World Bank raises funding for renewables by two-thirds
WASHINGTON, DC, US, October 29, 2007.
Funding for renewable energies from the World Bank Group has risen to US$1.4 billion.
Funding for wind, solar, biomass, geothermal and hydro, as well as energy efficiency projects, was $860 million in the 2006 financial year and rose 67% for the latest financial year. The financing comes from the World Bank, the International Finance Corporation, Multilateral Investment Guarantee Agency, Carbon Finance operations and co-financed projects by the Global Environment Facility included.
“The World Bank has strengthened its investment support and technical assistance for low carbon energy projects,” explains Jamal Saghir of the World Bank. "This is reflected in the progress we made these last few years in expanding support for renewable energy and energy efficiency.”
“Recognizing the economic and environmental values of clean energy, the World Bank Group's Clean Energy Investment Framework established in 2006 sets the stage for even greater support for low carbon economy development in the coming years,” he adds.
Funding involves $421 million for wind, solar, biomass, geothermal and hydropower up to 10 MW capacity, $751 million for hydropower projects with capacities larger than 10M W, and $262 million for energy efficiency. The World Bank Group supported 63 renewable energy and energy efficiency projects in 32 countries.
The Bank has outperformed its 2004 pledge under the Bonn Commitment to increase funding of new renewable energy projects and energy efficiency projects by 20% a year. From July 2004 through June 2007, it committed $1.8 billion for new projects, double its Bonn goal of $913 million for the same period.
“IFC has learned a great deal in the process of identifying energy efficiency and renewable energy investment opportunities in recent years,” says Rachel Kyte of the International Finance Corporation. “Our investment of over $450 million in 27 projects in the 2007 financial year is already substantial and reflects strong market demand for clean energy, but we expect this part of our business to grow much more rapidly in coming years with benefits for our clients and the environment - especially considering the need to respond to climate change.”
There has been a rise in the share of financing committed for renewables and efficiency since 1990, with total financing of $11 billion. Financing for these projects amounts to one-quarter of the Bank's commitments in the energy sector in the past three financial years since the Bonn commitment, up from 12% in the 1990-94 period.
New renewable energy involves projects that provide solar energy for heat or power, wind energy for mechanical or electrical power generation, geothermal and biomass energy for power generation and heat, and hydropower of 10 MW per installation. The WBG supports projects that may be cross-sectoral in nature.
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