World Bank funding for efficient and renewable energy rose 87% in 2008 to nearly $2.7billion, reflecting the importance of moving to a low-carbon economy. Funding in fiscal 2008, ending June 30, was nearly double the previous year’s $1,4billion, which in turn was 67% higher than in fiscal 2006. Investment in “green” energy projects is essential for poor countries hit hard by soaring oil prices, says Jamal Saghir, World Bank Director for Energy, Transport and Water. “What’s affecting the poor countries is not only the oil price increase, it’s the volatility as well which is creating vulnerability at the same time,” Saghir says. “That’s why you look at alternative sources of energy.”
Rising traditional energy prices has made alternative energy, such as wind power, more attractive and affordable in the developing world. Commitments for 2008, including carbon finance operations and support from the Global Environment Facility, consisted of the following:
- “$1,1-billion for energy efficiency;
- “$476-million for new renewable energy projects including wind, solar, biomass, geothermal and hydropower projects that will generate up to 10 MW per facility;
- “$1-billion for hydropower projects with capacities of more than 10 MW per facility.
Fear of the effects of climate change also encourages developing countries to find ways of emitting less climate-warming carbon, Saghir argues. The high cost of traditional energy and acute power shortages have spurred demand for energy efficiency projects, according to a statement by the bank. Such projects are being put in place in China, Pakistan, Argentina, Ukraine, Burundi and Zambia, among other countries.