Wednesday, October 15, 2014

Why Is the World Bank Failing on Energy Poverty?

World Bank energy investments are categorically failing to end energy poverty.

That's the stark finding of a new report released by Sierra Club and Oil Change International which measures how multilateral development banks (MDB) fare on their efforts to end energy poverty.  The report benchmarked recent MDB investments in clean energy access against the breakdown of needed investment called for in the International Energy Agency's (IEA) "Energy for All" scenario.  In that scenario, universal energy access is achieved by 2030. 

As it stands, if the "Energy for All" scenario is going to succeed, it will require 64 percent of all new investments be used to fund the fastest, cheapest, and most effective source of energy that will help energy poor populations get on to the energy ladder.  That source of energy? Distributed off-grid and mini-grid clean energy systems for those living Beyond the Grid. 

The problem is, the world's foremost development institution -- the World Bank -- is failing miserably to live up to the IEA's goals.

Off-Grid and Mini-Grid Renewable Energy Spending as a Percentage of the Renewable Access Portfolio (Credit: ) Click to enlarge.
Despite the presence of wildly successful programs like Lighting Africa and Bangladesh's IDCOL program -- which has jumpstarted a booming off-grid solar market totaling 3.3 million systems installed to date -- the report shows that the World Bank Group fell painfully short on its investments in clean energy access. 

Key findings include that less than 10 percent of the Bank's energy funding specifically targets the poor - a group that makes up nearly 40 percent of the world's population, when you include people who lack access to electricity and/or modern cooking fuels.  Even worse is the fact that out of that miserly 10 percent, only one quarter was spent on off-grid or mini-grid clean energy deployment -- well short of the IEA's benchmark of 64 percent.

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