New Renewable Energy and Energy Efficiency—World Bank Group Exceeds Previous Year's Commitments by 48 Percent

WASHINGTON, August 14, 2006—The World Bank Group (WBG) announced today that $680 million was committed in fiscal year 2006 to New-Renewable Energy (New RE) and Energy Efficiency (EE) projects. This is an increase of 48 percent when compared to last year’s commitments. This is more than double the annual growth rate the WBG committed to achieve two years ago in Bonn.  

In fiscal year 2006 (July 2005-June 2006), the commitments by the WBG – the World Bank, the International Finance Corporation (IFC), Multilateral Investment Guarantee Agency (MIGA), along with the Carbon Finance operations, and co-financing support from the Global Environment Facility (GEF) – comprised of the following:

·        $490 million for EE.
·        $190 million for New RE – wind, solar, biomass, geothermal (80 percent of New RE commitments), and hydropower up to 10 MW per facility (20       percent).
·        The subtotal of $680 million can be compared with the WBG commitment of $459 million towards New RE and EE projects in fiscal year 2005.
·        In addition, in fiscal year 2006 the WBG committed $192 million for hydropower projects which were larger than 10MW per facility.

The total amount of funds committed by the WBG for Renewable Energy (RE) and Energy Efficiency (EE) programs in 2006 was $871 million, according to the newly released data. Commitments for RE and EE were 37 percent of total power sector commitments and 20 percent of WBG total energy sector commitments in fiscal year 2006, which reached $4.4 billion.  In fiscal year 2006, the WBG supported 62 RE and EE projects in 35 countries.  

Overall RE and EE commitments by each organizational unit were as follows:

·        International Bank for Reconstruction and Development (IBRD) and International Development Association (IDA), including Global Environment Facility (GEF) co-financing and carbon funds, $418 million;
·        International Finance Corporation (IFC), including GEF co-financing and other trust funds, $452 million; and
·        Multilateral Investment Guarantee Agency (MIGA), $1.8 million for energy efficiency.

“Renewable energy and energy efficiency can contribute significantly to achieving the Millennium Development Goals – in fact, they offer a ‘double dividend’ – meeting the essential energy needs of countries for sustained growth and poverty reduction, while at the same time preserving or enhancing the environment,” said Jamal Saghir, Director of Energy and Water at the World Bank. “Since 1990, World Bank Group commitments in renewable energy and efficiency have exceeded $10 billion with each dollar leveraging another three dollars equivalent from other private and public sources.”

Rachel Kyte, Director, Environment and Social Development Department, at the International Finance Corporation, the private sector arm of the World Bank Group, said: “In addition to the $452 million in commitments in fiscal 2006, IFC sees a strategic priority in helping our clients increase their energy efficiency and explore clean energy technologies.  We believe this is smart business for our clients and underlines the role the private sector plays in mitigating global climate change.”  

Meeting the Commitments Made at the Bonn International Renewable Energies Conference

In Bonn, Germany, in June 2004, at the International Renewable Energies Conference, the WBG committed to increase its support for New RE and EE by an average of 20 percent per year from 2005 to 2009. This was later affirmed by the World Bank Board of Executive Directors during discussions of the management response to the Extractive Industries Review. In fiscal years 2005 and 2006, cumulative New-RE and EE commitments reached $1.14 billion, double the Bonn commitment target of $552 million for these two years.

Building Capacities, Creating and Disseminating Knowledge are Essential Elements of WBG Support for Scaling-up RE and EE

The WBG works extensively with its partners to build capacity and provide sector information and knowledge in addition to investment support. To improve its communication and to more effectively disseminate knowledge, the Energy and Water Department of the World Bank launched a Renewable Energy Web Site (http://www.worldbank.org/re), and a Renewable Energy Toolkit (REToolKit) (http://www.worldbank.org/retoolkit) – an interactive web-based tool for renewable energy practitioners and policymakers.

The Energy Sector Management Assistance Programme (ESMAP) (http://www.esmap.org), a multi-donor facility at the World Bank, committed $1.5 million for renewable energy and $1 million for energy efficiency. These commitments provided strong support to sector work and technical assistance, including multi-year projects. These projects are expected to lead to the development of supportive policies and identification of prospective investments in renewable energy and energy efficiency.  Additional support to developing countries is provided through the Asia Alternative Energy Program and other trust funds.

For more information about the World Bank Group’s commitment to renewable energy and energy efficiency, please visit: http://www.worldbank.org/energy and http://www.worldbank.org/re
For information on World Bank Group projects, please visit http://www.worldbank.org/projects, http://www.ifc.org, and http://www.miga.org

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