World Bank Group (WBG)

The World Bank is a vital source of financial and technical assistance to developing countries around the world. It is made up of two development institutions owned by 186 member countries—the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA)—and affiliated, complementary organizations, namely, the International Finance Corporation (IFC), the Multilateral Investment Guarantee Agency (MIGA) and the International Centre for the Settlement of Investment Disputes (ICSID).

The World Bank is a vital source of financial and technical assistance to developing countries around the world. It is made up of two development institutions owned by 186 member countries—the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA)—and affiliated, complementary organizations, namely, the International Finance Corporation (IFC), the Multilateral Investment Guarantee Agency (MIGA) and the International Centre for the Settlement of Investment Disputes (ICSID). The World Bank’s mission is to fight poverty with passion and professionalism for lasting results and to help people help themselves and their environment by providing resources, sharing knowledge, building capacity and forging partnerships in the public and private sectors. In advancing the vision of inclusive and sustainable globalization, each WBG institution plays a different role. The IBRD focuses on middle income and creditworthy poorer countries and the IDA on the world’s poorest countries. IFC provides investments and advisory services to build the private sector in developing countries. Together, the World Bank Group provides low-interest loans, interest-free credits and grants to developing countries for a wide array of purposes that include investments in education, health, public administration, infrastructure, financial and private sector development, agriculture, and environmental and natural resource management.

Energy at WBG

The World Bank supports developing countries’ efforts to provide cleaner and stable electricity services to households and businesses through its financing instruments, policy advice, partnerships and knowledge transfer. In order to increase access to affordable and reliable modern energy services and RE/EE in developing countries, the World Bank also recognizes the vital need to engage the private sector and other commercial partners. In response, a wide array of WBG financial and non-financial instruments supports developing countries’ efforts to secure private investments for advancing access to sustainable energy. Among these are conventional lending instruments, equity and quasi-equity, partial risk
guarantees, currency, commodity and interest rate risk management, and carbon finance. In addition, WBG provides capacity-building, policy, legal and regulatory support. In response to the demand from developing countries, WBG financing for energy infrastructure development has been strong in recent years. In 2008 the Bank set up the Climate Investment Funds (CIF), a unique pair of financing instruments designed to support low-carbon and climate-resilient development through scaled-up financing channeled through development banks. The CIFs consist of the Clean Technology Fund (CTF) and the Strategic Climate Fund (SCF).

Under energy access, services provided by WBG include:

• Building, rehabilitating and strengthening electricity distribution networks and supporting the corporate development of electricity supply companies
• Strengthening the capacity of regional and local governments to plan and manage electrification projects, including those that accompany other rural development activities and promoting electrification investment opportunities to potential private investors
• Developing the legal framework and associated regulations to facilitate provision of capital cost subsidies to private sector providers and increasing private sector participation in the energy sector
• Developing guidelines for electricity systems design and construction appropriate for rural areas, including operations norms and developing procedures for calculating rural tariffs and norms for rural service quality
• Developing appropriate policies and incentives for development of renewable energy and of public/private cost-sharing in renewable energy investment projects
• Developing and piloting sustainable financing strategies and supporting capable, local communities and stakeholders such as local governments, consumer associations and village groups interested in operating and participating in the financing of small electricity concessions
• Developing multisector programmes to serve as an effective interface between the development of rural electrification programmes and productive and social programmes and projects executed on the same territory by other actors
• Improving corporate governance and commercialization of state-owned energy companies
• Establishing competition in energy markets through market-opening and gradual liberalization
• Strengthening utility management and operations to underpin efficiency, quality of service and financial sustainability
• Strengthening and expanding the electricity networks to maximize the benefits of electricity trading
• Supporting generation, transmission and distribution projects through its full range of financial instruments (loans, guarantees, equity investment, etc.)

Under GHG mitigation measures, services provided by WBG include:

• Helping developing countries move to a lower carbon path by exploiting renewable energy resources, supporting energy conservation and increasing efficiency
• Promoting new technologies, like carbon capture and storage (CCS), addressing the need to reduce the carbon impact of fossil fuels
• Financing for clean energy and mitigation; this includes the creation of new carbon facilities, including the Carbon Partnership Facility and the Forest Carbon Partnership Facility