World Bank to back renewables in developing world
A change in the funding of renewable energy in the developing world is needed to address the dual problems of poverty and climate change, according to the World Bank.
In a report published on Sunday the bank outlines plans for restructured grants and loans as well as a venture capital fund to stimulate the growth of renewables and cleaner bridging fuels such as natural gas.
Figures from the International Energy Agency quoted in the report suggest an average of US$300 billion per year will be needed between now and 2030 for developing and transition economies to meet their energy needs.
By basing a large slice of new energy infrastructure on clean technologies, says the bank, the potential is there for a “double dividend” meeting energy needs that are vital for economic growth and fighting poverty while at the same time leaving a smaller environmental footprint.
The paper, Clean Energy and Development: Towards and investment framework, says this will be an “urgent and difficult challenge” that will require a shift in domestic policies of developing states as well as within the international community and organisations such as the World Bank itself.
Potential funding streams could include a blend of grants and carbon credits schemes, says the report, and savings could be made from improved energyefficiency at existing plants.
More partnership between the public and private sector is also likely to be necessary with governments prepared to take on a larger share of the financial risks of new projects.
There is also a need for action outside the energy sector itself with priority funding needed to look at better ways of managing natural resources such as water and forests.
The report also calls for more work to help farmers adapt to climate change, hinting at GMOs.
“Agriculture needs to be ‘climate proofed’ through the development of a new generation of drought resistant seeds and breeds,” it says.
It concludes by asking the World Bank’s Development Committee to endorse the potential new funding mechanisms and suggests that, if given the green light, detailed proposals for financing clean development could be on the table by September this year.