WB sets $200-M grant for renewable energy projects in next 5 years

The World Bank (WB) is setting aside about $200 million over the next five years as its annual financial commitment for renewable energy and energy efficiency projects.

"The increased lending would effectively double its current pace per year by 2010 to ensure an institutional focus on the fostering of the transition toward cleaner energy sources," said Peter Woicke, managing director of the World Bank Group and executive vice president of the International Finance Corp., its private sector lending arm.

"Our strategy — through programs and policies — will aim to ensure that renewable energy and energy efficiency are seen as economically viable and essential ingredients in the energy choices of our member nations, not marginal considerations," Woicke said.

The WB estimates that 1.6 billion people worldwide do not have access to modern lighting and power. Renewable energy include wind, solar, tidal, and geothermal power.

"They deserve more than conventional wisdom and more than conventional energy solutions, the solutions that will worsen our global, national, and local challenges. They deserve the best energy solutions, the cleaner energy solutions," WB official said.

It proposed a steering group of nations, institutions, civil society, and businesses to develop an action agenda on renewable energy and energy efficiency development.

Woicke said a marketplace of partnerships — public and private, national and local, corporations and civil society — must be organized around "a few key principles."

These are: (a) a transition from donor-driven subsidy schemes to market-based solutions; (b) the development of policies and regulations that promote renewable energies and energy efficiency; (c) openness toward the adoption of new technologies, new partners, and new business models; (d) elimination of market distortions that keep nations tied to inefficient, financially unsustainable, or environmentally damaging energy regimes; and, (e) the growth of carbon markets in order to mitigate climate change, accelerate the evolution toward shadow-pricing, and speed up the clean energy transformation.

Since 1990, the World Bank Group has been the largest lender for energy efficiency and renewable energy projects in the developing nations, investing more than $6 billion in Bank-managed resources and mobilizing more than $10 billion from other public and private sources.