Renewable energy has seen a resurgence at the World Bank.
A recent report on the bank’s energy lending shows funding for renewable sources of energy reached $3.5 billion in fiscal year 2014 — 38 percent of total lending for power generation and up nearly 126 percent from renewable energy lending in fiscal 2013.
Total funding to hydropower generation alone increased more than twofold: from 677 million in fiscal 2013 lending for hydropower rose to $2.3 billion this year.
The World Bank has increasingly shifted energy lending from fossil fuels to greener options. In fiscal 2010, only $2.1 billion was spent on renewable energy generation, or 22.7 percent of total energy lending that year. Funding for renewable energy climbed steadily since, topping $3.1 billion in fiscal 2012.
In 2012, the International Finance Corp., the bank’s private sector arm, helped put up a 40-megawatt solar power plant in Peru, the largest of its kind in Latin America. It also financed a large-scale wind power project in Jordan in 2013.
Lending for renewable energy sources, however, dropped 49 percent in 2013.
Apart from funding generation plants, a proportion of the World Bank’s renewable energy financing in fiscal 2014 went to building the policies and institutions countries need to manage a sustainable electricity supply as well as smart transmission and distribution systems that connect people and industries to energy.
The World Bank approved $9.4 billion in total energy lending in fiscal 2014. Funding for coal- and oil-fired energy generation projects accounted for the bulk of lending in the sector in fiscal 2010, but dropped to $158 million in fiscal 2014, a meager 1.7 percent of total spending. Funding for gas-fired plants, meanwhile, amounted to $404 million in 2014.
In the first U.S.-Africa Summit held in August in Washington, D.C., World Bank President Jim Yong Kim committed $5 billion in technical and financial support for energy projects in six African countries: Ethiopia, Ghana, Kenya, Liberia, Nigeria and Tanzania.
Kim said the financial commitment will be used to generate more power in the region, where some 600 million still have no access to electricity despite high potential in hydropower, geothermal, wind and solar, as well as oil and gas reserves.