The Challenge of Low-Carbon Development - World Bank Internet ...

Table 6.1Sector Intervention Direct impacts Leverage and diffusionimpactsEnergyefficiencySummary of Sectoral Findings (continued)Subsidizedguaranteesfor financialintermediaries’energy efficiencylendingto industry,commercial,and residentialsectorTechnical assistancefor banksOn-lendingthrough financialintermediariesESCO demonstrationPublic sector reformto permitESCO contractsDirect IFC investmentsin energyefficiencyGuarantees facilitate energyefficiency investment by SMEswith poor credit, in poorlydeveloped credit markets, or forhousing coops in East Europe;but are superfluous for largerfirms or for banks’ trusted clients.In China, technical assistancehelped Industrial Bank gainmarket share; in Russia, mayhave helped banks to convincecustomers to borrow for energyefficiency. Energy efficiencyappraisal tool was useful torecipient banks.Useful in countries with poorlydeveloped credit markets.Screening existing clients for energyefficiency opportunities hasidentified small loans with lowabsolute levels of CO 2reductionand is likely not cost-effective instaff time.Mainstream lending is usuallytoo late in the project cycle toaffect technology choice.However IFC may be able tofinance some credit-constrainedlarge firms with high absolutelevels of energy and GHGsavings.Guarantees were not,as assumed, catalytic ininducing diffusion of energyefficiency lending.Some diffusion of energyefficiency practice amongRussian banks.High leverage in China:demonstration wasscaled up.But ESCOs are small andare themselves creditconstrained,limitingscalability.In Hungary, facilitated nationwideinvestments bymunicipalities in efficientheating and lighting.Monitoring needs and issuesPool information on subprojectperformance to identify promisingmarket niches.86 | Climate Change and the World Bank Group