36001 Securing Enegy for Poverty Reduction and Economic Growth Energy Sector Management Assistance Program 2005-2007 Business Plan Copyright © 2005 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 May 2005 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. All photographs used in this report are property of the World Bank Group Photo Library and its authors. CONTENTS Preface ....................................................................................................................................................... Executive Summary..................................................................................................................................i Introduction..............................................................................................................................................1 Securing Energy for Poverty Reduction and Economic Growth.........................................................2 ESMAP's Clients, Products, and Comparative Advantage.................................................................2 Retrospective Review: Stocktaking on Implementation of the 2002-2004 Business Plan......................6 Major components of the 2002-2004 Business Plan........................................................................... 7 Accomplishments of the 2002-2004 Business Plan: Strengths and Weaknesses................................9 Assessing the Impact of the Program................................................................................................12 Portfolio: 2002-2004 Trends............................................................................................................12 Trends in Portfolio Composition..................................................................................................12 Trends in Resource Mobilization.................................................................................................15 Opening Balance as of January 1, 2002 and Resource Mobilization...........................................15 Disbursements and Closing Balance............................................................................................17 The 2005-2007 Business Plan................................................................................................................18 Strategic context for ESMAP 2005-2007 Business Plan ..................................................................19 ESMAP's Role in the Context of the World Bank Group ................................................................22 Program Strategy ..............................................................................................................................23 Evolution of Business Activities.......................................................................................................23 Thematic Programs...........................................................................................................................25 Thematic Program One: Energy Security ...................................................................................25 Thematic Program Two: Renewable Energy ..............................................................................28 Thematic Program Three: Energy-Poverty .................................................................................32 Thematic Program Four: Energy Market Efficiency and Governance........................................36 Activities Outside the Four Thematic Programs...............................................................................39 Implementing the Business Plan.......................................................................................................39 New Portfolio Management Method............................................................................................40 Human Resources ........................................................................................................................41 Knowledge Clearing-House.........................................................................................................41 Monitoring and Evaluating Business Plan Implementation..............................................................43 Budget and Financing Requirements ................................................................................................45 Annex 1.....Business Plan 2005-2007: Tasks and Outputs by Functions and Thematic Program, and Business Plan Outcomes ....................................................................................................48 Annex 2.....Retrospective Review: Stocktaking on Implementation of the 2002-2004 Business Plan...........................................................................................52 Appendix....List of Knowledge Dissemination Activities and Publications 2002-2004........................65 List of Abbreviations and Acronyms......................................................................................................... Preface Energy issues in developing countries are of mounting concern to all development partners. The lack of access to reliable, affordable and sustainable energy services is now recognized as a key deterrent to making substantial progress on economic growth and poverty reduction in the poorest countries, and in achieving the Millennium Development Goals. The increase in the level and volatility of hydrocarbon prices is putting pressure on governments to design new policies and programs to ensure energy security. The global environmental issue of climate change and the local issues of indoor and outdoor air pollution that affect the poor underscore the urgency of investing in clean energy systems and solutions. The proposed ESMAP Business Plan for 2005-2007 reflects the renewed commitment of the World Bank Group and its development partners to address the energy issues in a manner that will ensure progress towards energy security, towards the transition to a low carbon economy, towards accelerating access by the poor and in the poorest economies to reliable modern energy, and towards improving the performance of energy markets and the sector governance. ESMAP's management is grateful to all those from developing countries and from the Bank Group and development partner organizations who have contributed to the conceptualization of the Business Plan and who have committed to make its implementation a success. Dominique Lallement ESMAP Manager EXECUTIVE SUMMARY ESMAP ESMAP Business Plan 2005-2007 Energy Sector Management Assistance Program (ESMAP) The statistics are well known and the reality is bleak: almost two billion people--one-third of the world's population--are living today without access to modern energy services. Almost half of the world's population relies on traditional biomass energy sources and use to meet their basic energy needs for cooking food; one to two million women and children die prematurely every year from the damaging effects of indoor air pollution. Lack of energy to store or process crops, to transport goods and people, to expand or sustain the activities of enterprises lead to Mission Statement massive lost opportunities for economic growth, employment, and poverty reduction in developing ESMAP promotes the role of energy in countries. With such numbers, it is clear that without poverty reduction and economic growth with improved access to affordable and adequate energy redistribution in an environmentally services, the Millennium Development Goals--first responsible manner. Its work applies to low- among them to halve global poverty by 2015--will not income, emerging, and transition economies be met. ESMAP, through its comparative and contributes to the achievement of the advantages--a global program; recognition as an Millennium Development Goals. innovator and knowledge builder; response capability; honest broker status;--is working to bridge that gap. The goal of ESMAP is to provide energy solutions to reduce poverty. Its purpose is to improve access to affordable, adequate, reliable, and environmentally sustainable energy services to the poorest people and countries. This global technical assistance program provides policy advice and helps build consensus on sustainable energy development with governments of developing countries and economies in transition. ESMAP also contributes to the transfer of knowledge in energy sector management, technology opportunities, and the delivery of modern energy services to the poor. ESMAP is currently supported by 14 donors--11 bilateral donor agencies, the World Bank, the United Nations Development Program (UNDP), and the UN-Foundation. ESMAP's products have included specific energy related studies, advisory services; pilot projects, conferences, workshops, and roundtables, training, publications and websites. The Global and Strategic Context The 2005-2007 Business Plan is set against the backdrop of a particularly challenging environment including: The increased vulnerability of the supply of energy services due to the increased level and volatility of hydro-carbon prices and fast increasing demand for energy in developing countries. The ramifications of climate change--implementing the Kyoto Protocol means implementing a shift towards a low-carbon global economy, including the use of renewables. The minimum energy needs of the developing world--100 more million people a year will have to be served with modern lighting, power, and cooking fuels for the next 20 years, as compared to 40 million over the past 20 years. The gender factor--women's roles as providers of food and agriculture labor involve some of the most energy-intensive activities, and make them the most affected by indoor air pollution and the lack of mechanical power. It also makes them the most vulnerable to energy scarcity--they are the most susceptible to hardships associated with diminished supplies of biomass energy. Burned land site near electricity towers. Ruta 68, Valparaíso, Chile. Building on Experience and Lessons Learned The 2005-2007 Business Plan draws on ESMAP's work until now. The experience from the implementation of the 2002-2004 Business Plan shows: Strong achievements in the thematic areas of rural electrification and renewable energy, innovative multi-sector approaches, indoor air pollution, urban air quality, energy efficiency as well as on developing monitoring and evaluation methodologies, and in leveraging policy and investments in selected areas. ESMAP also made significant progress in streamlining its proposal review and approval process. Weaker achievements in the areas of delivering energy services for the peri-urban poor, developing regulatory frameworks for decentralized energy, scaling up renewable energy, developing public-private partnership models, leveraging the policy impacts of revenue management, anticipating the impact of energy. ii Insecurity on the poor, and mainstreaming gender in energy. In addition, ESMAP continued to be challenged to provide intellectual leadership in capturing new agenda issues, expanding the Africa portfolio, and achieving more effective knowledge dissemination. Furthermore, ESMAP concluded that, given the relatively small size of the program, selectivity and concentration on fewer themes is preferred to increase its monitorable development impact. Some lessons include: Time Frame: The three year time frame of the business plan, to bring in new activities and phase out others does not always tally with the cycle of the more complex activities and needs to be interpreted with some flexibility: at least five years of intensive work are at times needed to develop a solid body of work, and disseminate it effectively. ESMAP's substantial achievements with Measuring Energy-Poverty linkages, Lead Elimination, Indoor Air Pollution, Regional Power Market Integration, Rural Electrification and Renewable Energy Strategies, have been possible only because of continued work in these areas for five years or more, and even now, much more work is still needed. Sampling Size: The empirical and analytical work on a theme must be carried out across a sufficiently large number of countries, regions or circumstances to validate results, identify factors of success or failure, and provide criteria for replicability. Leveraging: Deepening the analytical and operational leveraging at the country level provides for higher probability of sustainable solutions. Flexibility: ESMAP needs to retain enough flexibility in its work program and resource allocation to have the agility to provide "Just In Time" responses and analyses, and to carry out quick assessments of emerging issues and situations. Methodology: ESMAP will adopt a new method to manage its portfolio of activities, instead of relying heavily on calls for proposals, a process which became cumbersome, did not generate as many new ideas as expected, and did not always ensure alignment with Bank and donors priorities. The 2005-2007 Business Plan The central underpinning of the 2005-2007 Business Plan is securing energy for poverty reduction. ESMAP will concentrate on the provision of energy access for the poor, on gender equity, and the focus on the poorest income groups in developing countries. The 2005-2007 Business Plan will respond to several key challenges facing the energy sector to ensure that ESMAP's work contributes to the focus on implementation and results in the development community, in terms of accelerating the effective delivery of sustainable energy services in the poorest countries or for the poorest income groups, and that it contributes to achieve the MDGs. ESMAP will help determine ways to meet the following challenges: iii The increased instability of the energy environment for developing countries; The change in the structure of global energy demand, with the spatial shift from industrialized to developing countries and from the rural to the peri-urban/urban areas, and with the pressure to move to a low carbon global economy. The need to scale up renewable energy, in order to accelerate the transition to a low- carbon economy, increase access to energy services for the poor, and diversify energy portfolios, as well as achieve the commitments and action plans announced at the International Conference on Renewable Energies and Energy Efficiency in Bonn, 2004. Mobilizing financing for energy investments in order to scale-up the effective delivery of sustainable and environmentally responsible energy services in the poorest countries and/or for the poorest income groups and achieve MDGs. The transfer of knowledge for effective sector policy formulation, planning, and management, and for effective investment implementation. How to evaluate and measure outcomes of revised policies and capital investments. Key Business Activities Drawing from the experience and the lessons of implementation of the 2002-2004 Business Plan, and in response to the new challenges, ESMAP will limit its activities to four key thematic programs: Two new areas: Energy Security: Design sector policies for the poorest countries and for the low income people that take into account factors of vulnerability or instability, such as the dependence on a few fuel resources, fuel price volatility, systems unreliability or income fluctuations; and Renewable Energy: Secure and diversify energy resource portfolios, increase the availability of energy services in un-served areas, in particular where the poorest people live, and accelerate the shift to a low carbon global economy. Two areas that represent a deepening of work initiated in previous Business Plans: Energy-Poverty: Integrate results from previous projects and operational programs to reduce energy-poverty in the rural areas, synthesize substantial existing work, and expand activities in the peri-urban areas to respond to the demographic trends; and Market Efficiency and Governance: Accelerate the building-up of policy formulation, regulatory and implementation capacity; develop the capability of entrepreneurs, utilities and domestic financial institutions, in order to facilitate the mobilization of financing for investments and services. iv Electricity towers installed 2800 meters over sea level in the Andes Mountains, Santiago, Chile. v Implementing the Business Plan A New Operational Framework ESMAP is adopting a new Operational Framework for this Business Plan which articulates the three main functions of ESMAP mandated by the Consultative Group (CG), and the Energy and Mining Sector Board of the World Bank Group. They include: A think-tank function to carry out cutting-edge analytical work. A knowledge clearing house function to distill and disseminate existing knowledge. An operational leveraging function to scale up investments in the development of energy services by development partners. To implement this new Operational Framework, ESMAP will: Manage directly the bulk of the analytical think-tank activities (part of which may nevertheless be contracted out for execution) to ensure alignment with donors' and Bank's priorities; Limit certain topics to the distillation and dissemination of knowledge, to focus on impact with clients; Contract with the Bank's regional teams a three year Program for Policy and Operational Innovation to implement the key thematic programs with the goal to serve the clients' needs more directly and better align with their priorities; Facilitate the scaling up of investments with preparatory activities in the key thematic programs; Create a fund to explore new and innovative ideas to support "Just-in-Time" responses; and Carry out every two years an impact analysis of ESMAP- supported interventions. Increase ESMAP's human resources, as follows: Increase its staffing with at least three additional specialists with qualifications aligned with the Business Plan priorities, bringing the core group from 5 to 8; Strengthen its partnerships with other global programs, in particular WSP, PPIAF, Cities Alliance, GVEP, and GNSED; and Retain a panel of ten experts from a wide range of expertise from developing and industrialized countries, from both the public and private sector and NGOs, to advise periodically, in cooperation with the TAG, on emerging energy issues, and provide client feedback. vi Invest in knowledge transfer, instead of tagging it as a by-product of its portfolio activities, as follows: Develop a clearing house to distill knowledge and experience from a wide range of donors and other stakeholders. Launch a new ESMAP's Knowledge Exchange publication, consisting of short topical and "Just-In-Time" notes. Revamp its publication strategy, to accelerate the rate of dissemination and the visibility and accessibility of its publications. Develop training partnerships with universities and the World Bank Institute. Hold a bi-annual ESMAP Conference to disseminate the results of ESMAP's work and report on impact analyses of ESMAP interventions. Operational Challenges The Implementation of the Business Plan includes: Aligning ESMAP priorities with donors' and World Bank Regions' in order to implement the thematic programs; Finalizing the funding arrangements; The timely delivery of the analytical work; and The revamping of the dissemination strategy. Monitoring Implementation This Business Plan will be monitored and evaluated at two levels output level and impact/outcome level. The output level focuses on measures of success in business plan implementation. The key performance indicators, for example, will include the volume and overall quality of ESMAP activities, the range of actors and partners involved, and dissemination of outputs. The impact level M&E will examine the poverty and development outcomes that were attained as a result of ESMAP work. The key performance indicators, for example, may include the number of ESMAP policy recommendations adopted and implemented by client countries, level of follow-up investment; and capacity built in client countries. Budget and Financing The total budget for the Business Plan has been estimated at US$40-45 million over three to four years. ESMAP's management believes that the funding goal can be achieved as it has already confirmed financing commitments of US$37.8 million for the Business Plan Implementation period, and agreements are almost completed for an additional US$9.0million. vii 1 INTRODUCTION ESMAP ESMAP Business Plan 2005-2007 Mission Statement ESMAP promotes the role of energy in poverty reduction and economic growth with redistribution in an environmentally responsible manner. Its work applies to low- income, emerging, and transition economies and contributes to the achievement of the Millennium Development Goals.1 The statistics are well known and the reality is bleak: almost two billion people--one-third of the world's population--are living today without access to modern energy services. Almost half of the world's population relies on traditional biomass energy sources and use to meet their basic energy needs for cooking food; one to two million women and children die prematurely every year from the damaging effects of indoor air pollution. Lack of energy to store or process crops, to transport goods and people, to expand or sustain the activities of enterprises lead to massive lost opportunities for economic growth, employment, and poverty reduction in developing countries. With such numbers, it is clear that without improved access to affordable and adequate energy services, the Millennium Development Goals--first among them to halve global poverty by 2015--will not be met. ESMAP, through its comparative advantages--a global program; recognition as an innovator and knowledge builder; response capability; honest broker status;--is working to bridge that gap. The goal of ESMAP is to provide energy solutions to reduce poverty. Its purpose is to improve access to affordable, adequate, reliable, and environmentally sustainable energy services to the poorest people and countries. This global technical assistance program provides policy advice and helps build consensus on sustainable energy development with governments of developing countries and economies in transition. ESMAP also contributes to the transfer of knowledge in energy sector management, technology opportunities, and the delivery of modern energy services to the poor. Currently supported by 14 donors--11 bilateral donor agencies, the World Bank, the United Nations Development Program (UNDP), and the UN-Foundation, ESMAP is a unique forum to build consensus on energy policies, undertake innovative energy solutions, and facilitate the leveraging of incremental financing amongst development partners, public and private. ESMAP's products have included specific energy related studies; advisory services; pilot projects; conferences, workshops, and roundtables; training, publications and websites. 1The mission is essentially the same as the one adopted by the Interim Consultative Group of November 2001 in Lisbon. It stresses economic growth with wealth and income redistribution. 1 Securing Energy for Poverty Reduction and Economic Growth The 2005-2007 Business Plan of ESMAP has been designed against the backdrop of a particularly challenging environment. On the one hand, the environment for the supply and use of energy services in developing countries is increasingly unstable instability characterized by a wide range of conditions, from the increased levels and volatility of hydro-carbon prices, the increase in power outages due to the lack of expenditures on infrastructure and plant maintenance, the instability of regulatory regimes and financial markets, the macroeconomic uncertainties and climate change, to the political instability with a large number of countries involved in domestic or international conflicts. On the other hand, there is an increasingly strong consensus amongst developing countries and their partners that energy is a key input to achieve economic growth, improve the populations' standard of living, and reduce poverty. In that sense, there is strong agreement since the World Bank Summit on Sustainable Development (WSSD) of September 2002 that investments in energy services development must be increased, and that the effective delivery of energy services must e accelerated to achieve the Millennium Development Goals (MDGs). The ESMAP Business Plan provides the strategic and operational framework for implementing the Program over the next three to five years and for achieving longer-term results. This implementation framework was accepted at the March 2005 Consultative Group of the donors. It has been anchored on three elements: 1. On the lessons learned from the implementation of the 2002-2004 Business Plan having taken into account conclusions from a systematic assessment of the achievements, strengths and weaknesses. 2. On the donors' request to maintain ESMAP as one of the focused instruments to catalyze their energy programs for more effective results than when they work independently. 3. The ideas emerging from the continued formal as well as informal dialogue with client country representatives, donors, private sector, NGOS, World Bank and other colleagues, dialogue that took place on various occasions throughout 2003 and 2004 (Box 2.1). The Business Plan takes a forward looking view. It seeks to integrate emerging trends and anticipate forthcoming determining forces that will shape energy policies and strategies in developing and transition economies ­ trends which call for accelerating innovation in policy and project formulation. The assessment of the 2002-2004 Business Plan is summarized in Chapter 2. In Chapter 3, the strategic context for the new Business Plan is articulated, as well as the revised thematic areas for implementation of the program, and the adjustments in operational procedures. The Business Plan concludes with the Financial Requirements for its implementation. ESMAP's Clients, Products, and Comparative Advantage ESMAP's clients are developing countries, where it works with Governments, public and private energy organizations, and NGOs. ESMAP strives to meet their needs for unbiased policy dialogue and analytical work; for expertise for up-stream but in-country activities. ESMAP's clients can benefit from ESMAP's neutrality to investigate and discuss difficult policy issues; from its ability to provide support for the development of new business models and innovation, such as renewable energy and efficiency; from its capacity to summarize experience, world-wide experience and best practices to guide future policy; and 2 from its ability to finance just-on-time technical assistance. The potential impact of ESMAP is based on the understanding that the transfer of knowledge to developing countries will increase their capacity at creating an enabling environment for investments in the efficient development of energy resources, and in the delivery and use of energy services. ESMAP provides six main types of products and services: Technical assistance for policy formulation and program design to help governments, public institutions, private businesses, and civil society deliver their responsibilities on energy. These often lead to new legal and regulatory frameworks, sectoral strategies and implementation plans. Analytical work in the form of studies on global or sectoral issues. Capacity building and training. The majority of these activities involve workshops, and are carried out with developing country client organizations. The staff from these organizations are trained in analytical methodologies, policy analyses and formulation, and project design. Knowledge generation and transfer. It generates knowledge through its analytical work, policy and innovative project experience. It compiles knowledge from a wide range of sources. It disseminates knowledge through training workshops and seminars, courses, and its websites. Publications. All activities result in one or several publications, as a means to disseminate the knowledge and experience generated. Identification of new investments: The merit of ESMAP's upstream work is to lead to new investments. These are identified as a result of sector strategies and pilot projects. Project Innovations: Either in design concept or in financing or implementation mechanisms. The results of ESMAP's analytical work, knowledge generation and transfer, and innovative projects are primarily used by governments and other organizations --public or private--in developing countries. ESMAP's knowledge products are also used by the broad community of donors directly associated or not with the program in the formulation of their own development cooperation policies and programs in energy. A wide array of other stakeholders (Table 1.1) from academia, the private sector, and non- governmental organizations draws on ESMAP's work to define their own activities. ESMAP's comparative advantage lies in its ability to be an honest broker, a partnership, and a pioneer/innovator. As an honest broker, it takes on issues in a way that is balanced and aims to generate the greatest benefits for developing countries. It provides a "safe space" for at times difficult policy discussions. The analytical work of ESMAP is known for its objectivity and quality. ESMAP's policy advice and reports are valued as not being biased by commercial or political interests. This is due to the multi-donor funding resources as well as the administrative procedures within ESMAP to monitor and control the quality of the activities conducted under the program through peer review and the oversight of the Energy and Mining Sector Board. 3 Table 1.1: Use of ESMAP Products by Various Energy Stakeholders Stakeholders Use of ESMAP products a. Use the "space" to ask the "difficult questions," and think about future Bilateral and other multi-lateral Donors, such as energy issues and policy. UNDP and Regional Development Banks b. learn from the Bank's and others' experience so that policy can be rapidly improved, to obtain summaries of experience, world class analysis and summaries of best practice to guide future IFI and bilateral policy. c. To obtain intellectual leadership on new agenda issues such as renewable energy, indoor air pollution, energy security. d. to map who is doing what and where the gaps are, for instance in research, that bilaterals can fill and avoid duplication. a. to obtain technical assistance and funding for up-stream but in-country WB Regional Energy Units (a) In country activities for policy dialogue and analytical work. (b) in Washington b. to obtain funds for downstream activities that enable the Bank to make loans to new areas (e.g. "renewable and alternative energy," decentralized systems). c. to mobilize momentum and support from in-country stakeholders and the WB management. d. to encourage Task teams to take forward issues identified as important by ESMAP and its clients. e. to undertake global studies, not tied to a specific country program. a. to deliver global products. WB central Energy and Water Department and other professional units b. to provide inputs to clients countries and Bank teams for policy c. to support Task teams to take forward issues identified as important by ESMAP and its clients. a. to provide support for up-stream but in-country activities for policy Others (NGOs, the private sector, academia etc.) dialogue and analytic work. b. To draw on global knowledge and access to training c. to establish a bridge with the World Bank Group. Source: TAG and ESMAP team. The Consultative Group (CG) of donors has confirmed ESMAP's value-added as a partnership that serves the global energy practice. ESMAP has the merit of focusing on sustainable energy per se in the development debate. The CG also confirmed that ESMAP adds value in disseminating global energy knowledge and experience through its technical assistance to country governments beyond what bilateral or multi-lateral agencies can do, as it can draw on the best experiences available in the world. The donors' contributions are valued not only for their financial resources, but also for their intellectual contribution to the policy agenda, and for their willingness to work as partners on the development of a common operational agenda which can be implemented through the respective institutions' work programs. As a pioneer and innovator, ESMAP, contributes to introduce and test new ideas into investment programs, to leverage new strategies and business development. Since ESMAP resources are used and transferred as grants, this is at no cost to the recipient country institutions. How Does ESMAP Fit within the World Bank Group Activities? As compared to the other energy trust funded programs managed by the World Bank namely the regional programs for Asia (ASTAE) and Africa (AETF) ESMAP's distinctive feature is to finance mainly activities up-stream of the World Bank project cycle, yet essential for the successful design and implementation of the project (Diagram below). This includes ensuring that energy is included in the country poverty reduction and assistance strategies, fostering the right policy environment for successful investments, testing of new energy services delivery mechanisms, capacity building of policy makers and 4 energy services providers. For example, within its business plan, ESMAP has the capacity to stimulate new programs in all Regions of the World Bank Group for new types of projects and policy priorities, such as renewable energy and energy efficiency. It also works in complementarity with other trust funded infrastructure programs, in particular PPIAF, WSP, Cities Alliance and Devco. ESMAP work within the WBG ithin he Project Investment Cyclestm 1. Primarily focused on development of Country Assistance Strategies. 2. Also assists in pre project identification work... 3. And project completion / "lessons learned" / knowledge dissemination work. 5 2 RETROSPECTIVE REVIEW: Stocktaking on Implementation of the 2002-2004 Business Plan ESMAP ESMAP Business Plan 2005-2007 The 2002-2004 ESMAP Business Plan aimed to continue ESMAP's work that had already proved important for the formulation of more effective energy policy in developing countries, to strengthen some parts of the program, and to develop some new areas that might eventually become core areas of research. This section provides a summarized critical assessment of the business plan accomplishments and areas that require further attention. A more detailed review is included in Annex 2. Major components of the 2002-2004 Business Plan The 2002-2004 Business Plan was anchored on the 1998 ESMAP Strategy which identified three strategic directions for ESMAP: increasing access to energy services, providing efficient energy services through the development of energy markets, and ensuring the environmental sustainability of energy services. However, the concept of "energy access" was extended to "energy poverty," concentrating on the one hand, on the inter-linkages between energy poverty, market development and the environment, and on the other hand, on the application of energy services for consumptive, social, or productive uses, in order to achieve the Millennium Development Goals (MDGs), in particular in education, health, income generation, and environment. Another feature of the 2002-2004 Business Plan was to concentrate the policy and capacity building work on countries, which did not have as yet an "organized energy sector." The 2002-2004 Business Plan had identified six core business lines under the following three strategic and cross-cutting areas: Energy-Poverty: the development of the Global Village Energy Partnership, and analytical work to deepen energy-poverty linkages; Market Development: the Impact of Reform on the Poor; Energy and Environment: Indoor Air Pollution; and Cross-cutting Areas: Measurement methodologies and knowledge dissemination. In addition, work initiated under the first business plan was to continue in the areas of: Energy Service delivery mechanisms for rural energy access, gender and energy, strengthening reform, regional market integration, energy-environment reviews, and the mitigation of social and environmental impacts of energy infrastructure development. The work on rural and renewable energy strategies was to be closely linked to the poverty reduction framework; market reform work was to be focused on the poorest countries; upstream oil and gas development, and rapid energy-environment appraisals for which there was no expressed demand, was to be phased out. In addition, the program was to contribute to resolving several operational issues, in particular the strengthening of the Africa portfolio, the need to shorten the proposal approval and funding process, and the need to encourage innovation and provide intellectual leadership in certain specific areas. The total cost of the 2002-2004 Business Plan was estimated at US$40 million, increasing from US$11.5 million in year 1, to US$13.1 million in year 2, and US$15.4 million in year 3. This represented a small increase as compared to the initial budget estimate for the 1999- 7 2001 Business Plan of US$35.6 million. Actually, the funds raised over the 2002-2004 period were US$25.8 million, substantially above the US$17.5 million achievement for the 1999-2001 periods, but still short of the expectations. Coal merchants in Beijing, China. In order to monitor and evaluate the implementation of the Business Plan, a framework was proposed to, and agreed by the CG which distinguished two levels of monitoring and evaluation activities: the output level, which included such indicators as the volume and overall quality of the portfolio, the range of actors and partners involved in ESMAP activities, the dissemination of products, the volume of resources mobilized, and the managerial efficiency in terms of administrative overheads and budget execution; and the impact level, which included such indicators as the volume of citations and references in the literature, the mainstreaming of ESMAP's strategies and policy recommendations by development partners, the level of investments catalyzed as a result of ESMAP's work, the capacity built in countries for replicating future policy or pre-investment work. 8 Box 2.1: The Global Village Energy Partnership ESMAP also delivered successfully on the development and operationalization of the Global Village Energy Partnership (GVEP), which had been retained at the request of the donors as one of the key elements of the Business Plan, with the goal of catalyzing energy stakeholders to increase their activities on modern energy services for economic growth and poverty reduction, in rural, peri-urban, and urban areas. This emphasis was fully justified in light of both the need to give increased attention to the linkages between energy services and poverty reduction to achieve the MDGs, in particular in Africa, and the political momentum building-up for the World Summit on Sustainable Development (Johannesburg, September 2002). In addition to coordinating the development of the partnership concept, and initially hosting the Technical Secretariat, ESMAP supported the first phase of implementation with regional and country-level activities in Africa, Latin America, and in India, as well as thematic workshops with practitioners. In 2004, ESMAP successfully transferred the Technical Secretariat to a new host organization, the International Technology and Development Group (ITDG), located in the UK. It continues to support the Technical Secretariat, with both financing of the host organization and partnership manager and expert resources in certain areas. As of October 5, 2004, more than 440 organizations have committed to working collectively to increase modern energy access by signing the GVEP's Statement of Principles and participating in country level activities. GVEP is now moving towards the full implementation phase to assist countries implement energy-poverty action plans and innovative pilot activities on energy services delivery. ESMAP is presently engaged in country level activities in 8 countries, 4 in Africa and 4 in Latin American, and is working on the preparation of a regional workshop for East Asia with other partners; these are activities, which will be fully implemented under the new Business Plan (Chapter 3). While the effort required from ESMAP on GVEP was considerable, it also gave ESMAP and the World Bank the opportunity to expand on networking and partnerships, in particular with private sector energy stakeholders and NGOs, on which they can capitalize for the future. Nevertheless, this effort created a strain on ESMAP resources. Certain donors raised concern that it might have diverted from ESMAP's primary functions to undertake analytical and knowledge management work. Accomplishments of the 2002-2004 Business Plan: Strengths and Weaknesses Given the difficulty in doing a quantitative assessment of the outcomes of a program like ESMAP, its management undertook five major portfolio reviews; the results are summarized in Box 2.2. The experience from the implementation of the 2002-2004 Business Plan shows: Strong achievements in the thematic areas of rural electrification and renewable energy, launching the Global Village Energy Partnership which aims at scaling up energy services for poverty reduction (Box 2.1); developing innovative multi- sector approaches, indoor air pollution, urban air quality, energy efficiency as well as on developing monitoring and evaluation methodologies, and in leveraging policy and investments in selected areas. ESMAP also made significant progress in streamlining its proposal review and approval process. 9 Box 2.2: Reviews of ESMAP Portfolio ESMAP's management commissioned five portfolio and evaluation reviews on the following portfolios: energy efficiency, rural and renewable energy, regional power trade, sector reform and market development, and gender and energy (see also Box 2.3). The reviews were conducted by ESMAP staff and by a consultant hired by the Technical Advisory Group (TAG). In addition, these reviews were complemented by periodic assessments by the TAG to the Consultative Group (CG), and audit reports. Energy Efficiency (EE). ESMAP support for improving EE during 1997-2004 amounted to about 6 million USD and has been focusing on four critical areas. The first areas involved conducting pilot activities in improving EE in the industrial sector, for example, applying the monitoring and targeting (M&T) approach in the industrial sector, reducing energy costs in water utilities, and engaging the private sector in the industrial parks in LCR, ECA, East Asia, and North Africa. The second area consisted of developing energy-efficient and cost-effective urban heating strategies, for example, in ECA, China, and Mongolia. Another theme concerned developing innovative EE financing mechanisms, for example, in Romania. Finally, there was a dissemination of experience through global cross-exchange of experience and lessons. The conclusion is that ESMAP should evaluate what has been learned over the past five-six years on Bank EE activities, and propose new ways forward. Rural and Renewable Energy. ESMAP funded renewable energy projects for as total of about 9 million USD. ESMAP has actively supported in the RE in four critical areas. Technical assistance was provided for RE policies and action plans, for example, in Cambodia, Mexico, Nicaragua, the Philippines, and Vietnam. RE business models were also developed and demonstrated in Bolivia, Comoros, and Peru. ESMAP also was involved in demonstrating innovative financing mechanisms from both supply and demand side, for example, piloting consumer credit mechanisms for solar home systems in Kenya, and creating financing mechanisms for small and medium enterprises in Bolivia. The issues of promoting productive use applications of RE also was an issue addressed during the business plan. some examples of these activities are passive solar heating for rural schools in Bolivia, ICT services from solar in Honduras, and ice-making from micro-hydro in the Philippines. ESMAP support also catalyzed World Bank lending pipeline on RE/EE through pre-investment analytical work, pilot projects, and increased commitment and momentum from client countries and Bank managers. Many ESMAP projects are scaled up through follow-up investment from WBG, donors, governments, and the private sector. Sector Reform and Market Development. ESMAP has conducted a draft review of reform and market development in 4 countries in it portfolio. This includes Bolivia, Poland, Thailand and Ghana. The conclusions of the review is that ESMAP was more effective in advancing reforms through long term in-depth interventions compared to smaller isolated ones. A major lesson was that ESMAP should concentrate on taking the lead in mainstreaming issues of access, public benefits, and the environment into the power sector reform agenda. Regional Power Trade. This review was financed by ESMAP and completed by a consultant for the Technical Advisory Group. It covers projects executed before and during the period covered by the business plan. The report highlights the difficulty in monitoring effectiveness of the outcomes of ESMAP projects due to different regional contexts. In some cases an effective outcome may be the mobilization of political support for regional power trade, and in other regions it may be to provide technical assistance and a proper framework to carry out regional trade. But in general ESMAP's contribution to regional power trade has dependent upon the varying degrees of political support and local technical capabilities to carryout out the work. Gender and Energy. Gender and energy is a recent business line with activities spanning the last six years with a total budget of US$1 million. The gender and energy review was to take stock of the level of work and the difficulties that ESMAP has experienced in developing projects. In general, the quality of the completed projects is quite high. Gender is a crosscutting theme, and many of the projects were carried out with assistance from units collaborating with mainstream energy. The conclusion of the review is that gender is an emerging issue for energy in the World Bank and will require some scaling up to have more influence in the main line energy units. 10 Weaker achievements in the areas of delivering energy services for the peri- urban poor, developing regulatory frameworks for decentralized energy, scaling up renewable energy, developing public-private partnership models, leveraging the policy impacts of revenue management, anticipating the impact of energy insecurity on the poor, and mainstreaming gender in energy. On the administrative side, ESMAP also made significant progress in streamlining its proposal review and approval process (Annex 2, Graph A1.1). In addition, ESMAP continued to be challenged to provide intellectual leadership in capturing new agenda issues, expanding the Africa portfolio, and achieving more effective knowledge dissemination. Some lessons include: Time Frame: The three year time frame of the business plan, to bring in new activities and phase out others does not always tally with the cycle of the more complex activities and needs to be interpreted with some flexibility: at least five years of intensive work are at times needed to develop a solid body of work, and disseminate it effectively. ESMAP's substantial achievements with Measuring Energy-Poverty linkages, Lead Elimination, Indoor Air Pollution, Regional Power Market Integration, Rural Electrification and Renewable Energy Strategies, have been possible only because of continued work in these areas for five years or more, and even now, much more work is still needed. Sampling Size: The empirical and analytical work on a theme must be carried out across a sufficiently large number of countries, regions or circumstances to validate results, identify factors of success or failure, and provide criteria for replicability. Leveraging: Deepening the analytical and operational leveraging at the country level provides for higher probability of sustainable solutions. Flexibility: ESMAP needs to retain enough flexibility in its work program and resource allocation to have the agility to provide "Just In Time" responses and analyses, and to carry out quick assessments of emerging issues and situations. Selectivity: ESMAP concluded that, given the relatively small size of the program, selectivity and concentration on fewer themes is preferred to increase its monitorable development impact. Methodology: ESMAP will adopt a new method to manage its portfolio of activities, instead of relying heavily on calls for proposals, which became cumbersome, did not generate as many new ideas as expected, and did not always ensure alignment with Bank and donors priorities. 11 Assessing the Impact of the Program Although a complete quantitative assessment is not available, ESMAP management is seeing an increase in follow-up activities in client countries key changes in government policies, in the development of new investments and adoption of new technologies, and in the increase in donors' financing. Examples of such impact from the indoor air pollution, urban air quality, energy efficiency, and private sector provision of energy services activities have been cited in the previous paragraphs. In addition, according to a review carried out by ESMAP's TAG, it concluded that ESMAP's policy studies in India were a key factor in changing the Government's policy towards renewable energy. The results is that today approximately 10,000MW of power is generated by renewable energy. The energy-poverty workshops mentioned above (Box 2.1) have triggered the integration of energy in PRSP updates and the integration of new projects or project components in several countries (Brazil, Honduras, Cameroon, Burkina, Madagascar, Mauritania, Senegal, Zambia, Mexico). This increased evidence of ESMAP's leverage suggests both increased alignment between ESMAP activities and World Bank's and other donors' activities, and the value of ESMAP to undertake activities that support the implementation of new investments. Box 2.3: ESMAP Activities on Renewable Energy and Energy Efficiency: From 1997 to 2004, ESMAP funded nearly 70 renewable energy (RE) and energy efficiency (EE) projects at a total cost of approximately US$16 million--US$9 million for RE and US$7 million for EE. ESMAP's support in the RE area has focused on five critical areas: 1) Providing technical assistance in RE policies and action plans, for example, in Cambodia, Mexico, Nicaragua, the Philippines, and Vietnam; 2) Demonstrating RE business delivery models, for example, in Bolivia, Comoros, and Peru; 3) Demonstrating innovative financing mechanisms from both supply and demand side, for example, piloting consumer credit mechanisms for solar home systems in Kenya, and creating financing mechanisms for small and medium enterprises in Bolivia; 4) Promoting productive use applications of RE, for example, passive solar heating for rural schools in Bolivia, ICT services from solar in Honduras, and ice-making from micro-hydro in the Philippines; and 5) Generating and disseminating knowledge, for example, on Best Practice of Micro-hydro Development. ESMAP's support in improving EE has focused on four critical areas: 1) Conducting pilot activities in improving EE in the industrial sector, for example, applying the monitoring and targeting (M&T) approach in the industrial sector, reducing energy costs in water utilities, and engaging the private sector in the industrial parks in LCR, ECA, East Asia, and North Africa; 2) Developing energy-efficient and cost-effective urban heating strategies, for example, in ECA, China, and Mongolia; and 3) Developing innovative EE financing mechanisms, for example, in Romania; and Disseminating knowledge through global cross exchange of experience and lessons. Portfolio: 2002-2004 Trends Trends in Portfolio Composition To better illustrate the evolution of the portfolio, the following graphs cover the starting situation at the end of 1998, and the period of the first two business plans, 1999-2001 and 2002-2004. The annual distribution of the portfolio is richer than the three-year summary. 12 Evolution of the Portfolio by Strategic Areas 2002-2004 By Number of Activities 160 140 Latin America & Caribbean 120 Middle East & North stce Africa 100 Europe & Central rojP Asia ofreb 80 South Asia mu 60 East Asia & Pacific N Africa 40 Global 20 0 End 1998 End 2001 End 2004 90 Projects 114 Projects 144 Projects By Value of ESMAP Funding 35.0 30.0 Cross- Cutting 25.0 Environment Dollars Market 20.0 of Access 15.0 Millions 10.0 5.0 0.0 End 1998 End 2000 End 2002 End 2004 Total Value: $21.7m Total Value : $28m Total Value : $28.3m Total Value : $32.7m 13 Evolution of the Portfolio by Regional Distribution 2002-2004 By Number of Activities 160 Latin America 140 & Caribbean Middle East & 120 North Africa Europe & 100 Central Asia Projects South Asia of 80 East Asia & 60 Pacific Number 40 Africa 20 Global 0 End 1998 End 1999 End 2000 End 2001 End 2002 End 2003 End 2004 89 Projects 107 114 110 110 124 144 Projects Projects Projects Projects Projects Projects By Value of ESMAP Funding 35 30 Latin America & Caribbean Middle East & 25 North Africa Europe & Dollars 20 Central Asia US South Asia of 15 East Asia & Millions Pacific 10 Africa 5 Global 0 End 1998 End 1999 End 2000 End 2001 End 2002 End 2003 End 2004 TotalValue: TotalValue : TotalValue : TotalValue : TotalValue : TotalValue : TotalValue : $21.7m $27.7m $28m $26.3m $28.3m $30.3m $32.7m 14 Table 2.1: New Approvals by Strategic Areas, 2002- 2004 Number of Projects Value of Strategic Area Projects(US$thousand) 2002 2003 2004 2002 2003 2004 Cross-Cutting 3 3 1 $82 $375 $45 Environment 12 10 10 $3,724 $2,160 $825 Access/Poverty 21 19 19 $1,193 $2,459 $3,199 Market 9 9 11 $918 $1,548 $735 Total 33 50 39 $5,917 $6,542 $4,804 During 2002-2004, the ESMAP portfolio grew both in dollar value and number of projects. The value of the portfolio rose from US$26.3 million at the end of 2001 to US$32.7 million at the end of 2004, a 24% increase. The number of projects also increased by 24%, from 110 projects in 2001 to 144 projects at the end of 2004, including 37 completed projects whose publication is in process. However, the average value of the portfolio between the first and second business plan grew from US$27.8 million to US$30.4 million, and the average size grew from 110 to 122 projects. This evolution in the portfolio is mainly due to (1) the prolonged publication process for several projects, and (2) the introduction of the Fast-Track Window for smaller projects, although an ex-post review revealed that they actually are not implemented faster. Details of the new approvals by strategic areas are provided on Table 2.1. The regional distribution of the portfolio by amount and number of projects kept the same pattern during 2002-2004 as in 1999-2001. The regional distribution of new approvals is given on Table 2.2. Table 2.2: New Approvals by Regions, 2002-2004 Value of Projects (US$ Number of Projects thousand) Region 2002 2003 2004 2002 2003 2004 AFR 10 15 7 $1,197 $2,181 $677 EAP 5 7 5 $2,005 $841 $1,015 ECA 2 3 3 $18 $880 $150 GLB 7 9 10 $631 $771 $1,008 LCR 7 7 13 $1,609 $1,015 $1,923 MNA 2 4 0 $457 $494 $0 SAR 0 5 1 $0 $360 $30 Total 33 50 39 $5,917 $6,542 $4,804 Trends in Resource Mobilization Opening Balance as of January 1, 2002 and Resource Mobilization After taking into account, the expenditures and receipts, cash balances in ESMAP trust funds (including UNDP accounts) on December 31, 2001 amounted to US$7.4 million (of which US$101,024 in UNDP accounts). The cash balance not allocated to projects as of December 31, 2001 amounted to US$3.8 million (of which US$1.5 million was in core funds). 15 Of the estimated US$40 million of financing requirements for the implementation of the 2002- 2004 Business Plan, ESMAP mobilized only US$25.8 million. Compared to US$19.6 million mobilized for the implementation of the previous business plan of 1999 ­2001, this was an increase of US$6.2 million (of which about half for GVEP). As Table 2.3 shows, the implementation of the 2002-2004 business plan was initiated with US$26 million secured upfront, representing a 35% shortfall in funds secured compared to the budgeted US$40 million. Contrary to expectations, this initial gap could not be filled. The table below gives the donor-wise break down of ESMAP receipts from calendar year 2002 to 2004. The Netherlands maintained its position as the largest contributor to ESMAP, with 38% of total contributions, followed by the United Kingdom (16%) and Germany (9%). Table 2.3: ESMAP Receipts 2002-2004 (US$ '000) of which, % of Total % of Total % of Total Core Receipts Receipts Total Pledges 2002 2003 2004 for 2005 02-04 02-04 02-04 2004 Core (US$) UNDP 100.0 100.0 100.0 100.0 300.0 0.0 1.2% 1.2% 0.0% World Bank 545.4 535.0 523.8 400.0 1,604.2 1,604.2 6.2% 6.1% 24.1% Canada 737.8 277.6 563.8 0.0 1,579.2 0.0 6.1% 6.6% 0.0% Germany 899.5 892.3 558.0 4,100.0 2,349.8 495.2 9.1% 6.5% 7.5% Finland 82.8 0.0 108.0 112.0 190.8 190.8 0.7% 1.3% 2.9% Netherlands 3,097.0 3,964.3 2,924.0 5,200.0 9,985.3 0.0 38.7% 34.3% 0.0% Denmark 258.1 0.0 0.0 881.0 258.1 258.1 1.0% 0.0% 3.9% Norway 0.0 1,150.0 700.0 700.0 1,850.0 925.0 7.2% 8.2% 13.9% Sweden 636.4 1,023.2 396.6 1,600.0 2,056.2 597.0 8.0% 4.7% 9.0% France 0.0 0.0 0.0 396.0 0.0 0.0 0.0% 0.0% 0.0% United Kingdom 1,125.0 1,246.3 2,047.2 4,035.0 4,418.5 2,575.0 17.1% 24.0% 38.7% United Nations Foundation 335.0 300.0 600.0 316.0 1,235.0 0.0 4.8% 7.0% 0.0% Total 7,817.0 9,488.7 8,521.4 17,840.0 25,827.1 6,645.3 100.0% 100.0% 100.0% 16 Graph 2.1: ESMAP Receipts by Donor ESMAP RECEIPTS United Nations FoundationUNDP World Bank 5% 1% Canada United Kingdom 6% 6% Germany 17% 9% Finland 1% Sweden 8% Norway 7% Denmark 1% Netherlands 39% Disbursements and Closing Balance The total disbursements for the period 2002-2004 were US$22.5 million as compared to US$19.6 million for the period 1999-2001, representing an increase of 15% in comparison to the previous business plan, but only 72% of contributions received. ESMAP's cash on hand, on December 31, 2004 amounted to US$11.3 million of which US$4.9 million core and the remaining US$6.4 million non-core funds. This illustrates the trend in more non-core than core funds. Of the US$11.3 million, US$10.5 million were allocated to projects (of which US$5.0 were committed to various contracted expenditures, US$5.5 million uncommitted) leaving an unallocated balance of US$814K. 17 3 THE 2005-2007 BUSINESS PLAN ESMAP ESMAP Business Plan 2005-2007 Strategic context for ESMAP 2005-2007 Business Plan This section highlights some of Box 3.1: The 2005-2007 Business Plan responds to key the more significant trends, challenges facing the energy sector: challenges, issues and opportunities, which have had or How to respond to the increased instability of the energy will have a direct impact on the environment for developing countries; energy world and ESMAP's activities. How to respond to the change in the structure of global energy demand, with the spatial shift from industrialized to developing countries and from the rural to the peri-urban/urban areas, and with Significant Events in the the pressure to move to a low carbon global economy; External Environment How to scale up renewable energy, in order to accelerate the Four sets of events in the external transition to a low-carbon economy, increase access to energy services for the poor, and diversify energy portfolios, as well as environment are highlighted in achieve the commitments and action plans announced at the terms of their relevance for the International Conference on Renewable Energies in Bonn; development of ESMAP's Business Plan: the momentum for How to mobilize financing for energy investments in order to scale- up the effective delivery of sustainable and environmentally reaching the Millennium responsible energy services in the poorest countries and/or for the Development Goals, the trend in poorest income groups and achieve MDGs; higher hydro-carbon prices, the shift in the distribution of world How to transfer knowledge for effective sector policy formulation, demand for energy, and the shift planning, and management, and for effective investment implementation; towards a low-carbon global economy with the implementation How to ensure that ESMAP's work contributes to the focus on of the Kyoto Protocol. implementation and results in the development community, in terms of accelerating the effective delivery of sustainable energy services in the poorest countries or for the poorest income groups and Momentum to Reach the Millennium contributes to achieve the MDGs; and Development Goals. The World Summit on Sustainable How to evaluate and measure outcomes of revised policies and Development (WSSD) held in capital investments. Johannesburg in September 2002 gave a renewed endorsement of the Millennium Development Goals (MDGs) adopted by the United Nations General Assembly in September 2000 as a means to measure progress on reducing global poverty by half by 2015. The greatest merit of the MDGs is to have catalyzed the focus of development assistance on achieving substantial poverty reduction outcomes, even though there is increasing concern that the overall and specific goals will be unlikely achieved over the next 10 years. Progress towards achieving the MDGs will be assessed at a UN-Conference in September 2005 for which preparations are underway. Access to energy services, although not an MDG, has been increasingly recognized as an essential input to achieving the other MDGs, and will undoubtedly be discussed during the Conference. Energy has also been retained as the main theme for the 14th and 15th sessions of the United Nations Commission on Sustainable Development (CSD 14 and CSD15). ESMAP's analytical work and operational support, including the multi-sectoral projects at the country level, will contribute to maintaining the momentum on operational energy solutions to achieve the MDGs, improve the poor's livelihoods, and facilitate the scaling up of energy services including those based on renewable energy sources. 19 Trend in Higher Hydrocarbon Prices and Other Sources of Vulnerability. The volatility in oil prices since 2000, with acceleration since 2003, has radically changed the energy environment for developing countries, in particular for the poorest oil importing countries. While industrialized and most emerging market economies can cope with the trend in higher prices, the lower income economies face substantial downside risks, calling for global efforts to mitigate adverse impacts on the most vulnerable economies and income groups. Besides price shocks, other sources of vulnerability for energy services and infrastructure include the high degree of dependency on a limited number of sources of primary energy supplies, natural or man-made events, such as earthquakes, as was unfortunately the case in South Asia in December 2004, and domestic or international conflicts which still prevail in many parts of the developing world. New strategies are needed to assist developing countries in building their resilience to future price volatility, to reduce their energy intensity and dependency on hydrocarbon imports or single sources of supplies. The literature review carried out by ESMAP in 2004 confirmed that it is also essential to address the issue of vulnerability at the household and enterprise levels. This issue is directly linked to the issue of sustainable access to energy services. ESMAP will follow-up on the preliminary work done in 2004 (Bacon, March 2005) and complement the work done by others (including the World Bank DEC and PREM departments) on the macro-economic aspects of vulnerability. It will focus on the areas for which it has a comparative advantage: on micro- economic impact analyses, policy formulation, resource portfolio diversification, and other options to reduce vulnerability to external or internal shocks. A Shift in the Distribution of Demand and the Demographic Challenge. The world is witnessing a substantial long-term shift in the distribution of energy demand. While two thirds of the world's energy demand still is in industrialized economies, it is projected to shift increasingly towards developing countries. In addition, within the developing world, the emergence of Asia, in particular China and India, as the new growth poles, is creating some tensions. With sustained growth rates of 8-10% and 30% of the world's population, China (Graph 3.2) and India have an energy demand which competes with that of industrialized economies, in particular on hydro- carbon markets, leading to new geo-political trends in order to secure long-term arrangements that will guarantee the flow of primary energy products. Besides the resulting pressure on prices, there is concern that a number of developing countries which today do not have the political strength for participating in such geo-political arrangements will be "left out" and subject to high prices and marketing arrangements dictated by the more dynamic economies. In addition, most of the projections concur to predict that by 2020, more than half of the world's population will live in urban centers, that 70-75% will live in megalopolises of over 1.0 million people, and that 60% of the urban population will be below poverty level. About 40 percent of the world's poor --1.3 billion people, a forgotten but important consumer group-- already live in peri-urban areas. The resulting pressure on the demand for the various forms of energy services is not well known, nor the strategies to respond on time to this challenge. The implications for the energy sector are that demand growth will occur mainly in urban and peri-urban centers, and that the emphasis in the access issue is likely to shift to the peri-urban areas. The demographic trends call for revisiting fundamentally urban/peri-urban energy policies. This includes taking into account the perspective of the users who need the services in spite of their low income levels; the perspective of utilities charged to provide the services; the perspective of spatial planning in order to achieve greater energy efficiency; and the environmental perspective to ensure cleaner air at the global, regional and household level. ESMAP will undertake substantial work to palliate to the limited analytical work presently available on these issues and to the fragmented knowledge 20 of practical experiences. The issue of servicing the urban poor will therefore be one key components of the new Business Plan. Part of the response to the demographic challenge will also be to better understand gender differences: women and men have different energy needs and requirements, use energy differently, and encounter different energy problems. Women are both producers of energy resources and services ­ gathering traditional biomass sources for fuel, spending human energy while they walk to gather fuel and water or to transport crops; and users of energy resources and services (for household fuel needs, the needs for fodder for livestock, the energy needs of small business and home industries). More than half of the world's households cook with wood, crop residues, and untreated coal. Women's roles as providers of food involves one of the most energy-intensive of household chores, and make them the group most affected by indoor air pollution. Women as victims of energy scarcity ­ because of their prime roles, they are also the most susceptible to hardships associated with diminished supplies of energy Women and men are confronted to competing energy priorities, such as fodder for livestock, an important aspect of livelihood and subsistence. ESMAP will therefore further develop a combination of knowledge dissemination and mainstreaming gender sensitivity in all relevant activities, in particular in the energy-poverty thematic program. Graph 3.2: Meeting the Growth-Energy Challenge in China Major growth in power demand will be in developing countries Figure 2. Energyconsumptionwill more thandouble by2020 China Primary Energy Forecasts PowerConsumptionProjections(IEA) 8,000 4,500 AllDevelopingCountries 7,000 4,000 6,000 3,500 ent alv h 5,000 3,000 quiE kWfo USA 4,000 oalCfo 2,500 sn iolliB3,000 s 2,000 China Ton EasternEurope/FSU of 2,000 1,500 Central&SouthAmerica onsili 1,000 M 1,000 India 0 500 1990 2001 2005 2010 2015 - 0 6 6 2 2 8 02 18 24 199 9921 1994 199 9981 2000 20 2004 200 0082 2010 201 0142 2016 20 2020 202 20 2026 202 0302 Actual BP 03 Actual ERI-LBL IEA 2003 High IEA 2003 REF IEA 2003 LOW China's economic growth between 1980 and 2000 more than doubled its primary energy demand. The Government of China has set the target of quadrupling its 2000-GDP by 2020. By 2020, primary energy demand can be expected to nearly double again, (see graph), with major trends affecting energy use: the rising urbanization and the spread of modern lifestyles, an increasing proportion of value-added goods among manufactured goods currently dominated by heavy industrial goods, and fundamental changes in passengers and freight transportation needs. Source: World Bank, EAP Energy Unit (Source: The World Bank, DEC) Renewable Energy Development. The Earth's climate is changing and human activities are generally believed to be a significant contributing factor, with a large share attributable to the consumption of carbon-emitting energy services. This is likely to increase climate variability, which in turn will adversely affect socio-economic sectors, including water resources, ecological systems, and human health. The cost of such technologies as wind, micro-hydro and in certain circumstances, solar has continued to decrease, making them competitive in certain circumstances, provided a level playing field with other technologies is developed. Further decreases in costs are 21 anticipated, as the market for the new technologies expands. Climate and environmentally friendly technologies and policies need to be adopted to ensure that the necessary level playing field exists. Many of these issues were debated both during WSSD and the Bonn Conference on Renewable Energies and Energy Efficiency in June 2004, at which many countries and institutions committed to promote environmentally responsible policies and scale up their investments in these technological solutions. ESMAP has had strong engagement in the environmental sustainability agenda for energy and will scale up its efforts, in particular to leverage new investments in this area by the World Bank Group and other financiers. Implementing the Kyoto Protocol: The Shift Towards a Low-carbon Global Economy. Two major events will further facilitate progress on this shift, first the ratification of the Kyoto Protocol of the UNFCCC which entered into force in February 2005; and second, the likely policy change from the G8 under the Presidency of the United Kingdom which has declared climate change one of the two key themes for its presidency (the development of Africa being the other). While other entities such as the GEF and the Prototype Carbon Fund are better placed to finance investments, ESMAP proposes to capitalize on its policy expertise and knowledge, and to support the scaling up of investments in sustainable energy services based on renewables, both as a means to accelerate access to modern energy by the un-served or underserved, and as a means to meet the demands for local and global environmental sustainability. ESMAP's Role in the Context of the World Bank Group As a global program managed by the World Bank, ESMAP is obligated to assess its alignment with the World Bank Group and bilateral donors global and sector strategy and policies, while recognizing that it primarily serves client countries. In response to changes in the broad energy context, and in recognition of the key role of energy services for achieving the MDGs and for stimulating growth for poverty reduction, the Bank adopted in July 2003 an Infrastructure Action Plan. The Infrastructure Action Plan acknowledges the importance of access to quality energy services, among other infrastructure services, and emphasizes the need for policy and operational flexibility in recognition of the diversity of situations confronting developing countries. It also recognizes the increasing investment gap in developing countries between the estimated needs for investments and the financing available from the governments, international and bilateral financing institutions, and international private sector investors. In line with the implementation objectives of this plan, the Bank Group launched an Initiative to Scale up Energy Services in March 2004, with the objective of defeating the current trend in an increase in the un-served populations. The Initiative to Scale-up Renewables and Energy Efficiency was approved by the Board in September 2004 as part of the response to the Extractive Industry Review. It is an effort to meet both the environment challenge of moving towards a lower carbon global economy and the access challenge, given the fact that many of the services based on renewable energy are modular and decentralized and can be provided where the access needs are the most acute. With these efforts, the World Bank Group aims to deliver on its commitment at WSSD and in other fora. While much of ESMAP's previous analytical work has contributed to facilitate the implementation of these initiatives, it proposes to intensify its technical assistance work to help countries revise their energy policies with a focus on access, reaching the MDGs, and on environmentally sustainable energy solutions. ESMAP will, support 22 their knowledge dissemination activities, pre-investment work particularly for renewable energy and efficiency, the operationalization of these initiatives, as well as the measurement of outcomes. Program Strategy The core objective of the 2005-2007 Business Plan is to secure energy for poverty reduction. The nexus -- energy-poverty, environmental sustainability, and market efficiency ­ which has been the architecture of the program since 1998 remains valid--but ESMAP will concentrate on the social dimension of the thematic areas retained for the business plan, with emphasis on energy services for the poorest income and on the gender dimension. This implies a significant shift in the content of ESMAP's activities and in its operational framework. These are described later on in this section. Evolution of Business Activities Note that the description of the program's activities as "business lines" which was used in the 2002-2004 Business Plan, has led to different interpretations, depending on the perspective of individual reviewers. For the 2005-2007 Business Plan, this description has therefore been dropped. Instead, the content of the program is described in terms of thematic programs, and a new operational framework has been designed, corresponding to the three main functions of the program. Drawing from the lessons of implementation of the 2002-2004 Business Plan, ESMAP will structure its activities into four thematic programs (see Graph 3.3): Two new areas: Energy Security: Design sector policies for the poorest countries and for the low income people that take into account factors of vulnerability or instability, such as the dependence on a few fuel resources, fuel price volatility, systems unreliability or income fluctuations; and Renewable Energy: Secure and diversify energy resource portfolios, increase the availability of energy services in un-served areas, in particular where the poorest people live, and accelerate the shift to a low carbon global economy. Two areas that represent a deepening of work initiated in previous business plans: Energy-Poverty: Integrate results from previous projects and operational programs to reduce energy-poverty in the rural areas, synthesize substantial existing work, and expand activities in the peri-urban areas to respond to the demographic trends; and 23 Market Efficiency and Governance: Accelerate the building-up of policy formulation, regulatory and implementation capacity; develop the capability of entrepreneurs, utilities and domestic financial institutions, in order to facilitate the mobilization of financing for investments and services. The new Operational Framework for this Business Plan articulates the three main functions of ESMAP mandated by the Consultative Group (CG) and the Energy and Mining Sector Board of the World Bank Group. They include: A think-tank function for creating knowledge on cutting-edge issues, which will be the basis for flagship publications to influence the energy agenda of the energy community; A knowledge clearing house function to distill, assimilate, exchange, and disseminate existing sector knowledge to a large group of development partners; and An operational leveraging function to ensure that the results from the analytical and knowledge work are integrated into country-level policy dialogues and the scaling-up of investments in energy services by development partners. Graph 3.3: Thematic Areas Structure and Operational Functions Four Thematic Programs & he Three Operational Functions hr Oper tiona Functi Cutting-Edge ttin Energy Renewable ewab Think Tank Security Sec Energy Energ Knowledge Know dg Clearing House Clear Ho Market Market Operational Op on Energy Energ Efficiency & ciency Leveraging Lev Poverty Governance Gover ance Each thematic program will contribute to one, two or all three of the main functions. This said, in order to ensure the completion of on-going thematic activities and the smooth transition to the new operational framework, the same "up-in-out" approach to activity entry and exit decisions has been applied. Key changes include: Areas for further development: Energy Trade. Stock-taking of the existing portfolio is needed prior to developing new activities, to assess in particular, whether they were efficiently designed, and the adjustments necessary to better respond to the need for increasing energy trade, as a least cost option to secure 24 energy supplies. Gender: there is also a need for a stock taking exercise to determine how to mainstream it in ESMAP's and others' activities, beyond increased knowledge dissemination and advocacy. Core areas: Energy Security, given the urgency to undertaking thorough analytical work on the impact of energy vulnerability, and on remediation options. Renewables, in relation to access, portfolio diversification, and environmental sustainability, becomes a main thematic program, and therefore, will have activities in all three areas. Energy Efficiency will be addressed under the Energy Security thematic area. However, further stock taking of past ESMAP's and others' work needs to be carried out, in particular to leverage more operational programs and investments and support the World Bank' s and others' commitment to increase their financing of energy efficiency investments. Servicing the Peri-urban poor: to respond to the demographic trends. Decentralized Energy Services: engaging SMEs to mobilize domestic competencies and financing. Areas moving from "think-tank" to knowledge management: Indoor Air Pollution, Urban Air Quality, Revenue Management, Regional Power Trade, Monitoring and Impact Evaluation Methodologies: no longer amongst the main thematic or cross-cutting areas as the foundation work has been completed. Work on these topics will be limited to knowledge dissemination and Operational Leveraging. During the Business Plan period, the content of these programs may be revised to take into account the new emerging trends that could be identified either under the consultative process described in the introduction, or through the feedback from the proposed panel of experts (see section on Human Resources below). Thematic Programs Thematic Program One: Energy Security This is a new thematic program which will build up on the preliminary research undertaken in the last year of the 2002-2004 Business Plan. The trend in high and volatile hydrocarbon prices has been described above as one of the major event in the energy sector environment. The instability of petroleum prices has been largely studied in its macro-economic effects on oil exporting and oil consuming countries at the time of the previous oil price peaks; this work is being updated. Beyond its macro dimension, energy security, or energy vulnerability, is tightly linked with access to better energy services and poverty. Petroleum price pikes affect the poor directly through the increase in prices of kerosene, and indirectly through their impact on the price of consumer goods, electricity, and transport. The poor also pay the price of hydrocarbon price instability when un-employment results from the contraction of industrial or service activities. These effects may result in shifts in the structure of effective demand for energy services to "lower" forms of energy, causing the poorest to `climb down' the energy ladder towards biomass resources; this in turn can generate a negative ecological impact. Vulnerability to price and other shocks also affects business development and private sector investments. This program, which will be implemented in cooperation with the DEC and PREM departments of the World Bank who have a deep knowledge of certain aspects of this issue, will initially include three main elements: 25 Analytical Work: To map out the macro-economic impact of hydrocarbon price volatility, including on public budgets and on revenue management, especially the impact on the social sector budgets which are key to the achievement of the MDGs. The objective is to be able to identify a typology of country situations, and facilitate the identification of mitigation policy options. This will require consultations with client countries, as well as with donors whose budgetary support financing could be linked to sector policy options. through empirical studies to deepen the research and methodology for analyzing the impact of energy market instability on various income groups, especially the poor, on various consumer groups, in particular transport, industry, agriculture; and SMEs; on geographically vulnerable regions; and to analyze mitigation policy options and formulate risk mitigation instruments, including resource portfolio diversification, energy efficiency programs, increased energy trade, and improved energy security pre-warning and rapid response mechanisms; one such study has already been commissioned for China. Knowledge Tasks, including: Consultations with a wide range of stakeholders in order to document best practices in particular in industrialized countries, and to validate and disseminate the findings of the analytical work. Energy Efficiency. Increasing energy efficiency and improving energy intensity is urgently needed to improve energy security in developing countries, at the same time as higher levels of energy efficiency can contribute to the transition to a low carbon economy. In the effort to meet increased demand for energy at the least economic, financial, and environmental cost, improved energy efficiency complements and reduces the need for measures to increase energy supply. Few countries have legal or regulatory frameworks that encourage energy efficiency, neither in the construction, industrial, or transport sectors. Few urban development plans include energy efficiency criteria. Energy sector strategies should integrate the following components: (a) strengthening the demand management and distribution efficiency activities of energy supply enterprises; (b) developing competitive markets for energy services and energy-efficient technologies; (c) setting up or strengthening national, local, and energy sector entities to provide training and disseminate information on improving energy efficiency, and to facilitate the transfer of more energy-efficient technologies; and (d) putting in place and monitoring compliance with standards and codes for energy efficiency. Pricing policies that reflect the real costs of energy supply, that promote economically justified fuel switching and that encourage energy consumers to use energy efficiency are also needed. - A stock taking exercise of best practices from energy efficiency programs will be carried out, in order to determine how to develop more significant policies and investments in energy efficiency. This knowledge work could result in the development of guidelines for governments, investors, and 26 financiers; these guidelines should benefit various sectors, in particular, energy, urban, transport and industrial development. Operational Leveraging: Integration of policy options and mitigation instruments in macro-economic or sectoral policy dialogues and programs; and Development of energy efficiency investment and other energy resource portfolio diversification programs, in particular to the benefits of lowest income groups; and development of investments to facilitate increased energy trade in favor of most vulnerable countries. Other elements may be added to the Program when the first results of the analytical work become available. The planned outputs from this Energy Security Thematic Program are; One or two flagship publications, which would include diagnostic tools and information on risk mitigation instruments that can be used by policy makers and advisers; Validation and dissemination workshops, and possibly some long distance training; Short notes for the Knowledge Exchange Series; and New energy efficiency regulations and investment opportunities. The expected outcomes would be: A significant shift in energy sector policies and strategies in China and other selected countries that integrate vulnerability to external or internal shocks as major variables in achieving the goal of securing sustainable energy services for growth and poverty reduction. Improved domestic policies, in several countries, that take into account the needs of the vulnerable groups. Design and implementation in several countries of mechanisms to mitigate the impact of vulnerability to external and internal shocks, such as improved energy efficiency, increased regional trade and lesser reliance on one main source of primary energy. 27 Power theft, Dhaka, Bangladesh. Thematic Program Two: Renewable Energy ESMAP will seek to support the implementation of the commitments made at the 2004 Bonn Conference on Renewable Energies and Energy Efficiency. In particular, The Commitments made by the World Bank to increase its level of lending by 20% a year for the next five years for renewable energy, a goal endorsed by the Bank's Board. The Commitments made by many public and private partners to scale up the development of renewable energy resources. In the 2005-2007 Business Plan, ESMAP will support the operationalization and scaling up of renewable energy sources, as a means to diversify energy resource portfolios, to facilitate access to modern energy services for the poor in remote areas, and to respond to the global transition to a low carbon economy. To help close the access gap, ESMAP's work will address localized distributed energy solutions where other options like grid extension are difficult and costly. Taking into account the energy access activities based on biomass for household heating and cooking needs, ESMAP's renewable energy activities are expected to grow significantly during the coming years, to reach 40% of its portfolio in the present Business Plan. In this business plan, ESMAP will: Develop operational models based on Poverty Reduction Strategies to increase access to modern energy services by the poor and the un-served. 28 Advise on the formulation of policies to diversify the primary energy supply portfolios as means to improve energy security. Provide upstream advisory services to client countries on the design of renewable energy projects that can be financed by bilaterals, international institutions, or the private sector. Assist on the design of incentives for a more effective utilization of renewable energy for development. Explore mechanisms to foster the global shift to a low carbon economy. The main elements of the program will include: Analytical Work on: Legal and regulatory frameworks and incentive policies for renewables, adapted to the specificity of developing country needs. Experience from a number of countries with advanced renewable energy development such as Brazil, Denmark, Germany, India, the Netherlands, Spain, and the UK, has demonstrated that a sound legal and regulatory framework to encourage renewable energy development, such as the renewable energy portfolio standard and feed-in law, are critical drivers in developing a large renewable energy industry in these countries. ESMAP will provide advisory services and technical assistance to a number of selected countries to (a) capture and disseminate best practices on legal and regulatory issues to enable grid-connected and off-grid renewable energy solutions; (b) propose implementation solutions and adjust the solutions based on the lessons of experience. These TA activities will capitalize on initial work that ESMAP has been developing in tandem with the Energy and Water department of the World Bank on the legal framework for renewables and decentralized energy services in several countries, and on the emerging regulatory issues. The integration of renewables in energy policies, system planning and energy sector regulation including the design or dissemination of grid system management tools, which integrate the intermittency of supply from renewables. An ESMAP study reviewed the treatment of the modern energy, renewable energy and efficiency in Poverty Reduction Strategy Papers (PRSPs) and Country Assistance Strategies (CASs), and found that PRSPs and CASs give limited attention to energy in general, and when mentioned, tended to focus on large infrastructure. Energy access, renewables and efficiency are under- represented, leaving important linkages with productivity and quality of life aspects unaddressed. ESMAP will provide systematic technical assistance support to ensure that renewable energy options are integrated into the national action plans, into the resulting investment plans, and into sector reform processes. In addition, ESMAP will provide guidance and training to the staff from various sectoral ministries, World Bank and other donor teams during the preparation of the PRSP/CAS updates on the design of renewable energy programs as part of national energy plans. 29 The development of innovative financing instruments. This task will seek to design specific solutions to deal with financing issues stemming from the small size of renewable energy projects and their special risk profile. One of the major challenges to scaling up renewable energy is how to meet the financing needs. The investment requirements for renewable energy based on commitments (approximately 70 GW up to 2015) made by a number of developing countries at the International Conference on Renewable Energies in Bonn is estimated to be up to US$120 billion. Given that ODA funding and countries' fiscal resources are limited, the key to leverage investments from the private sector, including both large international companies and local small and medium enterprises, and domestic financiers. Small renewable energy schemes, under the right conditions have proven attractive to local investors (India, Sri Lanka). Some successful examples of working in partnership with local financial institutions exist and should be documented and mainstreamed. Financial intermediation with project developers is needed to bridge the knowledge and perception gaps. For example, bankers expect that small-scale RE projects be bundled by developers to reduce the high transaction costs. ESMAP proposes (i) to engage with a consortium of financiers from multilateral and bilateral organizations, together with domestic and international financial institutions; and (ii) commission a few studies of innovative financing instruments especially designed for renewable energy that engage the private sector and leverage financing from local capital markets through risk-mitigation and credit-enhancement instruments. Knowledge Tasks: ESMAP plans to expand its role as a knowledge clearing house. ESMAP will Facilitate cross-regional exchanges of information and lessons learned; Disseminate best practices of renewable energy projects. ESMAP can disseminate and foster the replication of positive experiences from China and Mexico to other countries, based on demand. ESMAP will capture the experience with business models and financing mechanisms from successful country programs, including India, China, Sri Lanka, and Bangladesh; prepare a Practitioner's Operational Guidebook for staff from the World Bank, client countries and other organizations, in order to facilitate the preparation and implementation of new investment projects; Review lessons of experience on how the development of renewable energy resources can benefit the poor, in particular poor women; and distill the latest review of best practices and opportunities for biomass energy sources as a renewable resource to provide modern energy services; Launch a special short-note series on lessons learned from RE/EE projects, based on the experience and lessons learned from the above activities. ESMAP will also conduct in-country knowledge dissemination activities; and Further develop the methodological and Best Practice work on the economic, social and environmental evaluation of hydro power development; this will be done in partnership with Bank's Water Practice and other stakeholders. 30 Operational Leveraging will be implemented through the provision of: Advisory and training services. ESMAP will capitalize on the work it supported in China, Vietnam, Mexico, and the Philippines, in order to: (i) advise governments on sector policy and legal and regulatory frameworks, to ensure that measures for creating a level-playing field for renewables are introduced; and (ii) advise clients how to integrate renewable energy in energy-poverty action plans, which themselves support PRSP implementation plans; and (iii) train financial intermediaries, service providers, investors, and NGOs in client countries on the development and financing of renewable energy projects, in cooperation with such sources of financing as the Carbon Fund and the GEF. One of the major lessons learned from ESMAP, GEF and GVEP renewable energy projects is the need for handholding small and medium entrepreneurs (SMEs), particularly for renewable energy projects. In many cases, these local SMEs are the backbone of development of RE. Large private players may be reluctant to jump start a new market and bring the scale of investment to a higher level until the SMEs have tested the market and helped set up market infrastructure. Another lesson learned from past experience is that general training is usually not sufficient. What these SMEs need are handholding technical assistance and advisory services on topics such as how to develop business plan, how to get financing, how to market the energy they will produce, etc. ESMAP will provide these needed capacity building and advisory services to local entrepreneurs and service providers in the renewable energy area. In addition, as most financial institutions are not familiar with RE projects, ESMAP will provide capacity building support to a set of selected financial institutions, particularly domestic financial institutions including micro-finance institutions, on appraisal RE projects; and help create a window for RE lending wherever possible and applicable. Project support. One obstacle to scale up renewable energy is that many Bank and donor staff and stakeholders in client countries may not be familiar with renewable energy projects. Preparing and implementing renewable energy projects, therefore, involves a higher-than-usual transaction costs. The relatively smaller size of renewable energy projects also adds extra costs. ESMAP, in cooperation with GEF and the CDCF in particular, will contribute to cover this higher-than-usual transaction cost by assisting the World Bank teams in identifying, developing and preparing renewable energy projects, and evaluating the development impact of these investments. ESMAP funding, however, will not be used to substitute for Bank budget and GEF funding. Pilot activities to validate innovative financing instruments. ESMAP will support a series of pilot activities to test innovative delivery and financing mechanisms that (a) engage both local SMEs and large private players in renewable energy investment to leverage access to technology and management skills; and (b) leverage domestic financing sources, through outreach activities, capacity building, regulatory framework, and financing intermediaries. ESMAP pilot activities on innovative delivery and financing mechanisms in Bolivia, Comoros, Honduras, and Kenya, for example, demonstrated that small amount of funding on pilot activities played a catalytic role in securing support from decision makers in client countries and donor teams to scale up innovative 31 approaches; these pilot activities also convinced the private sector players to start renewable energy market in developing countries. The planned outputs from the Renewable Energy Thematic Program are: One or two flagship publications (on regulatory frameworks for renewables and innovative financing instruments or the Practitioner's Handbook). Several short notes for the Knowledge Exchange Series. Other publications resulting from the analytical work and knowledge tasks. New sector policy documents for renewables in at least 5-10 countries. A cadre of trained staff, financial intermediaries, and private service providers and investors. The expected outcomes are: An increase in World Bank and other financiers' investments in at least 10 new countries, as well as an increase in other stakeholders' investments and service provision, in line with the commitments declared at the Bonn Conference. Increased access to modern energy services by un-served or under-served regions and populations, in particular amongst low income groups, within a few years. Reduced vulnerability to shocks in energy markets in several countries as a result of portfolio diversification. Improved legal and regulatory frameworks on renewables in several countries. The beginning of a shift towards a low carbon economy. Thematic Program Three: Energy-Poverty Under the previous business plan much work was completed on how to improve energy access, in particular, on launching the implementation of the Global Village Energy Partnership Box 4). Under the new business plan, the Energy-Poverty Thematic Program will consist of the following elements: Analytical Work on: Peri-urban issues, including the costs for the poor of unreliable supplies and conversely the benefits on development outcomes from improved services; identification of best practices in grid and off-grid services in low-income areas; financing mechanisms and institutional models; experience with multi-energy service delivery models and multi-infrastructure delivery models; new technical options, and public-private partnerships between municipalities, utilities, and NGOs or CBOs; issues of fuel supply and fuel substitution in relation to air 32 quality and environmental health issues; best practices in providing municipal energy services such as street lighting. Subsidies. Although much has been written on the subject, there is a need to re- establish the economic justification for subsidies to extend service, and distinguish financing issues such as affordability from the `public good' issue to justify the allocation of public funding to the lowest income group. Biomass Energy. Renewed attention is given to the use of biomass resources both to diversify the energy resource portfolios and to create productive activities in the rural areas. Pressure on charcoal production for example exists for a wide range of applications, from industrial uses in the steel industry of Brazil to household uses in the cities where it remains the main source of cooking fuels, in particular for low income households. A review of energy consumption patterns in 45 cities (about to be published by ESMAP and WRI) reveals that for the poorest income households in the urban areas up to 50% of their energy consumption is from traditional fuels ­ wood and charcoal. Further to ESMAP's review of the potential for biomass energy (Advancig Bioenergy for Sustainable Development, Guidelines for Policymakers and Investors, April 2005), and the forthcoming study (2005) on the Potential for Biofels for Transport in Developing Countries, ESMAP will undertake specific country-focussed assessments to test the range of potential biomass development as a modern form of energy for industrial heat and electricity production, for household needs, and liquid biomass resources for the productive use of plant oils and production of biofuels (experiences, approaches, socio-economic impact, and lessons learned). The emphasis will be put on the identification of economic and sustainability criteria for project and program design, with the objective of assisting policy makers, investors, and financiers in identifying investment opportunities which are ecologically and financially sustainable. The Impact of Energy on Developing Countries linked with Multisector Survey Work and MDGs. The international emphasis on the MDGs and their achievement is unsustainable without the availability of energy and infrastructure. In the future, much development assistance will be directed towards the accomplishment of the MDGs. Within the energy sector, there is a beginning to be an awareness that it is necessary to understand the direct and indirect linkages between energy and the MDGs. The main way to achieve this is through the multisector surveys that are supported by international donors and implemented by developing countries. Unfortunately, they do not have very good energy or infrastructure questions in those surveys at the present time. The work to have a wider array of energy questions in the surveys has begun, and this needs to be complimented by encouraging greater participation by development researchers in analyzing the linkages between energy, infrastructure and development. Knowledge Tasks: To synthesize the foundation work developed in the last business plan on indoor air pollution (dissemination of the damaging effect of indoor air pollution on human health, and of the opportunities in many sectors to introduce 33 remediation programs, update and review of best practices on improved stoves, including the linkages with sustainable biomass production), urban air quality, rural electrification best practices, including the allocation of subsidies, productive uses applications of lighting and power services, and gender in energy. To complete the studies on the impact of reform on the poor; and disseminate the results of the analytical work. To develop with WBI training programs for various institutions in client countries and audio-visual programs to reach out to more communities and people, in particular women. Finally, it will also continue to disseminate the methodologies for collecting and analyzing energy data in Household and other Multi-sector Surveys, through staff training, publication of guidelines and analytical results. To further the work on defining an energy-poverty index, this could be used to monitor overall progress with the implementation of energy access programs in developing countries. Operational Leveraging: For peri-urban areas. ESMAP will test some alternative business models to provide energy services in peri-urban areas taking into account the needs of both men and women, ranging from the private supply model to the community based model, and including the traditional utility model. Alternative technologies are also under test through pilot projects in Asia (Bangladesh) and in Africa (South Africa) and have now been operational for several years. As similar problems apply to the provision of energy services and to other infrastructure services such as water and sanitation, a joint approach with other partnerships such as WSP and Cities Alliance will be adopted by ESMAP. Review of Distribution of Household Petroleum Fuels and to formulate recommendations to encourage more activities in Bank lending. The work in the petroleum sector in the Bank has been moving towards addressing issues of distribution, and particularly how the poor have access to petroleum products. However, the progress has been relatively slow. Besides quality of life considerations, there has been an increasing emphasis given to the transition to "cleaner" energy for households due to issues involving indoor air pollution and health. Most of the recent research indicates that with the use of kerosene and LPG for cooking, there is significant reduction air pollution within the home and this in all likelihood leads to an improvement in the health of women and children. Under this activity there would be a review of existing Bank and non- Bank projects to encourage the wider distribution and marketing of petroleum fuels in both rural and urban areas. Operational Support for the Access Scaling-up Initiative. ESMAP will also undertake a portfolio review of World Bank and selected donor activities to assess the opportunities of scaling up energy services in non-energy projects, e.g. in health, education, water, agriculture and rural development, transport, and 34 SMEs. The objective will be to develop guidelines for including energy components which will increase the return to these sectoral investments, and to offer sustainable implementation solutions. Too many such investments have failed in the past for lack of appropriate cost recovery, sustained financing, or maintenance after installation. If needed, a toolkit will be developed for task managers and other professionals. ESMAP will continue with its commitments on the implementation of the Global Village Energy Partnership (Box 2.1), both in terms of financial or thematic support to the Technical Secretariat, the launch of the GAP Fund to support partner activities, and country-level activities that include the preparation of multi-sector energy-poverty investment plans and pilot projects. ESMAP will also support pre-investment activities such as the provision of strategic or policy advice on rural energy development, gender-sensitive demand assessments, training of financial intermediaries or entrepreneurs that would be needed to kick-start the implementation of World Bank or other ESMAP donors' investment programs. These activities should be defined in full complementarity with the activities on decentralized energy options and SME development which are described in the thematic area on market development and governance. The planned outputs from this Energy-Poverty Thematic Program include: At least three to four flagship publications (on peri-urban issues, subsidies, gender in energy, and on the progress towards achieving the MDGs); Four to five short notes for the new Knowledge Exchange Series; Training and audio-visual dissemination programs designed and implemented; and Publications on substantial field results from pre-investment activities. The expected outcomes are: To have the foundations and tools generated by the program used by central and local governments and municipalities for the formulation of policies for access to energy infrastructure services and financing. Improved utility performance in low-income peri-urban areas, and increased affordable and reliable energy services. An effective increase in investment financing for accelerating access to modern energy services by the World Bank Group and other public and private sector partners, in particular in Africa, but also in South Asia and in the IDA countries of East Asia. An effective increase in services generated by these investments. Better information on monitoring indicators and impact results. 35 Thematic Program Four: Energy Market Efficiency and Governance The work on energy market development and sector reform has yielded many valuable insights into the reasons why modern energy often is not reaching the poorest households in developing countries. In many cases the reasons for the problems lie in the discrepancy between the business objectives and obligations of the institutions involved in delivering energy services and the economic profile of the poor or their geographical dispersion in areas difficult to access or with a limited natural endowment. As evidenced in the distribution of financial flows, international private investments in the 90's were essentially limited to large energy projects, and overlooked access projects in isolated rural and peri-urban areas, largely because the wave of sector reforms of the `90s by-passed rural and peri-urban energy. Poorer countries and isolated areas are perceived to present higher risks to investors. They are seen as un-attractive business propositions, although the demand for services is increasing rapidly, not only to meet the needs of growing economies and urbanization, but also to catch up with the lag in rural and peri-urban services. Even if FDI is to resume on a larger scale in the future, it is unlikely that investing on a significant scale in the supply of energy services in isolated areas would be one of the priorities of international investors. At the same time, the performance of the utilities, in particular in Africa, requires major improvements, as well as the management of revenues from hydrocarbons, both in resource-rich countries, and in oil and gas importing countries as such imports are a significant source of tax income. The Energy Market Efficiency and Governance Thematic Program will therefore focus on: Building-up an effective public-private partnership both for the engagement of small energy developers and service providers (SMEs), who present a critical potential of management and technical talent as well as resources, in particular in IDA countries; and for public utilities; and Improving the capacity of policy makers and regulators, including in revenue management. The main elements of this Thematic Program will include: Analytical Work on: Public-private partnership for distributed energy. Policy work is needed for the regulation for the operation of isolated and non-isolated mini-grid systems (including renewable energy based systems), as well as for the definition and management of pro- poor subsidies. This work will clearly be complementary to what will be undertaken on subsidies under the Energy-Poverty Program, and under the Renewable Energy Program. Assistance will be provided to cover both regulatory governance (laws, regulations and processes) and regulatory substance (tariff setting approaches, investment or connection requirements and service standards). The result should provide a "baseline" on current regulatory and subsidy practices, and recommendations on how to improve the regulation and, if needed, subsidization of distributed energy systems. The main tasks will comprise: - An assessment of the enabling environment and incentive framework in selected countries with a focus on Africa, and taking into account the political economy of the supply of electricity in isolated areas and the role of the communities. 36 - Mobilization of stakeholders and design of innovative and formulation of specific regulations and incentives, including the design of alternative business models for SMEs, cooperatives and other forms of decentralized businesses. - Development of financing and support mechanisms for the implementation of projects. - Operationalization of enabling and incentive framework including its validation through support to the development of pilot projects, followed by scaling-up. - Capacity building with governments, communities and local business community. Knowledge Tasks: To distill and disseminate to policy makers at various levels of government, best practices on revenue management or on utilities management from other countries; and Follow-up to Power Sector Investors' Roundtable. ESMAP supported actively follow-up action to the Power Sector Investors' Roundtable it organized with EWDEN in March 2004, through its direct involvement in each of the three Working Groups (Workout of Projects under Stress; Development of Risk Mitigation Instruments; and Rules of Engagement for Private Investors). Each working group brought together representatives of six large private investors, World Bank staff, as well as IFC and MIGA staff who worked together throughout the March to November period. ESMAP developed a number of Case Studies to examine the relationship between sector reforms and the preferred form of private sector engagement, with a view to introduce maximum flexibility in PPP. ESMAP also prepared a multi-regional analysis of all power projects under stress to understand the causes of stress and their consequences on energy projects of various types in each region. The study determined specific patterns of stress, amenable to diversified workout strategies. ESMAP coordinated the preparation of the follow-up meeting of the participants to the Round Table in November 2004, which acknowledged progress made since the March 2004 initial meeting, and the relevance of the work done. The output of the Working Groups was the consensus between WBG and investors to apply the risk mitigation strategies outlines by the group to selected private projects under development, and to develop specific workout instruments and strategies to be implemented with WBG involvement for testing on selected real stress situations. A follow-up project co-financed with PPIAF is under execution, for completion by December 2005. Operational Leveraging: Program on distributed energy systems with SMEs. Demonstration projects in five to eight pilot countries will be designed and implemented to test out the full range of regulatory measures and the training of policy makers, regulators, and operators, on the relevant regulatory framework and implementation modalities; 37 these demonstration projects will also test out new business and financial models. Working within selected countries, ESMAP will facilitate increased engagement with governments, potential local investors and finance institutions in order to (1) define/improve and implement a legal, policy and regulatory framework to stimulate private sector involvement in decentralized energy infrastructure and services delivery; (2) develop and assess the outcome of pilot projects; and (3) move from the implementation of pilot projects to the implementation, in coordination with donors, of a nation-wide program of access to modern energy in isolated areas on a scale sufficient to make a difference at country level. Funds will help facilitate the adjustment of local institutions and design country- specific, ad-hoc financing mechanisms aimed at promoting domestic entrepreneurship and investment in infrastructure services. There will be a particular focus on building the capacity of the local private sector to develop and manage infrastructure businesses. . Given the potential synergies in the provision of energy and water and sanitation services, ESMAP and the Water Supply and Sanitation Program (WSP) will coordinate their activities, as well as with the multi-donor Public Private Infrastructure Advisory Facility (PPIAF), Cities Alliance, InfraCo., and the Slum Upgrading Facility (SUF). Joint programs to cover all infrastructure services in selected countries will be developed where appropriate. ESMAP will bring value-added to these programs, by making them benefit from its demonstrated experience in: (a) building-up global and local partnerships that provide results on the ground, (b) leveraging policy reforms into broader fora such as PRSOs; (c) carrying out multi-sectoral activities focused on achieving the MDGs, and (d) leveraging financing for large-scale technical assistance and investment projects. Program on enhancing the performance of utilities, in particular in Africa. Advice will be provided to find transitional paths until the institutional and economic conditions enable a more active participation of the private sector. This differentiation will influence further market reforms and require the development of new market structure and regulation mechanisms to handle private-public partnerships, possibly implying a change in the governments' function sector planning in the absence of a fully competitive energy market. The planned outputs from this thematic program are: One flagship publication on the building-up of effective public-private partnership for decentralized energy, building of national consensus on a business model for the delivery of energy services by SMEs in seven or eight countries; Formulation of national policies for access in isolated areas in seven to eight countries, revised local regulation for the provision of energy services by SMEs in seven or eight countries, five to eight completed demonstration projects; Dissemination notes on best practice both on how to implement such partnerships; and Dissemination notes on how to improve utility performance in the absence of a fully competitive market. 38 The expected outcomes are: Strengthened regulatory and operators' capacity in countries with public-private partnership demonstration projects; Improved utility performance, hence more people and businesses served or better served; and It is also expected that the pilot projects will lead to the expansion of new investment programs for the provision of decentralized energy services. Activities Outside the Four Thematic Programs Some activities presently fall outside the four flagship programs either because the way forward is not yet clear, or because they are new ideas which need some further exploration before they can reach maturity for either one of the flagship programs or under a new program. This is the case for gender activities. Until the full stocktaking exercise is completed, it will be difficult to go beyond the on-going projects and more systematically mainstreaming gender in the activities of the main thematic areas. Likewise on Regional Power Trade, until the synthesis of the experience with past projects is completed, the way forward for ESMAP is not clear, beyond the three on-going activities (Central Asia, South Asia and West Africa). Implementing the Business Plan This section presents the implementation modalities for the new Business Plan. In order to fulfill the three functions presented in the Operational Framework think tank, knowledge clearing house, and operational leveraging, ESMAP will undertake four main implementation measures: Since 1998, ESMAP has contracted the bulk of the task management for the projects that it finances to World Bank staff in the regions or in other professional practices (Graph 3.4). It also established a transparent system of call for proposals, in order both to ensure the alignment with operational priorities and to retain the best proposals for the program's strategic areas. This approach, on occasions, became cumbersome, did not generate as many new ideas as expected and did not always ensure alignment with Bank and donors priorities. Graph 3.4: ESMAP in the Energy Practice ESMAP in the Energy Practice Energy & Mining Sector Board Africa SA AETF ASTAE MENA EAP ECA LCR Urban, Transport & PREM/ Water, DEC Energy 39 MIGA IFC/WB Environment Global Human & Rural Products Social Groups New Portfolio Management Method For the new Business Plan implementation, ESMAP will put more emphasis on the operational support function, which will be decentralized in order to make it more directly relevant to operational needs, and to reinforce its think tank and knowledge dissemination functions. This implies that it will: For the Think-tank Function: Manage directly the bulk of the analytical non-regional think-tank activities, to be implemented by either Bank staff or external experts/organizations (the "best brains" from academia, private sector, bilaterals, NGOs or other organizations). ESMAP will retain task management of these activities mostly with its core staff as part of its own work program. The tasks will be few and focused, each aligned with the thematic program, except in case of an emerging issue. This will ensure a better alignment with donors' and the Bank's priorities. For the Knowledge Clearing House Function: ESMAP core staff will be responsible for the delivery of a number of specific and monitorable products or tasks with a focus on impact with clients. For the Operational Leverage Function: Contract with the Bank's regional teams a three-year Regional Program for Policy and Operational Innovation to implement the key Operations Leveraging activities of the four thematic programs. This approach will permit better alignment with regional needs, and facilitate the scaling up of investments with preparatory activities consistent with the ESMAP thematic programs. This means that ESMAP will transfer to the Regions the responsibility for implementing on a programmatic basis ESMAP financed regional programs, while maintaining the coordinating, fiduciary and quality control functions and responsibilities in the ESMAP team. ESMAP will organize each year a single call for proposals for each Region to propose their Regional Program with a set of monitorable deliverables. A balance will be required between pre-investment support, and support for innovative policy formulation and dialogue. ESMAP will allocate to the Region an annual lump sum for the implementation of the first year of the program, with a commitment to finance the following years, provided the execution of the overall program meets expectations and its targets are achieved; the funds allocated will be managed by the Region. The execution of each Regional Program will be monitored and evaluated annually for alignment of deliveries with the agreed objectives, and effectiveness. Quality control at the delivery stage of the program will remain the responsibility of ESMAP, which it may contract out its analytical part to a trusted third party. Each Regional Program will include two components: Pre-investment Support which will cover the formulation of energy policies which would emphasize the social dimension of energy for poverty reduction and the MDGs, renewable energy and environment, and institutional development for the benefit of the poor. This could include assistance for policy formulation for renewable, rural and peri-urban access, energy for the poor; energy planning and options evaluation; establishing policy, legal and regulatory framework; and training developing countries governments, private sector, financiers and NGOs in renewable and poverty oriented energy project development and support. 40 Project Support will provide project preparation assistance for innovative energy projects including renewable energy development and the supply of affordable energy projects to the poor. For innovation and exploration of new ideas: In order to respond to requests for just-in-time work and to support the exploration of new ideas, ESMAP will create a (small) fund, for which proposals will be accepted on a rolling basis, and/or from a limited call for proposals. This approach will significantly reduce the transactions costs for ESMAP of small projects implemented in support to the Regions. It will also reduce the demands on scarce in-house expertise for the management and quality control function of a large number of small projects. In the Regions, this approach will put the Sector Manager in charge of the Regional Program and ensure its full ownership by the Region; in addition, it will help the Sector Manager plan and allocate resources better. ESMAP resources freed by the programmatic approach will be re-deployed to handle ESMAP's core program, which will emphasize crosscutting and global research, innovative cutting-edge topics within ESMAP priorities, and pro-active knowledge dissemination. Human Resources In order to successfully implement the business plan, ESMAP plans to: Increase its staffing with at least three additional senior specialists with qualifications aligned with the Business Plan priorities, bringing the core group from 5 to 8; Strengthen its partnerships with other global programs, in particular WSP, PPIAF, Cities Alliance, GVEP, EU Energy Initiative (EUEI), and GNSED, to draw on their competencies and resources; and Form a virtual panel of about ten experts from academia from a wide range of expertise from developing and industrialized countries, from academia, policy making agencies, NGOs, the private sector, to consult and exchange views particularly with the TAG three times a year and produce notes on "scanning the horizon for emerging trends in energy and poverty". In addition, ESMAP will use its contacts under its Knowledge Clearing-House activities to monitor informally the pulse of the energy sector worldwide. Knowledge Clearing-House ESMAP will invest in the development of a Knowledge Clearing House in order to meet the needs of its multiple clients, and instead of tagging the knowledge transfer as a by-product of its portfolio activities. It will undertake the following: Brokering Knowledge: ESMAP will reinforce/extend its cooperation with other global and regional or other energy programs through more regular and systematic knowledge exchanges. ESMAP will aim at taking the lead for its thematic programs to gather, integrate, and disseminate knowledge generated by energy practitioners. It will also engage with academia and WBI to develop training programs with developing countries. 41 High level support to Developing Countries Governments: ESMAP will support on request senior officials from country governments on an individual or regional basis, to enable them to access knowledge in an independent environment. For example, it will support the newly established forum of Energy African Ministers. It will also facilitate for several country governments' preparations for CSD 14 and 15 or other international or regional events. Knowledge Dissemination: ESMAP knowledge products will include a revised publications strategy, expanding the Knowledge Exchange Series, revamping ESMAP website, and organizing a number of presentations. It will also revisit with PPIAF the possibility of a `hotline' on energy akin to the rapid response system deployed by PPIAF. Publications: A new publications strategy will be implemented to enhance the efficiency and outreach of ESMAP as well as the professional image of the ESMAP reports. - Four types of publications will replace the current series of standard and technical reports: Enhanced country or thematic reports, selected from the best country or thematic reports and including literature reviews; Standard reports; and Technical reports; Flagship publications, resulting mostly from the wrap-up of ESMAP cutting-edge analytical work - A new product: short "Just in Time" Knowledge Exchange Notes to quickly respond to emerging energy issues or disseminate findings from think- tank analytical work. - Dissemination of ESMAP work through articles in journals and periodicals. - A new publication procedure: ESMAP will outsource most of publication procedures to the Office of Publisher (EXTOP) or another publisher, including editing, formatting, design, printing, ISBN numbering, dissemination and marketing. Knowledge Exchange Series: ESMAP will continue its Knowledge Exchange Series (KES), which provides a stage for ESMAP task managers, as well as outside energy practitioners to exchange knowledge and experiences. Create a Virtual energy library and revamp the website to include all past ESMAP publications and work on its website, including: - Extending the Virtual library to include publications from partner institutions on the social dimension of energy, renewables and reduction of carbon emissions, and institutional aspects of energy for poverty reduction - Producing every year three to five years in-depth Literature Reviews, syntheses and compendiums on selected topics within ESMAP priorities, which may cover programs recently completed by ESMAP or emerging topics in the energy community. Organize a Forum on Energy and the Poor every two years for the benefit of all energy practitioners. The role of ESMAP would be to organize the event, while 42 the content and delivery will be set in cooperation with members of the energy community at large. Knowledge Dissemination Products: About thirty publications per year, including two Flagship publications. About 10 Short Notes a year. About 10 KES every year. Monitoring and Evaluating Business Plan Implementation The retrospective review process that helped guide the formulation of the present business plan provided valuable insights for business strategy and operations. The key need is to standardize and regularize this monitoring and evaluation process so as to be able to obtain feedback in "real time." M&E activities are required at two levels: Output Level: The output level focuses on measures of success in business plan implementation. Key performance indicators include: Volume and overall quality of ESMAP activities, and coherence with business strategy in terms of thematic and regional distribution. The range of actors and partners involved in the design and implementation of ESMAP activities, particularly the balance between national vs. local institutions and international vs. domestic sources of expertise. Dissemination outputs such as number and overall quality of ESMAP reports issued, volumes distributed, attendance levels at conference and seminars, web site visits, audiences reached, etc. Breadth and strength of ESMAP partnerships, as assessed by the frequency and quality of reporting and substantive individual exchanges, and the volume of resources mobilized for the priority business areas, and volume of resources leveraged by ESMAP activities from non-ESMAP partners. Resource planning in terms of managerial efficiency and use of staffing and dollar resources (e.g. level of program overheads) and budget execution (monitoring of budget vs. actual). Impact Level: The impact level examines the poverty and development outcomes that were attained as a result of ESMAP work. ESMAP faces particular challenges in making direct associations between the outputs of its activities and achievement of specific development outcomes because: (a) the predominantly upstream nature of ESMAP activities implies that there may be significant time lags between activity completion and uptake and application of results, making establishment of causality more difficult, (b) similarly, the innovative nature of ESMAP activities suggests that there may be difficulties or delays in mainstreaming ESMAP-generated approaches, or simply that some new ideas will not prove out as successes worthy of follow-up 43 replication, and (c) the diversity of partners in ESMAP activities makes direct impact attribution to ESMAP difficult, and in many cases ESMAP's contribution is as a broker and mobilizer of support among many parties. Key performance indicators include: Volume of citations or references to ESMAP outputs in research literature, client country national plans and strategies, and in Bank and bilateral partner project designs. Degree to which ESMAP strategies and approaches are adopted by and mainstreamed within other organizations concerned with energy and development. Number and significance of ESMAP policy recommendations adopted and implemented by client countries (e.g. new laws and regulations). Level of follow-up to ESMAP pre-investment work in terms of volume of new investments catalyzed and breadth of new investment sources (e.g. private sector). Capacity built within participating countries and institutions, assessed inter alia by their ability to replicate similar future policy and pre-investment work without the need for ESMAP or other external assistance. Resources are included in this business plan in order to develop an approach to program impact monitoring and evaluation, and to begin applying and implementing the methods in a sustained manner. 44 Budget and Financing Requirements Budget and Financing Plan The total cost of the Business Plan is estimated at US$40-45 million. It is summarized below on Tables 3.1 and 3.2. In the preparation of the Business Plan, ESMAP intensified its efforts to raise additional financing. As a result, it has received confirmed commitments of about US$30.8 million, and another US$9 millions are in negotiations. This is a much better position than at the beginning of the previous business plan. In addition, two donors have confirmed financing for five years (the last two years are not included in the table), and one potential donor, Austria, has indicated already receiving clearance from the Minister of Finance to join as an ESMAP donor (no amount announced yet). Note that with the reconfiguration of the operational framework and the expansion of the program, the overhead costs would increase over their current level. 45 Table 3.1: Budget Allocation by Thematic Program 2005 2006 2007 Total Total Thematic Low Target Program case case 1 Energy 500 500 1,000 2,000 2,200 Security 2.Renewable 4,400 5,700 6,400 16,500 17,000 Energy 3.Energy- 3500 3500 3800 10,800 12,000 Poverty 4 Market 2,000 2,000 2,000 6,000 6,300 Efficiency& Governance Total 10,400 11,700 13,200 35,300 37,500 Business Lines Knowledge 500 600 700 1,800 2,000 400 500 500 1,400 2,000 Innovation Fund Program 1,000 1,200 1,300 3,500 3,500 Governance & Management TOTAL 12,300 14,000 15,700 42,000 45,000 Table 3.2: Budget Allocation by Operational Function Operational 2005 2006 2007 Total Total Framework base case Target case 1 Think Tank 3,500 3,800 4,400 11,700 13,000 2. 6,100 7,100 7,700 20,900 22,000 Operational Leveraging 3. 1,700 1,900 2,300 5,900 6,500 Knowledge Clearing House Sub-total 11,300 12,800 14,400 38,500 41,500 Program 1,000 1,200 1,300 3,500 3,500 Governance & Management TOTAL 12,300 14,000 15,700 42,000 45,000 46 IT Training for kids who live in the surrounding areas of Stutterheim outside East London in the Eastern Cape, South Africa. 47 ANNEX 1 BUSINESS PLAN 2005-2007: Tasks and Outputs by Functions and Thematic Program, and Business Plan Outcomes ESMAP ESMAP Business Plan 2005-2007 Functions Think tank Knowledge clearing house Operational leveraging Outcomes Thematic programs 1. Energy Tasks Tasks Tasks A significant shift in Security Map out the macro- Consult with a wide Integrate policy options and energy sector economic impact of range of stakeholders to mitigation instruments in macro- policies and hydrocarbon price document best practices economic or sectoral policy strategies in China volatility. and to validate and dialogues and programs. and other countries Deepen the research disseminate the findings Develop energy efficiency Improved domestic and methodology of the analytical work. investment and other energy policies, in several through empirical Outputs resource portfolio diversification countries, that take studies for analyzing Short notes for the programs, in particular to the into account the the impact of energy Knowledge Exchange benefits of lowest income groups. needs of the market instability on Series Increase investments to facilitate vulnerable groups various income Validation and increased energy trade in favor of groups and on various dissemination most vulnerable countries. consumer groups, and workshops, and possibly Outputs to analyze mitigation some long distance New Sector Policies documents policy options and training An increased pipeline of formulate risk investments in energy efficiency mitigation and in energy infrastructure to instruments. facilitate trade. Outputs 1-2 flagship publications on Diagnostic tools and Risk mitigation instruments 2. Renewable Tasks Tasks Tasks Increase in the Energy Analyze legal and Facilitate cross-regional Provide advisory and training World Bank and regulatory exchanges of information services to policy makers, local other financiers' frameworks and and lessons learned. entrepreneurs, service providers, investment in 10+ incentive policies for Disseminate best and financial institutions in the countries renewables, adapted practices of renewable RE area. Increased access to to the specificity of energy projects. Provide project support by energy services for developing country Review lessons of assisting the World Bank teams un-served regions needs. experience on how the in identifying, developing and within a few years Provide systematic development of RE preparing renewable energy Reduced technical assistance, resources can benefit the projects, and evaluating the vulnerability to guidance, and training poor and distill the latest development impact of these shocks in energy to support the review of best practices investments. market in several integration of and opportunities for Support a series of pilot activities countries through renewables in energy biomass. to test innovative delivery and portfolio policies, system Launch a special short- financing mechanisms. diversification planning and energy note series on lessons Outputs Improved legal and sector regulation, learned from RE/EE New sector policy documents, or regulatory including the design projects and conduct in- PRSP/CAS incorporating RE for frameworks on RE or dissemination of country knowledge 5-10 countries in several countries grid system dissemination activities. An increased pipeline of RE The beginning of a management tools. Further develop the projects at the Bank (added) shift towards a low Develop innovative methodological and Best A cadre of trained staff, financial carbon economy financing instruments Practice work on the intermediaries, and service to address the risks economic, social and providers and investors and issues of small- environmental evaluation scale RE projects. of hydro power development. Outputs 1-2 flagship Outputs publications on Practitioners' Guide Regulatory 2-3 short notes for the frameworks and Knowledge Exchange Innovative financing Series instruments Other publications from the analytical work and knowledge tasks 49 3. Energy Tasks Tasks Tasks Foundations and Poverty Analyze peri-urban Synthesize the Test some alternative business tools generated by issues, including best foundation work models and technologies to the program used by practice on financing developed in the last provide energy services in peri- central and local mechanisms, business plan on indoor urban areas taking into account governments for the institutional models, air pollution, urban air the needs of both men and formulation of service delivery quality, rural women. access policies models, and technical electrification best Review of Distribution of Improved utility options. practices, and gender in Household Petroleum Fuels and performance in low- Re-establish the energy. come up with recommendations income peri-urban economic justification Complete the studies on to encourage more activities in areas for subsidies to extend the impact of reform on Bank lending. Increase in service. the poor; and disseminate Provide operational support for investment Undertake specific the results of the the Access Scaling-up Initiative, financing by the country-based analytical work. including undertaking a portfolio WBG and other applications to Develop with WBI review, continuing the partners and establish specific training programs for implementation of GVEP increase in services guidelines for the various institutions in activities, and support pre- generated by these development and use client countries and investment activities. investments of biomass options. audio-visual programs to Outputs Better information Analyze the impact of reach out to more Substantial field results from pre- on monitoring Energy on communities and people, investment activities indicators and Developing Countries in particular women. impact results linked with Further the work on Multisector Survey defining an energy- Work and MDGs. poverty index. Outputs Outputs 3-4 flagship 4-5 short notes for the publications on peri- Knowledge Exchange urban issues, Series subsidies, gender in Training and audio-visual energy, and progress dissemination programs towards achieving MDGs 4. Energy Tasks Tasks Tasks Strengthened Market Provide policy Distill and disseminate Establish and manage a program regulatory and analysis on how to best practices on revenue on distributed energy systems operators' capacity build up the public- management or on with SMEs. In selected (5-8) in countries with private partnership for utilities management countries, pilot, assess, and scale PPP distributed energy, from other countries to up policy and regulatory More people and focusing on policy makers at various framework, business and business served as a regulatory and levels of government. financial models to stimulate result of improved subsidy issues. Outputs private sector involvement in utility performance Outputs Short dissemination notes decentralized energy service Expansion of new 1 flagship publication on best practice for PPP delivery. investment on public-private and improving utility Provide advice on how to programs for the partnership for performance enhance the performance of provision of decentralized energy utilities, in particular in Africa. decentralized energy services Outputs Formulation of national policies for access in isolated areas in 7-8 countries Revised local regulation for the provision of energy services by SMEs in 7-8 countries 5-8 completed demonstration projects 50 Urban Air Pollution in China. 51 ANNEX 2 RESTROSPECTIVE REVIEW: Stocktaking on Implementation of the 2002-2004 Business Plan ESMAP ESMAP Business Plan 2005-2007 The 2002-2004 ESMAP business plan aimed to continue ESMAP's work that had already proved important for the formulation of more effective energy policy in developing countries, to strengthen some parts of the program, and to develop some new areas that might eventually become core areas of research. This section provides a critical assessment of the business plan accomplishments and areas that require further attention. Major Components of the 2002-2004 Business Plan The 2002-2004 Business Plan was anchored on the 1998 ESMAP Strategy which identified three strategic directions for ESMAP: increasing access to energy services, providing efficient energy services through the development of energy markets, and ensuring the environmental sustainability of energy services. However, the concept of "energy access" was extended to "energy poverty," concentrating on the one hand, on the inter-linkages between energy poverty, market development and the environment, and on the other hand, on the application of energy services for consumptive, social, or productive uses, in order to achieve the Millennium Development Goals (MDGs), in particular in education, health, income generation, and environment. Another feature of the 2002-2004 Business Plan was to concentrate the policy and capacity building work on countries, which did not have as yet an "organized energy sector." The 2002-2004 Business Plan had identified six core business lines under the following three strategic and cross-cutting areas: Energy-Poverty: the development of the Global Village Energy Partnership, and analytical work to deepen energy-poverty linkages; Market Development: the Impact of Reform on the Poor; Energy and Environment: Indoor Air Pollution; and Crosscutting Areas: Measurement methodologies and knowledge dissemination. In addition, work initiated under the first business plan was to continue in the areas of: Energy Service delivery mechanisms for rural energy access, gender and energy, strengthening reform, regional market integration, energy-environment reviews, and the mitigation of social and environmental impacts of energy infrastructure development. The work on rural and renewable energy strategies was to be closely linked to the poverty reduction framework; market reform work was to be focused on the poorest countries; upstream oil and gas development, and rapid energy-environment appraisals for which there was no expressed demand, was to be phased out. In addition, the program was to contribute to resolving several operational issues, in particular the strengthening of the Africa portfolio, the need to shorten the proposal approval and funding process, and the need to encourage innovation and provide intellectual leadership in certain specific areas. The total cost of the 2002-2004 Business Plan was estimated at US$40 million, increasing from US$11.5 million in year 1, to US$13.1 million in year 2, and US$15.4 million in year 3. This represented a small increase as compared to the initial budget estimate for the 1999- 2001 Business Plan of US$35.6 million. Actually, the funds raised over the 2002-2004 period were US$25.8 million, substantially above the US$17.5 million achievement for the 1999-2001 periods, but still short of the expectations. This issue is further in discussed in Chapter 2. 53 In order to monitor and evaluate the implementation of the Business Plan, a framework was proposed to, and agreed by the CG which distinguished two levels of monitoring and evaluation activities: the output level, which included such indicators as the volume and overall quality of the portfolio, the range of actors and partners involved in ESMAP activities, the dissemination of products, the volume of resources mobilized, and the managerial efficiency in terms of administrative overheads and budget execution; and the impact level, which included such indicators as the volume of citations and references in the literature, the mainstreaming of ESMAP's strategies and policy recommendations by development partners, the level of investments catalyzed as a result of ESMAP's work, the capacity built in countries for replicating future policy or pre-investment work. Accomplishments of the 2002-2004 Business Plan: Strengths and Weaknesses The assessment of the 2002-2004 Business Plan is based on the use of the monitoring and evaluation indicators mentioned above. Most were used and presented systematically during the Business Plan implementation period through the semi-annual reporting system on the portfolio, and other periodic reporting on ESMAP's outputs, financing and budgets. The systematic use of quantitative impact indicators is more difficult in a program like ESMAP because of the wide range of actors and partners involved. Moreover, there are often significant time lags involved between the completion of an ESMAP activity and the anticipated development or policy outcome. ESMAP's management therefore proposed to address this issue by commissioning five specific portfolio and evaluation reviews during the course of the program over the last 3 years on the following portfolios: energy efficiency, rural and renewable energy, regional power trade, sector reform and market development, and gender and energy (see Box 2.2), and reviewed the results of country-level activities in 5 additional thematic areas: indoor air pollution, urban air quality, public-private partnership, revenue management, and reform and the poor. These reviews were complemented by periodic assessments by the Technical Advisory Group (TAG) to the Consultative Group (CG), and/or audit reports. The results of these evaluations have led to the conclusion that, on balance the 2002-2004 Business Plan was successfully implemented, both in thematic and in process areas. It is also recognized that all objectives were not achieved and that further improvements are needed. The achievements and shortcomings are reviewed below, highlighting: (i) the stronger achievements in the thematic areas of energy-poverty, renewable energy, energy efficiency, indoor air pollution, urban air quality as well as on developing monitoring and evaluation methodologies and innovative approaches, and in leveraging policy and investments in some areas; and (ii) the weaker achievements in concluding the work on the impact of sector reform on the poor, in mainstreaming gender in energy, in scaling-up the analytical work on the peri-urban challenge, in leveraging the policy impact of the oil revenue management, and in achieving more effective knowledge dissemination and capturing new agenda issues. Areas of Strength Energy-poverty. Over the years, ESMAP has developed a valuable body of knowledge on energy access issues, both in documenting the energy needs of the poor and coping mechanisms to meet those needs, and in investigating new ways ­ financing and institutional mechanisms and technologies ­ to meet their needs. The incremental contribution under the 2002-2004 Business Plan was to initiate some analytical work on regulatory frameworks for off-grid electrification 54 (starting with Latin America and the Philippines), to carry out best-practice policy work on energy and poverty reduction (Yemen), and to continue developing knowledge products on successful factors and lessons learned from grid electrification ESMAP also delivered successfully on the development and operationalization of the Global Village Energy Partnership (GVEP), which had been retained at the request of the donors as one of the key elements of the Business Plan, with the goal of catalyzing energy stakeholders to increase their activities on modern energy services for economic growth and poverty reduction, in rural, peri-urban, and urban areas. This emphasis was fully justified in light of both the need to give increased attention to the linkages between energy services and poverty reduction to achieve the MDGs, in particular in Africa, and the political momentum building-up for the World Summit on Sustainable Development (Johannesburg, September 2002). In addition to coordinating the development of the partnership concept, and initially hosting the Technical Secretariat, ESMAP supported the first phase of implementation with regional and country-level activities in Africa, Latin America, and in India, as well as thematic workshops with practitioners. In 2004, ESMAP successfully transferred the Technical Secretariat to a new host organization, the International Technology and Development Group (ITDG), located in the UK. It continues to support the Technical Secretariat, with both financing of the host organization and partnership manager and expert resources in certain areas. As of October 5, 2004, more than 440 organizations have committed to working collectively to increase modern energy access by signing the GVEP's Statement of Principles and participating in country level activities. GVEP is now moving towards the full implementation phase to assist countries implement energy-poverty action plans and innovative pilot activities on energy services delivery. ESMAP is presently engaged in country level activities in 8 countries, 4 in Africa and 4 in Latin American, and is working on the preparation of a regional workshop for East Asia with other partners; these are activities, which will be fully implemented under the new Business Plan (Chapter 2). While the effort required from ESMAP on GVEP was considerable, it also gave ESMAP and the World Bank the opportunity to expand on networking and partnerships, in particular with private sector energy stakeholders and NGOs, on which they can capitalize for the future. Nevertheless, this effort created a strain on ESMAP resources. Certain donors raised concern that it might have diverted from ESMAP's primary functions to undertake analytical and knowledge management work. Renewable Energy: ESMAP's renewable energy portfolio during 2002-2004 aimed at helping prepare the ground for the incorporation of renewable energy in future projects and in national energy policies, which were still largely focused on traditional forms of energy and rarely take into account the specificity of renewable energy. The work focused on piloting innovative renewable energy schemes, developing renewable energy policies and strategies and examining how renewable energy can be successfully integrated in energy sector planning for increasing energy security. ESMAP activities supported potential renewable energy projects by demonstrating the feasibility of innovative delivery mechanisms for setting up low-cost renewable energy systems to provide affordable electricity for example: (i) remote Internet and phone access via solar PV-powered packet radio transmissions in Honduras; and (ii) productive applications (ice-making from micro-hydro in the Philippines). At the policy level, ESMAP's work ranged from technical assistance to Cambodia, Mexico and Nicaragua in developing specific policies and strategies for renewable energy, which laid the foundations for large-scale World Bank/GEF projects in these countries, to supporting regulatory and market development for pico-hydro in Ecuador. ESMAP also supported methodological work on energy portfolio management in Mexico, to include renewable energy as an economically viable option in the national energy mix in order to increase energy security. ESMAP policy work also led to specific large-scale investments programs in India and China subsequently implemented with World Bank and GEF financing. Altogether, ESMAP's work has produced valuable insights into the potential 55 of renewable energy for increasing access and reducing energy insecurity, and laid the foundation for scaling-up and operationalization of the commitment to invest in renewable energy expressed by the Bank and other stakeholders at the Bonn Conference of June 2004. The work in support of the development of an enabling environment for scaling-up of renewable energy in national energy mixes and for knowledge dissemination will be pursued and amplified in the new Business Plan (Chapter 3). The next stage for ESMAP is to provide support to countries, to establish a business environment suitable for scaling-up renewable energy, test alternative business models for developing renewable energy under PSP, involving local entrepreneurs and communities to mobilize financing. Energy Efficiency: ESMAP's energy efficiency portfolio during 2002-2004 focused on establishing a direct and clear links between energy, environment, water, and poverty reduction. The energy conservation activities in water utilities in Brazil, Central Asia and China have been followed up by private investments. ESMAP training of financing intermediaries in the financing of energy efficiency activities in Brazil, India, and China, has enabled several banks to start their own portfolios; this work has been carried out in partnership with UNF, UNEP, and RISOE. ESMAP also assisted low-income countries, small cities and towns in Eastern Europe and China in developing heating strategies and pricing policies, which have led to Bank/GEF financed projects. A concern, however, is that this work on energy efficiency has not yet led to a major scaling-up of investments, including by the World Bank. ESMAP is proposing to undertake a major stocktaking exercise on how to leverage the existing knowledge into investment portfolio development (Chapter 3). Indoor Air Pollution: WHO has now recognized Indoor Air Pollution as a major public health issue in many developing countries, causing the premature death and high rate of morbidity in particular among women and children in poor households, half a million children in India alone. Through its portfolio of activities on energy-related indoor air pollution (IAP) developed over the last three years in five countries China, Guatemala, India, Mongolia, and Nicaragua. ESMAP has established itself amongst the leaders in this field in: 1) health impact assessments of indoor air pollution; 2) evaluation of the barriers to the development of improved stove programs, and promotion of innovative designs and best practice and wide knowledge dissemination of improved stoves; and 3) examination of policies and measures to enable the development of liquid and gas fuel alternative such as LPG, kerosene, and natural gas to traditional biomass use. ESMAP has played an important role in enhancing awareness among key local stakeholders, and influencing health professionals in the Bank and client countries, in particular in Asia and Latin America. In India, for example, the Government is undertaking with World Bank and GEF support a project called "Creating Village Energy Security through Biomass" which aims at meeting rural energy needs for productive uses, lighting and cooking through biomass-based technologies using local resources in a manner that creates new income opportunities for the rural population. It has been less successful in Africa, although it did carry out an excellent literature review and issues paper. These activities have provided foundation knowledge, which will be further disseminated under the 2005-2007 Business Plan (Chapter 3), and will lead to new investment activities in several countries. Urban Air Quality. In providing support to what has since become the Clean Air Initiative and contributing to the analytical work of the World Bank's Air Quality Thematic Group, ESMAP has contributed to generating a strong body of analytical work on the impact of urban air pollution on the urban poor, on the correlation between emissions by various fuel-based transport systems and human health, as well as on possible remediation measures. For example, the work on the environmental health damage from baby-taxis in Bangladesh led to new regulations for the 56 lubricant market and the elimination of two-stroke engine vehicles, as well as to new investments in Thailand and India in clean-fuel urban transport. The work on inter-fuel substitution (Pakistan and Nigeria) has also led to changes in the policies on LPG, generating social benefits stemming from the availability of clean cooking fuels on the Box A1.1: Improving Integration of Energy in the Burkina Faso domestic markets: in PRSP ­ 2000-2006 Nigeria, for example, domestic LPG prices have The starting point: The first version of the Burkina Faso PRSP (2000) had very little reference to energy: It contained a factual declined by 40%. The paragraph called "living environment" describing the rate of access to dissemination of this electricity, a mention to electricity in the "reduction of factor costs" analytical work to policy paragraph and a brief description of the importance of a potential rural makers and other electrification program to be developed in the following years. Other stakeholders will continue sources of energy were barely mentioned. This was not found under the new Business satisfactory by the energy community, which tried to improve energy Plan (Chapter 3). references in the Progress Report issued in 2002, but met with little success beyond the description of the "reforms of the sector." A key Monitoring and Evaluation reason was the difficulty in relating to the broader issues treated in the Methodologies: ESMAP PRSP. has been very active in this Changing approach: In February 2003, a delegation of 10 people, area. The methodology led by the Minister of Energy, participated in the multi-sector regional developed with the country- workshop on Energy and Poverty Reduction. The workshop was led case of the Philippines to by ESMAP under the umbrella of GVEP. The 3-day workshop measure the impact of provided the Ministry of Energy with the opportunity of electrification on education, understanding the design of the PRSP from the standpoint of other health, and income sectors. The Burkina team collectively wrote an initial draft Energy generation of poor Action Plan that outlined how energy could contribute to the households is now being achievement of other sector's goals within the PRSP. The Ministry of adopted as a standard Energy later enriched this document and, with the support of several donors, used it as a tool to engage the Ministries in charge of the methodology in an PRSP revision process through late 2003. increasing number of projects (Cambodia, Laos, Results: The 2004 PRSP now includes significant references to Bangladesh, Senegal). energy, including the linkages between energy services as "means to ESMAP has also promote growth in remote rural areas," to improve "access to water," contributed to the "agriculture development" and "gender promotion;" wood fuels are development and testing of included, and an entire page is devoted to "rural electrification." Energy Modules in More importantly, it now includes an allocation of Heavily Indebted household surveys which Poor Countries (HIPC) funds and a new energy-related indicator in are used in poverty the monitoring indicators. The HIPC allocation is modest (2%), but this is in line with the expected 2.5% contribution of the energy sector assessment and self- to the GDP growth and the "rate of electrification" indicator. standing Living Standards Measurement Surveys Additional work needed: The Ministry of Energy is now focusing (LSMS). This work will be on the Implementation Program of the PRSP for 2004 to 2006, further disseminated including its direct contributions to other sectors. For example, it has through staff training committed to electrify a specific number of school and health centers programs in the Bank and over the next 3 years to support the education and health sectors. client countries (Chapter 3), as well as through cooperating with GVEP partners on the monitoring of the partnership outcomes. Innovation in Multi-Sector Approaches. Taking on the operational challenge of building up the linkages and the MDGs, ESMAP drew on various sources to develop new operational concepts 57 for multi-sector approaches in energy services development. In particular, it benefited from the above-mentioned methodological and analytical work done in the Philippines, from the lessons from such projects as the Uganda-Electrification for Rural Transformation, and from the experience with the implementation of the Comprehensive Development Framework and PRSP of Burkina Faso. ESMAP designed multi-sector/multi-stakeholder workshops, which offered participants the opportunity to design their own country programs that integrate energy services as an input to achieve the objectives in health, education, water, agriculture and SME development. These workshops laid the foundations for integrating energy in the revisions of the Poverty Reduction Strategies (Box 2.1) and for the country-level activities, which are now being pursued under the GVEP program. Deepening the implementation of the multi-sector approach, ESMAP's support led to the development of new terms for rural electrification concessions in Senegal, which target the applications of the services to specific social or productive applications. Other examples of ESMAP's innovative multi-sector work include pilot activities in Honduras to demonstrate innovative institutional and financing delivery mechanisms for setting up a low-cost model to model to obtain remote internet and phone access via solar PV-powered packet radio transmissions; and a project carried out with the private sector in Morocco intended to increase energy and water efficiency in the industrial park, and finance improvements in housing and social infrastructure from the savings in energy and water expenditures through an Environment and Social Fund. Dissemination of this work had started through publications and presentations in various fora and will continue (Chapter 3). Streamlining the ESMAP Process. Analyzing the results of a review of the 57 proposals approved between 1998 and 2002 (Graph A1.1) showed that on average six months used to elapse between submission of a proposal, approval, and the first allocation of funds. The process was revised in 2003 and the time elapsed reduced to 10 weeks. This was made possible with the following measures: closer follow-up of every proposal, strict adherence to announced processing schedule, and more systematic interface with donors earlier in the process. In addition, ESMAP introduced a Fast-Track Window in response to just-in-time requests for projects under US$50,000, for which the request is limited to a two-page concept note, and ad hoc reviews are immediately set up. The Fast Track Window proved effective in accelerating the delay between proposal submission and approval, which was reduced to about fifteen days; however, disbursements for some of these projects proved to be slower than expected after approval, as their implementation was dependent upon the preparation cycle of the associated project, which slipped in certain cases with a parallel impact on the implementation of the Fast Track ESMAP project. Graph A1.1: Streamlining the Proposal Approval Process (1998-2002) 58 Leveraging Policy Change and Investments. Although a complete quantitative assessment is not available, ESMAP management is seeing an increase in follow-up activities in client countries key changes in government policies, in the development of new investments and adoption of new technologies, and in the increase in donors' financing. Examples of such impact from the indoor air pollution, urban air quality, energy efficiency, and private sector provision of energy services activities have been cited in the previous paragraphs. Additional examples include the impact of ESMAP's work on renewables in India (TAG's review) which attributed to ESMAP's policy work the trigger for the Government's policy change towards renewables, with the result that today more than 10,000MW equivalent based on renewables are now in the energy system. The energy-poverty workshops mentioned above have triggered the integration of energy in PRSP updates and the integration of new projects or project components in several countries (Brazil, Honduras, Cameroon, Burkina, Madagascar, Mauritania, Senegal, Zambia, Mexico). This increased evidence of ESMAP's leverage suggests both increased alignment between ESMAP activities and World Bank's and other donors' activities, and the value of ESMAP to undertake activities that support the implementation of new investments. This is an important lesson that helps define the operational leveraging function of ESMAP for the new business plan (Chapter 3). Weaker Areas Impact of Sector Reform on the Poor. This is a theme for which ESMAP management both commissioned work and responded to country requests. The portfolio of activities is promising, but only two activities, Yemen and Central America, are completed. This work has elicited a lot of interest from other countries (e.g. Ghana, Lesotho, Malawi, Nigeria, Djibouti, Pakistan, and more recently, Mauritania) but the results in these countries are not yet available. The other activities on the impact of sector reform on the poor has not moved at the speed expected largely because they are complex multi-country studies being implemented with a large number of decentralized local research organizations so that the results from both the methodological design and the country applications are not yet fully available. The results are now expected in 2005 for further dissemination (Chapter 3). Delivering Services for the peri-urban poor. Past ESMAP work on peri-urban issues--besides the urban air quality work ­ focused essentially on issues related to the supply of domestic fuels and their impact on biomass resources (India) and environmental health (Mauritania), and to the introduction of innovative solutions to improve basic housing, energy, water and sanitation services (Brazil, Kenya, Tunisia, Morocco). The issue of the peri-urban areas was retained as a "development business line" with the objective of initiating work more aggressively. The value- added of the activities initiated over the past three years (Brazil, Nigeria) is to start recognizing the pressure emanating from the trends in accelerating urbanization and from the impoverishment of cities on the provision of basic energy and other infrastructure services. This is clearly insufficient, and the issue being increasingly recognized by policy makers, municipal managers, and donors. ESMAP has retained this concern as a key theme for further work (Chapter 3). Gender in Energy. Quality work has been done, but mainstreaming the results is insufficient. The Gender in Mining International Workshop in Papua and New Guinea was ground-breaking territory which led to other national workshops in Eastern Europe, and more importantly, it 59 provided participating women with ideas and tools to raise funding for economic reconversion activities. The Bangladesh project Women and Renewable Energy has had a significant impact, both on the policy and program design for renewables in Bangladesh, but also in launching the local manufacturing of components for solar home systems. Other gender-in-energy activities have included workshops, studies and pilot projects in rural electrification and other energy services. Although ESMAP has worked both with the World Bank's Gender Group and the operational staff on these activities, the impact on Bank and other stakeholder activities is still limited. There is not yet enough recognition that 70% of the poor are women, and access to energy services has a gender dimension that brings considerable benefits to women in health, education and productive activities. For example, modern cooking fuels free women from the burden of collecting and carrying large loads of wood fuel and from exposure to debilitating fumes from primitive stoves. In addition, access to modern energy enables women to develop their own income activities. More resources need to be mobilized, and more dissemination efforts need to be undertaken, to achieve results that ensure electrification and energy services programs more generally meet the needs of women and men. ESMAP is presently working on a joint publication with Energia and NREL which will review the issues and provide best practice examples; a stock-taking workshop is also envisaged in order to define ESMAP's options on how to best address this issue (Chapter 3). Expansion of Africa Portfolio. Although the number of projects increased by about 10 projects as compared to end 2001, the proportion of the Africa portfolio in the whole ESMAP project portfolio both in number and in value has not increased noticeably. For the previous business plan, ESMAP had identified the lower success rate of proposals (28% vs. 42% portfolio average, submissions to approvals) as a possible contributing factor. This was no longer the case under this Business Plan (68% vs. 49% portfolio average), and Africa received more of ESMAP's staff dedicated support than any other region. This disappointing increase in ESMAP portfolio in the Africa region was due to several factors, including the lack of available Task Managers in the region as it was devoting all its resources to World Bank portfolio supervision, and scaling up its energy operations, the availability of regional trust funds for support to project preparation, and the slow emergence of access as a regional priority over the period under consideration. ESMAP's management therefore counts on the better alignment between the priorities of the Africa region access, sector management and regional energy market integration and ESMAP's priorities, and on the new operational procedures proposed for the new Business Plan (see Section III) to remedy to this situation. Knowledge Dissemination. Knowledge products are ESMAP's major outputs. ESMAP issues about 30 publications a year, including its own publications, CD-ROMs, and publications with partner organizations. However, concerns were raised that ESMAP was not dedicating sufficient resources to digest and disseminate knowledge effectively and efficiently. The website has been improved, and the number of hits significantly jumped when it was reopened to about 44,000 hits a month, but has leveled off again around 16,000 in 2004; possible explanations include that the search engine is not yet agile enough, and not enough visibility is given to the site. ESMAP publication process is still slow, and short notes are needed to digest the comprehensive studies and disseminate their conclusions to a broader public. Although there are lots of quality ESMAP publications, too few have been given the dissemination, visibility and wide recognition they deserve. The course on Urban Air Quality developed with WBI and delivered already in three 60 languages to an audience of about 4,000 persons is an example of successful knowledge dissemination. It is the prototype of dissemination activities that ESMAP plans to develop under the new business plan. In the new business plan, innovative methods and partnerships for knowledge dissemination will be developed (Chapter 3). Capturing New Agenda Issues. ESMAP is continuingly challenged to provide leadership in capturing new agenda issues, and scanning the horizon for commissioning just-in-time analytical work. In some areas power sector reform, electricity pricing, rural and renewable energy strategies, revenue management, regional power trade ESMAP's valuable past contributions are recognized. These activities have directly addressed energy poverty issues, generated in- country momentum, played a catalytic role in policy changes, generated and disseminated knowledge, and leveraged Bank operations. However, as the ESMAP business model was based essentially on implementing its business plan through the Regions, it had limited opportunities to engage in own work-program activities. This limitation will be eased through the implementation of the new operational framework presented in Chapter 3. The process for understanding the market for ESMAP's work has also been questioned, and concerns were raised by the TAG. A systematic effort has been made to review the issues which are brought out in the main international conferences and in the Bank Energy Week and energy publications, and to draw from focused discussions with country clients, donors, TAG, the private sector, NGOs, the members of the Energy and Mining Sector Board, and the many staff from the energy and other practices with whom ESMAP interacts. The result from this process has enabled ESMAP to select the main thematic areas for the past and forthcoming business plans, as well as providing inputs for future orientations of the World Bank's energy work (e.g. regulation of decentralized energy services and distributed energy, energy security). Nevertheless, in order to address these concerns and become more agile and forward looking, ESMAP is proposing a new mechanism for "scanning the horizon," which is described in Chapter 3. Conclusion To conclude, the 2002-2004 Business Plan can be seen as a productive continuation of the program development, both on content and on business processes. Yet, several of the shortcomings noted at the onset of the Business Plan were not corrected. The level of effort on knowledge dissemination, for example, has remained insufficient. Other lessons from the review of the 2002-2004 Business Plan include: The three year time frame of the business plan, to bring in new activities and phase out others, has its shortcomings: at least five years of intensive work are needed to develop a solid body of work, then disseminate it effectively. ESMAP's substantial achievements with Measuring Energy-Poverty linkages, Lead Elimination, Indoor Air Pollution, Regional Power Market Integration, Rural Electrification and Renewable Energy Strategies, have been possible only because of continued work in these areas for five years or more. The empirical and analytical work on a theme must be carried out across a sufficiently large number of countries or circumstances to validate results, identify factors of success or failure, and criteria for replicability. 61 Given the relatively small size of the program, selectivity and concentration on fewer themes is preferred. Deepening the analytical and operational leveraging at the country level provides for higher probability of sustainable solutions. Having recognized both, the strengths and the weaknesses of the program, significant adjustments to the program, in particular a new operational framework has been designed for the new business plan. These issues are addressed in greater detail in Chapter 3. 62 Solar Panels and telephones in Qunu in the Eastern Cape, South Africa. 63 APPENDIX LIST OF KNOWLEDGE DISSEMINATION ACTIVITIES AND PUBLICATIONS: 2002- 2004 ESMAP ESMAP Business Plan 2005-2007 International Workshops, Conferences, and Presentations 1. Turkey: A number of reports produced under the Turkey Energy Environment Review (Phase III) project were discussed at a major stakeholders' workshop in Istanbul (June 2002). 2. Azerbaijan: The Azerbaijan­Natural Gas Sector Restructuring and Regulatory Reform project presented NERA's inception report at a stakeholder workshop in Baku (March 2002). 3. Cambodia: First national stakeholder workshop was held under the Cambodia Renewable Energy Action Plan project in Phnom Penh (January 2002). 4. Cambodia: Final national stakeholder workshop was held under the Cambodia Renewable Energy Action Plan project in Phnom Penh (November 2002). 5. India: A major regional workshop was held under the India Indoor Air Pollution activities in Delhi (May 2002). 6. India: Three-country workshop was held in Delhi under the Financial Intermediation Mechanisms for Energy Efficiency Projects in Brazil, China and India activity (May 2002). 7. Ethiopia: Regional Energy and Poverty Reduction Workshop was held by ESMAP and the World Bank's Africa Energy team in Addis Ababa (October 2002). 8. South Africa: The Global Village Energy Partnership was launched at a well-attended side event at the World Summit on Sustainable Development in Johannesburg (August 2002). 9. Côte d'Ivoire: ESMAP and the World Bank's Africa Energy team co-financed a workshop on rural electrification for poverty reduction in Abidjan (March 2002). 10. Brazil: A document about the National Rural Energy Strategy was discussed at a Stakeholders' Consultation Workshop under the Brazil Rural Electrification Strategy project (June 2002). 11. Brazil: Stakeholder roundtable about financing options for energy efficiency projects was held in Rio de Janeiro, under the Brazil Energy Efficiency Monitoring & Evaluation for Water Utilities project (September 2002). 12. Bolivia: Third of four stakeholder workshops held in Trinidad, Bolivia, under the Training Program for Key Group Representatives of Indigenous Peoples (September 2002). 13. Ecuador: The Ecuador­Indigenous People's Training Program on Oil Development activity held a consensus- building training course for the representatives of indigenous peoples (February 2002). 14. ESMAP sponsored session on Solid Fuel Use in Developing Countries (with 12 sponsored developing-country participants) was held at Indoor Air Pollution 2002 Conference, Monterrey, California (July 2002). 15. An international stakeholder workshop on Petroleum Revenue Management was held in Washington, DC, under the Governance and Revenue Management project (October 2002). 16. Belgium: EU/ESMAP workshop on power sector for EU accession candidates was held in Brussels (March 2002). 17. Belgium: EU/ESMAP workshop on power sector for EU accession candidates was held in Brussels (November 2002). 18. Energy-Poverty Nexus in Africa (GVEP). Dakar, Senegal, February 4-6, 2003 19. Activity Dissemination Workshop: Health Impacts of Traditional Fuel Use in Rural Households in Guatemala. Held in Guatemala from April 1-2, 2003 20. GVEP Technical Secretariat and Kreditanstalt fur Wiederaufbau sponsored a Workshop in Berlin for input on the GVEP financing facilitation line. April 2003. 21. The South Asia Practitioners' Workshop brought together energy practitioners to share lessons learned and develop best practices, and network for follow-up opportunities. These practitioners had many years of experience in their own countries, but had never had the opportunity to share experiences across borders. Columbus, Sri Lanka. June 2003. 22. A major regional conference was held in Santa Cruz, Bolivia, on the delivery of energy services to rural areas in Latin America and the Caribbean. More than 260 participants from 21 countries attended. Eight countries have since presented draft national action plans that they developed with support from the conference. July 2003. 23. Workshop Focused on Energy-Poverty Nexus in Africa (GVEP). Douala, Cameroon. July 16-18, 2003. 24. At the Second World Forum on Energy Regulation, ESMAP had as an objective involving more developing country regulators and ensuring that the forum agenda met their needs. Feedback after the forum confirmed that the Second Form was more relevant to developing country needs than the previous forum held in 2001. Rome, Italy, October 2003. 25. Workshop Focused on Energy-Poverty Nexus in Africa (GVEP). Addis Ababa, Ethiopia. October 23-25, 2003. 26. In Norway, ESMAP sponsored a workshop on Revenue Management in the Petroleum Industry for a delegation from Chad. The objective was to inform the delegation about the way Norway is handling the income from the petroleum industry, and create a forum for discussion about relevant issues concerning revenue management. 65 27. ESMAP presented "Energy, Gender and the MDGs" at the International Workshop on Gender Equality and the MDGs, Washington DC, November, 2003 28. Nicaragua Policy and Strategy for the Promotion of Renewable Energy Resources Project held in Managua, Nicaragua, February 2004 and in December 2004. 29. Presentation at the request of the Infrastructure Vice Presidency for the Development of the Administrative Client Support Staff (ACS). Presented by John Strongman on the ESMAP Activity: Women in Energy and Mining Voices for Change: A Vision for a Better Future. March 17, 2004. 30. Columbia University: The Energy Challenge for Poverty Reduction and Economic Growth. March 23, 2004 31. Brown University: The Energy Challenge for Poverty Reduction and Economic Growth. March 31, 2004 32. World Bank Priorities: The Energy-Environment Perspective. April 22, 2004. 33. Lead Elimination: ESMAP's Global Experience. Nairobi, May 6, 204. 34. Princeton University: Indoor Air Pollution Workshop. May 25, 2004. 35. Business Forum on Renewables Presentation on: The Markets for Renewable Energies and the World Bank Group" June 2, 2004. Germany, 2004. 36. International Conference for Renewable Energies, Bonn, Germany, June 1-4, 2004. 37. Africa Energy Forum in Amsterdam. June 21, 2004. 38. North American meeting of the International Association for Energy Economics (IAEE). Session entitled "The Global Energy, Environment and Investment Outlook" July 8, 2004. 39. ESMAP presented "Domestic Energy and Women's Lives: The Case of India," at the Society for International Development, Washington, DC, July 2004. 40. World Renewable Energy Conference (WREC). Denver, August 2004. 41. Stanford University: Rural Electrification Workshop. August 2004. 42. Mexico's Innovative Financing Mechanism for Energy Efficiency in Mexico. Presentation delivered to PowerMex in Mexico City, Mexico, September 2004. 43. ESMAP presented "Benefits of Rural Electrification for Development: Implications for the MDGs" at Columbia University, September 2004. 44. Presentation to Canadian Regional Government entities and private sector enterprises of the Bank's energy strategy, and of ESMAP: its goals, products, and portfolio of activities. November 14, 2004. 45. ESMAP presented "Rural Electrification Public Policies and Programs: Do They Mater" at the Conference Electricity and the Human Prospect, Stanford University, December 8-9, 2004. 46. ESMAP co-sponsored the Clean Air Initiative (CAI) Asia: Better Air Quality 2004 Annual Conference for CAI- Asia in Agra, India, December 4-9, 2004. 47. ESMAP Presentation: "Policies for Improving Rural and Peri-Urban Access to Modern Energy Services." Energy for Development 2004 Conference in Noordwijk, The Netherlands, December 13, 2004. Knowledge Exchange Series, Roundtables, and Booths 1. Indoor Air Pollution Roundtable Discussion. March 19, 2003. 2. ESMAP/Energy Market Development Thematic Group/ASTAE: PEPCO Development and Management of Green Electricity Offerings, March 27, 2003. 3. Infrastructure Forum: "Connecting People to Resources and Opportunities." May 2-5, 2003. 4. Delivered to the Administrative Client Support Staff (ACS) of the Infrastructure Vice Presidency under the INFVP Breakfast Series: "The Global Village Energy Partnership GVEP." June 11, 2003. 5. ESMAP/European Commission/PPMI/PPIAF Roundtable: Financing and Reform needs in the Water and Power Sector in Lebanon for the Middle East and North Africa. June 11, 2003. 6. Reducing Energy Costs in Water Utilities. June 12, 2003. 7. Power Sector Reform and the Poor in Central America. July 2003. 8. Global Programs were showcased at the request of the Infrastructure V ice Presidency in response to HD week. September 9, 2003 9. Roundtable on Lessons Learned on Hydro Power Investment. September 10, 2003. 10. ESMAP/COCPO: Small-Scale Rural Gas Projects in Bolivia. September 23, 2003. 11. Landfill Gas Capture in Sub-Saharan Africa: Opportunity and Feasibility Report. November 4, 2003. 12. At the request of the Infrastructure Vice Presidency during Human Development Week. November 10, 2003. 13. Rapid Assessment (RA) of Environmental Policies in the Power Sector. Karnataka and Rajasthan. November 17, 2003. 66 14. ESMAP/COCPO: Energy, Environment, and Population Program. November 21, 2003. 15. Invited by the Infrastructure Vice Presidency for the Development Market Place. December 3-4, 2003. 16. The Dams Planning and Management Action Plan. A Tool-Kit for Bank Operations. January 20, 2004. 17. ESMAP/IIE/SID Presentation: Domestic Energy and Women's Lives: The Case of India. January 21, 2004. 18. Regional Electricity Market Integration. January 22, 2004. 19. ESMAP/Energy and Mining Sector Board: ESMAP Activity: Energy and Mining Sector Board Lecture Series on some of the Rural Electrification work carried out by ESMAP. February 11, 2004. 20. Renewable Energy Policies and Action Plans. February 26, 2004. 21. ESMAP/GPOBA BBL: Joint ESMAP-GPOBA-Energy&Poverty Thematic Group BBL: Promoting Private Investment in Rural Electrification in the Philippines. March 1, 2004. 22. ESMAP (World Bank Group) Participation in the International Conference for Renewable Energies, Bonn, Germany, June 1-4, 2004. 23. Invited by the 5th Annual Staff Exchange and Knowledge Sharing Program Conference and Expo on June 28-29, 2003. 24. ESMAP/ESSD East Asia Pacific Region: Air Pollution in China: Sulfur and Particulate Pollution Sources and Control Measures. July 22, 2004. 25. Lessons Learned from the ESMAP Renewable Energy Portfolio. September 29, 2004. 26. Innovative Financial Intermediation in Poland. November 11, 2004. 27. ESMAP/Urban Transport Thematic Group: Eliminating Emissions from Two-Stroke Engine Baby-Taxis in Dhaka. November 16, 2004. 28. The Uses of Pico-Hydro Technologies in Rural Development Programs. November 22, 2004. 29. Scaling up Energy Efficiency Financing in Brazil, China and India. Held on December 16 at 10:00a.m in Room H7- 290. 30. ESMAP/Energy and Water Department: Energy for Development 2004 Conference in Noordwijk, The Netherlands, December 12-14, 2004. 67 PUBLICATIONS 2002 1. Cambodia: Efficiency Improvement for Commercialization of the Power Sector. 031/02 East Asia 2. Mongolia: Improved Space Heating Stoves for Ulaanbaatar. 254/02 Pacific 3. Philippines. Rural Electrification and Development in the Philippines: Measuring the Social and 255/02 (EAP) Economic Benefits. 4. Vietnam: An Overnight Success: Vietnam's Switch to Unleaded Gasoline. 257/02 5. Vietnam: The Electricity Law for Vietnam: Status and Policy Issues. The Socialist Republic of Vietnam. 259/02 6. Vietnam: Renewable Energy Action Plan. 021/02 South Asia 1. Bangladesh: Reducing Emissions from Baby-Taxis in Dhaka. 253/02 (SAR) 2. India: Energy Strategies for Rural India: Evidence from Six States. 258/02 3. India: Household Energy, Indoor Air Pollution, and Health. 261/02 Europe and Central Asia 1. Bulgaria: Energy Environment Review 260/02 (ECA) 1. Economic Development, Climate Change, and Energy Security. N/A 2. Annual Report 2000-01. N/A Global 3. Energy and Development Report 2001: Energy and the Environment. N/A (GLB) 4. Status of ESMAP Portfolio of Projects as of June 30, 2002. N/A 5. Economic Development, Climate Change, and Energy Security: The World Bank's Strategic Perspective. N/A Paper No. 3. 6. Private Financing for Community Infrastructure. 256/02 Sub Saharan 1. Phase-Out of Leaded Gasoline in Sub-Saharan Africa. 028/02 Africa (SSA) 2. Regional Conference on the Phase-Out of Leaded Gasoline in Sub-Saharan Africa held in Senegal. 029/02 3. Nigeria: Phase-Out of Leaded Gasoline in Nigeria. 4. Tanzania: Mini Hydropower Development Case Studies on the Malagarasi, Muhuwesi, and Kikuletwa 022/02 Rivers. Volumes I, II and III 024/02 1. Proposals to facilitate Increased Energy Exchanges in South America ­ Phase II. 016/01 Latin 2. Population, Energy and Environment (EAP) English and Spanish. 020/02 America and 3. Estudio Comparativo sobre la Distribución de la Renta Petrolera, Estudio de Casos: Bolivia, Colombia, 023/02 the Ecuador y Perú. Caribbean 4. Latin America and the Caribbean Refinery Sector Development Report. Volumes I and II. 026/02 (LCR) 5. The Population, Energy and Environmental Program (EAP). English and Spanish. 027/02 6. Ecuador: Programa de Entrenamiento a Representantes de Nacionalidades Amazónicas en Temas 025/02 Hidrocarburíferos. 7. Nicaragua: Memoria Taller de Electricicación Rural. 030/02 2003 1. China: Air Pollution and Acid Rain Control. The Case of Shijiazhuang City and the Changsha Triangle 267/03 East Asia Area. Pacific 2. Vietnam's Petroleum Sector: Technical Assistance for the Revision of the Existing Legal and Regulatory 269/03 (EAP) Framework. 3. Thailand: Why Liberalization May Stall in a Mature Power Market: A Review of the Technical and 270/03 Political Economy Factors that Constrained the Electricity Reform in Thailand 1998-2002. 4. Thailand: Reducing Emissions from Motorcycles in Bangkok. 275/03 1. Sustainable Transport Options for Sri Lanka: Vol. I; Greenhouse Gas Mitigation Options in the Sri Lanka 262/03 Power Sector: Vol. II; Sri Lanka Electric Power Technology Assessment (SLEPTA): Vol. III. South Asia 2. India: Access of the Poor to Clean Household Fuels. (SAR) 3. Regional: Energy and Poverty Reduction: Proceedings from South Asia Practitioners Workshop How Can 263/03 Modern Energy Services Contribute to Poverty Reduction? Colombo, Sri Lanka, June 2-4, 2003. 268/03 68 Europe and 1. Turkey: Energy and Environment Review. 273/03 Central Asia 2. Romania: Private Sector Participation in Market-Based Energy-Efficiency Financing Schemes. Lessons 274/03 (ECA) Learned from Romania and International Experiences. 3. Russia: Russia Pipeline Oil Spill Study. 034/03 1. Stakeholder Involvement in Options Assessment: Promoting Dialogue in Meeting Water and Energy Needs: 2645/03 A Sourcebook. 2. A Review of ESMAP Energy Efficiency Portfolio. 271/03 3. Cross-Border Oil and Gas Pipelines: Problems and Prospects. 035/03 Global 4. Monitoring and Evaluation in Rural Electrification Projects: A Demand-Oriented Approach. 037/03 (GLB) 5. Household Energy Use in Developing Countries: A Multi-country Study (printing/editing paid by ESMAP). 042/03 6. Knowledge Exchange: Online Consultation and Project Profiles from South Asia Practitioners Workshop. 043/03 Colombo, Sri Lanka, June 2-4, 2003. N/A 7. Status of ESMAP Portfolio of Projects As of December 31, 2002. 8. Status of ESMAP Portfolio of Projects As of June 30, 2003. N/A 9. Annual Report 2002 (CD Version). N/A 10. Energy Services for the World' Poor. Spanish Version. Also available on CD. (ISBN-08213-4705-5) N/A 11. Energy, Poverty and Gender (EnPoGen) Synthesis Report. Two special reports were commissioned under N/A the project: (a) a report on the gender aspects of energy and poverty in the context of rural electrification by Elizabeth Cecelski (Cecelski 2003), and (b) a report on a demand-oriented approach to monitoring and N/A evaluation of rural electrification projects by ASTAE-ESMAP in association with Winrock International and the Mallika Consultants (Winrock International, the World Bank, and the Mallika Consultants 2003). 1. SSA: Sub-Saharan Petroleum Products Transportation Corridor: Analysis and Case Studies. 033/03 2. SSA: Phase-Out of Leaded Gasoline in Oil Importing Countries of Sub-Saharan Africa: The Case of 038/03 Ethiopia - Action Plan. (Clean Air Initiative/ESMAP). Sub Saharan 3. SSA: Phase-Out of Leaded Gasoline in Oil Importing Countries of Sub-Saharan Africa: The Case of 039/03 Africa (SSA) Tanzania - Action Plan. (Clean Air Initiative/ESMAP). 4. SSA: Phase-Out of Leaded Gasoline in Oil Importing Countries of Sub-Saharan Africa: The Case of 040/03 Mauritania - Action Plan. (Clean Air Initiative/ESMAP)Elimination du Plomb de l'Essence dans les Pays Importateurs de Pétrole de l'Afrique Sub-Saharienne: Le Cas de la Mauritanie - Plan d'Actions. 5. SSA: Phase-Out of Leaded Gasoline in Oil Importing Countries of Sub-Saharan Africa: The Case of Mali - Action Plan. (Clean Air Initiative/ESMAP)Elimination du Plomb de l'Essence dans les Pays Importateurs de 041/03 Pétrole de l'Afrique Sub-Saharienne: Le Cas du Mali -Plan d'Actions. 6. SSA: Sub-Regional Conference on the Phase-out Leaded Gasoline in East Africa, June 5-7, 2002. Working Paper #9 (Clean Air Initiative/ESMAP). 044/03 7. SSA: Second Steering Committee: The Road Ahead. Clean Air Initiative in Sub-Saharan African Cities. Paris, March 13-14, 2003. Working Paper #12 (Clean Air Initiative/ESMAP). 045/03 8. SSA: Elimination du Plomb dans I'Essence en Afrique Sub-Saharienne. Conference Sous Regionales du Groupe Afrique de l'Quest. Dakar, Senegal, March 26-27, 2002. Working Paper #8 (Clean Air Initiative/ 046/03 ESMAP). Latin America 1. Brazil: Reducing Energy Costs in Municipal Water Supply Operations. "Learning-while-doing" energy 265/03 and the M&T on the Brazilian Frontlines (report was published jointly thus it does not carry ESMAP's cover). Caribbean 2. Guatemala: Household Fuel Use and Fuel Switching. (LCR) 036/03 1. Regional: Energy and Poverty Reduction: Proceedings from a Multi-Sector and Multi-Stakeholder 266/03 Africa (AFR) Workshop. Addis Ababa, Ethiopia, October 23-25, 2003. 2. Ghana: Corporatization of Distribution Concessions Through Capitalization. 272/03 3. Zambia: Power Sector Restructuring Program: Technical Assistance to ZESCO. 032/03 2004 East Asia 1. China: Capacity Building for National and Provincial Socially and Environmentally Sustainable 287/04 Pacific Management of Coal Resources in China. (EAP) 2. Vietnam: Vietnam's Petroleum Sector: Technical Assistance for the Revision of the Existing Legal and 053/04 Regulatory Framework. 1. India: The Impact of Energy on Women's Lives in Rural India. 276/04 2. India: Environmental Issues in the Power Sector: Long-Term Impacts and Policy Options for Rajasthan. 292/04 South Asia 3. India: Environmental Issues in the Power Sector: Long-Term Impacts and Policy Options for Karnataka. 293/04 (SAR) 4. Regional: Toward Cleaner Urban Air in South Asia: Tackling Transport Pollution, Understanding Sources. 281/04 5. Bangladesh: Integrating Gender in Energy Provision: Case Study of Bangladesh. 054/04 6. Bangladesh: Opportunities for Women in Renewable Energy Technology Utilization Phase I. 055/04 69 Europe and 1. Regional: Development of Heat Strategies for Urban Areas of Low-Income Transition Economies: Urban 282/04 Central Asia Heating Strategy for the Republic of Armenia. Including a Summary of a Heating Strategy for the Kyrgyz (ECA) Republic. 2. Ukraine: Integrated Heat Demonstration (ACR ­ Restricted) 001/04 1. Energy and Poverty Reduction: Proceedings from the Global Village Energy Partnership (GVEP) 294/04 Workshop on Pre-Investment Funding. Berlin, Germany, April 23-24, 2003. 2. A Review of ESMAP's Rural Energy and Renewable Energy Portfolio. 280/04 3. ESMAP Renewable Energy and Energy Efficiency Reports. 1998-2004 (CD only). 283/04 4. Regulation of Associated Gas Flaring and Venting: A Global Overview and Lessons Learned from 285/04 International Experiences. 5. ESMAP Women in Energy Reports and other Related Information. (CD Only) 288/04 6. ESMAP Indoor Air Pollution and other Related Information. (CD Only). 289/04 Global 7. GVEP Annual Report 2004 (GVEP). 295/04 (GLB) 8. Manila Workshop Proceedings (GVEP). 296/04 9. Energy & Environmental Health: A Literature Review and Recommendations. 050/04 10. Petroleum Revenue Management Workshop. 051/04 11. Developing Financial Intermediation Mechanisms for Energy Efficiency Projects: Focus on Commercial 058/04 Banking Windows for Energy Efficiency. (CD Only). 12. Evaluation of ESMAP Regional Power Trade Portfolio. 059/04 13. Gender and Sustainable Energy Regional Workshop Series: Mesoamerican Network on Gender in 061/04 Sustainable Energy (GENES). Winrock/ESMAP. 14. Women in Mining Voices for a Change Conference (CD Only). 063/04 15. Status of ESMAP Portfolio of Projects: As of December 31, 2003 N/A 16. Status of ESMAP Portfolio of Projects: As of June 30, 2004 002/04 17. 2003 Annual Report N/A 18. Empowering Information and Communication Technologies in Isolated Areas: Learning from the Solar- N/A Net Villages Program in Honduras. 18. The Impact of Higher Oil Prices on Low Income Countries and on the Poor (for Discussion) N/A Sub Saharan Africa (SSA) 1. SSA: Opportunities for Integration ­ Power Trade In the Nile Basin. Phase I. 277/04 1. Guatemala: Health Impacts of Traditional Fuel Use. Published by the Office of the Publisher, ISBN-0- 284/04 8213-6082-5. Latin 2. Guatemala: Evaluation of Improved Stove Programs: Final Report of Project Case Studies. 060/04 America and 3. Bolivia: Capacitación de Pueblos Indígenas en la Actividad Petrolera. Fase II. (Spanish and English 290/04 the versions). Caribbean 4. Bolivia: Estudio Sobre Aplicaciones en Pequeña Escala de Gas Natural. (Spanish and English versions). 291/04 (LCR) 5. Regional: Rural Electrification & Power Reform in Central America. 297/04 6. Regional: Bank Experience in Non-energy Projects with Rural Electrification Components: A Review of 052/04 Integration Issues in LCR. 7. Regional: Supporting Gender and Sustainable Energy Initiatives In Central America. 062/04 8. Mexico: Energy Policy and the Mexican Economy. 047/04 1. Nigeria: Nigeria Strategic Plan. 279/04 2. Nigeria: Nigerian LP Gas Sector Improvement Study. 056/04 3. Nigeria: Taxation and State Participation in Nigeria's Oil and Gas Sector. 057/04 4. Regional: Énergies modernes et réduction de la pauvreté: Un atelier multi-sectoriel. Actes de l'atelier 278/04 Africa (AFR) régional. Dakar, Sénégal, du 4 au 6 février 2003 (French only) Proceedings of the Dakar Workshop. 5. Regional : Énergies modernes et réduction de la pauvreté: Un atelier multi-sectoriel. Actes de l'atelier régional. Douala, Cameroun, du 16 au 18 juillet 2003 (French only). Proceedings from the Douala Workshop. 286/04 6. Regional: 1998-2002 Progress Report. The World Bank Clean Air Initiative in Sub-Saharan African Cities. 048/04 Working Paper#10 (Clean Air Initiative/ESMAP). 7. South Africa: South Africa Workshop: People's Power Workshop. 064/04 Middle East 1. Regional: Roundtable on Opportunities and Challenges in the Water, Sanitation and Power Sectors in the 049/04 and North Middle East and North Africa Region. Summary Proceedings. May 26-28, 2003. Beit Mary, Lebanon. (CD Africa only). (MENA) 70 1. SSA: Urban Air Pollution. South Asia Urban Air Quality Management and ESMAP Briefing Notes 1-15. N/A (Joint) Joint and 2. SSA: Indoor Air Pollution Associated with Household Fuel Use in India: An Exposure Assessment and N/A Translated Modeling Exercise in Rural Districts of Andhra Pradesh, India. (Joint) Reports 3. SSA: Clean Household Energy for India: Reducing the Risks to Health. (Joint) N/A 4. GLB: Mejores Prácticas para el Desarrollo Sostenible de la Micro-Hidroenergía en los Países en Desarrollo. 006/04 (Translated) 5. Bolivia: Capacitación de Pueblos Indígenas en la Actividad Petrolera. Fase II. (Translated) 290/04 6. Bolivia: Estudio Sobre Aplicaciones en Pequeña Escala de Gas Natural. (Translated) 291/04 71 List of Abbreviations and Acronyms AAA Analytical & Advisory Activities ACR Activity Completion Report AFRREI Africa Rural and Renewable Energy Initiative ASTAE Asia Alternative Energy Program CAS Country Assistance Strategy CDM Clean Development Mechanism CG Consultative Group CIDA Canadian International Development Agency COP-7 Seventh Session of the UNFCCC Conference of the Parties CSD14&15 Commission on Sustainable Development, 14th and 15th Sessions DEC Development Economics Department, World Bank DFID Department for International Development, UK EE Energy Efficiency EER Energy and Environment Review ESMAP Energy Sector Management Assistance Program EU European Union GEF Global Environment Facility IAP Indoor Air Pollution LPG Liquefied Petroleum Gas LSMS Living Standards Measurement Survey M&E Monitoring & Evaluation MDGs Millennium Development Goals MNA Middle East and North Africa Region NGOs Non-Governmental Organizations OECD Organization for Economic Co-operation And Development OED Operations Evaluation Department, The World Bank PCF Prototype Carbon Fund PPIAF Public-Private Infrastructure Advisory Facility PRM Poverty Reduction & Economic Management PRSP Poverty Reduction Strategy Paper PV Photovoltaic RE Renewable Energy RPTES Regional Program for the Traditional Energy Sector SMEs Small and Medium Enterprises TA Technical Assistance TAG Technical Advisory Group of ESMAP UN United Nations UNDP United Nations Development Program UNFCCC United Nations Framework Convention for Climate Change USAID United States Agency for International Development WBI World Bank Institute WBG World Bank Group WCD World Commission on Dams WHO World Health Organization The World Bank Group 1818 H Street, NW Washington, D.C. 20433 USA Tel 1.202.458.2321 Fax 1.202.522.3018 Email esmap@worldbank.org Internet www.worldbank.org/esmap