (World Bank 1996) and electricity through off-grid and mainly renewable the advent of the GEF, the Carbon Funds, and the energy projects. Thus, the promotion of rural regional programs, such as ASTAE, for the promotion electricity in World Bank projects has traditionally of renewable energy in off-grid applications. More been through grid electricity, but increasingly recently, the possibility of an investment fund innovative projects have been developed to serve promoting energy services for the poor has arisen. people in areas that will not receive grid electricity for many years to come. These innovative programs are generally run through either private sector General Trends in Energy Access organizations, such as equipment retail companies, Investments as is the case in China, or through the support of NGOs and microfinance organizations. The general findings of the review are quite positive. As indicated, investments in electricity access— One surprising finding is that about one-quarter of both grid and off-grid—are increasing, along the World Bank’s investments in energy access— with other energy investments by the World Bank. about US$1 billion between 2000 and 2008— In fact, this review has examined some extremely involves policy development and institutional successful programs in which the World Bank has building. Under these types of investments, the main been involved with rural electrification programs categories of funding were for rural electrification for decades. The impact that such programs can master plans, policy frameworks, energy strategies, have on development is quite substantial, with rates and heating sector reform. Although there were of return that are very high, as documented by a some regional differences, much of this investment recent review by the World Bank IEG (2008). In went to support the development of public sector general, the design of rural electrification programs capability to administer such projects. is very country-specific, and they require a significant amount of project preparation in the initial stages. Investments in energy efficiency and the promotion of Later repeat projects can lessen the cost, but the cost productive uses of energy also comprises about one- required for the development of initial projects that quarter of World Bank lending for energy access. must face poor pricing regimes, conservative utilities, These are projects that have direct or indirect support weak institutions, and adverse regulatory regimes for households, and that include investments in should not be underestimated. building efficiency, installation of efficient equipment, and the enhancement of the energy delivery network, As indicated, the investments going to household so the majority of these investments are in energy electricity comprise about half of all investments efficiency. As expected, the main regions with these in the energy access portfolio. Within household types of investments are Eastern Europe and Central electricity, grid electricity investments comprise close Asia and East Asia and Pacific. The main reason to 70 percent of this financing, and off-grid electricity for this is that these regions already have extensive is close to 20 percent. It is encouraging that Africa, energy networks, and improving the efficiency of which has the lowest electricity access rates of any these existing investments to serve household and region in the world, also has an active program to community populations better has been a priority. assist countries in promoting access to electricity services, which is true for both grid and off-grid One somewhat surprising finding is that so few electricity projects. Off-grid projects in South Asia investments have been made in promoting the have been significant, including in such countries energy transition to higher-quality cooking fuels. In as Bangladesh, Nepal, and Sri Lanka. In East Asia, this regard, a concerted effort is needed to improve MODERNIZING ENERGY SERVICES FOR THE POOR // CHAPTER 5 the lives of the 3 billion people in the world that use Financial Instruments and Energy Access solid fuels for cooking in very inefficient ways, since 55 this could have significant benefits for both health The main financial instrument utilized for energy and the environment. Electricity is only rarely used access investments is World Bank–IDA funds. in developing countries for cooking, so most of the This is because energy access projects are mostly electricity investments have a substantial impact on directed toward poor households. However, IDA is quality of life, but really do not improve household a general poverty alleviation fund, and allocations cooking. Only about 1 percent of the total lending are made based on country size, population, and was dedicated to the promotion of the transition level of poverty. For larger countries, this is not such to more modern cooking fuels. It must be realized an issue, but for scaling up energy access in small that projects, such as improved cooking stoves, countries, it has significant limitations. In small local forest management, and development of gas countries, IDA funds generally are dedicated toward and LPG networks, have faced challenges in the one sector per year, and energy has to wait its turn past, whether local institutional issues or political for available resources. As a result, obtaining these realities. The regional patterns of investment suggest funds for rural energy projects in small countries can that Africa has been more involved in improved sometimes be difficult. cookstoves and improved forest management, in Latin America the focus has been on improved Energy access projects also have very high rate stoves, and in North Africa and the Middle East, the of using grant funds. Most grant funds available goal has been to support the transition to modern for energy access projects involve a specialized fuels, such as LPG and gas. However, this is an area review procedure. Examples are the Public-Private that should receive more attention, since improving Infrastructure Advisory Facility, the GEF, and the the cooking environment has significant impacts on Carbon Funds. Obtaining such grants requires an household welfare in the form of improved health inordinate amount of time preparing proposals and and alleviation of hours of drudgery that could be satisfying multiple financing windows. Mobilizing better used for more productive activities. the extra preparation financing and undertaking the range of tasks needed to prepare an energy access Potential exists to expand work in the area of project makes for a protracted and complicated periurban energy, which today is just considered part project preparation process. Energy access project of urban infrastructure. The use of higher-quality development would benefit greatly from introducing cooking fuels and the promotion of electricity in poor more streamlined or simplified procedures. urban areas or slums generally are not addressed in the lending program. Serving poor households in As evidenced by the high level of grant funds urban slums usually takes a different approach than in the World Bank’s energy access investments, the usual methods used for expanding grid electricity these various grant funds to support energy access service, which may be a new area of concentration have been very important for promoting energy for the World Bank’s lending program. access. However, it would be much easier if there were dedicated grant funds for addressing To conclude, quite a bit of progress has been made the development of energy access for the poor in promoting energy access in developing countries. in developing countries. Applying for such grant It should be kept in mind that the World Bank is not funds to support energy access would more directly the only development agency involved in energy address the issue of alleviating energy poverty access. In order to truly promote the poor’s access without the trappings of environmental, global to modern energy services that are necessary for warming, or privatization issues. This is not to say achieving the MDGs, the cooperation of a wide that the other issues are not important, but it would variety of development agencies will be required. make the application process for grants more MODERNIZING ENERGY SERVICES FOR THE POOR: A WORLD BANK INVESTMENT REVIEW — FISCAL 2000–08 streamlined and more directly related to an issue that energy options. The business models of these two 56 is of high importance to the World Bank, and that is enterprises are quite different, so different public to alleviate poverty. support mechanisms were necessary. The Bangladesh model is but one option in a Lessons Learned from Portfolio Review wide variety of institutional, legal, and regulatory and Successful Projects approaches to providing energy access to poor populations. Most countries must develop an Several lessons can be drawn from both this portfolio approach that coincides with their social-political review and the successful projects that have emerged realities. This is the case whether the projects are from this review. The first is that at the beginning of grid or off-grid expansion of electricity, promotion many energy access projects, there is a period of of energy efficiency, or development of ways to high levels of technical assistance in which the Bank encourage better cooking fuels. At the beginning assists governments in developing custom strategies of this process, laws must be changed, sometimes to deal with providing energy to their poorest institutions have to be created or altered, and populations. The second is that both public support techniques to develop well-targeted subsidies that do and private investments are important in many not destroy business incentives have to be studied projects, but they take a different form depending and implemented. These are not easy tasks, and they on the country and its political realities. The third is require a significant commitment by governments that many projects have low levels of monitoring and to undertake strategies and projects to help their evaluation, so it is difficult to judge the development poorest populations gain access to high-quality effectiveness of the projects and whether they support energy services. the MDGs. The good news is that, after this initial high level of technical assistance to prepare the political, High Levels of Technical Assistance institutional and financial landscape for energy For new countries that are politically committed access, much of the World Bank’s investments in to developing better access for their poorest repeat projects are much easier to implement and populations, an initial period of analysis and strategy are highly cost effective. In fact, it was somewhat development is necessary. For instance, there is often surprising that World Bank investments in energy a need to develop new institutions to implement a access are somewhat concentrated in countries with rural energy or electricity access program, which repeat projects. Vietnam is a very good example is true whether the main program is going to be of this. The first loan in 2000 spawned a series of for grid or off-grid electricity. As an example, in investments over the decade to take the country to the early Bangladesh rural electrification program, an over 90 percent electrification rate today. The the Rural Electrification Board was developed to interesting feature of these series of loans is that handle the entire rural electrification grid expansion they are not repeat projects in the sense that they program. This meant that the government had to be are the same. Rather, they keep defining and solving committed to both financial and institutional support implementation problems and issues that come up for the program, and it was a novel way of doing as the program evolves. The lesson is that there are business for the country, which in the past had relied significant levels of technical assistance to set up almost exclusively on state-run utilities for electricity the framework for energy access investments that provision. When it came time in that last loan to should not be underestimated in countries that want support off-grid electrification, the task was given to embark on energy access programs, although to an entirely different agency that would dedicate this can be followed by a stream of projects that are staff to developing and supporting mostly renewable easier to implement over subsequent years. MODERNIZING ENERGY SERVICES FOR THE POOR // CHAPTER 5 Public and Private Investments in Energy Access the projects themselves and the yearly progress in The rural access agenda is often thought to be a meeting the energy access goals. 57 public agenda, but this is only partially true. The review of World Bank projects actually challenges this idea and there seems to be a need for public- Conclusion private partnerships in many projects. To be sure, some purely public-rural electrification projects are This review of World Bank energy access investments in the portfolio, but there also is a large amount reveals both strengths and weaknesses in of investment in what might liberally be called the approaching the goal of alleviating energy poverty private sector. Taking the case of three large projects and achieving the MDGs in developing countries. in the portfolio, the Bangladesh rural electrification Progress has been made for World Bank financing program is based on publicly supported electricity for both energy and energy access during the last distribution businesses that are called cooperatives. decade. Significant commitments have been made For the off-grid program, microcredit organizations for addressing energy access issues in Africa, are selling PV SHSs and making three-year loans where the need is probably the greatest. There are to recover the costs of the systems with competitive many highly diverse, innovative, and significant interest rates. In Vietnam, the latest project involves advances in project design, including innovative support for local electricity companies that collect subsidy models and private-public partnerships. The revenue and maintain local system lines. The goal is increasing amount of investments going to off-grid to develop incentive frameworks to make these small electrification compared to a decade ago is clearly private and sometimes semipublic businesses work a step in the right direction. Likewise, problems have more effectively. In Peru, the investments are actually arisen as well. Cooking energy issues are widely going mostly to private distribution companies to discussed within the World Bank and at international promote electricity expansion in a way that is more forums, but more needs to be done to promote financially viable for the involved companies. Even World Bank lending in the areas of biomass energy investments in purely public electricity companies and interfuel substitution. Also, project monitoring often end up in the hands of private sector and evaluation has been modest at best, hence companies that produce electricity equipment or a real need to improve the assessment of project construct and maintain the electricity lines. impacts on the poor. Energy sector reform projects still address energy access issues in a modest way, and the links between the benefits of reform and Monitoring and Evaluation Needs Improvement energy poverty need to be more clearly delineated in Monitoring and evaluation of energy access project the project documents. impacts is also still at a very basic level in most energy access projects. Projects often do not quantify Much progress has been made both through the physical targets to be met, unless they are investments by international development agencies expansion projects with specific goals. Besides the and the countries themselves. The number of usual physical measures, few projects measure the people with electricity increases every year, and social or economic impact in a comprehensive way. this number is staying ahead of population growth. One significant exception to this is the Vietnam rural Some notable progress is even being made in electrification project, which has a comprehensive the development of a new generation of improve monitoring and evaluation instrument associated biomass stoves. However, the rapid expansion of with it; it was actually financed through independent populations in developing countries and patterns of trust funds outside the project. Given the current increasing urbanization in the form of slums means climate and interest in energy access issues, a better the task of dealing with energy poverty will be a job needs to be done in tracking both the impact of challenge for many years to come. Annex 1 ACCESS INVESTMENT COMPARISONS WITH CLEAN ENERGY INVESTMENT FRAMEWORK (CEIF) REPORT UPDATES T he figures compiled for energy access under reports. This goal of this energy access review is to the Clean Energy Investment Framework (CEIF classify the various components that make up or update reports) are based on a different lead to energy access, including rural electrification, definition than those analyzed in this study. The biomass energy, heating reforms and building term energy access for this report relates to the efficiency, and the promotion of modern fuels, such physical proximity of people to infrastructure and to as LPG, for cooking. Accordingly, a thorough review the policies and supporting technical activities that of World Bank projects at the component level has are geared toward encouraging people to move been undertaken to determine energy access. The to cleaner, more efficient, and in general more purpose of the CEIF report is to broadly classify modern fuels. This definition frames energy access as projects or large project components into categories, supporting the transition from low-quality or inefficient such as low carbon, transmission and distribution, use of energy sources to higher and more efficient oil, gas, coal, thermal generation, and other uses. The CEIF has the dual purpose of tracking clean types of energy investments. As a result, the CEIF energy and energy access investments, with the focus report undertakes classification on a broader level on how to support investments in developing countries according to its interest in carbon production and that reduce risks from climate change and achieve climate change (Table A2.1). low-carbon growth. These two quite different focuses actually lead to different ways of classifying energy The significant differences make it very difficult to access in the Bank’s lending portfolio. reconcile the energy access figures between the two reports. The major difference is to the result of the treatment of generation and transmission Differences in Classifications as energy access in the CEIF updates and their qualified exclusion in this study. Another noteworthy Differences in the calculations of energy access are difference is that IFC investments are included in the CEIF updates, but because they are not 59 based on the underlining purposes of these two MODERNIZING ENERGY SERVICES FOR THE POOR: A WORLD BANK INVESTMENT REVIEW — FISCAL 2000–08 60 TABLE A2.1: Example of Differences in Project Classifications: Energy Access Review versus the Clean Energy Investment Framework Project type CEIF Energy access review Thermal generation 100% access in IDA only 0% access, but qualified in Chapter 4 Transmission 100% access 0% access, but qualified in Chapter 4 Rural electrification (distribution) 100% access 100% access Urban electrification (distribution) 100% access 100% access Building heating efficiency 100% low carbon 100% access Cooking and biomass energy Not classified 100% access Policy and reform lending 0% access Included % that is related to access definition Non-energy project policy and 0% access Included % that is related to access definition reform with energy components Mining projects Not classified Included % that is related to access definition Renewable energy 100% low carbon or low carbon access Included % that is related to access definition IFC investments and MIGA Examined in report because it is part of the World Bank Group Not Examined in report because it is not in World Bank annual report energy figures. Low carbon Classified Not classified Source: Portfolio review and Clean Energy Investment data base. in the World Bank annual report (World Bank, purposes, and they are both valid, given their various years), they have not been included respective definitions of energy access. in this study. The issues involved in estimating generation and transmission are detailed in Chapter 4 of this report. Certainly much electricity Implications goes to commercial businesses and industry, but households consume much electricity as well. The differences between the two approaches to energy access may actually reflect on the lack of A comparison of the figures from both reports research on energy poverty as it relates to climate reveals that the investment figures are fairly far change. The goal of alleviating poverty is central to apart (Table A2.2). This is mainly to the result of the international efforts to promote development. In the inclusion of generation and transmission and fact, linking macro issues, such as climate change, other investments in the CEIF report that are not to micro issues, such as energy poverty, is difficult considered in this review. An effort was made to beyond the stage of saying that economic growth reconcile the figures by reconstituting some of and reduced climate change are good for everyone. the categories in Table A2.1, and the results were Little information is available on the energy poor encouraging. By adding generation and transmission and how their energy use pattern relates to climate to the energy access figures in this report, the change. For instance, what would be gained from numbers are fairly close. However, overall there are substituting electric modern fuels or modern ways too many differences in the project classifications, as of cooking for traditional use of fuels in low-income well as in the definition of energy access to reconcile developing countries? What would happen with the figures. As indicated, both reports have different massive adoption of improved stoves in developing ACCESS INVESTMENT COMPARISONS WITH CLEAN ENERGY INVESTMENT FRAMEWORK (CEIF) REPORT UPDATES // ANNEX 1 TABLE A2.2: Comparison of Energy Access Review and Clean Energy Investment Framework Figures, 2003–08 61 (US$ millions per year) Year 2003 2004 2005 2006 2007 2008 CEIF access (IFC and MIGA excluded) 618 441 586 664 476 956 Blended low carbon and access 176 79 396 265 479 903 Total CIEF access 794 521 983 929 955 1,858 % Access in CIEF classification 0.68 0.57 0.53 0.29 0.47 0.41 Access in this review 169 254 326 476 359 1151 % Access in investment review 0.14 0.24 0.16 0.15 0.18 0.23 Source: Portfolio review and Clean Energy Investment data base. countries? With more efficient heating technologies, energy. In order to understand the relationship how would this impact climate change? Quite a between energy poverty and climate change, it would few ways are available for households to move up be necessary to develop better information on energy the energy ladder to more modern forms of using use by the poor as it relates to climate change. Annex 2 THE WORLD BANK ENERGY ACCESS INVESTMENT PORTFOLIO: FISCAL 2000–08 63 64 Efficiency Bank Electricity Non- and Fiscal total Energy Access Policy extension electri. productive year Region Country Project name Product line commit. commit. commit. intervention intervention HH interv. uses FY00 EAP China CN-BEIJING ENVIRONMENT II IBRD/IDA 374.0 199.5 173.5 Yes No Yes No FY00 EAP Vietnam VN-RURAL ENERGY IBRD/IDA 150.0 150.0 150.0 Yes Yes No No FY00 LCR Brazil BR Energy Efficiency (ELETROBRAS) IBRD/IDA 58.4 58.4 36.8 Yes No Yes Yes FY00 SAR India UP POWER SECTOR RESTRUCTURING IBRD/IDA 150.0 150.0 35.6 Yes Yes No No MODERNIZING ENERGY SERVICES PROJECT FY00 SAR India REN EGY II IBRD/IDA 130.0 130.0 20.0 Yes Yes No Yes FY00 ECA Ukraine KIEV PB ENERGY EFFIC IBRD/IDA 18.3 18.3 18.3 Yes No No Yes FOR THE FY00 LCR Mexico GEF MX ALTERNATIVE ENERGY GEF 8.9 8.9 8.9 Yes Yes No Yes FY00 SAR India ENERGY EFFICIENCY GEF 5.0 5.0 5.0 No No Yes No FY01 ECA Russian MUN HEATING IBRD/IDA 82.5 82.5 82.5 Yes No No Yes Federation FY01 ECA Latvia RIGA DIST HEAT IBRD/IDA 36.2 36.2 36.2 Yes No No Yes FY01 ECA Ukraine SEVASTOPOL HEAT SUPPLY IBRD/IDA 28.2 28.2 28.2 Yes No No Yes IMPROVEMENT FY01 EAP Vietnam VN-COMMUNITY BASED RURAL IBRD/IDA 102.8 23.6 23.6 Yes Yes No No INFRA. FY01 ECA Belarus SOC INF RETROFIT IBRD/IDA 22.6 22.6 22.6 Yes No No Yes FY01 SAR India MP DPIP IBRD/IDA 110.1 16.5 16.5 Yes No No No FY01 ECA Poland KRAKOW ENRGY EFF IBRD/IDA 15.0 15.0 15.0 Yes No No Yes FY01 AFR Lesotho LS-Utilities Sec Reform SIL (FY01) IBRD/IDA 28.6 20.6 13.6 Yes Yes No No FY01 LCR Brazil BR Bahia Rural Poverty Reduction IBRD/IDA 54.4 5.4 5.4 Yes Yes No No Project FY01 SAR India Rajasthan Power I IBRD/IDA 178.2 178.2 5.2 Yes Yes No No FY01 LCR Brazil BR Pernambuco Rural Poverty IBRD/IDA 30.1 3.0 2.9 Yes Yes No No POOR: A WORLD BANK INVESTMENT REVIEW — FISCAL 2000–08 Reduction FY01 AFR Nigeria NG-Privatization Supt SIL (FY01) IBRD/IDA 114.3 27.8 1.6 Yes Yes No No FY01 ECA Kosovo ENERGY SECTOR TA (KOSOVO TF) Special Finc. 2.5 2.5 0.8 Yes No Yes Yes FY01 EAP Mongolia MN-GEF-Urban Stove Improvement GEF 0.6 0.6 0.6 Yes No Yes No (continued on next page) Efficiency Bank Electricity Non- and Fiscal total Energy Access Policy extension electri. productive year Region Country Project name Product line commit. commit. commit. intervention intervention HH interv. uses FY01 LCR Uruguay UY PUBLIC SERVICES IBRD/IDA 6.0 2.0 0.5 Yes No No No MODERNIZATION TA FY02 SAR Bangladesh Rural Elect. Renewable Energy Dev. IBRD/IDA 199.2 199.2 199.2 Yes Yes No No FY02 LCR Brazil Energy Sector Reform Loan IBRD/IDA 431.8 431.8 108.0 Yes Yes No No FY02 SAR Sri Lanka Renewable Energy for Rural IBRD/IDA 83.0 83.0 83.0 Yes Yes No Yes Economic Dev. FY02 AFR Uganda UG-Energy for Rural Transform IBRD/IDA 52.4 52.4 47.9 Yes Yes No Yes (FY02) FY02 EAP Vietnam VN-SYSTEM ENERGY, EQUITIZATION IBRD/IDA 216.0 216.0 18.8 Yes Yes No Yes & RENEWAB FY02 ECA Lithuania EDUC IMPRVMT IBRD/IDA 25.4 16.8 13.8 No No No Yes FY02 AFR Tanzania TZ-Songo Gas Dev & Power Gen IBRD/IDA 183.0 183.0 11.8 Yes Yes No No (FY02) FY02 ECA Lithuania VILNIUS DIST HEAT IBRD/IDA 17.1 17.1 10.1 Yes No No Yes FY02 LCR Ecuador EC Power & Comm.Sect Moderniz. & IBRD/IDA 25.8 11.6 7.3 Yes Yes No No Rural Servi FY02 ECA Serbia SAC (SERBIA) IBRD/IDA 70.0 14.0 7.0 No No No Yes FY02 LCR Brazil BR Sergipe Rural Poverty Reduction IBRD/IDA 20.8 4.4 4.4 Yes Yes No No FY02 ECA Serbia EMG ELEC POWER RECN Special Finc. 6.0 6.0 3.1 Yes No No Yes FY03 AFR Ethiopia ET-Energy Access SIL IBRD/IDA 132.7 112.8 130 Yes Yes Yes No FY03 LCR Nicaragua NI Off-Grid Rural Electrification IBRD/IDA 16 11.8 14.5 8 Yes No Yes (PERZA)* FY03 LCR Bolivia BO Decent Infras for Rur IBRD/IDA 20 13.4 7.5 Yes Yes No Yes Transformation FY03 AFR Guinea GN Decentralized Rural Electrification* IBRD/IDA 7 4.9 7 Yes Yes No No FY03 SAR Nepal POWER DEVELOPMENT PROJECT IBRD/IDA 75.6 69.6 5.5 Yes Yes No No FY03 LCR Brazil BR-Energy Sector TA Project IBRD/IDA 12.1 12.1 2.4 Yes No No No FY03 AFR Chad TD CRITICAL ELEC & WATER Services IBRD/IDA 54.8 36.7 1.8 No Yes No No (continued on next page) THE WORLD BANK ENERGY ACCESS INVESTMENT PORTFOLIO: FISCAL 2000–08 // ANNEX 2 65 66 Efficiency Bank Electricity Non- and Fiscal total Energy Access Policy extension electri. productive year Region Country Project name Product line commit. commit. commit. intervention intervention HH interv. uses FY04 SAR Afghanistan Emergency Power Rehabilitation IBRD/IDA 105 99.8 78 Yes Yes No No Project FY04 AFR Mali ML Household Energy & Universal IBRD/IDA 39.2 39.2 37.5 Yes Yes Yes Yes Access* FY04 AFR Mozambique MZ Energy Reform and Access IBRD/IDA 40.3 33.4 33.6 Yes Yes No Yes MODERNIZING ENERGY SERVICES Project* FY04 EAP Cambodia KH-Rural Electrif. & Transmn* IBRD/IDA 45.8 40.2 25.6 Yes Yes No Yes FOR THE FY04 ECA Serbia and ENERGY EFF IBRD/IDA 21 20.4 20.5 No No No Yes Montenegro FY04 SAR Afghanistan Emergency National Solidarity IBRD/IDA 95 19 19 No Yes No No Project FY04 EAP Philippines PH-Rural Power Project* IBRD/IDA 19 19 18.9 Yes Yes No Yes FY04 EAP Philippines PH-GEF-Electric Cooprtv System GEF 12 12 12 Yes Yes No No Loss Redu FY04 ECA Czech PCF UMBRELLA CO 7 7 4.2 No No No Yes Republic FY04 LCR Uruguay UY Energy Efficiency Project GEF 6.9 6.5 1.5 No Yes Yes No FY04 ECA Moldova REN ENER FROM AG WASTE GEF 1 0.7 1 Yes No No Yes BIOMASS (GEF MSP) FY04 LCR Dominican DO Power Sector TA Project IBRD/IDA 7.3 0.2 0.9 Yes No No No Republic FY04 AFR Madagascar MG-Environment Program 3 IBRD/IDA 40 4 0.8 No No Yes No FY04 SAR Pakistan NWFP Community Infrastructure II IBRD/IDA 37.1 0.7 0.7 No No No Yes (CIP2) FY04 SAR Bangladesh Power Sector Development TA IBRD/IDA 15.5 11.3 0.3 Yes No No No POOR: A WORLD BANK INVESTMENT REVIEW — FISCAL 2000–08 FY05 EAP Vietnam VN-2nd Rural Energy* IBRD/IDA 225.3 225.3 225.3 Yes Yes No No FY05 AFR Senegal SN-Rural Electric Service Prj* IBRD/IDA 34.9 21.3 22 Yes Yes Yes Yes FY05 EAP China CN-GEF-Heat Reform & Bldg Egy Eff. GEF 18 5.8 18 Yes No No Yes (continued on next page) Efficiency Bank Electricity Non- and Fiscal total Energy Access Policy extension electri. productive year Region Country Project name Product line commit. commit. commit. intervention intervention HH interv. uses FY05 AFR Eritrea ER-Power Distribution SIL IBRD/IDA 50 45 14.5 Yes Yes No No FY05 ECA Russian KAZAN MUNICIPAL DEVT INF 125 12.5 12.5 Yes No No No Federation FY05 AFR Kenya KE-Energy Sector Recovery Prj IBRD/IDA 80 77.6 12.1 Yes Yes No No FY05 AFR Benin BJ-Energy Service Delivery APL IBRD/IDA 45 28.8 7.2 Yes No Yes No FY05 SAR Afghanistan Emerg National Solidarity – IBRD/IDA 28 5.6 5.6 No Yes No No Supplemental FY05 LCR Chile CL-Infrastructure for Territorial IBRD/IDA 50.3 4.5 4.5 No Yes No Yes Dvlpmt FY05 AFR Rwanda RW-Urgent Electricity Rehab SIL IBRD/IDA 25 23.8 2.7 Yes No Yes No FY05 LCR Peru PE Santa Rosa Hydro Carbon Finance CO 1.5 1.5 1.5 No Yes No No FY05 EAP Timor-Leste TP-POWER SECTOR PRIORITY Special Finc. 1.4 1.4 0.1 No No Yes No INVESTMENTS FY06 AFR Ethiopia ET-Electricity Access (Rural) IDA 133.4 133.4 133.4 Yes Yes Yes Yes Expansion FY06 LCR Peru PE Rural Electrification IBRD 59.5 59.5 59.5 Yes Yes Yes Yes FY06 ECA Belarus POST-CHERNOBYL RECOVERY IDA 50.0 50.0 50.0 Yes No Yes Yes FY06 LCR Mexico MX Competitiveness DPL IBRD 300.8 60.2 30.1 Yes Yes Yes Yes FY06 ECA Croatia District Heating Project IBRD 29.8 29.8 29.8 Yes No No Yes FY06 LCR Mexico MX ENVDPL II IBRD 200.5 40.1 20.1 Yes No Yes No FY06 LCR Honduras HN (CRL1) Rural Infrastructure IDA 49.4 19.7 19.7 Yes Yes No No Project FY06 EAP China CN-Renewable Energy II (CRESP II) IBRD 86.3 86.3 19.0 No Yes No No FY06 ECA Armenia URBAN HEAT IDA 15.0 15.0 15.0 Yes No No No FY06 EAP Philippines PH-SUPPORT FOR STRATEGIC LOCAL IBRD 100.0 13.0 13.0 Yes Yes No No DEV & INV FY06 AFR Nigeria NG-Natl Energy Dev SIL (FY06) IDA 172.0 172.0 11.1 Yes Yes No No FY06 EAP Lao PDR LA-Rural Electrification Phase I IDA 10.0 10.0 10.0 Yes Yes No Yes (continued on next page) THE WORLD BANK ENERGY ACCESS INVESTMENT PORTFOLIO: FISCAL 2000–08 // ANNEX 2 67 68 Efficiency Bank Electricity Non- and Fiscal total Energy Access Policy extension electri. productive year Region Country Project name Product line commit. commit. commit. intervention intervention HH interv. uses FY06 SAR Bangladesh Bangladesh Development Support IDA 200.0 30.0 10.0 Yes No No No Cr. III FY06 LCR Brazil BR-MG Rural Poverty Reduction IBRD 35.0 8.8 8.8 Yes Yes No No FY06 SAR Afghanistan Emerg NSP (II supplemental) IBRD/IDA 40.0 8.0 8.0 Yes Yes Yes No MODERNIZING ENERGY SERVICES FY06 AFR Rwanda RW-PRSC 2 DPL (FY06) IDA 55.0 8.3 5.5 Yes Yes Yes Yes FY06 AFR Malawi MW-Infrastr Srvcs SIM IDA 40.0 5.2 5.2 Yes Yes No No FY06 AFR Congo, DRC-Transitional Support Credit IBRD/IDA 90.0 13.5 4.5 No No Yes No FOR THE Democratic (DPL) Republic of FY06 EAP Lao PDR LA-GEF Rural Electrification Phase I GEF 3.8 3.8 3.8 Yes Yes No Yes FY06 SAR Nepal Nepal – Biogas Program Carbon Offset 4.5 3.4 3.4 No No Yes No FY06 AFR Ethiopia ET-GEF Energy Access Prj (FY06) GEF 4.9 4.9 3.3 Yes Yes No No FY06 ECA Georgia PRSO IDA 20.0 3.4 2.9 Yes No No No FY06 ECA Serbia PPFDPC1(SERBIA) IBRD 55.0 5.5 2.8 Yes No No No FY06 AFR Guinea- GW-MS Infrastructure Rehab SIM IDA 15.0 8.0 2.4 Yes Yes No No Bissau (FY06) FY06 MNA Djibouti DJ-POWER ACCESS AND IDA 7.0 7.0 1.6 Yes Yes No No DIVERSIFICATION FY06 ECA Moldova BIOMASS HEAT IN RUR COMM Carbon Offset 1.5 1.5 1.5 Yes No Yes No (CDCF) FY06 Papua New PG-GEF-Teacher’s Solar Lighting GEF Med Size 1.0 1.0 1.0 Yes Yes Yes No Guinea Project FY06 EAP Lao PDR Lao PDR PRSO2 IDA 8.0 0.8 0.8 Yes Yes No No FY06 EAP Timor-Leste TP Consolidation Support Program IDA 0.5 0.1 0.0 Yes No No Yes (CSP) 1 POOR: A WORLD BANK INVESTMENT REVIEW — FISCAL 2000–08 FY07 AFR Uganda UG-Power Sector Dev. Project (FY07) IDA 300.0 300.0 150.0 Yes No No No FY07 AFR Congo/Africa 3A-Reg&Domestic Pwr Mkt Dev. IDA 296.7 296.7 50.0 Yes Yes No Yes (FY07) FY07 SAR Sri Lanka CL-TAL Min of Public Works IDA 40.0 40.0 40.0 Yes Yes No Yes (continued on next page) Efficiency Bank Electricity Non- and Fiscal total Energy Access Policy extension electri. productive year Region Country Project name Product line commit. commit. commit. intervention intervention HH interv. uses FY07 ECA Serbia ENERGY EFF ADDITIONAL FINANCING IBRD 28.0 28.0 28.0 Yes No No Yes FY07 SAR Afghanistan NSP II IDA 120.0 16.8 16.8 Yes Yes No No FY07 SAR India India AP DPL III IBRD 225.0 22.5 11.3 Yes No No Yes FY07 AFR Central CF-Development Policy Operation IBRD/IDA 82.0 20.5 10.3 Yes No No No African DPO FY07 Republic FY07 MNA Morocco MA-Energy Sector DPL IBRD/IDA 100.0 100.0 10.0 Yes Yes No No FY07 EAP Pacific 4P-GEF Sustainable Energy Finance GEF 9.5 9.5 9.5 Yes Yes Yes Yes Islands FY07 EAP Mongolia MN-Renewable Energy for Rural IBRD/IDA 7.0 7.0 7.0 Yes Yes No No Access FY07 LCR Argentina AR Prov Ag Devt I Add’l Financ IBRD 37.0 5.6 5.6 No No Yes No Ln7425-AR FY07 AFR Rwanda RW-PRSG III DPL (FY07) IDA 50.0 12.5 5.0 Yes Yes Yes No FY07 LCR Brazil BR Pernambuco Rural Pov. Add’l IBRD 30.0 4.5 4.5 Yes Yes No No Financing FY07 ECA Macedonia, SUSTAINABLE ENERGY (GEF) GEF 5.5 5.5 3.1 Yes No No No former Yugoslav Republic of FY07 SAR Nepal Nepal – Village Micro Hydro Carbon Offset 1.9 1.9 1.9 No Yes No No FY07 ECA Kyrgyz VIP 2 IDA 15.0 1.2 1.2 Yes Yes Yes No Republic FY07 EAP Lao PDR LA - PRSO III IDA 10.0 1.2 1.2 Yes Yes No No FY07 AFR Ghana GH-PRSC 5 DPL (FY07) IDA 110.0 15.4 1.1 No No Yes No FY07 ECA Tajikistan TJ Prg. Development Policy Grant IDA 10.0 1.0 1.0 Yes No No Yes FY07 ECA Kosovo LIGNITE POWER TECHNICAL IDA 8.5 8.5 1.0 Yes Yes Yes Yes ASSISTANCE FY07 EAP Timor-Leste TP Energy Services Delivery Project IDA 2.5 2.5 0.6 Yes No Yes No FY08 EAP China CN-Liaoning Med. Cities (LMC) III SDN 191.0 191.0 186.9 Yes No No Yes (continued on next page) THE WORLD BANK ENERGY ACCESS INVESTMENT PORTFOLIO: FISCAL 2000–08 // ANNEX 2 69 70 Efficiency Bank Electricity Non- and Fiscal total Energy Access Policy extension electri. productive year Region Country Project name Product line commit. commit. commit. intervention intervention HH interv. uses FY08 EAP Vietnam VN-Rural Distribution Project SDN 150.0 150.0 150.0 Yes Yes No No FY08 AFR Ethiopia ET-Elect. Access Rural II SIL (FY07) SDN 130.0 130.0 130.0 No Yes No No FY08 ECA Russian HOUSING & COMMUNAL SERVICES SDN 200.0 104.0 104.0 Yes No No Yes Federation MODERNIZING ENERGY SERVICES FY08 ECA Ukraine URBAN INFRASTRUCTURE SDN 140.0 70.9 70.9 Yes No No Yes FY08 MNA Egypt, Arab EG-NATURAL GAS CONNECTIONS SDN 75.0 75.0 68.3 No No Yes No Republic of FOR THE FY08 AFR Cameroon CM-Energy Sector Development SIL SDN 65.0 65.0 65.0 Yes Yes No No (FY08) FY08 SAR Bangladesh Power Sector DPL SDN 120.0 120.0 60.0 Yes No No No FY08 AFR Ghana GH-Energy Dev & Access SIL (FY08) SDN 94.5 94.5 47.2 Yes Yes No No FY08 AFR Burkina Faso BF-Energy Access SIL SDN 38.8 38.8 38.8 Yes Yes Yes No FY08 LCR Mexico MX (CRL2) Integrated Energy SDN 30.0 30.0 30.0 Yes Yes No Yes Services FY08 SAR Bangladesh BD DSC IV-Supplemental PREM 100.0 25.0 25.0 Yes No No No Financing II FY08 AFR Zambia ZM-Incr.Eff.&Access to Elec SIL SDN 36.0 36.0 22.0 Yes Yes No No (FY08) (including GEF) FY08 SAR Bangladesh Bangladesh DSC IV-Supplemental PREM 75.0 19.5 19.5 Yes No No No Financing FY08 SAR Pakistan Electricity Distribution and SDN 256.7 256.7 16.4 Yes No Yes No Transmission FY08 AFR Senegal SN-En. Sec. Recov. Dev Policy SDN 80.0 80.0 16.0 Yes No No No Financing FY08 AFR Tanzania TZ-Energy Development & Access SDN 105.0 105.0 16.0 Yes Yes No No POOR: A WORLD BANK INVESTMENT REVIEW — FISCAL 2000–08 Expansion FY08 LCR Argentina AR Energy Efficiency Project SDN 15.2 15.2 15.2 Yes No Yes Yes FY08 ECA Belarus SOC. INF RETROFIT - ADDL SDN 14.1 14.1 14.1 Yes No No Yes FINANCING (continued on next page) Efficiency Bank Electricity Non- and Fiscal total Energy Access Policy extension electri. productive year Region Country Project name Product line commit. commit. commit. intervention intervention HH interv. uses FY08 MNA West Bank WBG PRDP Support PREM 40.0 40.0 10.0 Yes No No No and Gaza FY08 SAR Bangladesh Grameen Shakti Solar Homes SDN 9.0 9.0 9.0 Yes No No No FY08 MNA Morocco MA-ONE Support Project SDN 150.0 150.0 8.9 No No No Yes FY08 ECA Tajikistan ENERGY EMERGENCY SDN 5.7 5.7 5.7 No No No Yes FY08 AFR Tanzania TZ-GEF Energy Dvpt and Access SDN 4.5 4.5 4.5 No Yes No No Expansion FY08 AFR Guinea GN-Electricity Sec Eff Improv GEF SDN 4.5 4.5 2.3 Yes No Yes No (FY07) FY08 MNA West Bank GZ-ELECTRIC UTILITY MANAGEMENT SDN 12.0 12.0 1.6 Yes No No No and Gaza FY08 ECA Azerbaijan RURAL INVESTMENT (AZRIP) ADDL. SDN 15.0 1.4 1.4 Yes Yes No No FINANCING FY08 AFR Burundi BI-Multisectoral Water & Electricity Inf SDN 50.0 33.0 1.0 No No Yes No THE WORLD BANK ENERGY ACCESS INVESTMENT PORTFOLIO: FISCAL 2000–08 // ANNEX 2 71 REFERENCES General References ———. 2008. The Challenge of Rural Electrification: Strategies for Developing Countries. Washington, Asaduzzaman, M., Douglas Barnes, and D.C.: RFF Press. Shahid Khandker. 2010. Restoring Balance: Barnes, Douglas, and Willem Floor. 1996. Rural Bangladesh’s Rural Energy Realities. World Bank Energy and Developing Countries: A Challenge Working Paper No. 181. Washington, D.C.: for Economic Development. Annual Review of World Bank. Energy and Environment 21: 497–530. Bacon, Robert. 2002. Global Electric Power Reform, Barnes, Douglas, Priti Kumar, and Keith Openshaw. Privatization and Liberalization of the Electric Forthcoming. Cleaner Hearths, Better Homes: Power Industry in Developing Countries. Energy Improved Stoves for India and the Developing and Mining Sector Board Discussion Paper Series World. ESMAP World Bank, Washington, D.C. , No. 2. Washington, D.C.: World Bank. Besant-Jones, John. 2006. Reforming Power Barkat, Abdul, M. Rahman, S. Zaman, A. Podder, Markets in Developing Countries: What Have S. Halim, N. Ratna, M. Majid, A. Maksud, We Learned? Energy and Mining Sector A. Karim, and S. Islam. 2002. Economic and Board Discussion Paper No. 19. World Bank, Social Impact Evaluation Study of the Rural Washington, D.C. Electrification Program in Bangladesh. Report Bravo, V., G. Gallo Mendoza, J. Legisa, C. E. to the National Rural Electric Cooperative Suarez, and I. Zyngierman. 1979. “Estudio sobre Association International. Dhaka, Bangladesh: requerimientos futuros no convencionales de National Rural Electric Cooperative Association energía en América Latina.” Project RLA/74/030, International. , Report to the UNDP Appendix 9. Fundación Barnes, Douglas. 1988. Electric Power for Rural Bariloche, Buenos Aires. Growth: How Electricity Affects Rural Life in Cabraal, Anil, and Douglas Barnes. 2006. Developing Countries. Boulder, CO: Westview “Productive Uses of Energy for Rural Press. Development.” Annual Review of Environment and Resources 30: 117. 73 MODERNIZING ENERGY SERVICES FOR THE POOR: A WORLD BANK INVESTMENT REVIEW — FISCAL 2000–08 Cecelski, Elizabeth, Joy Dunkerley, Ahmed Ounalli, IEA (International Energy Agency). 2002. World 74 and Moncef Aissa. 2007. “Electricity and Energy Outlook. Paris: IEA. Multisector Development in Rural Tunisia.” In ———. 2004. World Energy Outlook. Paris: IEA. Douglas F. Barnes, The Challenge of Rural ———. 2006. World Energy Outlook. Paris: IEA. Electrification: Strategies for Developing Khandker, Shahidur. 1996. Education Achievements Countries. Washington, D.C.: RFF Press, pp. and School Efficiency in Rural Bangladesh. World 163–97. Bank Discussion Paper No. 319. Washington, Desai, Sonalde, Amaresh Dubey, B. L. Joshi, Mitali D.C.: World Bank. Sen, Abusaleh Shariff, and Reeve Vanneman. Khandker, Shahidur R., Douglas F. Barnes, Hussain India Human Development Survey 2005 (IHDS). A. Samad. 2008. “Welfare Impacts of Rural A multisector survey and data base prepared Electrification: A Case Study from Bangladesh.” by the National Council of Applied Economic DEC Technical Paper, World Bank, Washington, Research, New Delhi, and the University of D.C. Maryland, College Park, Maryland. Khandker, Shahidur, Victor Lavy, and Deon Filmer. Eberhard, Anton, Alix Clark, Njeri Wamukonya, 1994. Schooling and Cognitive Achievements and Katherine Gratwick. 2005. Power Sector of Children in Morocco: Can the Government Reform in Africa. Assessing the Impact on the Improve Outcomes? World Bank Discussion Poor, ESMAP Report 306/05, World Bank, Paper No. 264. Washington, D.C.: World Washington, D.C. Bank. Eckholm, Eric. 1975. “The Other Energy Crisis: Krugman and Goldemberg. 1983. Krugmann, Firewood.” Worldwatch Paper No. 1, Hartmut, and Jose Goldemberg. 1983. “The Worldwatch Institute, Washington, D.C. Energy Cost of Satisfying Basic Human Needs.” Foster, V., Jean-Philippe Tre, and Quentin Wodon. Technological Forecasting and Social Change 2000. Energy Prices, Energy Efficiency, and Fuel 24: 45–60. Poverty. Latin America and Caribbean Regional Lampietti, Julian, Sudeshna Banerjee and Amelia Studies Program. World Bank, Washington, DC. Branczik. 2007. People and Power: Power Sector Goldemberg, Jose. 1990. “One Kilowatt per Reforms and the Poor in Europe and Central Capita.” Bulletin of the Atomic Scientists 46(1). Asia. Directions in Development, World Bank, Gordon, Adele. 1997. Facilitating Education in Rural Washington, D.C. Areas of South Africa: The Role of Electricity and Lewis, Laurence, and William Coffee. 1985. “The Other Sources of Energy. University of Cape Continuing Deforestation of Haiti.” Ambio 14(3): Town Energy and Development Research Centre 158–60. (EDRC) Report Series. Cape Town: EDRC. Lighting Africa. www.lightingafrica.org. Govindarajalu, Chandra, Raihan Elahi, and Jayantha Modi, V., S. McDade, D. Lallement, and J. Saghir. Nagendran. 2008. Electricity beyond the Grid: 2005. Energy Services for the Millennium Innovative Programs in Bangladesh and Sri Development Goals. Report for Nations Lanka. ESMAP Knowledge Exchange Series No. Development Programme and World Bank, 10, World Bank, Washington, D.C. Washington, D.C. Hutton, G., and E. Rehfuess. 2006. Guidelines for . Nieuwenhout, F., P Van de Rijt, and E. Conducting Cost-Benefit Analysis of Household Wiggelinkhuizen. 1998. Rural Lighting Services. Energy and Health Interventions to Improve Report prepared for the World Bank, Netherlands Health. WHO, Geneva. Energy Research Foundation, Petten. Hutton, G., E. Rehfuess, F. Tediosi, and S. Weiss. O’Sullivan, Kyran, and Douglas Barnes. 2007. 2006. Evaluation of the Costs and Benefits of Energy Policies and Multitopic Household Household Energy and Health Interventions at Surveys. Guidelines for Questionnaire Design in Global and Regional Levels. WHO, Geneva. Living Standards Measurement Studies. World REFERENCES Bank Working Paper No. 90. Washington, D.C.: ———. 2006c. The World Health Report 2005. World Bank. Geneva: WHO. 75 O’Sullivan, Kyran, and Kevin Fitzgerald. 2006. ———. 2007. Indoor Air Pollution: National Burden “Household Energy Use in Malawi.” Background of Disease Estimates. Geneva: WHO. Study, World Bank, Washington, D.C. WHO and UNDP (World Health Organization and Pachauri, Shonali, and Daniel Spreng. 2004. United Nations Development Programme). “Energy Use and Energy Access in Relation to 2009. The Energy Access Situation in Developing Poverty.” Economic and Political Weekly 39(3): Countries. New York: WHO and UNDP . 271–78. World Bank. Business Warehouse. A data base that REB (Rural Electrification Board), Bangladesh. 2007. keeps track of all the Bank’s energy investments. REB website. http://www.reb.gov.bd/ ———. Various years. World Development Report. Rojas, Juan Immanuel, and Dominique Lallement. Washington, D.C.: World Bank. 2007. Meeting the Energy Needs of the Urban ———. 1996. Rural Energy and Development: Poor: Lessons from Electrification Practitioners. Improving Energy Supplies for Two Billion People. ESMAP Technical Paper No. 118/07, World Development in Practice Series. Washington, Bank, Washington, D.C. D.C.: World Bank. Saghir, Jamal. 2005. Energy and Poverty: Myths, ———. 2000. Fuel for Thought: An Environmental Links, and Policy Issues. Energy Working Note Strategy for the Energy Sector. Washington, D.C.: No. 4, May 2005. Energy and Mining Sector World Bank. Board Paper, World Bank, Washington, D.C. ———. 2001a. Russia—Municipal Heating. Project Stevenson, Glen. 1989. “The Production, Distribution Appraisal Document Report No. 21153-RU. and Consumption of Fuelwood in Haiti.” Journal Washington, D.C.: World Bank. of Developing Areas 24: 59–76. ———. 2001a. Uganda Energy for Rural Victor, David. 2006. The Effects of Power Sector Transformation. Project Appraisal Document Reform and Energy Services for the Poor. Paper Report No. 23195-UG. Washington, D.C.: for Department of Economic and Social Affairs, World Bank. United Nations, New York. ———. 2001a. Vietnam Rural Energy. Project WHO (World Health Organization). 2001. Air Appraisal Document Report No. 2035 1-VN. Quality Guidelines for Europe. WHO Regional Washington, D.C.: World Bank. Publications, European Series No. 91. Geneva: ———. 2002a. Energy Strategies for Rural India: WHO. Evidence from Six States. ESMAP Report No. ———. 2002a. The Health Effects of Indoor Air 258/02. Washington, D.C.: World Bank. Pollution Exposure in Developing Countries. ———. 2002b. India: Household Energy, Indoor Bruce, Nigel, Rogelio Perez-Padilla, and Rachel Air Pollution and Health. ESMAP Report No. Albalak, eds. Report WHO/SDE/OEH/02.05, 261/02. Washington, D.C.: World Bank. WHO, Geneva. ———. 2002c. Sri Lanka—Renewable Energy for ———. 2002b. The World Health Report 2002: Rural Economic Development. Project Appraisal Reducing Risks, Promoting Healthy Life. Geneva: Document Report No. 23886-CE. Washington, WHO. D.C.: World Bank. ———. 2006a. Fuel for Life: Household Energy and ———. 2003. “Infrastructure Action Plan.” Paper Health. Geneva: WHO. prepared for the Board of Executive Directors. ———. 2006b. WHO Air Quality Guidelines for Washington, D.C.: World Bank. Particulate Matter, Ozone, Nitrogen Dioxide and ———. 2004a. The Impact of Energy on Women’s Sulfur Dioxide. Global Update 2005. Geneva: Lives in India. ESMAP Report No. 276/04. WHO. Washington, D.C.: World Bank. MODERNIZING ENERGY SERVICES FOR THE POOR: A WORLD BANK INVESTMENT REVIEW — FISCAL 2000–08 ———. 2004b. Renewing our Energy Business: Technologies. ESMAP Report No. 121/07, World 76 World Bank Group Energy Program Bank, Washington, D.C. Implementation Progress Report 2001–03. ———. 2007f. Uganda Power Sector Development. Washington, D.C.: World Bank. Project Appraisal Document Report No. 36644- ———. 2004c. Vietnam Second Rural Energy. UG. Washington, D.C.: World Bank. Project Appraisal Document Report No. 29860- ———. 2008a. “Energy for the Poor Initiative.” VN. Washington, D.C.: World Bank. Informal Technical Donor Meeting, World Bank ———. 2005a. Senegal: Sustainable and Office in Paris, November 18. Participatory Energy Management Project. ———. 2008b. Ethiopia Electricity Access Rural Implementation Completion Report No. 32102. Expansion. Project Appraisal Document Report Washington, D.C.: World Bank. No. 34321-ET. Washington, D.C.: World Bank. ———. 2005b. South Asia Region (SAR) Road Map ———. 2008c. Ethiopia Energy Access Project. for Scaling Up Access to Energy Services and Project Appraisal Document Report No. 32482- Renewable Energy. World Bank, Washington, D.C. ET. Washington, D.C.: World Bank. ———. 2005c. Sustainable and Participatory ———. 2008d. Vietnam Rural Distribution Project, Energy Management Project. World Bank Po99211. Project Appraisal Document Report Implementation Completion Report, World Bank, No. 41345-VN. Washington, D.C.: World Bank. Washington, D.C. World Bank IEG (Independent Evaluation Group). ———. 2006a. “An Assessment Framework for 2008. The Welfare Impact of Rural Electrification: Clean Energy and Development.” Paper A Reassessment of the Costs and Benefits. An IEG prepared for the Development Committee Impact Evaluation, World Bank, Washington, D.C. Meeting, World Bank, Washington, D.C. ———. 2006b. China: Heat Reform and Building Energy Efficiency Project. Project Appraisal World Bank Project References Document Report No. 30747-CN. Washington, D.C.: World Bank. Benin ———. 2006c. Peru—Rural Electrification. Project World Bank. Benin Energy Services Delivery APL Appraisal Document Report No. 32686-PE. Project Appraisal Document Report No. 29092- Washington, D.C.: World Bank. BJ (Washington, D.C.: World Bank, 2004). ———. 2007a. Ethiopia: Second Electricity Access Rural Expansion. Project Appraisal Document China Report No. 38158-ET. Washington, D.C.: World World Bank. China: Heat Reform and Building Bank. Energy Efficiency Project. Project Appraisal ———. 2007b. Nepal—Nepal Power Development. Document Report No. 30747-CN (Washington, Project Appraisal Document Report No. 2363 D.C.: World Bank, 2006). . 1-NP Washington, D.C.: World Bank. ———. 2007c. Nepal Village Micro Hydro Carbon Ethiopia Offset Project. Project Information Document No. World Bank. Ethiopia: Second Electricity Access Rural 40113. Washington, D.C.: World Bank. Expansion. Project Appraisal Document Report ———. 2007d. Sri Lanka—Renewable Energy No. 38158-ET (Washington, D.C.: World Bank, for Rural Economic Development—Additional 2007). Financing. Project Information Document No. World Bank. Ethiopia Electricity Access Rural 39834. Washington, D.C.: World Bank. Expansion. Project Appraisal Document Report ———. 2007e. Technical and Economic Assessment No. 34321-ET (Washington, D.C.: World Bank, of Offgrid, Minigrid, and Grid Electrification 2008). REFERENCES World Bank. Ethiopia Energy Access Project. Project Sri Lanka Appraisal Document Report No. 32482-ET World Bank. Sri Lanka—Renewable Energy for 77 (Washington, D.C.: World Bank, 2008). Rural Economic Development. Project Appraisal Document Report No. 23886-CE (Washington, Nepal D.C.: World Bank, 2002). World Bank. Nepal—Nepal Power Development. World Bank. Sri Lanka—Renewable Energy for Rural Project Appraisal Document Report No. 2363 Economic Development—Additional Financing. 1-NP (Washington, D.C.: World Bank, 2007). Project Information Document No. 39834 World Bank. Nepal Village Micro Hydro Carbon (Washington, D.C.: World Bank, 2007). Offset Project. Project Information Document No. 40113 (Washington, D.C.: World Bank, 2007). Vietnam World Bank. Vietnam Rural Energy. Project Appraisal Peru Document Report No. 2035 1-VN (Washington, World Bank. Peru—Rural Electrification. Project D.C.: World Bank, 2001). Appraisal Document Report No. 32686-PE World Bank. Vietnam Second Rural Energy. Project (Washington, D.C.: World Bank, 2006). Appraisal Document Report No. 29860-VN (Washington, D.C.: World Bank, 2004). Russia World Bank. Vietnam Rural Distribution Project, World Bank. Russia—Municipal Heating. Project Po99211. Project Appraisal Document Report Appraisal Document Report No. 21153-RU. No. 41345-VN (Washington, D.C.: World Bank, (Washington, D.C.: World Bank, 2001). 2008). Uganda Senegal World Bank. Uganda Energy for Rural World Bank. Senegal: Sustainable and Participatory Transformation. Project Appraisal Document Energy Management Project. Implementation Report No. 23195-UG (Washington, D.C.: Completion Report No. 32102 (Washington, World Bank, 2001). D.C.: World Bank, 2005). World Bank. Uganda Power Sector Development. Project Appraisal Document Report No. 36644- UG (Washington, D.C.: World Bank, 2007).