The Challenge of Low-Carbon Development - World Bank Internet ...
The Challenge of Low-Carbon Development - World Bank Internet ... The Challenge of Low-Carbon Development - World Bank Internet ...
Table 2.3WBG Low-Carbon Energy Commitments ($ millions) by Product Line and Investment Category,2003–08Type of projectTraditionalfinancing (IBRD,IDA, IFC, MIGA)Blended financing(traditional + GEFor carbon finance)Stand- aloneGEF andcarbon financeTotalOff-grid and mini-grid renewablesDirect investments, including cookstoves and household biomass/biogas228 224 64 515Indirect, with funds that support subprojects 101 124 10 235On-grid renewable energyDirect investments in renewable energy (may include some ancillarytransmission and distribution loss reduction)2,277 282 496 3,055Indirect, with financial intermediaries 202 0 11 213Energy efficiencyTransmission and distribution loss reduction 529 104 0 633End user energy efficiency 338 21 63 422Combined heat and power and/or district heating 344 77 56 477Supply-side energy efficiency 460 2 66 528Energy efficiency via financial intermediaries 200 514 98 812OtherBoth renewable energy and energy efficiency, or unspecified, viafinancial intermediariesDevelopment program lending, other investment programs, andtechnical assistance227 85 23 335646 14 93 753Total 5,553 1,446 980 7,978Source: IEG calculations, low-carbon component database.Note: Excludes freestanding WBG analytic and advisory activities, IFC advisory services, and special financing. Note that these data excludetransmission and distribution projects that may reduce technical losses but were not classified by the WBG as low-carbon activities.IBRD = International Bank for Reconstruction and Development; IDA = International Development Association; IFC = International FinanceCorporation; GEF = Global Environment Facility; MIGA = Multilateral Investment Guarantee Agency.Figure 2.1RegionSARMENALCRECAEAPAFRLocation of 2003–08 Low-CarbonPortfolio, by Type0 500 1,000 1,500 2,000 2,500Off-grid renewableEnergy efficiency$ (millions)Grid renewable energyOtherSource: IEG.Note: Unit of analysis is the project component. Excludes freestandingWBG analytic and advisory activities, IFC advisory services, andspecial financing. Regions: SAR = South Asia, MENA = Middle Eastand North Africa, LCR = Latin America Caribbean, ECA = Europe andCentral Asia, EAP = East Asia and Pacific, AFR = Sub-Saharan Africa.WBG = World Bank Group.Figure 2.1 shows the location of these projects. Africa’sshare is large relative to its population; its 30 percent shareof grid-connected renewable energy reflects investments inlarge hydropower. The Europe and Central Asia Region hasa large relative and absolute investment in energy efficiency,reflecting a legacy of inefficient equipment and underpricedenergy in the transition countries. In contrast, energyefficiency investments in South Asia are small relative toinvestments in hydropower and coal; this is striking in viewof large transmission and distribution losses. (Efficiencyand transmission investments increased in fiscal 2009,however.) The Middle East and North African portfolio forthis period is very small; the amount counted as renewableenergy includes hybrid solar thermal plants that are mostlygas fired.Seventy percent of the low-carbon energyportfolio was financed purely throughtraditional instruments.14 | Climate Change and the World Bank Group
Figure 2.2Breakdown of 2003–08 Low-Carbon Portfolio by Country Income Group and Type3,5003,000Amount ($ millions)2,5002,0001,5001,0005000Low incomeLower middleincomeUpper middleincomeIncome groupHigh incomeRegionalOff-grid renewable Grid energy renewable Energy and efficiency OtherSource: IEG.Note: Unit of analysis is the project component. Excludes freestanding WBG analytic and advisory activities, IFC advisory services, and specialfinancing.Figure 2.2 show the breakdown of this portfolio by countryincome group. About 60 percent goes to low- andlower-middle-income countries; China, the single largestrecipient, accounts for 16 percent. Energy efficiency is moreprominent in the wealthier countries.Meeting the Bonn commitmentAt the Bonn Conference on Renewable Energy, the WBGpromised that with the aim of ensuring an institutionalfocus on the transition toward cleaner energy sources,it would commit to a target of at least 20 percent averagegrowth annually—in both energy efficiency and new renewableenergy commitments—over the next five years(fiscal 2005–09).IEG’s reckoning of funds committed to energy efficiencyand new renewable energy exceeds that of the WBG. TheBonn Commitment was surpassed, with commitmentsgrowing from a base of $209 million to $2,061 million in2008 (IEG calculation) and $3,128 in 2009 (managementcalculation). 5 Figures 2.3 and 2.4 show the growth in totallow-carbon commitments, indicating a sizeable boom ingrid-connected renewable energy, much of it large hydropowernot counted under the Bonn Commitment.Energy efficiency grew with large spurts in 2006 and 2008,with financial intermediaries assuming more prominencein the latter period. The growth was mostly in projects thatwere purely traditionally financed, with a rapid expansionof IFC and IBRD funds, and it occurred disproportionatelyin the lower-middle-income countries.The WBG funds committed to energyefficiency and new renewable energy greatlyexceed the amounts agreed under the BonnCommitment.Based on data reported by the Investment Framework forClean Energy and Development (management), low- carbonFigure 2.3Amount ($ millions)3,0002,0001,000Growth in Low-Carbon Portfolio byProject TypeLow carbon: Groups of technologiesversus FI, by financing amount02003 2004 2005 2006 2007 2008YearOff-grid renewable, no FIEnergy efficiency, no FIFI, totalGrid renewableenergy, no FIOther, no FISource: IEG.Note: Unit of analysis is the project component. Excludes freestandingWBG analytic and advisory activities, IFC advisory services, andspecial financing. FI = financial intermediation.Renewable Energy | 15
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Table 2.3WBG <strong>Low</strong>-<strong>Carbon</strong> Energy Commitments ($ millions) by Product Line and Investment Category,2003–08Type <strong>of</strong> projectTraditionalfinancing (IBRD,IDA, IFC, MIGA)Blended financing(traditional + GEFor carbon finance)Stand- aloneGEF andcarbon financeTotalOff-grid and mini-grid renewablesDirect investments, including cookstoves and household biomass/biogas228 224 64 515Indirect, with funds that support subprojects 101 124 10 235On-grid renewable energyDirect investments in renewable energy (may include some ancillarytransmission and distribution loss reduction)2,277 282 496 3,055Indirect, with financial intermediaries 202 0 11 213Energy efficiencyTransmission and distribution loss reduction 529 104 0 633End user energy efficiency 338 21 63 422Combined heat and power and/or district heating 344 77 56 477Supply-side energy efficiency 460 2 66 528Energy efficiency via financial intermediaries 200 514 98 812OtherBoth renewable energy and energy efficiency, or unspecified, viafinancial intermediaries<strong>Development</strong> program lending, other investment programs, andtechnical assistance227 85 23 335646 14 93 753Total 5,553 1,446 980 7,978Source: IEG calculations, low-carbon component database.Note: Excludes freestanding WBG analytic and advisory activities, IFC advisory services, and special financing. Note that these data excludetransmission and distribution projects that may reduce technical losses but were not classified by the WBG as low-carbon activities.IBRD = International <strong>Bank</strong> for Reconstruction and <strong>Development</strong>; IDA = International <strong>Development</strong> Association; IFC = International FinanceCorporation; GEF = Global Environment Facility; MIGA = Multilateral Investment Guarantee Agency.Figure 2.1RegionSARMENALCRECAEAPAFRLocation <strong>of</strong> 2003–08 <strong>Low</strong>-<strong>Carbon</strong>Portfolio, by Type0 500 1,000 1,500 2,000 2,500Off-grid renewableEnergy efficiency$ (millions)Grid renewable energyOtherSource: IEG.Note: Unit <strong>of</strong> analysis is the project component. Excludes freestandingWBG analytic and advisory activities, IFC advisory services, andspecial financing. Regions: SAR = South Asia, MENA = Middle Eastand North Africa, LCR = Latin America Caribbean, ECA = Europe andCentral Asia, EAP = East Asia and Pacific, AFR = Sub-Saharan Africa.WBG = <strong>World</strong> <strong>Bank</strong> Group.Figure 2.1 shows the location <strong>of</strong> these projects. Africa’sshare is large relative to its population; its 30 percent share<strong>of</strong> grid-connected renewable energy reflects investments inlarge hydropower. <strong>The</strong> Europe and Central Asia Region hasa large relative and absolute investment in energy efficiency,reflecting a legacy <strong>of</strong> inefficient equipment and underpricedenergy in the transition countries. In contrast, energyefficiency investments in South Asia are small relative toinvestments in hydropower and coal; this is striking in view<strong>of</strong> large transmission and distribution losses. (Efficiencyand transmission investments increased in fiscal 2009,however.) <strong>The</strong> Middle East and North African portfolio forthis period is very small; the amount counted as renewableenergy includes hybrid solar thermal plants that are mostlygas fired.Seventy percent <strong>of</strong> the low-carbon energyportfolio was financed purely throughtraditional instruments.14 | Climate Change and the <strong>World</strong> <strong>Bank</strong> Group
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