World Bank Group International Bank for Reconstruction and Development (IBRD) Works with governments in middle income and creditworthy poorer countries Provides loans, guarantees, analytic, and advisory services International Development Association (IDA) Works with governments in 81 poorest countries providing highly concessional financing Provides interest-free credits and grants International Finance Corporation (IFC) Works with the private sector Invests in private enterprises in developing countries Provides long term loans, guarantees, and risk management and advisory services Multilateral Investment Guarantee Agency (MIGA Provides political risk insurance against non- commercial risks to eligible foreign investors and commercial banks for qualified investments in member countries
World Bank and Clean Energy WB is actively supporting clean energy technology solutions that bring about a truly diverse bioenergy mix, not focused solely on fuels Since 1990, The World Bank Group committed more than US$11 billion to RE/EE in LDCs Support for RE/EE rose to 1.4 billion dollars in FY 2007, reaching 40% of total energy sector commitment Committed $2.5 billion for new RE/EE from June 2004 to December 2007 –Exceeding their Bonn commitment 1.5 years ahead of schedule
World Bank and Biofuels Bank has long held a view of conditional & cautious support for biofuels –Consistent since their assessment 3 years ago, on the commercial viability of biofuels for transport in developing countries Bank acknowledges in some cases, biofuels do promise benefits such as: –Lower greenhouse gas and local air pollution emissions, –Energy diversification –Economically least cost compared to conventional fuels. Banks approach to biofuels has been cautious, due to manifold environmental & economic impacts accompanying large scale development Sustainability concerns include: –Biofuel production impact on the cost of staple food grains –High lifecycle GHG emissions associated with intensive cultivation of some biofuel feedstocks and fuels processing –Ecological impact of land-use changes –Competition for scarce water resources; biofuel production in some cases channels water away from other productive activities.
Benefits and Costs of Biofuels Benefits and costs of biofuel development are largely site and circumstance specific There is a crucial need for more research to: –Inform the development of biofuels –Determine range of technologies/feedstock best suited to varying economic, environmental and social endowments Bank supports expanded R&D in sustainable biofuels, especially: –Second generation fuel production systems, to include cellulosic materials and agricultural wastes that do not compete with food –Realizing the potential of second generation feedstock to utilize marginal lands for production without bringing about large land-use and water use changes –Enabling developing countries and small-scale farmers to profit from the resulting technologies Also concerned about trade, standards and certification issues –Particularly as they affect developing countries
The Way Forward for The World Bank Given the many uncertainties regarding biofuel benefits/costs, The Bank will continue to be cautious Will put more emphasis into R&D leading to a better understanding of a more effective strategy for biofuels. Will support governments to assess economic, environmental, and social benefits and the various options available for enhancing energy security, before making large scale decisions and reforms –Current wisdom on biofuels can be enriched by doing country and region-specific analyses of agriculture, land- and water-use and trade impacts –More feedstock-specific studies of energy balances and lifecycle GHG and the development of new processing technologies would also add to understanding of the potential of different biofuels More emphasis and investment needs to be directed towards improving that state of R&D of second generation fuels to make them economically viable and competitive with other fuel alternatives in the future. –Will need to involve the private sector
IDB Jatropha Activities IDB has a couple of private sector projects on jatropha in the pipeline, but none approved yet IDB also has a: –A small study being developed on jatropha in Haiti –Larger study with Fundacion Getulio Vargas (FGV) of Brazil looking at range of feedstocks
Areas for Multi-lateral Collaboration with IFAD Joint research on feedstock development and processing Assessment of biofuels development on: –Cost of staple food grains, GHG emissions, impact of land use change, water impacts, etc. Pro-poor impacts of biofuels development –Including opportunities for rural off-farm employment and enterprise development Policy development Trades, standards, certification issues Land ownership Project co-financing Above activities needed at national and regional levels