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WASHINGTON, DC, US, May 24, 2006 (Refocus
Weekly)
One of the world’s largest financing sources
invested more than US$705 million last year in renewable energy and
efficiency projects, “substantially greater” than in previous years.
The International Finance Corporation (IFC) says the funding was
applied to 21 projects with a sustainable energy component which had
a total value of $2.9 billion, it notes in its latest sustainability
report, ‘Choices Matter.’ The value includes $832 million invested
directly in renewables and efficiency.
“We are responding to the global warming crisis by investing
directly in energy efficiency and renewable energy, but also by
identifying opportunities for sustainable energy in our mainstream
projects,” explains Lars Thunell of the private sector arm of the
World Bank Group. “IFC is a sustainability standard setter for the
financial community; major banks apply our environmental and social
standards. As such, it is important that we walk the talk.”
Of the $832 million, $583 million went to energy efficiency, while
$193 million went to renewables with hydro capacity greater than 10
MW and $56 million to renewables projects where hydro capacity was
less than 10 MW. Total financing for new projects last year was $6.5
billion with a total committed portfolio of $19.3 billion.
“In 2005, our level of investment in sustainable energy was
substantially greater than the numbers reported in previous years,
as well as far exceeding the $61 million reported in the December
2005 report ‘World Bank Group Progress on Renewable Energy & Energy
Efficiency Fiscal Year 2005.’ Previous assessments referenced only
stand-alone projects where the sole focus was renewables or
efficiency, “thus missing the full scope of investment in
sustainable energy undertaken as a component of larger investments
in various industry sectors.”
Since its last sustainability report, IFC has undertaken its first
“comprehensive assessment to determine the level of renewable energy
and energy efficiency components in our mainstream investment
portfolio, laying the foundation for an effort to greatly expand
sustainable energy investment through our core business.” Last year,
G-8 nations increased the pressure on global institutions to
increase the amount of investments made in renewables and “IFC is
taking a leading role in developing new business models that
stimulate private sector investment in sustainable energy and at the
same time support sustainable economic development in emerging
markets.”
“Clean energy has the potential to improve development outcomes
significantly by increasing the availability and security of energy
in emerging markets, while reducing its environmental impact,” the
report explains. IFC is active in the growing market to finance
private power generation using grid-connected renewables from wind,
hydro, biomass and geothermal).
Wind energy investments included the 50 MW Rio do Fogo project in
Brazil and the 8.25 MW Cabo Engano project in the Dominican
Republic, and IFC is actively pursuing wind project and carbon
credit financings in China and India. An IFC-supported credit
facility in the Czech Republic led to the first fully commercial
windfarm in that market.
Financing was provided for ten run-of-river hydroelectric projects,
including the 43 MW El Canada project in Guatemala, the 28 MW Pamir
project in Tajikistan, the 192 MW Allain Duhangan project in India
and the 155 MW La Higuera project in Chile, while IFC also helped
finance the 24 MW Orzunil geothermal plant in Guatemala and is
financing other prospective geothermal projects for electricity
production and district heating.
“IFC is the largest source of financing for off-grid solar
businesses in the developing world” and it uses a combination of
donor resources and its own capital to “test new business models,
seed promising enterprises and provide capital for business
development.” With resources from GEF, it has also implemented the
largest grid-connected PV installation in the developing world, a 1
MW facility in the Philippines.
IFC defines ‘new’ renewables as energy from wind, solar, geothermal,
biomass and hydropower with a capacity of less than 10 MW per
facility.
IFC is the private sector arm of the World Bank Group and
coordinates its activities with other institutions of the Bank, but
it is financially independent and its 178 member countries provide
share capital and determine its policies.
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