Worldbank asked for more emphasis on wind and solar energy projects

Nov. 6, 1997 Environmentalists are urging the World Bank to lend developing countries more money for wind and solar energy projects, and less cash for fossil fuel-burning efforts that emit heat-trapping greenhouse gases.
Because the Bank heavily subsidises fossil fuel projects, developing countries have little incentive to explore energy alternatives that produce virtually no carbon dioxide, argue such groups as the Washington-based Worldwatch Institute and Institute for Policy Studies.
If the Bank prioritised renewable energy sources, then "such a sea-change could in itself create the sort of global momentum needed to lower the price of renewables, making them more competitive with fossil fuels," says Daphne Wysham, research fellow at the Institute for Policy Studies. "Rather than creating climate change, the World Bank Group could lead the way in promoting clean energy for developing countries," Wysham adds.
The World Bank remains the largest public financier of fossil fuel projects, spending atleast 6 times more money on these than it does for renewable energy efforts, Wysham charges. Since 1992, fossil fuel lending has topped $ 9.8 bn, according to a recent survey.
Just one of the Bank's fossil fuel projects, a 3,600-MW coal-fired power plant in China, will put more than 7 mm tons of CO2 into the atmosphere each year -- more than the emissions reduced by all of the green energy projects funded by GEF.
Bank staffers themselves have complained that the agency overstates the benefits of fossil fuel projects by turning a blind eye to the environmental and social damage involved.
Specifically, the Bank's estimates of project costs do not factor in the costs of environmental clean-ups and treatment for the respiratory infections and other ailments that increase where fossil fuels are burned, papers circulated among staff reveal.
However, Robert Watson, the new head of the Bank's environment department, argues that the Bank is a relatively small player in the power sector and is helping to promote advances that result in greater energy efficiency. " Should the Bank be involved in this sector? Absolutely, so long as it can demonstrate that it is improving (the sector's) performance," he says.
Watson notes that even wind power has its detractors, including groups concerned that the propellers used to generate electricity may be a menace to birds.
Energy experts and activists say the renewable energy potential of developing countries is huge. The Bank could make its experimental projects -- including wind farms in India and a credit program for off-the-grid solar home systems in Indonesia -- the mainstream, argues Christopher Flavin, a researcher at Worldwatch.
Flavin favours initiatives such as a $ 100 mm to $ 200 mm fund for small, commercial renewable energy projects in developing countries approved last year by the International Finance Corporation (IFC), the Bank's private-sector affiliate. "This could turn out to be a real breakthrough, with the potential to jump-start renewables in developing countries," Flavin writes in the current issue of World Watch Magazine.
The IFC also is working on a Photovoltaic Market Transformation Initiative intended to provide $ 30 mm in low-interest financing to manufacturers and dealers of small solar systems in developing countries, says Flavin.
Despite such examples, the idea of funding small-scale technologies has yet to catch on at the Bank, Flavin complains.
The ranks of critics have been joined by renewable energy advocacy groups looking to expand the market for their relatively eco-friendly technology. The Washington-based American Wind Energy Association (AWEA), for example, is calling on the U.S. government to urge the World Bank and other multilateral organisations to aggressively pursue wind energy projects.
Kevin Rackstraw, AWEA's director of international programs, says Bank staffers are inherently biased against renewable-energy projects, because they must perform additional feasibility studies before proceedingwith any alternative to traditional energy projects.
The Bank, however, is not alone. "Because little is known about wind resources in most countries, it is virtually always overlooked (by governments) as a feasible project," Rackstraw says.
"The state of knowledge of wind resources today is comparable to the early days of the petroleum industry," the lobby group says in a new publication. "Many people...believed oil would never replace coal and kerosene as the fuel of choice for the industrialising world. It was only after substantial exploration that the magnitude of the oil resource became understood."