46794 IMPROVING LIVES: World Bank Group Progress on Renewable Energy and Energy Efficiency Fiscal Year 2006 December 2006 World Bank Group Energy and Mining Sector Board Copyright © 2006 The International Bank for Reconstruction and Development / The World Bank Group 1818 H Street, NW Washington, DC 20433, USA All rights reserved First printing: December 2006 Manufactured in the United States of America ThisdocumentisaproductofthestaffoftheWorld Bank Group. The findings, interpretations, and conclusions expressed herein do not necessarily reflect the views of the Board of Executive Direc- tors of the World Bank Group or the governments they represent. Table of Contents Acronyms and Abbreviations 4 Foreword 5 Acknowledgments 6 ExecutiveSummary 7 1. Introduction 10 Case 1: The ABC's of Energy Efficiency in Serbia 12 2. Making Lives More Secure 14 Case 2: Solar PV--Moving Toward Universal Access in Bolivia 18 3. Energy for Lighting 20 Case 3: Lighting Up Timor-Leste 24 Case 4: Bridging the Rural Divide--Solar Systems in Bangladesh 26 4. Energy for Food: Focus on Africa 28 Case 5: Greening Guinea-Bissau after Conflict 34 Case 6: Waste Not--Biodigesters in Latin America 36 5. A Commitment Made and Kept: Renewable Energy and Energy Efficiency Portfolio Overview 38 Case 7: Enterprising through Renewable Energy in Lao PDR 46 6. The Road Ahead 48 Case 8: Carbon Finance for Hydropower in Sierra Leone 50 Annex 1: Institutional Support for Renewable Energy and Energy Efficiency 52 Annex 2: Annual Renewable Energy and Energy Efficiency Statistics 55 Annex 3: List of Fiscal Year 2006 Renewable Energy and Energy Efficiency Projects 58 List of Tables Table 1: People Relying on Biomass for Cooking and Heating in Developing Countries 29 Table 2: Comparative Cost of Household Cooking Fuels in Selected Countries 32 Table 3: WBG Commitments for Renewable Energy and Energy Efficiency, FY06 39 Table 4: Number of Projects by Region, FY06 42 Table 5: Measuring the FY05 and FY06 Progress in New Renewable Energy and Energy Efficiency Lending against the Bonn Commitment 43 Table 6: References in CAS and PRSP Documents, FY04­06 45 ListofFigures Figure 1: Estimated Per Capita Consumption of Electric Light in 2005 21 Figure 2: WBG Renewable Energy and Energy Efficiency Commitments, FY90­06 38 Figure 3: Share of Renewable Energy and Energy Efficiency Relative to the WBG's Other Energy Commitments 39 Figure 4: WBG Renewable Energy and Energy Efficiency Commitments by Region, FY06 40 Figure 5: FY06 Commitments by Region 41 Figure 6: Locations of WBG Projects in Renewable Energy and Energy Efficiency 42 Figure 7: Number of AAAs with Renwable Energy and Energy Efficiency Focus, FY00­06 44 List of Boxes Box 1: Valuing Diversity in Mexico's Power System 15 Acronyms & Abbreviations AAAs analytical and advisory activities IEA International Energy Agency AFR Africa Region ISPs ImprovedStovePrograms APL Adaptable Program Loan KFW Kreditanstalt für Wiederaufbau ASTAE Asia Sustainable and Alternative (Reconstruction Credit Institute) EnergyProgram KVA kiloVoltAmpere BHP Bumbuna Hydropower Project LAC Latin America and the Caribbean (Sierra Leone) Region CAS Country Assistance Strategy Lao PDR Lao People's Democratic Republic CER certified emission reduction LEDs light-emitting diodes CFL compact fluorescent lamp LPG liquefied petroleum gas CFU Carbon Finance Unit MDGs Millennium Development Goals CIS Commonwealth of Independent MEM Ministry of Energy and Mines States (Lao PDR) CO2 carbon dioxide MGI Millennium Gelfuel Initiative CRESP China Renewable Energy Scale- MIGA Multilateral Investment Guarantee UpProgram Agency EAP East Asia and Pacific Region MNA Middle East and North Africa ECA Europe and Central Asia Region MW megawatt EDTL Electricidade de Timor-Leste NGO nongovernmental organization EE energy efficiency OBA output-based aid EOF Environmental Opportunities OECD Organisation for Economic Facility Co-operation and Development ESMAP Energy Sector Management OTP Hungary Sub Sovereign Assistance Program Schools Project ESW economic and sector work PELP Poland Efficient Lighting Project FAO Food and Agriculture PROGEDE Senegal Sustainable and Organization Participatory Energy Management FY fiscal year (July 1 to June 30) Project GDP gross domestic product PRSP Poverty Reduction Strategy Paper GEF Global Environment Facility PSPIP Power Sector Priority Investments GHG greenhouse gas Project GPOBA Global Partnership on PV photovoltaic Output-Based Aid RE renewable energy GTZ Deutsche Gesellschaft für RETs renewable energy technologies Technische Zusammenarbeit SAR South Asia Region (German Agency for Technical SCDI UpperSeliCommunity Cooperation) DevelopmentInitiative IBRD International Bank for SHS solar home system Reconstruction and Development SICAJU Sociedade Industrial de Caju ICSID International Centre for SPRE Southern Provinces Rural Settlement of Investment Disputes Electrification Project (Lao PDR) IDA International Development TA technical assistance Association Tk Taka IDCOL InfrastructureDevelopment WBG World Bank Group CountryLimited WHO World Health Organization 4 Foreword The potential role of renewable energy and energy efficiency in transforming people's lives in the developing world is enormous. Alongside fossil energy sources, renewable energy and energy effi- ciency can make a significant contribution to help people attain a quality of life that empowers them, among other things, to reduce drudgery, extend their working day, participate in and contribute to a growing local economy, and take better advantage of community, health, and education services. To foster such potential transformation, the World Bank Group (WBG) has committed more than US$10 billion to renewable energy and energy efficiency in developing countries since 1990. We are building on this experience to support the implementation of the WBG's Renewable Energy and Energy Efficiency Action Plan--including the target of a 20 percent average annual growth in renew- ableenergyandenergyefficiencycommitments--andtheCleanEnergyandDevelopmentInvestment Framework. Previous reports provided an account of the WBG's achievements toward the renewable energy and energy efficiency target and described the role played by WBG institutions and departments. In this report,wealsoillustratehowourprojectshavecontributedtotransformingpeople'slives.Wediscuss howrenewableenergyandenergyefficiencycanrenderpeoplemoresecureandsafe.Wedemonstrate how we can contribute to improving the standard of living to a level adequate for people's health and well-being. We asked a number of beneficiaries in our partner countries to speak for themselves, and these testimonies are recorded in this report. This report acknowledges with thanks the dedication and hard work of our partner countries, the development partners of the WBG, and WBG staff who have contributed to scaling up the use of renewable energy and energy efficiency. Jamal Saghir, Director Energy and Water Chair, Energy and Mining Sector Board The World Bank 5 Acknowledgments The report was prepared by the Energy and Water Department in the Sustainable Development Vice Presidency. The work was led by Fanny Missfeldt-Ringius under the direction of Anil Cabraal. Laura Berman, Samantha Constant, Fanny Missfeldt-Ringius, Ashok Sarkar, Boris Utria, and Anil Cabraal are the principal authors of the chapters and case studies. The portfolio analysis was conducted by Laura Berman. Jamal Saghir provided overall guidance and vision. Varadarajan Atur, Sabrina Birner, Raihan Elahi, CharlesFeinstein,MiroslavFrick,Abdul-HameedIbrahim,AnupJagwani,VesnaKostic,GeetaKumar, Morten Larsen, Kilian Reiche, Luis de Sousa Sequeira, Kalim Shah, Steffi Stallmeister, Jason Steele, Jie Tang,andKafuKofiTsikataprovidedwrittencontributionsonregionalandinstitutionalperspectives, background materials, and photographs. The quotes in the Bangladesh case (case 4) are credited to the Ashden Awards. The photos of this case are credited to The Daily Star, Dhaka, Bangladesh. This reportalsobenefitedfromthesupportofmanyothers:BrunoBonansea,SylviaMicheleDiez,Anastasia Gekis, Anita Gordon, Cecilia Lim, Alan Miller, Maria Antonia Paraan, Kristyn Schrader, Xiaoyu Shi, Russell Sturm and Vikram Widge. Please address questions or comments to Anil Cabraal (acabraal@worldbank.org) or Laura Berman (lberman@worldbank.org). 6 Executive Summary Meetingtheenergyneedsofdevelopingcountries costly and fastest way to enhance energy in an environmentally sustainable manner is an supplies. Recognizing the important role played urgent challenge. Clean energy underpins by renewable energy and energy efficiency in sustainable growth and poverty reduction. development,theWorldBankGroup(WBG)has Indeed, the livelihoods and welfare of poor made renewables and energy efficiency an people in developing countries depend on the integral part of its energy strategy as it strives to availability of energy services. Major support sustainable economic development in improvements in the quality, quantity, and its partner countries. affordability of energy services in developing countries will be necessary to support countries' The WBG committed to scaling up its support development objectives of job creation, health, for renewable energy and energy efficiency in and education. The increase in global oil prices since 2004 has further added to the challenge of ensuring affordable energy services, especially in the poorest countries of Sub-Saharan Africa. Energy price volatility, supply uncertainties, and environmental concerns are leading many countries to give greater consideration to alternatives such as renewable energy and energy efficiency that can provide affordable energy services and enhance energy security and reliability in an environmentally sustainable manner. Nevertheless, renewable energy developing countries at the 2004 International resources remain an underused resource in Conference on Renewable Energies in Bonn, many developing countries, even though Germany. In addition to supporting specific commercial maturity and cost competitiveness programsandpolicies,theWBGadoptedatarget of renewable energy technologies (RETs) have of a 20 percent average annual growth in energy improved significantly. The energy efficiency efficiency and new renewable energy potential remains largely untapped in commitmentsbetweenfiscalyears2005 and2009 developing countries, though it is often the least (the "Bonn target").1 The WBG also reaffirmed 7 World Bank Group Commitments for Renewable Energy and Energy Efficiency in Fiscal Year 2006 (millions of dollars) Source of Funds New-RE Hydro>10MW EE Total World Bank (IBRD/IDA) 135.7 118.6 115.3 369.5 World Bank (GEF and Carbon Finance) 54.7 6.0 1.2 62.0 IFC (Own Funds) 17.4 67.0 309.0 393.4 IFC (GEF, Carbon Finance and other trust funds* ) 13.0 0.0 20.1 33.1 MIGA 0.0 0.0 1.8 1.8 Total 220.8 191.6 447.4 859.8 *The IFC's"other trust funds"category includes the Environmental Opportunities Facility (EOF). its support to larger-scale hydropower where it The use of renewable energy and energy is economic, financially viable, and where efficiency in these projects has contributed to environmentalandsocialsafeguardsaremet.The improving livelihoods in the developing world WBG provides investment support, policy in line with the WBG's mission of working for a advice, technical assistance, capacity-building worldfreeofpoverty.Asillustratedbyfiscalyear and analytical services, cofinancing support 2006WBGprojects,renewableenergyandenergy from the Global Environment Facility (GEF) and efficiencycanplaykeyrolesinenhancingenergy CarbonFinanceOperations,andmobilizesother security for livelihoods, energy for lighting, and funding that complements WBG support. people's access to food. For the second year in a row, the WBG has Theenergysecurityofcountriescanbeenhanced outperformed its Bonn target. In fiscal year 2006, inmanywayswiththehelpofrenewableenergy the WBG's financial support for renewable and energy efficiency, including by diversifying energyandenergyefficiencywasUS$860million. fuelsusedandthesourcesfromwhichtheycome, Commitments for new renewable energy and enhancing availability by increasing supply- energyefficiencywereUS$668 million,morethan and demand-side energy efficiency, reducing doubletheBonn20percenttarget.Thisrepresents energy infrastructure vulnerability through the a 45 percent increase over the amount of use of distributed energy, and promoting good commitments made by the WBG to new governance and equitable energy sector rent renewable energy and energy efficiency in fiscal distribution to reduce political and social year 2005. Total WBG renewable energy and divisions. Among the fiscal year 2006 projects energy efficiency financing in fiscal year 2006 that contributed to meeting these goals is the supported 61 projects in 34 different countries. second phase of the China Renewable Energy Theseincreasessuggestthattheconcertedefforts Scale-UpProgram(CRESP).Thisprojectsupports oftheWBGtoscaleupsupportfornewrenewable the implementation of a renewable energy law energyandenergyefficiencyarehavingapositive and contributes to achieving the country's goal impact.Thetableabove givesadetailedoverview of increasing the share of renewable energy to 15 ofcommitments. percent of total power supply by 2020. 8 Access to modern energy is considered a prime per year on a sustainable basis for the urban contributor to overcoming poverty, delivering householdenergymarketsandreducewoodfuel- good education and health related deforestation by services, creating some 39,500 hectares per enterprises,andgenerating year. It also helped employment and incomes. generatemorethanUS$20 Among the various energy million in direct revenues end uses, meeting lighting to the participating needs affordably and villages. Ongoing reliably is often the developmentofrenewable underlyingkeytoeconomic energy technologies developmentandcrucialto (RETs) such as solar meeting the Millennium cookers and biofuels for Development Goals cooking can also greatly (MDGs). For example, the contribute to improving Power Sector Priority living standards and InvestmentsProject(PSPIP) people's health. in Timor-Leste has distributed more than The WBG will continue to 27,000compactfluorescent expand its support for lamps(CFLs)freeofcharge renewable energy and to electricity consumers energy efficiency in the who have acquired prepayment meters as a coming years. Priority attention will include means to reduce peak loads, improve energy integrating support for alternative energy efficiency, and reduce costs. development with initiatives to increase energy access in Sub-Saharan Africa, and improving As 95 percent of staple foods need to be cooked energy efficiency in the fastest-growing and to be digested, securing an affordable supply of largestenergy-consumingdevelopingcountries. energy for cooking is crucial. This applies The WBG will continue to assist its partner especially in Africa, where roughly two-thirds countries in integrating renewable energy and of households, more than 580 million people, energy efficiency into their development dependonwoodfuelsfortheirdailycookingand strategies, supporting renewable energy and heatingneeds.Tomakebiomassusesustainable, energy efficiency investment projects, building a comprehensive supply- and demand-side capacity, and improving its partner countries' approach is needed. The Senegal Sustainable policy environment. and Participatory Energy Management Project (PROGEDE), a World Bank­sponsored project, 1 New renewable energy comprises energy from biomass, was able to establish a permanent, community- solar, wind, and geothermal energy as well as hydro- based forest management system capable of power with capacities up to 10 megawatts (MW) per producing more than 370,600 tons of woodfuel facility. 9 1. Introduction Although it is evident that energy access can improve livelihoods, extending access is not an easy task.Energypovertyiswidespread in developing countries, where more than 1.6 billion people lack electricity, primarily in Asia and Sub-Saharan Africa. There is a dire needforbasicenergyinfrastructure and efficiency improvements in existing installations. The lack of InasmallvillageintheLaoPeople'sDemocratic capacity, resulting from insufficient energy Republic (Lao PDR), a woman sews at night infrastructure or as a result of inefficient energy using light from a solar home system (SHS). supply, means that developing countries are Acrosstheglobe,womenandchildreninBolivia unable to meet their basic energy demands. The are safer because of street lighting and the use International Energy Agency (IEA) estimates of solar-powered lighting in public buildings. under its reference scenario that developing Moving eastward, we encounter Serbian school countries need an annual investment for the children enjoying warm classrooms due to electricity sector alone of US$ 300 billion.2Under improved district heating and, as we continue the Clean Energy and Development Investment our journey, we hear about the cash savings of Framework,3 it is estimated, however, that Timor-Leste energy users who have obtained without significant policy changes, major compact fluorescent lamps (CFLs). Each financing shortfalls will occur. snapshotisareallifeexampleofhowrenewable energyandenergyefficiencycanhaveatangible Energy efficiency improvements, on both the impact on the welfare of people in developing supply and the demand side, commonly and transition countries. represent the least-cost option for freeing up generation capacity and reducing the volume of Improving access to modern energy sources incrementalinvestmentneeds.Althoughenergy such as renewables and enhancing the efficiencyenhancementisa"quickwin"strategy, efficiency with which energy is used can have it cannot solve energy poverty by itself. In rural many positive impacts on household income, areas, where four out of five people lack health, education and security. It contributes electricity, conventional grid-connected directly to achieving the Millennium electricityschemesareoftennotfeasible.Because Development Goals (MDGs) of reducing ofthehighcostsofextendingelectricitycoverage poverty and hunger, improving education and to these areas, renewable energy technologies health, and ensuring environmental (RETs) may be the least-cost solution. sustainability. Technologies such as SHSs, run-of-river and small hydropower systems, and biogas plants may be more attractive options for rural energy supply. 10 In these areas, traditional biomass such as In June 2004, at the Bonn International woodfuels and crop or animal residues remain Conference on Renewable Energies, the WBG themainenergysourceforcookingandheating. committedtoscalingupitsrenewableenergyand The 2.4 billion people in developing countries energy efficiency financial assistance by an who rely on these fuels use much of their labor average of 20 percent per year over five years to gather woodfuel and are exposed daily to (fiscal years 2005­09) and to reporting on its indoor air pollution. The World Health annual performance in supporting renewable Organization(WHO)estimatesthatthepollution energy and energy efficiency (the Bonn target). caused by using indoor biomass cook stoves is Furthermore,inSeptember2005,theWBGbegan responsible for 1.6 million deaths per year-- developing a Clean Energy and Development mostly of young children and mothers. Modern Investment Framework, which supports usage of biomass through comprehensive accelerating investment in energy efficiency and demand-sideandsupply-sidemanagementand renewableenergy. improvementofpracticesandtechnologiesused (suchasimprovedcookstovesorcleanerbiogas) This report examines the development is needed to reduce pollution, improve people's outcomes and the positive changes that can be health, and improve their economic welfare. made in peoples' lives through effective use of renewable energy and energy efficiency Renewable energy use is not limited solely to technologies.Theprevioustwoannualprogress off-grid applications. The use of renewable reports informed readers of the specifics of each energy sources is particularly attractive in light WBG institution's support for renewable energy of today's volatile and high oil prices and and energy efficiency; this report highlights the concerns about global climate change. Both human impact of these commitments. It draws energy efficiency improvements and the real lessons of experience from projects that the adoptionofrenewableenergyhavethethreefold WBG supports, and discusses how the use of effectof:moderatingupwardpressureonenergy renewable energy and energy efficiency has prices; improving energy security through contributed to improving lives. To this end, the greater diversity in supply options; and report discusses three areas of application of decreasing the negative environmental impact renewable energy and energy efficiency that are associated with energy supply.4 atthecoreofpeople'swell-being:energysecurity, energy for lighting, and energy for food. These social, economic, and environmental Throughoutthereport,casestudiesdescribehow implications underpin the WBG rationale for renewable energy and energy efficiency projects supporting renewable energy and energy have changed people's lives. The final chapter efficiency. Over the past 15 years, the WBG has describes the road ahead for the WBG's been assisting partner countries in integrating renewable energy and energy efficiency work. renewable energy and energy efficiency into their national energy strategies. This has 2International Energy Agency (IEA). 2004. "World Energy included identifying and exploiting Outlook 2004." Organisation for Economic Co-operation opportunities to improve the use of renewable and Development (OECD), IEA, Paris. 3 energyandefficiencyofenergyuse,production, World Bank. 2006. "Clean Energy and Development: Towards an Investment Framework." Washington, DC. and distribution. In doing so, the WBG makes 4World Bank. 2006. "An Investment Framework for Clean flexible and innovative use of its wide range of Energy and Development: A Progress Report." assistanceinstruments--policyadvice,technical Washington, DC. assistance, investment and adjustment lending, and guarantees. 11 2. Making Lives More Secure It is evident that the country in which people drought since 2005 has brought about an energy arebornwillcruciallyaffectthepossibilitiesthat crisis where about 40 percent of the demand is life will afford them. Among the key elements curtailed.6 Although some countries have that shape people's opportunities in different temporary energy crises, caused by external countries is the availability of energy. This is events, other countries find themselves in reflected in a strong statistical correlation permanent crisis. In many countries in Sub- betweenpeople'senergyconsumptionandtheir Saharan Africa, the curtailment of power is income.5 The reason for this relationship is the simply part of life, and in Liberia, civil war reliance of most economic activity on the resulted in the country having no operational availability of energy. energysystemuntilmid-June2006,whenasmall system was set up that is barely sufficient to Energy security in a country is reached when provide electricity for governmental offices. the energy available is sufficient and affordable so that no constraints are imposed on people's Whenenergycriseshappen,theyaffectthepoor lives and the economic activities they engage themost.Industryisabletopurchaseadditional in. Even in developed countries, energy power by means of power generators, but the shortages occur. They commonly lead to price ordinaryresidentmaysimplysitinthedark.Even increases and thus affect the disposable income when power shortages lead energy utilities to of each individual. However, while these types enforce outages, the residents in poorer of energy shortages only temporarily affect the neighborhoods are often subject to extended availability of energy in developed countries, in outages. When the outages are scheduled and developingcountries,energyshortagescanlead publicized, they lead to a change of people's to regular power shortages, with serious habits and lives, and the day becomes centered consequences for economic development. around those few hours when electricity is available. Business hours might be shifted well Over the past 10 years, many countries--both into the night, when electricity is available. developing and developed--have been subjected to energy crises with serious For example, in the Republic of Guinea, welders consequences for their economies. The origins willworkbetweenmidnightandearlymorning, werediverse,butthereasonsforthesecriseswere because electricity is guaranteed only then. But that the underlying energy systems were not even those parts of industry that are able to sufficiently resilient to provide the required purchase and operate generators incur much power as external circumstances changed. In higher costs than when they buy electricity Chile, droughts and depletion of hydropower throughthegrid.Thisinturnrendersoperations reservoirs led to serious brownouts and of such businesses less competitive than those blackouts between 1988 and 1999. Since 2002, of other countries and affects the productivity of the Dominican Republic has been subject to the economy as a whole. haphazard outages, mainly affecting the poor, which are due to a financially unsustainable Rendering the lives of people more stable and sector with no resources to buy fuel. In Uganda, 14 secure is only possible when countries are more energy,and(d)promotinggoodgovernanceand independent and less reliant on a single source equitableenergysectorrentdistributiontoreduce of energy. Renewable energy and energy political and social divisions.7 efficiency can play key roles in reducing such risks. Renewable energy sources help diversify and decentralize existing energy resources, and energyefficiencycanreducetheamountofenergy neededforthesameactivity.Theenergysecurity of countries can be enhanced in many ways, including by (a) diversifying fuels used and the sources from which they come (see box 1), (b) increasing supply- and demand-side energy efficiency, (c) reducing energy infrastructure vulnerability through the use of distributed Box 1: Valuing Diversity in Mexico's Power System One of the major obstacles to renewable en- ergy becoming economically competitive in its own right is the way in which its addition to the system is valued. An interesting approach to valuing the contribution of renewable energy was to apply the capital asset pricing model to power systems planning. This approach is nor- mally used by financial investors to make in- vestment decisions in the face of uncertain out- comes and risk to ascertain the value of a bas- ket of diverse assets as a way of maximizing the risk-return combination of an investment portfolio. Investors would not conceive of in- vesting all their money in one stock based on a 30-year forecast, yet this is exactly how the least-cost power system planning is currently interpreted. By applying portfolio theory to elec- tric generation planning, Antonius and others showed that the widespread belief that adding renewable-based capacity will cost more is not necessarily true. Because renewables have high up-front costs, but few or no ongoing input costs, by including a larger percentage of renewables in the production portfolio, utilities can reduce their exposure to commodity price­ derived risk. The study showed that for most countries' utilities, and certainly in the case of Mexico, a greater proportion of renewable energy could result in a production portfolio with a much more favorable risk-return ratio. Source: Antonius, Andrés, Shimon Awerbuch, Martin Berger, Donald Hertzmark, Jorge M. Huacuz V., and Gustavo Merino. 2006. "Technical Assistance for Long-Term Program of Renewable Energy Development." ESMAP Technical Paper 093, World Bank, Washington, DC. 15 TheChina ABC's of Energy Efficiency in Serbia is one of the WBG's partner countries that Commonwealth of Independent States (CIS), as is heavily reliant on a single source of energy: former central planning economies, have domestic coal. To counter this imbalance, China inheritedeconomicstructuresthatareinefficient has set out a comprehensive plan todiversifyits and often use nearly obsolete manufacturing energy sources with the aim of enhancing its technologies in heavy industries. This in turn is energy security, including using renewable reflected in the high energy intensities of these energy. The WBG and Global Environment countries, which suggest a great potential for Facility (GEF)­supported China Renewable energy efficiency measures. Countries in this Energy Scale-Up Program (CRESP) assisted in region have wholeheartedly accepted this this effort and has supported projects as diverse challenge as an opportunity to implement new as a green electricity market in Shanghai, a wind legislative,regulatory,andeconomicinstruments farm improvement program, and assistance in to achieve reform; adopt innovative commercial drafting regulations and building capacity for practices; and use cutting-edge technologies. implementing a renewable energy law and Largestrideshavebeenmadesincethefallofthe investmentsinwind,hydropowerrehabilitation, Berlin Wall in 1989, and there is still a large and biomass cogeneration. In fiscal year 2006, potential to be tapped. the second phase of CRESP was approved by the World Bank's Board in the amount of US$86 This is reflected in fiscal year 2006's new million to support China's commitment to approval of energy efficiency projects by the increasetheshareofrenewablesinpowersupply WBG, 65 percent of which have been approved to 15 percent by 2020 from 7 percent in 2005. for this region. Among the projects are district heating, residential and commercial demand- EuropeandCentralAsia(ECA)isanotherregion sidemanagement,energysupply,andindustrial of the world focusing on enhancing energy and transport energy efficiency projects in securitybyimprovingsupply-anddemand-side countries such as Armenia, Belarus, Croatia, energy efficiency. Many countries in Central Hungary, Moldova, Romania, the Russian and Eastern Europe and among the Federation,SerbiaandMontenegro,Turkey,and Public meeting in Kafog, Sierra Leone (Case 8): Dialogue is among the first steps toward equitable energy use. 16 Ukraine. How these projects affect people's lives security. Mismanagement of energy resources is illustrated in case 1. andtheirusesisacontributortoimpoverishment andinequitythatbreedsunrestandviolenceand Centralized energy infrastructure efficiently ultimatelythreatenssustainableenergydelivery. exploits economies of scale in construction and This vicious circle takes many forms: draining of operation, and when adequately designed and governmentresourcesforhealth,education,and maintained, it has compiled an enviable record welfare that go instead to subsidizing inefficient of technical reliability and environmental powerutilities;captureofbenefitsbyurbanelites compliance. However, large-scale centralized at the expense of energy-poor rural or periurban facilities are also perceived to be vulnerable to populations; and dissipation of energy- large-scale catastrophe and loss. Distributed generated rents through corruption and energy resources provide inherent security diversion for private gains. advantages through their modularity and geographic diversity. The effect is similar to that Projects that explicitly target the rural poor can ofreplacingmainframecomputerswithpersonal counteracttheseeffects.AnewprojectforGuinea- computers linked by the Internet. Bissau, which is also part of the fiscal year 2006 portfolio,includeskeyrenewableenergyfeatures Themostmodularenergytechnologyispossibly that aim to help the country recover from civil thesolarcell.Itcanbesizedtoexactlyfitaspecific conflict. Case 5 gives an overview of the project. purposeortaskfromacalculatortoapowerplant Projects that focus on improving the use of of several megawatts (MW). In developing traditional energy resources, such as firewood countries, SHSs and solar lanterns often present and charcoal, by rendering production and the least-cost option for providing electricity to marketing more efficient and by establishing rural households far from the electric grid. A more (environmentally) sustainable practices particularly successful project that has targeted have also shown themselves to be effective in remote households is the Bangladesh Rural contributing to the promotion of equity. An Electrification and Renewable Energy example is the ongoing World Bank­sponsored Development project, supported by the World Sustainable and Participatory Energy Bank and the GEF, which is connecting rural Management Project (PROGEDE) in southern householdsatanunprecedentedrate--morethan Senegal, which combines sustainable forestry 3,000 households every month in a country management practices with more efficient wood where only 30 percent of households are fuel production and local economic and social electrified. Case 4 illustrates exactly how this development (see chapter 4). project has benefited the rural poor. A fiscal year 2006 project in Bolivia, which illustrates how 5Feinstein, Charles. 2002. "Economic Development, decentralized power can aid rural communities Climate Change, and Energy Security--the World Bank's get electricity supply through solar power for Strategic Perspective." Energy and Mining Sector Board both residential and commercial applications, is Discussion Paper 3. World Bank, Washington, DC. 6The developed world has also been subject to serious detailed in case 2. power shortages. Examples are California (2001­02) and Japan (2003). 7 Renewableenergyandenergyefficiencycanalso These are mainly long-term responses. An overview of short- and medium-run policy responses for overcoming beusedastoolsforpromotinggoodgovernance energy price shocks has been presented by Robert Bacon and equitable energy sector rent distribution. and Masami Kojima (2006) in "How Are Developing These are key factors for safeguarding energy Countries Coping with Higher Oil Prices?" ESMAP Knowledge Exchange 6, World Bank, Washington, DC. 17 3. Energy for Lighting Lighting ranks among the dominant end uses education and health services, creating of global power demand. Global electricity enterprises, and generating employment and consumption for meeting lighting needs totals incomes. Among the various energy end uses, about US$360 billion per year, roughly 1 percent meetinglightingneedsaffordablyandreliably of the global gross domestic product (GDP). is often the underlying key to economic Lighting is one of the energy end-uses often development and crucial to meeting the MDGs associated exclusively with electricity. because electric lighting helps people gain Consequently, 19 percent of global electricity additional time for working, studying, and generation goes into lighting.8 At the same time, readingintheevening,andenjoygreatersecurity the lack of access to modern energy services at and more comfort. The quality of electric light is the global level confronts 1.6 billion people. This betterwhencomparedwithcandlesorkerosene- resultsinextensiveuseoffuel-oil-basedlighting, fueled light and less hazardous. Better lighting which is expensive and inefficient, produces also leads to reduced cooking times and easier poorlightquality,andcontributestogreenhouse cleaninginilluminatedrooms.However,among gas (GHG) emissions and indoor air pollution. the poorest of the poor, lighting is often the most The International Finance Corporation (IFC) expensive item among their energy uses. estimates that US$38 billion is spent annually, mainly by the poor, on fuel-based lighting. Thereisasignificantpotentialforsavingenergy while meeting the growing demand for During the past decade, global demand for electricity-basedlightingneedsofthedeveloping electric lighting increased at a rate of 1.8 percent world through better, more efficient in industrialized countries and 3.6 percent in technologies.9 On one hand, much of the developing countries. While developing electricity production in the developing world is countries move toward higher levels of energy from largely inefficient and carbon-intensive consumption, the share of lighting energy use is technologies;ontheotherhand,thelackofaccess expected to grow dramatically over the next few tomodernlightingserviceshindersdevelopment decades.Thisprovidesanopportunitytochange in many parts of the world, especially Sub- the lives of billions of people who currently do Saharan Africa. For instance, the estimated per nothaveaccesstomodernlightingtechnologies. capita consumption of electricity-based light in However, without rapid action, it is projected North America is more than 30 times that of that the amount of energy used for lighting will India and 60 times that of Africa (see figure 1). be 80 percent higher in 2030 than today, and still unevenly distributed. By 2030, developing The potential for lighting energy performance countries are expected to account for 60 percent improvements in the developing world is also of global lighting electricity demand because of reflected in the fact that, currently, lighting new construction, ongoing electrification, and electricitydemandinthe23developedcountries rising illumination levels. represents more than half of the world's total lighting use. The rest of the world depends on Access to modern energy is considered a prime either inefficient lighting technologies or mover for overcoming poverty, delivering good nonelectric, fuel-based lighting solutions. 20 Figure 1: Estimated Per Capita Consumption of Electric Light in 2005 120 h) mI 101 consumers and electric utilities are (M 100 making the switch to such technologies on pti 80 72 attractive and economical. In fact, um 62 emerging solid-state lighting onsC 60 technologies, such as LEDs, are ght 42 Li improving very rapidly and may allow atipac-reP 40 32 far greater savings over the timeframe to 20 10 8 2050, according to the IEA. 0 North Europe Japan/ Australia/ China Former Rest of Introduction of efficient lights faces America Korea NewZealand Soviet world Union classicalbarriersofnoneconomicpricing Source: OECD-IEA. 2006. "Light's Labours Lost--Policies for Energy-Efficient Lighting." Paris. of energy and the high up-front costs compared to recurring costs. In addition, Although one in three people obtains light from there is a lack of awareness of the benefits that kerosene, paraffin, diesel, and other fuels, theselampsofferintermsoflowerrunningcosts, representing about 20 percent of global lighting higher-quality light, and lower CO2 emissions. costs and associated carbon dioxide (CO2) Often,theseinformationasymmetriesarefurther emissions, they receive only 0.2 percent of the compounded by the lack of incentives for those resulting lighting services.10 actors that decide on the implementation of lighting systems. For example, in the case of Despite these potentially large savings and apartment or office rental in large buildings, substantial improvements in average lighting energy bills are paid by renters and decisions systemefficiency,inefficientsystemsandpractice concerning lighting systems and fixtures have arestillcommonplace.Aglobalswitchtoefficient been made by the building developers who lighting systems would reduce the world's procure the lighting systems. electricity bill by nearly one-tenth. The IEA projects that savings potential from energy- Experience in many countries, both in WBG- efficientlightingdeployedto2030willbeatleast financed projects and through initiatives outside 38 percent of lighting-related electricity the Bank, has shown that simple lifestyle consumption even if no major advances in changes, such as convincing people to switch lighting technology take place. As much as 7 offlights,commonlyrequiremassiveeducational percent of power consumption in developing and awareness-building efforts in developing countriescanbesavedby2020byusingcurrently countries. The impacts are larger when such available efficient lighting technology options. awareness programs are accompanied by smart systems (motion sensors and so on), but this Energy savings in lighting can be achieved with remains a clear challenge to the adoption of technologies that are not only readily available efficient lighting appliances. in the market but also economically competitive during the life cycle of the product. As the cost of There are many ways to reduce the barriers to efficient lighting technologies--such as CFLs for the use of energy-efficient lights. They include residential use, high-pressure sodium lamps for technological developments, awareness raising, street lighting and light-emitting diodes (LEDs) establishment of technological standards, and for rural uses and off-grid applications--has market transformation programs in which close been gradually declining, the benefits to both collaboration with the private sector is required. 21 Energy efficiency standards and labels for Successstoriesofsuchprogramsinthepastfrom equipment can encourage the adoption of more which these lessons were derived include the efficient technologies. The application of US$5 million Poland Efficient Lighting Project minimum lighting energy performance (PELP), funded through the GEF and requirements in building energy conservation implemented by the IFC, which transformed the codes across the world has also helped the market and dramatically increased the widespread penetration of CFLs and linear availability and selection of CFLs in Poland.11 fluorescent tube lights. The market transformations that occurred in the CFLmarketinPolandbetweenthebeginningand Market transformation programs have the end of the project were significant. By the demonstrated short payback periods and high endofthePELPinitiative,theretailpriceofCFLs internal rates of return associated with efficient haddecreasedby34percentinrealtermsrelative lights. These programs target one or more to1995.PELPsignificantlyincreasedthenumber lighting products through a wide variety of of Polish households using CFLs. The CFL models, such as technology transfer, marketing, penetration in Poland increased from 11.5 subsidies, labeling, codes and standards, percent of households before PELP to 33.2 manufacture negotiations, financing and bulk percent one year after the initiative. The procurement or market aggregation, or a penetration of CFLs was then higher than in combinationofmodels.Thelessonsofexperience many other countries, even some of the higher- from WBG-GEF projects indicate that the use of income countries such as the United Kingdom market mechanisms to promote certain and the United States. technologiesorenergyefficiencyproductsismost likely to prove sustainable because it allows CFL sales increased in Poland at more than market actors to make decisions based on a double the rate of the rest of Central and Eastern product's commercial merits. However, where Europe. Before PELP, distribution of CFLs was market imperfections exist or the government primarily from manufacturers to wholesalers to desires a strong push, well-designed small retail shops selling a limited range of interventions can be very effective. Such electrical products. During the program, CFLs programs could be based on a need to improve also began to appear in the new hypermarkets local manufacturing capabilities as well as and supermarkets that began to gain in enhance competition. popularity, and also in home centers. A survey found that 97 percent of purchasers of CFLs Introduction of voluntary mechanisms (labels, intended to replace their CFLs with another CFL standards) before moving to mandatory labels when the current CFL burned out. Print media and standards is also generally accepted good coverage increased and shifted from explaining practice. Judicious use of subsidies can help CFLs to describing where and how to best use stimulate markets and facilitate recruitment of them, which was indicative that CFLs were participating manufacturers, but such becomingmorecommon,ratherthansomething interventionsshouldberestrictedtopromotional thatneededtobeintroducedtoconsumers.New periodsandtargetmarketsegments,andexplicit manufacturers have also entered the Polish sunset provisions should be included. market. Enforcement,whennecessary,shouldbeeffective and efficient. Well-designed marketing efforts can be critical in bridging the gap between supply and demand. 22 Large-scale deployment of energy-efficient providing lighting to people without access to lighting technologies has featured in several electricity. To be initially piloted in Ghana and ongoing and new WBG projects, as a means to Kenya,theprojectwillidentifymarketforcesand overcomethebarriersandmeetobjectivesranging technological changes that can be mobilized fromaddressingpowershortagesfacedbyelectric toward a commercial solution with high utilities, to increasing reliability of supply to developmental impact. Leveraging the lighting consumers, to reducing the environmental industry'smotivationstobreakintoanimportant impacts. These projects were carried out in new market and the exciting opportunities countries such as Ethiopia, Rwanda, Timor- offeredbynewlightingtechnologies,theIFCwill Leste, and Uganda. seek to promote a market transformation that would provide the poorest of the poor--the In Uganda, under the World Bank's Energy for "bottomofthepyramid"--withgreateraccessto Rural Transformation Project, 600,000 CFLs are reliable and affordable lighting services. The beingprocuredattheendof2006fordistribution projectbeganbyengagingawiderangeofpower by the electric utility to residential consumers as source producers (PV, fuel cell, and so on), a replacement for their incandescent lamps. This lightingmanufacturers,distributors,andenergy intervention is expected to reduce the peak load access stakeholders to participate in the project by about 25 MW and help alleviate the supply by providing their products and technical and deficit, which now stands at more than 100 MW marketing expertise to support field tests and because of the falling water levels in this focus group exercises with end users. hydropower-dominatedsystem. As these examples show, with access to modern In a similar effort in Rwanda, under the Urgent sources of energy, CFLs provide an efficient Electricity Rehabilitation Project, 400,000 CFLs solution to meeting lighting needs more reliably arebeingprocuredforfreedistributionandsales and affordably. The newly emerging LEDs are at subsidized prices. In its first phase, which considered the next generation of efficient covers replacement of 200,000 incandescent lighting solutions to meet the needs of poorer lamps with CFLs, it is expected to reduce peak markets--such as in Sub-Saharan Africa--that loadby8MWandoffsettheneedfordiesel-based havelittleornoaccesstoelectricityandarehighly power generation, resulting in emission dependentonfuel-basedlighting.Theyrepresent reductionsofabout50,000tonsofCO2equivalent. a large and attractive, yet mostly unexplored, Under yet another newly approved project in market for modern lighting manufacturers and Ethiopia (Accelerated Electricity Access distributors. Expansion), 200,000 CFLs are to be deployed to benefit poor communities and save an estimated 8Lighting accounts for about 13 percent of electricity 6.8 MW of peak load, increasing the reliability of consumption in the residential sector. power supply to consumers. 9Incandescent bulbs are very inefficient, converting only about 5 percent of the energy they receive into light; efficiency of fluorescent tubes can vary widely, between With the aim of directly targeting those without 15 percent and 60 percent. access to electricity, the IFC launched the 10Fuel-based lighting is much less efficient than even the Lighting the Bottom of the Pyramid Project in most inefficient incandescent lamp. 11 World Bank. 2006."World Bank GEF Post- 2006.12 In targeting this potential, the project, Implementation Impact Assessment: Poland Efficient supported by the GEF, will mobilize the private Lighting Project." Washington, DC. sector to develop a commercial solution to 12Details are available at www.ifc.org/led. 23 4. Energy for Food: Focus on Africa As 95 percent of staple foods need to be cooked Close to 50 percent of these woodfuels are tobedigested,securinganaffordablesupplyof currently traded in the urban and periurban energy for cooking is crucial. This applies markets, and woodfuels are being increasingly especially in Africa, where roughly two-thirds traded in rural energy markets, especially in the of households, more than 580 million people, Sahelian countries.16 All activities related to dependonwoodfuelsfortheirdailycookingand fuelwood use amount to an economic value of heating needs. The IEA projections indicate that approximatelyUS$6billion,withmorethatUS$1 by 2030, that number will grow to more than 820 billion of this being in charcoal production and million,equivalenttoa27percentincrease(table trading.17 The prevailing patterns of forestry 1). According to the Food and Agriculture resource exploitation in most parts of Africa are Organization (FAO),13 best current estimates destructive and unsustainable, and the burning place total consumption at 452 million tons of of woodfuels in poorly ventilated spaces poses a wood per year, which amounts to close to 148 disproportionate health hazard for women and milliontonsofoilequivalent.14Theimprovement their children. of these energy services to provide for a better quality of life has been identified as one of the As populations continue to grow across the key challenges in the Clean Energy and continent, pressure on existing forest resources DevelopmentInvestmentFramework.15 From waste to fuel: Cashew shells used as biomass for renewable energy in Guinea- Bissau For more information, see case 5 on page 34-35. 28 the lion's share of donor-supported Table 1: People Relying on Biomass for Cooking and Heating in assistance in the household energy Developing Countries sector was limited to demand-side In 2000 Projected for 2030 2000-30 (million) (million) (%) management activities (improved China 706 645 -9 stoves, subsidized interfuel Indonesia 155 124 -25 substitution for LPG and kerosene, Rest of East Asia 137 145 6 and consumer education) and India 585 632 7 relatively narrow government- Rest of South Asia 128 187 32 managed forestry and reforestation Latin America 96 72 -33 programs and projects. The lessons Africa 583 823 27 of experience resulted in the Developing countries 2,390 2,628 9 principal conclusions discussed Source: IEA. 2002. World Energy Outlook 2002, 2nd ed., p. 391. Paris. below. will also increase through the clearing of land Demand-Side Management foragriculture,andthehigherdemandforwood and nonwood forest products and woodfuels. "Demand management" interventions Over the last 30 years, most efforts to address alonewerenotcapableofaddressingthe this situation focused on the subsidized sustainability of the traditional energy promotion of improved stoves and of interfuel markets, the environmental problems substitution for liquefied petroleum gas (LPG) associated with the rapid deforestation and kerosene. Some successes were registered, in and around growing urban centers, but many stove programs failed to move from a orthenegativehealthandsocialimpacts subsidizedplatformtomarketsustainabilityand of indoor air pollution from the use of werediscontinuedattheendoftheirunderwritten woodfuels in closed quarters, especially donor funding. And although subsidized affecting women and children. interfuel substitution programs achieved considerable market penetration of LPG and The implementation of improved stove kerosene in the 1980s and 1990s, they resulted programs (ISPs) for woodfuels had in macroeconomic imbalances. When subsidies mixed results, as substantiated by (a) were removed, penetration rates generally lack of proof on deforestation reduction stabilizedordeclined.Withinthecontextofslow effects,(b)limitedreductionofaggregate economic and household income growth demand for woodfuels, and (c) poor projections in the region, the prevailing US$50­ demonstrated consumer acceptance of 60 per barrel cost of oil provides less prospect for improved stoves, as confirmed by a further rapid penetration of petroleum limited market sustainability of ISPs household fuels. beyond the initial donor-subsidized phase. A critical review of policies, programs, and projectsatthenationalandregionallevelsjointly The typical institutional arrangements undertaken by the World Bank, African set up for demand management governments18, NGOs, and academic energy programs were weak and lacked the experts, spanning a decade of interactive work required institutional knowledge and andresearch,indicatedthatuntiltheearly1990s, skill base that was necessary to make 29 ISPswork.Energyagenciesinparticular From that overall effort, the following agenda were not well suited to run ISPs. for action was elaborated by African energy experts with multidonor support and LPG and kerosene substitution endorsement, which is in line with the Clean advanced mostly on the basis of Energy and Development Investment considerable consumer price subsidies, Framework:19 (a)rapidlyincreasingsociallyand and the benefits of those subsidies were environmentally sustainable woodfuels supply mostly captured by the wealthiest management through community-driven consumers in the respective markets. development approaches; (b) continuing to promote woodfuel transformation and end use Supply-Side Management energy efficiency (improved kilns, stoves, and ovens), but through market-based delivery The outcomes of the typical supply-side mechanismstoensuremarketsustainability,and management programs and projects with an increased emphasis on effectively undertaken demonstrated that reducing indoor air pollution effects on women governments were not capable of and children; and (c) continuing to promote managing woodfuels and forests interfuel substitution away from woodfuels in sustainably. This happened because of thehouseholdandsmallandmediumenterprise a lack of adequate funding, human sectors, but doing so through market-based resource constraints, and lack of mechanisms and with an emphasis on political incentives to do so. mainstreaming RETs and fuels (ethanol, vegetable oil, and solar cookers) when Giventhelowprofitability,therequired economically viable. long investment payback periods, and highrisks(landandtreetenureconflicts, As depicted in table 1, today there is a clear regulated pricing, consumer pressures, consensus that the large majority of the African and so on), the private sector lacked the population will continue to depend on biomass necessary incentive to participate in fuels for at least the next three decades. Thus, sustainable woodfuel management ensuring a sustainable and sufficient access to systems in most African countries. woodfuel is increasingly recognized by national governments and the donor community as an Because of the need to ensure the energy, environmental, and social priority. security and availability of affordable Because of the macroeconomic implications of fuels for the growing urban household havingtorapidlyincreasetheimportofexpensive energy markets, it was necessary to petroleum household fuels to substitute for promote the sustainability of woodfuel decreasing fuelwood supplies, promoting the supply systems across Sub-Saharan sustainability of biomass energy supplies is now Africa. And, based on the experiences also an economic imperative for most Sub- ofthepreviousthreedecades,thatcould Saharan African countries. be achieved only through holistic, community-driven forestry and natural The cost of the government-managed forestry resource management schemes. and reforestation programs and projects that existed until the late 1980s ranged from US$450 per hectare in southern Africa up to US$750 per hectare in the Sahelian countries. Starting in the 30 Cashew apples can be converted to produce ethanol, once the cashews have been separated and shells peeled for biomass cogenera- tion. This is all made possible by wide community involvement. For information on Guinea Bissaue project details, see Case Study 5. early 1990s, however, several donors (the World considerable rural development and poverty Bank, Japan, the Netherlands, Norway, and alleviation benefits. Among those examples, others) started experimenting with community- Senegal'sPROGEDEisoneofthemostsuccessful based sustainable forest and natural resource in the region. management approaches. Over the last decade, those new approaches proved to have positive PROGEDE covered 317 rural villages and was results, including sizable operational able to establish a permanent community-based experiences in Burkina Faso, Ethiopia, forestmanagementsystemcapableofproducing Madagascar, Mali, Mozambique, Senegal, and more than 370,600 tons of fuelwood per year on other countries. a sustainable basis for the urban household energy markets and reduce woodfuel-related The investment costs of the new type of deforestation by some 39,500 hectares per year. community-basedapproacheshaverangedfrom It also helped generate employment and US$50 per hectare in southern Africa up to economic development opportunities in the 317 US$100 in the Sahelian region. But within that participating villages, generated more than cost envelope, projects have by and large US$20 million in direct revenues to the delivered a comprehensive rural development participating villages, and distributed 255,000 assistance package (crop and income improved charcoal stoves and 4,000 kerosene diversification, increased local revenues, stoves in the urban and periurban markets. In increased access to potable and processed water, late 2006, a two-year follow-up phase of increased delivery of health and education PROGEDE began implementation, and a third services, and improved local and subnational and final phase to extend PROGEDE nationally governance). Those experiences have helped is presently under consideration. stabilize the supply of woodfuels and ensure their availability for the growing urban Over the last two decades, there has been much household energy markets, while promoting discussion of the possible use of new RETs for 31 household cooking applications. The two A recent breakthrough in pricing is being options that have been explored and tested are advanced through recycling plastic residues solar cookers and biofuels (ethanol, gelfuel, and (soft-drink bottles, plastic bags, and so on) for direct vegetable oil). The practical experience fabrication of a high-quality box-type cooker, withtheseRETshas,however,beenmixed.From which has brought down the price threshold of the technical point of view, both solar cookers the box-type cooker with comparable and biofuels have demonstrated their technical performance parameters from US$150 to US$50, and economic viability as clean and renewable if medium- to large-scale in-country production cooking fuels, but to date the market uptake has is feasible. Consumer acceptability will remain been limited. The significant increase in prices aconstrainttobemanagedonaprojectbyproject of petroleum products, which until now basis in relation to local culture. However, the remained as the main interfuel substitution significant reduction in pricing has prompted a option for woodfuels, has nevertheless started visible market and policy response to this to change the landscape of household energy technology. A good example is Ethiopia, where markets. Solar cookers and biofuels are starting a large plant for the manufacture of these solar to show more market--as well as national cookers is now under construction with direct policy--traction. participation from the Oromiya regional government.Theuseofthesenewgenerationsof A considerable volume of work has been lower-cost solar cookers offers interesting undertaken on solar cookers around the opportunities for water treatment in rural areas developing world in the last two decades. Most with direct and immediate health and human of this work has been undertaken by NGOs with development impacts. bilateral donor funding (the GTZ, Danish International Development Agency, Norwegian World Bank biofuels efforts between 2000 and Agency for Development Cooperation, and 2004 included the Millennium Gelfuel Initiative others).TodaytheGTZistheleadingagencywith (MGI), a public-private partnership, aimed at solar cooker expertise. Solar cooker experience adapting and disseminating an existing ethanol- has ranged from the original large-scale based cooking fuel (gelfuel) for the African parabolic cookers to the newer closed-box type. household sector. This initiative was sponsored by the World Bank's Development Marketplace Program.19 Table 2: Comparative Cost of Household Cooking Fuels in Selected Countries, 2004 (a) US$ Household Cooking Costs per Month (b) Fuel/Stove Type Ethiopia Malawi Mozambique Senegal South Africa Zimbabwe LPG Burner 30.21 18.16 7.62 6.11 12.56 13.02 Kerosene (W) 10.42 12.31 8.21 7.52 11.54 19.23 Kerosene (P) 10.32 12.20 8.13 7.46 11.44 19.06 Charcoal (T) 7.74 11.26 5.33 6.02 15.88 7.15 Charcoal (I) 5.29 7.69 3.64 4.11 10.85 4.88 Fuelwood (T) 7.02 8.94 4.20 4.10 16.81 2.52 Fuelwood (I) 4.86 6.19 2.91 2.84 11.63 1.75 Millenium Gelfuel (CR) 8.81 15.52 6.41 6.41 6.41 6.41 Direct Ethanol (CR) (c) 6.17 10.86 4.49 4.49 4.49 4.49 (W) Wick (P) Petroleum (T) Traditional (I) Improved (CR) Cover + Regulator Source: Regional Program on the Traditional Energy Sector National Teams. Updated from RPTES (2004)."Millenium Gelfuel Initiative, Progress Report."Washington, June 2004." Notes: (a) Does not include purchase cost of stoves. (b) 75 Meals/month = 2.5 meals/day x 30 day/month (c) direct ethanol is 30% cheaper than gelfuel as no additional manufacturing costs are necessary. 32 TheMGIanditsfollow-upworkondirectethanol pharmaceutical industries and, in a few cookingachieved(a)developmentandmarketing countries, for the transportation sector. of five low-cost, high-efficiency gelfuel stoves Production of vegetable oil is a fraction of that. (US$2­20), one direct ethanol stove (US$15), and Although the use of biofuels for the household gelfuel and ethanol burners (US$0.50­4.00) for sector holds interesting opportunities, a wider retrofitting into a wide range of existing African adoption will take some time to materialize woodandcharcoalcookingstoves;(b)assessment because the transport sector will take priority for of the competitiveness of gelfuel and ethanol the allocation of increasingly available biofuels compared with other household fuels in various in the African markets. countries in Africa (see table 2);20 (c) demonstrationofthecomparativeenvironmental 13FAO. 1999, "The Role of Wood Energy in Africa. "Work- advantages of gelfuel compared with other ing Paper FOPW/99/3, Rome, Italy. household fuels through CO2 emissions testing; 14To target the specific needs of the African continent, the (d) confirmation of consumers' acceptance of WBG has endorsed the Africa Action Plan (2005). Among other things, the plan focuses on building capable states gelfuel, ethanol, or both in the household energy and improving government, strengthening the drivers of market through consumer tests and marketing growth, and access to economic opportunity for the poor. assessmentsconductedinEthiopia,Madagascar, Access to modern energy fuels is thus at the heart of these activities. Malawi, Mali, Mozambique, Senegal, South 15World Bank. 2006. "Clean Energy and Development: Africa, and Zimbabwe; (e) establishment of Towards an Investment Framework." Washington, DC. private sector gelfuel plants in Durban, South 16Regional Program on the Traditional Energy Sector.1997. "Regional Report: Review of Policies, Programs and Africa (200,000 liters per month), Lilongwe, Projects in the Traditional Energy Sector." Regional Pro- Malawi (25,000 liters per month), and Harare, gram on the Traditional Energy Sector and the Africa Zimbabwe (20,000 liters per month); and (f) Energy Unit. World Bank, Washington, DC. 17 stimulation of a broad international technical FAO. 1999. "The Role of Wood Energy in Africa. " Working Paper FOPW/99/3, Rome, Italy. and policy discussion among national policy 18This refers to the Governments of Benin, Burkina Faso, makers,theprivatesector,thedonorcommunity, Gambia, Guinea, Malawi, Mali, Mozambique, Niger, academia, and NGOs on the opportunities and Senegal, South Africa, and Zimbabwe. 19Groupe Africaine d'Appui. 2002. « Plan d' action issues of ethanol and ethanol-based fuels for the régionale pour le secteur des énergies traditionnelles». deliveryofmodernhouseholdenergyservicesin Ouagadougou, Burkina Faso. thedevelopingworld(cooking,lighting,heating 20For information on the Development Marketplace Pro- gram, see www.developmentmarketplace.org. and refrigeration). 21The economic competitiveness of large-scale ethanol production is highly dependent on a number of factors-- The main constraint on a wider adoption of including agro-climatic conditions, market price of feed- biofuels for household cooking has been the stock (sugarcane, sugar beets, corn, and so forth), agri- culture and agricultural trade policy, fuel pricing and physicalavailabilityofthefuelsonthecontinent, subsidy policy--and inversely related to the price of subject to their economic competitiveness sugar. For smaller-scale production, such as for use in compared with other uses for feedstock. Total gelfuels, the economics may be more favorable because alternative fuels will be costlier, although small-scale etha- ethanol production in Africa today is fewer than nol production cost is also higher (Kojima, Masami, and 1 billion liters per year, with 50 percent coming Todd Johnson. 2005. "Potential for Biofuels for Trans- from fermentation processes and the remainder port in Developing Countries." ESMAP Report 312/05, World Bank, Washington, DC.) from the coal industry (in South Africa). The ethanol is mostly used for the beverage and 33 "The 330 KVA cashew shells cogeneration system that we are installing in our plant will provide all the electrivity that we need to run our operation and will enable us to provide continuous power service to the rest of Bolama on a commercial basis." Daniel Nunes, General Manager, Sociedade Industrial de Caju, (SICAJU) Sixteen days after the installation of the biodigester, a farmer in Brazil commented, "I could not visualize how much pollution I was creating until I saw the gas bubble up in the digester. The smell that attracted mosquitoes and flies is no longer there, and I feel better living in my own house, which is next to the farm." One farmer in Mexico said, "The biodigester has helped us comply with environmental regulations and gives us additional income, so we are very happy with this." 5. A Commitment Made and Kept: Renewable Energy and Energy Efficiency Portfolio Overview For the second year in a row, the WBG has commitments. The share of renewable energy outperformeditsBonntarget.Infiscalyear2006, and energy efficiency lending as part of the the WBG's financial support for renewable overall energy portfolio has been continuously energyandenergyefficiencywasUS$860million. increasing, as figure 3 illustrates. Commitments for new renewable energy and energy efficiency were US$668 million, more AmongthevariousWorldBankinstitutionsand than double the 20 percent Bonn target. This units, the IFC, IBRD, and IDA were the largest representsa45percentincreaseovertheamount contributors, with US$393 million in of commitments made by the WBG to new commitments by the IFC and US$370 million renewable energy and energy efficiency in fiscal from the IBRD and IDA. The IFC contributed year 2005. Total WBG renewable energy and US$326 million of its own funds for new energy efficiency financing in fiscal year 2006 renewable energy and energy efficiency and supported 61 projects in 34 different countries. US$67 million for hydropower greater than 10 The WBG's support can be broken down into MW; the IBRD and IDA contributed US$251 US$412 million for renewable energy22 and millionandUS$119million,respectively.World US$447 million for energy efficiency (table 3).23 Bank­administered GEF commitments amounted to US$48 million for both new Since 1990, the WBG has committed more than renewable energy and energy efficiency. US$10 billion toward renewable energy and energy efficiency (see figure 2). Of this amount, The IFC administered GEF and Environmental US$2.7 billion were for new renewable energy Opportunities Facility (EOF) commitments sources and US$2.8 billion for energy efficiency totaling US$20.1 million, of which US$600,000 projects. Hydropower projects greater than 10 was for new renewable energy and US$19.5 MW per facility received US$4.5 billion in million was for energy efficiency. Furthermore, theIFC-NetherlandsCarbonFacilitycommitted US$13 million for two new renewable energy projects. The Multilateral Investment Guarantee Agency (MIGA) provided a US$1.8 million guarantee for an energy efficiency project. BoththeIBRDandtheIFChavecarbonfinance units (CFUs) that leverage public and private investments for projects that generate GHG emissions reductions from projects eligible undertheKyotoProtocol'sCleanDevelopment Mechanism and the Joint Implementation Mechanism. The World Bank CFU consists of 38 Figure 3: Share of Renewable Energy and Energy Efficiency Releative to the WBG's Other Energy Commitments 35% nine carbon funds amounting to approximately Share of Renewable Energy and 32% Energy Efficiency Relative to US$1.9 billion. Methane captured from 30% Other Energy Commitments municipalwasteandrenewableenergyaccounts 26% 25% for 7 percent and 12 percent of the portfolio, 21% 21% respectively.Energyefficiencyprojectsrepresent 20% another 5 percent. In fiscal year 2006, the World Bank CFU provided US$14 million in 15% 14% commitments to renewable energy and energy 10% efficiency. 5% The IFC has carbon funds of about US$150 million under management in partnership with 0% 1990 -1994 1995 -1999 2000 -2004 2005 -2006 (2 yrs.) Total (1990 -2006) thegovernmentoftheNetherlands.Infiscalyear 2006, the IFC concluded emission reduction donors. In fiscal year 2006, WBG renewable agreements of about US$13 million for two energy projects leveraged an average US$3 for renewable energy projects: EcoPower, which eachdollarofWBGinvestment,andWBGenergy operates small run-of-river hydroplants in Sri efficiencyprojectsleveragedanaverageUS$2for Lanka, and Enercon India, which develops each dollar of WBG investment.5 Because this windpower plants in the Indian states of cofinancing is critical for the development of Rajasthan and Karnataka. renewable energy and energy efficiency opportunities in developing countries, the WBG In fiscal year 2006, the WBG share of renewable attempts to maximize its ability to leverage energy and energy efficiency financing was 19 financing from other sources. percent of total energy sector24 commitments of US$4.5 billion. Renewable energy and energy The WBG's work on renewable energy and efficiency financing accounted for 35 percent of energy efficiency is pursuing a two-pronged power sector25commitments of US$ 2.45 billion. approach targeting, on one hand, the supply of energy in the short to medium run and, on the WBG loans, grants, and guarantees leverage other hand, providing assistance to developing millions of dollars in additional financing from policy and building capacities for scale-up of private investors, governments, and other renewable energy use and efficiency in the Table 3: World Bank Group Commitments for Renewable Energy and Energy Efficiency in Fiscal Year 2006 (millions of dollars) Source of Funds New-RE Hydro>10MW EE Total World Bank (IBRD/IDA) 135.7 118.6 115.3 369.5 World Bank (GEF and Carbon Finance) 54.7 6.0 1.2 62.0 IFC (Own Funds) 17.4 67.0 309.0 393.4 IFC (GEF, CF and other trust funds* ) 13.0 0.0 20.1 33.1 MIGA 0.0 0.0 1.8 1.8 Total 220.8 191.6 447.4 859.8 *The IFC's"other trust funds"category includes the Environmental Opportunities Facility (EOF). 39 longer term. The success of WBG-assisted removal of institutional, regulatory, financial, projects in improving energy access using andtechnicalbarriers.Forexample,efficientand renewable energy was recognized in 2006, when reliable heating systems and the provision of Grameen Shakti and Rahimafrooz Batteries in other energy services for public buildings such BangladeshandSarvodayaEconomicEnterprise as schools, apartments, hospitals, and Development Services in Sri Lanka-- orphanageswerethefocusofprojectsinArmenia, organizations supported by World Bank Belarus, and Croatia. In the Armenia project, projects--won the prestigious Ashden Awards 17,000 households and 100 schools will benefit for Sustainable Energy (see case 4). In Papua from the rehabilitation of heating systems and New Guinea, a credit scheme that makes solar loans to providers of heat services. Large-scale PV electricity affordable encourages teachers to deployment of energy-efficient lighting remain in remote rural areas to serve students. technologies is featured in several WBG projects In Nepal, carbon finance supports the provision in Ethiopia, Timor-Leste, and Uganda (case 3) of clean biogas cooking fuels that at the same as a means to address power shortages faced by timehelpsreducedeforestation,improveindoor utilities and to increase reliability of supply to airquality,andprovidenutrient-richby-product residential consumers. as fertilizer that contributes greatly to improved livelihoods. Projects supporting on-grid Fromaregionalperspective,countriesintheECA renewables include financing of windpower in regionreceivedthehighestlevelofcommitments Brazil, China, Djibouti, and Mexico. in fiscal year 2006, with a total of US$313 mil- lion, including a US$42.5 million energy effi- Building on experiences in core energy supply ciency project, the Belarus Post-Chernobyl Re- sectors, the WBG seeks to adopt a covery Project (IBRD), and an energy efficiency comprehensive,multisectorapproachtotapinto project of US$137 million, the Hungary OTP- efficiency opportunities in the transportation, SubsovereignSchoolsProject(IFC).EastAsiaand industry, households, education, health, the Pacific (EAP) ranked second, with US$232 agriculture, and rural sectors. The WBG energy million in commitments, and Latin America and efficiency projects in fiscal 2006 encompass end theCaribbean(LAC)wasthird,withUS$141mil- use and supply-side opportunities and the lion. Both the ECA and LAC regions saw in- creasesovertheirfiscal2005commit- Figure 4: WBG Renewable Energy and Energy Efficiency Commitments by Region, FY06 ments, with ECA commitments in- creasing from US$260 million in fis- 350 cal year 2005 to US$313 million in 300 Hydropower > 10 MW fiscal year 2006, and LAC commit- New Renewables sn 250 mentsincreasingfromUS$92million Energy Efficiency illio to US$141 million, respectively. 200 m $S These increases suggest that the con- UlaunnA 150 certedeffortsoftheWBGtoreengage 100 in hydropower and scale up support 50 fornewrenewableenergyandenergy efficiency are having a positive im- 0 Africa East Asia Europe and Latin Middle South Asia Global pact (see figures 2, 3, and 4). and Pacific Central America East and Asia and North Caribbean Africa 40 Figure 5: FY06 Commitments by Region Energy Efficiency: US$447 Million Global US$1 million East Asia and Pacific The ECA region had the highest energy US$72 million efficiency commitments--US$292 million. The EAP and LCR regions also showed a Africa high level of commitments for energy US$30 million efficiency projects. Among the projects were eight in the industrial sector, mostly South Asia IFC-financed, four that supported district US$8 million heating, four that aimed at transport Middle East and North Africa efficiency, and five that assisted in US$6 million demand-side management in the residen- tial and commercial sectors. Europe and Central Asia US$292 million Latin America and Caribbean US$38 million Renewable Energy--Hydropower> 10 MW: US$192 Million Three projects in the AFR region and two projects in EAP region accounted for 70 percent of nearly US$192 million in total commitments in the category of hydropower greater than 10 MW. The IBRD, IDA, and IFC classify projects as large Africa hydropower only if the installed capacity at US$77 million a single facility exceeds 10 MW. Pumped storage, run-of-river hydropower, and East Asia and Pacific hydropower projects with dams are also US$57 million included here if the capacity exceeds 10 MW. Hydropower rehabilitation projects, Europe and Central Asia which do not result in greater increase of US$11 million capacity installed (that is MW), are classified as energy efficiency projects. Latin America and Caribbean US$47 million Renewable Energy--New Renewables: US$221 Million The EAP region received the largest contribution from WBG commitments for South Asia new renewables in FY06. This was due to a US$27 million large project in China, CRESP II, with US$86 million from the IBRD. In the LAC region, Africa US$56 million were committed for nine US$19 million new renewable energy projects, of which two were IBRD carbon finance projects. Middle East and North Africa There were also two IFC carbon finance US$5 million projects in the SAR region. Among all regions, 13 of the projects supported Europe and Central Asia US$11 million hydropower up to 10 MW, 7 supported solar PV, and 6 supported windpower. East Asia and Pacific There are also 3 biomass projects and 3 US$103 million biofuel projects. Twenty percent of new renewable energy commitments were for Latin America and Caribbean hydropower less than 10 MW in capacity. US$56 million 41 Table 4: Number of Projects by Region, FY06 Renewable Energy Althoughthelevelofcommitmentsvar- Region Total Hydropower New Energy efficiency ied significantly among regions, the > 10 MW renewables number of projects was somewhat AFR 7 2.5 2 2.5 more evenly distributed. As shown in EAP 11 2 5 4 ECA 18 1 4.5 12.5 table 4, the ECA region had 18 projects LCR 16 2 9 5 with renewable energy or energy effi- MNA 2 0 1 1 ciency components in fiscal year 2006, SAR 6 0 5 1 Global 1 0 0 1 the LAC region was close behind with Total 61 7.5 26.5 27 16,theEAPregionhad11projects,and Note: The AFR's Benin and Ghana Second Coastal Transmission Backbone Project had both theAFRregionhad7projects.TheSAR EE and hydropower > 10 MW components and thus is counted as half a project for EE and half a project for hydropower > 10 MW to avoid double counting. The Russia Sustainable region had 6 projects, the MNA region Energy Finance Program had both EE and RE components, thus each component is counted only as half a project. The Lao PDR Rural Electrification Phase I GEF and IDA had 2 projects, and there was 1 global projects both had EE and RE components, each of which was counted as half a project. The IFC's OTP Subsovereign Schools EE Project in Hungary has two different departments project. working on the same project; it was also counted half and half. Fiscalyear2006commitmentsfornewrenewable commitmentsreachedUS$1.13billion,compared energy and energy efficiency were US$668 totheBonncommitmenttargetofUS$552million million,morethandoublethe20percentperyear for these two years (table 5). Bonn commitment scale-up target of US$301 million. In fiscal years 2005 and 2006, total new Meeting the Bonn commitment requires more renewable energy and energy efficiency than just project lending. Lending must be Figure 6: Locations of WBG Projects in Renewable Energy and Energy Efficiency 42 preceded by economic sector work ESW and building capacity. Figure 7 shows how the technical assistance in partner countries to number of World Bank­funded TA and ESW identify and prepare such projects. Moreover, activities has fluctuated from fiscal year 2000 to to ensure that projects are successful and fiscal year 2006, reaching a high of 16 activities sustainable, additional support for capacity in fiscal year 2003. building and policy reform is needed. Consequently, a key component of the WBG's InadditiontotheWBG'sAAAwork,studiesand scale-up program for renewable energy and reports are supported by trust fund programs. energy efficiency is made up of upstream The Asia Sustainable and Alternative Energy analytical and advisory activities (AAAs). Such Program (ASTAE) and the Energy Sector AAA support is often an integral part of World Management Assistance Program (ESMAP) are Bank investment projects. Examples of two multidonor trust fund programs that form a independent ESW undertaken in fiscal year 2006 vital body of knowledge and lessons on which include the Long-Term Energy Issues Study for Bank staff and practitioners can draw. In fiscal India, the Solomon Islands Renewable Energy year 2006, these products included the launch of Study,andtheMekongRegionWaterAssistance two new Web sites: the World Bank Renewable Strategy, all of which addressed renewable Energy Web site (http://www.worldbank.org/ energy. re) and the Renewable Energy Toolkit, an interactiveWeb-basedtoolforrenewableenergy These studies are funded by Bank resources as practitioners and policymakers (http:// wellasbilateraldonorresourcesheldundertrust www.worldbank.org/retoolkit). Another key by the Bank. Technical assistance (TA) is also an reportissuedinfiscalyear2006wastheTechnical important way in which the WBG assists and Economic Assessment: Off-Grid, Mini-Grid and countries, and it is often used for reforming and Grid Electrification Technologies, which was strengthening institutions. TA activities include funded by a Japanese trust fund.There is a workshops, consultations, training events and direct link to this document on our Renewable programs, and similar activities aimed at Energy Web site. Table 5: Measuring the FY05 and FY06 Progress in Renewable Energy and Energy Efficiency Lending against the Bonn Commitment (millions of US$) FY02 FY03 FY04 Average FY05 FY06 FY05 + FY06 New RE and EE 204 178 245 209 a 4 61b 6 68 1 ,129 commitments Bonn Commitment 251 301 552 Target a. The baseline of US$209 million was set as the average annual lending commitment for new RE and EE made by the IBRD and IDA, IBRD carbon finance business, and the GEF (IBRD and IDA) in FY02, 03, and 04. The baseline comprises exclusively new RE and EE. b. This includes the additional US$168 million in the IFC's FY05 commitments that were not reported in the FY05 RE and EE progress report (December 2005). Commitment amounts for two IFC projects included in last year's FY05 RE and EE progress report have also been revised (the Dominican Republic Basic Energy was US$12 million and is now US$6.34 million; India's Allain Duhangan Hydropower was US$49 million and is now US$47 million). The additional IFC FY05 commitments were principally EE and RE investment components of IFC projects in agriculture, industry, transport, and other nonenergy sectors. 43 households. ESMAPcommittedUS$1.5millionforrenewable energy and US$1 million for energy efficiency The World Bank's close cooperation with a during calendar year 2005. The resources were numberofnetworksandpartnershipscontinues. used to support regional sector work and TA, The World Bank is represented on the boards of including multiyear projects. These projects are the Global Village Energy Partnership, expected to lead to the development of support- RenewableEnergyNetworkforthe21stCentury, ive policies and to the identification of prospec- Sustainable Energy Finance Initiative, and tiveinvestmentsinrenewableenergyandenergy Photovoltaic Global Approval Program. efficiency. A complete list of these reports and Cooperation with the Renewable Energy and studies is available on the ESMAP Web site EnergyEfficiencyPartnershipisalsounder way. (http://www.esmap.org). To ensure that renewable energy and energy The Asia Sustainable and Alternative Energy efficiency investments are incorporated into Program(ASTAE), likeESMAP,isamultidonor future WBG lending activities, the WBG has facility at the World Bank. With a focus on coun- worked to integrate renewable energy and tries in East Asia, it is bringing renewable en- energy efficiency into country-owned ergy and energy efficiency into the mainstream, development frameworks. Through its scale-up and providing access to modern energy services action plan, the WBG has provided assistance to the poor. In fiscal year 06, US$2 million were in identifying promising prospects and in disbursed towards activities in Cambodia, garnering the support needed to develop such China, Indonesia, Lao PDR, Mongolia, the Phil- opportunities into projects. Before fiscal year ippines, Papua New Guinea, Timor Leste, and 2004, little attention was given to renewable Vietnam. Between 2004 and mid-2006, ASTAE- energy and energy efficiency in Poverty supported initatives and projects provided ac- ReductionStrategyPapers(PRSPs)andCountry cess to electricity for 799,500 new households, Assistance Strategy (CASs)27documents, which and delivered improved services to 600,000 providethebasisforWorldBanklendingtoclient countries.28 Figure 7: Number of AAAs with Renewable Energy and Energy Efficiency Focus, FY00­06 The situation has improved since then. A 18 review of 86 CAS and PRSP documents 16 TA completedinfiscalyears2004­06revealedthat 14 ESW the percentage of CAS and PRSP documents that include substantive references to 12 renewable energy and energy efficiency was 10 nearly 88 percent in fiscal year 2006 (table 6) butonly40percentofthetotalnumberofCASs 8 and PRSPs in fiscal year 2004. Identifying 6 potential investment activities in planning documentsiscrucialbecausetheyarealeading 4 indicator of future renewable energy and 2 energy efficiency investments. Table 6 shows 0 the extent to which renewable energy and FY00 FY01 FY02 FY03 FY04 FY05 FY06 energyefficiencyreferenceshaveactuallybeen incorporatedintoCASandPRSPdocumentsfrom fiscal year 2004 to fiscal year 2006. 44 Table 6: References in CAS and PRSP Documents, FY04-06 FY04 CAS and PRSP FY05 CAS and PRSP FY06 CAS and PRSP "None "None "None or or or passing" "Specific" passing" "Specific" passing" "Specific" Region Total reference reference reference reference reference reference AFR 26 7 7 3 5 1 3 EAP 11 2 1 2 3 -- 3 ECA 18 -- 7 1 4 -- 6 LCR 15 3 3 1 4 1 3 MNA 9 1 2 -- 3 1 2 SAR 7 1 1 -- 1 -- 4 Total 86 14 21 7 20 3 21 Source: Updated based on a study by Ted Kennedy and Yabei Zhang. 2004."Assessment of Energy Access and Renewable Energy in PRSP and CAS Process." various sectors. Subsequently, the IFC has identified 22See annex 1 for classification of renewable energy and additional renewable energy and energy efficiency energy efficiency. investments in commitments it had made in other sectors 23The commitment amounts in this report have been as agriculture, water supply, and industry and in updated from the values presented in "Right on Target: corporate loans to financial intermediaries. For more Progress on Renewable Energy and Energy Efficiency in details see, "Choices Matter: 2005 Sustainability Report" 2005/2006" and the press release, "New Renewable at www.ifc.org/SustainabilityReport, last accessed Energy and Energy Efficiency: World Bank Group Exceeds November 8, 2006. Previous Year's Commitments." This update reflects 25The power sector comprises only those energy sector several revisions to IFC and World Bank project data. activities that relate to generation, transmission, and The previous estimates were US$871 million for renewable distribution of electric power. energy and energy efficiency, with US $680 million for 26This is based on a review of 16 renewable energy and 8 new renewable energy and energy efficiency, compared energy efficiency projects in which 80 percent or more of to final estimates of US$860 million for renewable energy the funding commitments were specifically for renewable and energy efficiency, with US$668 million for new energy and energy efficiency. The leveraging amounts used renewable energy and energy efficiency. See annexes 2 have been rounded to the nearest dollar. For other projects, and 3 for more details. identifying the amount of additional funds leveraged is 24IBRD-IDA energy sector investments include oil, gas, difficult because these other funds also contribute to non­ and coal (including coal mine closing or rehabilitation); renewable energy and non­energy efficiency investments. transmission and distribution of oil, gas, and electricity; 27PRSPs and CASs provide the basis for World Bank power generation and associated environmental controls lending to client countries. PRSPs are prepared by IDA and plant rehabilitation; district heating and plant governments through a participatory process involving rehabilitation; renewable energy; and energy efficiency and civil society and development partners, including the conservation. IFC investments in the energy sector include World Bank and the International Monetary Fund. They investments from the IFC's own account; MIGA describe a country's macroeconomic, structural, and social investments refer to gross liability exposure. IFC and policies and programs to promote growth and reduce MIGA investments in the energy sector consist of poverty, as well as associated external financing needs. investments in the power sector; oil, gas, and mining; and The CAS represents the Bank's business plan, developed electricity and gas services. Previous IFC assessments and agreed with each client country, summarizing the referred only to stand-alone projects whose sole focus status of the country in a development context and the was energy efficiency or renewable energy, thus missing priorities for Bank operations over the near term. The the full scope of investment in sustainable energy PRSP process serves as a guide for CAS development. undertaken as a component of larger investments in 28Ted Kennedy and Yabei Zhang. 2004. "Assessment of Energy Access and Renewable Energy in PRSP and CAS Process." World Bank, Washington, DC. 45 6. The Road Ahead In September 2005, after the Gleneagles Group parallel tracks: (1) access to clean cooking, of Eight summit, the WBG began preparing a heating, and lighting fuels, coupled with Clean Energy and Development Investment sustainable forest management; (2) scaled-up Framework to simultaneously address the programs of electrification; (3) additional challenge of energy access in developing generation capacity to serve newly connected countries,lookatwaystomovetoalower-carbon households and enterprises, including through economy, and explore options on how to regionalprojects;(4)provisionofenergyservices "climate-proof" development. Energy efficiency for key public facilities such as schools and and renewable energy are part of two main clinics; and (5) provision of stand-alone lighting pillars of the framework: (1) energy for packages for households without access to the development and access for the poor and (2) electricity grid. transition to a low-carbon economy. The third pillar of the framework is adaptation. At the Bothgridandoff-gridrenewableenergyoptions World Bank­International Monetary Fund are being integrated into World Bank Annual Meetings in Singapore in September electrification projects that are currently under 2006, the World Bank's Development preparation for a number of African countries. Committee28 welcomed the progress made in Projects to advance the adoption of improved developing the Clean Energy and Development cook stoves and increase sustainable woodfuel InvestmentFrameworkandaffirmedtheirbroad supplieswillalsobesupported.Energyefficiency support for addressing the three pillars. measures, including accelerated market entry of CFLs as a way to reduce peak loads and energy The Clean Energy and Development use, are being introduced. InvestmentFrameworkoffersastructureupon which the WBG can direct its support for Investment and policy support to increase the renewable energy and energy efficiency in the use of renewable energy and energy efficiency coming years. The trust-funded ESMAP and are key features of the WBG efforts to assist ASTAE, carbon finance operations with nearly countries in transition to a low-carbon economy. US$2 billion in funds under management, and Theprimaryfocuswillbetoworkinpartnership theGEFremainessentialpartnersintheseefforts. with fast-growing countries such as Brazil, China, India, Mexico, and South Africa that are Investments for supporting energy for major energy consumers. ESW is underway to development and for improving energy access strengthen the policy and institutional will focus on regions that have the majority of frameworksforimprovingenergyefficiencyand unservedcommunitiesandhighestdependence developing long-term energy plans, including on biomass for cooking and heating, Sub- formulating laws and regulations for Saharan Africa and South Asia. Principal encouraging greater use of renewable energy. investment assistance in Sub-Saharan Africa-- Investment support will focus on energy where 550 million people are without electricity efficiency(industry,residential,andcommercial access and 580 million people are dependent on sectors as well as rehabilitation of generation, biomass fuels--will be guided by the Africa transmission, and distribution) and support for Energy Access Plan.29 The plan includes five greater renewable energy use, including 48 hydropower, wind, solar, thermal, and biomass 28The Development Committee is a forum of the World cogeneration. Bank and the International Monetary Fund that facilitates intergovernmental consensus building on development Training, capacity building, and knowledge issues. It is known formally as the Joint Ministerial Committee of the Boards of Governors of the Bank and dissemination will continue. The World Bank the Fund on the Transfer of Real Resources to Developing Institute, in cooperation with Carbon Finance Countries. The committee has 24 members, usually operations, will continue the Carbon Finance ministers of finance or development who represent the full membership of the Bank and Fund. They are appointed Assist Program to offer country and regional TA by each of the countries, or groups of countries, programs for carbon finance project portfolio represented on the Boards of Executive Directors of the development and capacity building. The Bank and Fund. 29Africa Region 2005. "Meeting the Challenge of Renewable Energy Toolkit launched in 2005 is Africa's Development: A World Bank Group Action being upgraded to improve its usability and Plan." World Bank, Washington DC. extenditscoveragetoincludeproductsrequested by policy makers, project developers, and financiers.TheBankwillconsultwithother like-mindedorganizationssuchastheGEF, Renewable Energy Network for the 21st Century, Sustainable Energy Finance Initiative, Renewable Energy­Energy Efficiency Partnership, and Global Village Energy Partnership to assess the feasibility of building renewable energy knowledge partnerships. A confluence of events and deliberate actions is creating the right conditions for advancing renewable energy and energy efficiency development in developing countries. Increasing concerns about volatile and high energy prices, the demonstrated confidence-building effect fromtherapidscale-upofrenewableenergy and energy efficiency in industrial countries, maturation of technologies, recognition of the value of diversity in energysupply,andconcernsaboutclimate change are creating the right environment foracceleratingtheuseofrenewableenergy and energy efficiency. The WBG will take advantage of these conditions and, building on its experience, is reaffirming its commitment to further strengthen the support for the scale-up of renewable energy and energy efficiency in our partner countries. 49 "The peace achieved in Bumbuna is a sure sign that the people are ready for develop ment. The project contractors and authori ties will now have the opportunity to work in a peaceful atmosphere.... This clearly participatory approach to conflict resolution and development." Peace Process Facilitator of the Kalansogoia Chiefdom Annex 1: Institutional Support for Renewable Energy and Energy Efficiency This annex describes the various WBG institutions The IFC and units and the role that each plays in contributing The IFC's mandate is to further economic to renewable energy and energy efficiency. It also development through the private sector. Working provides definitions of renewable energy and with business partners, it invests in private energy efficiency. Last, it discusses the methodology enterprises in developing countries and provides used to compute the data in this report. long-term loans, guarantees, and risk management and advisory services to its clients. The WBG (http://www.ifc.org). In this report, the WBG refers to four closely associated World Bank institutions that directly The GEF support renewable energy and energy efficiency The GEF, which is the World Bank's largest partner activities.30 The four institutions are the IBRD, IDA, in the area of renewable energy and energy IFC, and MIGA. There are six operational regions efficiency investments, is the financing mechanism under IBRD and IDA. The report disaggregates the for a range of international environmental commitments made by these regions and agreements, and it provides financing for projects institutions. In addition, the WBG is an that have global environmental benefits. implementing agency for the GEF. This report (http://www.thegef.org and http:// provides information on WBG-administered GEF www.worldbank.org/gef). projects. The WBG's carbon finance business is reported separately because it is a unique business MIGA line that purchases emissions reductions and does MIGA provides political risk insurance against not directly invest in a project. noncommercial risks to eligible foreign investors and commercial banks for qualified investments in The IBRD developing member countries. The IBRD aims to reduce poverty in middle-income (http://www.miga.org) and creditworthy poorer countries by promoting sustainable development through loans and Carbon Finance guaranteesand,inthenonlendingarea,AAAs(http:/ Both the IBRD and the IFC have CFUs that leverage /www.worldbank.org/ibrd). public and private investment for projects that generate GHG emission reductions. This helps to IDA grow the market by extending carbon finance to Contributions to IDA enable the World Bank to both developing and transition economies. The funds provide approximately US$6­9 billion a year in are provided by private companies and highly concessional financing to the world's 81 governments seeking to purchase emission poorest countries (home to 2.5 billion people). IDA's reductions to learn how to originate transactions in interest-free credits and grants are vital because this complex emerging market. Carbon finance these countries have little or no capacity to borrow business is divided into separate business lines-- on market terms (http://www.worldbank.org/ida). the IBRD CFU (http://www.carbonfinance.org) and the IFC CFU (http://www.ifc.org/carbonfinance). 52 ESMAP percent growth commitment if the share of ESMAP is a global technical assistance program and transmission and distribution investments cannot knowledge partnership sponsored by a group of be clearly disaggregated from other objectives, such donors, including Canada, Denmark, Finland, as network expansion and load increase. It also does Germany, the Netherlands, Norway, Sweden, the not include Development Policy Loan commitments United Kingdom, the United Nations Foundation, unless the share attributable to efficiency can be the United Nations Development Programme, and clearly determined. the World Bank. ESMAP is managed by the World Bank (http://www.worldbank.org/esmap). Hydropower > 10 MW The World Bank considers hydropower, regardless ASTAE of scale, as renewable energy. However, for In 1992, the World Bank and donor partners reporting purposes, hydropower projects in which established ASTAE to support the transition to the installed capacity at a single facility exceeds 10 environmentally sustainable energy use in MW are reported separately. Pumped storage, run- developing countries in Asia. ASTAE supports of-river hydropower, and hydropower projects with upstream ESW, much like ESMAP, and it also dams are included here if the capacity exceeds 10 provides assistance in renewable energy and energy MW. efficiency project identification, preparation, and supervision (http://www.worldbank.org/astae/). The WBG supports projects that may be cross-sectoral in nature. For example, renewable energy and Definitions energy efficiency components may be embedded Following are the definitions used for reporting on within an agricultural, health, or power project. In the WBG's activities. such blended projects, sometimes it is not easy to specify precisely what the size of each sectoral New Renewable Energy component is. In this report, as far as possible, great Projects that had at least one of the following were care has been taken to show only the commitment considered projects with a new renewable energy amount associated with new renewables, energy component: solar energy for heat and power, wind efficiency, or hydropower >10 MW. For example, in energy for mechanical and electrical power a particular project, the total commitment made by generation, geothermal and biomass energy for IBRD and IDA may be US$100 million. This project power generation and heat, and hydropower of 10 may have three different sectoral components: agro- MW or less per installation. industry, 50 percent; health, 30 percent; and new renewables, 20 percent. In such a case, in this report, Energy Efficiency only US$20 million has been included as the project's Energy efficiency comprises end use thermal and contribution to renewable energy. electricity efficiency activities (for example, industry, transport, buildings, appliances, and so on), power Different Reporting Styles sector rehabilitation, loss reduction in transmission The various World Bank institutions have differing and distribution, and improvements in the efficiency styles of reporting their data because of their of district heating systems. Hydropower different kinds of business. For example, MIGA rehabilitation projects, which do not result in provides guarantees to projects against various kinds increased capacity (MW), are also classified as energy of risks, whereas IBRD and IDA provide project efficiency. However, this report does not include finance and guarantees. Emissions reductions loss reduction due to rehabilitation of transmission purchases by carbon finance are a revenue stream. or distribution networks toward meeting the 20 The IFC provides both equity and loan financing, as 53 well as guarantees. For the purposes of this report report added together the MIGA maximum liability. and to arrive at an estimate of the WBG's total commitments toward renewable energy and energy Carbon Finance efficiency, we have added commitments made by To compare carbon asset purchases and regular each WBG institution. The following distinctions project financing, this report considered Emission should be kept in mind when reading this report. Reductions Purchase Agreements signed to be the appropriate measure and added those amounts to IBRD and IDA arrive at the total commitment--that is, the carbon For IBRD- and IDA­assisted projects, commitment finance business's equivalent of Board approval for amounts toward renewable energy, energy World Bank loans. efficiency, or both for each project have been used to estimate the cumulative total for the WBG. Reporting Updates The IFC The overall commitment amounts and The report shows IFC net investments from its own commitment amounts per WBG institution in this account for renewable energy and energy efficiency report have been updated from the amounts presented in the bulletin "Right on Target: Progress investment. Previous IFC assessments referred only on Renewable Energy and Energy Efficiency in to stand-alone projects whose sole focus was energy 2005/2006"2 and the press release "New efficiency or renewable energy, thus missing the Renewable Energy and Energy Efficiency: World full scope of investment in sustainable energy Bank Group Exceeds Previous Year's Commitments."3 This difference occurred because undertaken as a component of larger investments only preliminary IFC data were available at the in various sectors. The IFC has since revised its time of bulletin and press release and there were methodology so that it now identifies renewable also some revisions made in the commitment amounts from GEF-IBRD blended projects. The energy and energy efficiency investments in old estimations were US$871 million for renewable commitments it has made in other sectors such as energy and energy efficiency, with US$680 million agriculture, water supply, industry, and transport for new renewable energy and energy efficiency, whereas the final data used in this report are and in corporate loans to financial intermediaries. US$860 million for renewable energy and energy The new methodology assesses the percentage of efficiency, with US$668 million for new renewable IFC investment in proportion to the full project cost energy and energy efficiency. The preliminary IFC and applies that proportion to the full renewable data had inadvertently double counted the Trinidad Cement Company Group Swap Project energy or energy efficiency project value. This for Trinidad and Tobago, counting it in both fiscal methodology has been used to update the IFC's fiscal year 2005 and fiscal year 2006, which meant that 2005 renewable energy and energy efficiency the US$35 million commitment amount had to be subtracted from the fiscal year 2006 data. There commitment amounts. For more details, see were also a few IBRD projects that had been "Choices Matter: 2005 Sustainability Report" at erroneously classified in its database as renewable www.ifc.org/SustainabilityReport. energy or energy efficiency instead of power. These were corrected. Last, the percentage of GEF contributions to renewable energy and energy The GEF efficiency projects was underestimated in a few For approved GEF projects, this report uses the projects and was revised. commitment amounts for each project. 30There is also a fifth institution that is a part of the WBG: MIGA the International Centre for Settlement of Investment MIGA normally reports the maximum liability of Disputes (ICSID). Because this institution does not directly support any renewable energy or energy efficiency its guarantee and the foreign direct investment that activities, for this annual report, "WBG" precludes ICSID. the guarantee leveraged. For the purposes of 31See http://siteresources.worldbank.org/EXTENERGY arriving at a cumulative total for the WBG, this /Resources/336805-1157034157861/reEEbrochure.pdf. 32See http://web.worldbank.org/WBSITE/ EXTERNAL/NEWS/0,,contentMDK:21022967~page PK:34370~piPK:34424~theSitePK:4607,00.html. 54 Annex 2: Annual Renewable Energy and Energy Efficiency Portfolio Review Annual Table 1: WBG Renewable Energy and Energy Efficiency Commitments Grand Type of commitment 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 total New renewables 53 2 56 227 300 59 47 336 15 239 444 26 169 105 192 218 221 2,709 Energy efficiency 265 54 10 59 148 380 56 356 26 295 193 67 168 67 243 447 2,832 Hydropower (> 10 MW) 150 161 938 186 317 819 15 461 320 181 237 81 447 192 4,502 Grand total 53 53 417 271 1,174 545 524 1,245 407 832 264 1,059 219 416 510 339 908 860 10,043 Annual Table 2: WBG Renewable Energy and Energy Efficiency Commitments by Institution or Unit Grand Institution or unit 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 total GEF­IBRD/IDA 3 36 56 35 10 78 28 56 111 14 37 70 83 100 48 764 GEF-IFC 37 33 30 5 19 14 8 20 165 IBRD Carbon Finance 2 8 10 48 23 14 105 IBRD/IDA 53 392 196 1,113 303 452 1,108 146 534 137 691 197 340 290 194 445 370 6,959 IFC 25 72 26 186 7 36 135 206 15 1 6 13 135 221 393 1,475 IFC Carbon Finance 21 13 34 MIGA 30 35 15 65 26 252 5 91 2 521 Special Financing 20 20 Total commitment 53 417 271 1,174 545 524 1,245 407 832 264 1,059 219 416 510 339 908 860 10,043 Annual Table 3: WBG New Renewables Commitments by Institution or Unit Grand Institution or unit 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 total GEF­IBRD/IDA 3 26 30 10 7 39 6 56 66 9 36 16 62 47 47 459 GEF-IFC 30 30 14 14 1 89 IBRD Carbon Finance 2 4 10 19 4 8 47 IBRD/IDA 53 2 20 201 270 19 8 132 10 128 127 9 128 64 97 139 136 1,540 IFC 33 135 15 6 1 15 18 17 239 IFC Carbon Finance 10 13 23 MIGA 30 2 26 252 311 Total commitment 53 2 56 227 300 59 47 336 15 239 444 26 169 105 192 218 221 2,708 Annual Table 4: WBG Energy Efficiency Commitments by Institution or Unit Grand Institution or unit 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 total GEF­IBRD/IDA 10 26 25 3 39 22 1 45 5 1 54 22 53 1 305 GEF-IFC 7 3 16 5 19 7 22 78 IBRD Carbon Finance 13 4 0 18 IBRD/IDA 265 54 33 123 350 14 328 9 244 188 35 34 32 23 115 1,848 IFC 6 1 12 75 156 309 558 IFC Carbon Finance - MIGA 5 1.8 7 Special Financing 20 20 Total commitment 265 54 10 59 148 380 56 356 26 295 193 67 168 67 243 447 2,832 Annual Table 5: WBG Hydropower (>10 MW) Commitments by Institution or Unit Grand Institution or unit 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 total IBRD Carbon Finance 4 15 15 6 40 IBRD/IDA 125 122 912 310 750 196 320 177 192 66 283 119 3,571 IFC 25 39 26 186 7 36 200 45 47 67 677 IFC Carbon Finance 11 - 11 MIGA 33 15 65 91 203 Total commitment 150 161 938 186 317 819 15 461 - 320 - 181 237 81 447 192 4,502 Annual Table 6: WBG Renewable Energy and Energy Efficiency Commitments by Region Grand Region 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 total Africa 127 73 203 3 12 30 201 7 124 78 32 46 101 126 1,163 East Asia and Pacific 51 121 410 310 367 400 145 123 139 513 8 124 177 47 368 232 3,532 Europe and Central Asia 290 33 140 381 14 238 15 68 186 75 139 147 260 313 2,299 Latin America and Caribbean 2 75 340 199 10 2 41 186 79 219 6 30 78 30 92 141 1,531 Middle East and North Africa 2 4 40 9 11 67 Global 32 148 25 12 1 13 1 232 South Asia 2 222 419 29 85 135 7 108 85 15 77 35 1,218 Grand total53 417 271 1,174 545 524 1,245 407 832 264 1,059 219 416 510 339 908 860 10,043 Annual Table 7: WBG New Renewables Commitments by Region Grand Region 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 total Africa 2 18 3 3 8 30 5 6 124 16 32 46 46 19 357 East Asia and Pacific 51 300 49 112 2 139 3 18 37 129 103 942 Europe and Central Asia 7 9 6 6 2 0 56 10 11 107 Latin America and Caribbean 2 37 2 3 2 20 78 204 6 26 35 15 56 486 Middle East and North Africa 4 40 1 5 50 Global 30 145 10 12 1 13 0 212 South Asia 2 222 29 110 2 108 38 17 27 554 Grand total 53 2 56 227 300 59 47 336 15 239 444 26 169 105 192 218 221 2,708 Annual Table 8: WBG Energy Efficiency Commitments by Region Grand Region 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 total Africa 4 1 1 4 30 40 East Asia and Pacific 54 10 10 8 33 121 193 5 1 32 11 77 72 624 Europe and Central Asia 265 33 140 374 14 229 9 62 183 65 131 41 79 292 1,918 Latin America and Caribbean 14 6 1 15 0 6 15 61 38 157 Middle East and North Africa 2 9 6 17 Global 2 3 15 1 20 South Asia 6 25 5 1 13 8 58 Grand total 265 54 10 59 148 380 56 356 26 295 193 67 168 67 243 447 2,832 Annual Table 9: WBG Hydropower (>10 MW) Commitments by Region Grand Region 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 total Africa 125 55 200 196 62 51 77 766 East Asia and Pacific 67 400 310 400 320 105 145 163 57 1,967 Europe and Central Asia 25 10 8 51 170 11 274 Latin America and Caribbean 39 338 186 7 15 186 4 37 15 16 47 888 South Asia 419 79 47 15 47 607 Grand total 150 161 938 186 317 819 15 461 - 320 - 181 237 81 447 192 4,502 Annex 3: List of FY06 Renewable Energy and Energy Efficiency Projects (in millions of US dollars) No. Country Project Name Energy Type Financing RE or EE Sources Component Financing Africa Region 1 Africa Africa Region - Benin and Ghana Second Energy supply/ distribution (EE) IDA 27.00 Coastal Transmission Backbone Project Hydro>10MW IDA 3.00 2 Africa Africa Region - Mali, Mauritania, and Senegal Felou Second Hydroelectric Project Hydro>10MW IDA 69.75 3 Ethiopia Ethiopia GEF Energy Access Project Solar PV, Mini-Hydro GEF (WB) 4.93 4 Ethiopia Accelerated Electricity Access (Rural) Expansion DSM (EE) IDA 1.07 5 Guinea Guinea Electric Sector Efficiency Improvement Energy supply/ distribution; DSM (EE) IDA 2.30 6 Nigeria Nigeria-National Energy Dev SIL Small Hydro, Solar PV IDA 13.76 7 Sierra Leone Sierra Leone Bumbuna Hydroelectric Completion Hydro>10MW IBRD Carbon Finance 4.50 East Asia & Pacific Region 8 China Anhui Conch Cement Company Limited Industrial (EE) IFC 10.93 9 China China: Fifth Inland Waterways Hydro>10MW IBRD 35.00 10 China China Utility-Based Energy Efficiency Finance Program DSM/residential & commercial (EE) GEF (IFC) 19.50 11 China China Utility-Based Energy Efficiency Finance Program DSM/residential & commercial (EE) IFC 40.00 12 China China-Renewable Energy II (CRESP II) Wind, Small Hydro IBRD 86.33 13 China Yunnan Zhongda Yanjin Power Generation Co. Hydro>10MW IFC 22.00 14 Lao PDR Rural Electrification Phase I of Rural Electrification Program DSM/residential & commercial (EE) GEF (WB) 0.75 Mini/Micro Hydro GEF (WB) 0.25 15 Lao PDR Rural Electrification Phase I of Rural Electrification Program Solar PV, Mini/Micro Hydro and Biomass IDA 2.06 Energy supply/ distribution (EE) IDA 1.00 16 Papua New Guinea Rural Energy Fund (GEF-Teacher's Solar Lighting Project) Solar PV GEF (WB) 0.99 17 Philippines 20 MW Palinpinon II Geothermal Optimization Project Geothermal IBRD Carbon Finance - 18 Philippines Philippines-Support for Strategic Local Development & Investment Mini Hydro IBRD 13.00 Europe & Central Asia Region 19 Armenia Renewable Energy GEF Project Small Hydro, Wind, Solar, and Geothermal GEF (WB) 3.00 20 Armenia Renewable Energy Project Small Hydro, Wind, Solar, and Geothermal IDA 5.00 21 Armenia Urban Heating Project District heating (EE) IDA 3.75 No. Country Project Name Energy Type Financing RE or EE Sources Component Financing 22 Belarus Post-Chernobyl Recovery Project District heating (EE) IBRD 42.50 23 Bosnia- Raiffeisen Bank D.D. ( Housing/EE) DSM/residential & Hezegovina commercial (EE) IFC 15.40 24 Bosnia- Energy Community of South East Europe Herzegovina and Bosnia and Herzegovina Project Hydro>10MW IDA 10.80 25 Croatia District Heating Project District heating (EE) IBRD 29.80 26 Hungary OTP Bank Hungary (Sub-sovereign Schools EE) District heating (EE) IFC 106.42 DSM/residential & commercial (EE) IFC 30.58 27 Moldova Energy Conservation & Emissions Reduction District heating (EE) IBRD Carbon Finance 0.48 28 Moldova Public Heating Biomass Systems in Moldovan Rural Communities Biomass IBRD Carbon Finance 1.19 29 Poland Poland-Stargard Geothermal Project Geothermal IBRD Carbon Finance 0.52 30 Romania Transport Trade Services SA Transport (EE) IFC 7.65 31 Russia Bema Gold Corporation Industrial (EE) IFC 1.89 32 Russia United Metallurgical Company (OMK) Industrial (EE) IFC 8.48 33 Russia Russia Sustainable Energy Finance Program (RSEF) Industrial (EE) IFC 3.00 Biofuel IFC 1.00 34 Serbia and Montenegro Energy Community of South East Europe- Montenegro Project Energy supply/ distribution (EE) IDA 1.71 35 Turkey Eren Expansion Industrial (EE) IFC 10.00 36 Ukraine Industrial Union of Donbass (ISD) Industrial (EE) IFC 30.06 Latin America & Caribbean Region 37 Argentina Arcor S.A.I.C. Industrial (EE) IFC 0.26 38 Brazil Itambe Industrial (EE) IFC 0.02 39 Brazil MRS Logistica SA Transport (EE) IFC 4.50 40 Brazil Sugar Bagasse Cogeneration Project Biofuel IBRD Carbon Finance 0.55 41 Brazil Energia Renovaveis do Brasil Ltda. Wind IFC 5.50 42 Brazil TAM Airlines Transport (EE) IFC 25.00 43 Chile Chile Quilleco Hydropower Project Hydro>10MW IBRD Carbon Finance 1.50 44 Chile Hidroelectrica La Higuera Hydro>10MW IFC 45.00 45 El Salvador Biothermica Energy Inc. Biomass MIGA 1.80 46 Guatemala Municipality of Guatemala (CGP) Transport (EE) IFC 6.70 47 Honduras Honduras Rural Infrastructure Project Solar PV and Mini Hydro DA 3.76 No. Country Project Name Energy Type Financing RE or EE Sources Component Financing 48 Honduras Rural Electrification Project Micro Hydro, Wind, Biomass, and Solar PV GEF (WB) 2.35 49 Mexico Large-Scale Renewable Energy Development Project Wind GEF (WB) 25.35 50 Peru Peru -Rural Electrification Small Hydro; other RE GEF (WB) 10.00 51 Peru Peru -Rural Electrification Hydro and other RE IBRD 6.50 52 Peru Peru Huaycoloro Landfill Gas Recovery Biomass IBRD Carbon Finance 2.22 Middle East & North Africa Region 53 Djibouti Djibouti-Power Access and Diversification Wind IDA 5.32 54 Yemen, Republic of RY-Power Sector Energy supply/ distribution; DSM (EE) IDA 6.13 South Asia Region 55 India DCM Shriram Consolidated Limited (DSCL - II) Biofuel IFC 3.75 56 India India Hydro Development Corporation (IHDC) Energy supply/ distribution (EE) IFC 8.11 57 India India Hydro Development Corporation (IHDC) - Ascent Hydro Projects Limited (Ascent) Small Hydro IFC 7.12 58 Nepal Nepal - Biogas Program Biofuel IBRD Carbon Finance 3.38 59 Sri Lanka INCaF Eco Power Ltd. Small Hydro IFC Carbon Finance 5.00 60 India INCaF Enercon Wind IFC Carbon Finance 8.00 Global 61 Global Support to Sustainable Energy- Turbo Tech Expansion Industrial (EE) TFs (EOF-IFC) 0.60 Notes: 1) RE stands for renewable energy, and EE stands for energy efficiency. 2) In the absence of a precise methodology, the IFC assesses the percentage of IFC investment in proportion to the full project cost and applies that proportion to the full RE/EE project value. For more details see"Choices Matter: 2005 Sustainability Report"at www.ifc.org/SustainabilityReport/, last accessed November 8, 2006. 3) Fuel cells are categorized as RE by IFC disregarding of whether the energy resource used to generating the hydrogen has been a fossil fuel or renewable energy resource. For the World Bank fuel cells are only filed as renewable energy if the energy resource used to generating hydrogen is a renewable energy resource. Thus this report does not include the IFC (GEF) Fuel Cells Project (US$3.3M), because it does not match the World Bank's definition of renewable energy. 4) Hydropower rehabilitation projects, which do not result in greater output, are classified as EE (by both the IBRD/IDA and IFC).