The World Bank Group’s funding for renewable energy and energy efficiency programmes has increased by a massive 87% in the last year, it has recently been revealed. A statement by the Bank said $2.7b was used to fund renewable energy and energy efficiency commitments for the year ending 30 June 2008.
The funding includes carbon finance operations and co-financing from the global environment facility. A total of US$1.192b was used for energy efficiency, US$476m for renewable energy projects such as wind, solar, biomass, geothermal and hydro-power. Another US$1.007b was invested in hydro-power projects with capacities of producing over 10MW per facility.
The renewable energy and energy efficient investments made up 35% of the group’s total energy commitments during the year, up from 13% per year in the early 1990s.
The group funded 95 projects in 51 countries and two cross-border projects.
“Concerns about energy security, climate change and increasing energy prices make renewable energy and energy efficiency measures and applications attractive in a number of different settings,” Jamal Saghir, the bank’s energy director, said.
“This is reflected in the increased demand for investment and technical assistance to strengthen regulatory frameworks and providing incentives to climate change-friendly applications,” Saghir added.
The bank promised to increase financial support for renewable energy and energy efficiency projects by 20% per year. This was at the International Renewable Energies conference held in Bonn, Germany, in 2004.
However, over the last four years, the group has exceeded that goal by committing close to $3.7b, higher than the agreed commitment of $1.3b.
The International Finance Corporation (IFC) also raised its private sector investments in alternative sources of energy in 2007.
“The private sector plays a critical role in addressing global warming because over 80% of the current investments related to climate change is raised by non-governmental companies and investors,” Rashad Kaldany, the IFC’s vice-president for infrastructure, said.
“We are committed to helping developing countries tap into sustainable sources of energy,” he said.
MIGA, the bank’s Group’s political risk insurance arm, is also working to help countries to reduce carbon emissions.
“MIGA is committed to helping investors and developing countries reduce the harmful practices associated with global warming by supporting investments in projects that exploit renewable energy resources, support energy conservation, and increase efficiency,” the MIGA acting executive vice president, James Bond, said.
“This year, for example, we provided $88m in political risk coverage for a geothermal power project in Kenya, which will help alleviate the country’s severe power shortages while offsetting greenhouse gas emissions.”