- The World Bank Group announced today that its financing of renewable energy and energy efficiency projects and programmes in developing countries has gone up 24 percent in the last fiscal year to reach $3.3 billion, the highest ever.
Total renewable energy and energy efficiency commitments for the year ended June 30, 2009 accounted for more than 40 percent of total Bank Group energy lending.
The group also said it far surpassed commitments made at the Bonn International Renewable Energies Conference in 2004 to increase support for new renewable energy and energy efficiency by nearly $1.9 billion over the period 2005-2009 included.
In fact, new Bank Group financing for renewable energy and energy efficiency during that period amounted to more than $7.0 billion, more than three-and-a-half times the target, the group’s statement said.
“Five years ago, we thought we were stretching ourselves by promising to expand support for renewable energy and energy efficiency by 20 percent per year,” said Katherine Sierra, Vice President for Sustainable Development at the World Bank. “As it turns out, our client countries have been even more ambitious in asking us to help them in this area, and we’ve been able to respond with robust investments to help build the low-carbon economies each country is seeking. We’ve now committed to even more challenging goals on clean energy and carbon intensity reduction investments as we strive to make reliable energy access for all a reality.”
About two out of every three dollars spent on energy projects financed by the International Finance Corporation, the member of the World Bank Group focused on private sector development, were in the renewable energy or energy efficiency subsector. “We’ve shown that not only is lending for renewable energy and energy efficiency an environmentally and socially sound choice, but that often these options make good business sense as well,” said Rashad Kaldany, IFC’s Vice President for Asia, Middle East/North Africa and Global Infrastructure. “By stimulating private sector involvement in renewable energy projects, IFC is playing a transformational role in the sector.”
“The Multilateral Investment Guarantee Agency (MIGA) is helping investors and developing countries reduce the harmful practices associated with global warming by providing political risk guarantees to support investments in renewable energy, energy conservation, and increased efficiency”, said Executive Vice President Izumi Kobayashi. “Over the last five years, MIGA issued coverage of over $350 million to support projects geared to renewable energy and energy efficiency.”
During the past five years, the Bank Group approved 366 renewable energy and energy efficiency projects in 90 countries, including 99 projects in 48 countries last year. Among the projects were those in Bangladesh supporting private sector and civil society-led off-grid solar electrification. This means 1.5 million households and rural businesses will have access to a clean and reliable source of electricity by 2012.
For instance, in Tanzania, World Bank is funding solar, small hydro, and biomass power plants to expand grid electricity supplies and power to public health and education facilities (hospitals, clinics, and schools), enterprises, and households. As a result, electricity access is expanding faster and power shortages that have plagued the country are easing.
In addition to the $7.0 billion in new RE/EE financing in fiscal years 2005-09, the group said, driven by demand in developing countries the Bank Group also committed $2.7billion for hydropower projects of more than 10MW per facility. Contrasting this with commitments (respectively) for new RE/EE of $1.8 billion and $607 million for larger hydropower in the previous five year period reflects the increasing priority given to clean energy in poverty alleviation and sustainable development.
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