Entrepreneurs and Key Organizations Urge the World Bank Group to Set Aside $500 million for Energy Access at Rio+20

Image removed.Twenty clean energy entrepreneurs and nearly thirty civil society organizations leaders sent a letter to the World Bank Group President Robert Zoellick last week urging him to commit to $500 million for off-grid renewable energy investments at next month’s Rio+20 Earth Summit.  Both groups asked that the funds be fully disbursed by 2015 in order to achieve universal energy access by 2030. One in five people globally lack access to electricity. The World Bank must seize the opportunity presented at the Earth Summit to support off-grid renewable energy.

Currently, 85% of the 1.4 billion people without electricity live in rural areas. Extending the grid to the 85% poses a steep challenge to cash-strapped developing economies. Both clean energy access companies and NGOs urge the World Bank to recognize that providing energy access to many communities means moving away from a singular focus on grid extension and large scale solutions.  Many of these communities can be best served with off-grid renewable energy.  The entrepreneurs leading this initiative* are at the forefront of efforts to provide these communities with off-grid renewable energy and recognize that World Bank Group support of $500 million to “de-risk” off-grid clean energy investments would go a long way in scaling-up these efforts.

As the entrepreneurs stated*:

“We believe it is particularly critical to engage banks and financial institutions – both globally and locally – which the World Bank Group can do by securing up to $500 million to de-risk off-grid clean energy investments… In addition to making these financial commitments the World Bank Group can support our efforts by consolidating and focusing its technical assistance to create enabling environments that support off grid entrepreneurs and develop the pipeline of projects.”   

“The main problem is that there is not enough financing across the board. There’s just not enough flowing through our sector,” asserts Harrison Leaf, director of R&D for access:energy , one of the signatories of the letter to President Zoellick. His company offers products and services that are designed, manufactured and distributed locally in Kenya, where 84% of the population does not have electricity.

De-risking off-grid clean energy investments has profound implications for not only the clean energy practitioners that signed the letter but for the climate as well. According to the International Energy Agency‘s (IEA) most recent World Energy Outlook Report, 63% of the additional on-grid generation needed to provide energy for all by 2030 would be provided by fossil fuels. Alternatively, a staggering 91% of mini-grid and off-grid power generation would come from renewable sources. Further investment in off-grid investment both provides energy services to those that currently lack it and avoids the carbon emissions produced by conventional methods.

Energy poverty, defined as lack of access to electricity and the use of traditional biomass for cooking by the IEA, was ignored during the creation of the UN Millennium Development Goals. However, all goals, including universal education, ending poverty, and improved child and maternal healthcare, indirectly or directly involve access to energy. With the UN designation of 2012 as the “International Year of Sustainable Energy for All,” comes a long overdue global discussion of the problem and more consolidated efforts to address it. Unfortunately due to the nature of the current aid structure, it is at times difficult for existing funding to reach the smaller private sector actors that need it.  Leaf adds, “It’s not about asking for more money. We want the money that’s coming through to be targeted in a better way.”

June’s Earth Summit is an unparalleled opportunity. As the NGO letter states**:

“The World Bank Group has a tremendous opportunity to support these efforts by putting a monetary commitment on the table at the upcoming Rio+20 conference. We strongly urge you not to let this opportunity pass, and to ensure the World Bank group leads global efforts to secure universal energy access."

The time is now for the World Bank Group to step up to the plate.

This post was co-written with Adedana Ashebir, an NRDC summer fellow.


Image: Courtesy of SolarEnima, under Creative Commons License.

* The entrepreneurs signing this letter are: Ajaita Shah, Frontier Markets; Allison Archambault, EarthSpark International; Andrew Tanswell, ToughStuff; Anil Raj, OMC; Donn Tice, dlight design; Harish Hande, SELCO-India; Konrad App, Stima Systems; Lesley Silverthorn, Angaza Design, Inc.; Mack Ramachandran, Offset4Poor; Mathias Craig, BlueEnergy; Michael Lin, Fenix Intl; Nikhil Jaisinghani, Meragao Power; Patrick Walsh, greenlight planet; Paul Needham, Simpa Systems; Piyush Jaju, ONergy; Puneet Rustagi, Husk Power Systems; Dr. Sam Duby, Harrison Leaf, Co-Directors, access:energy; Simon Bransfield-Garth, Eight19; Stewart Craine, Village Infrastructure Angels; and Willem Nolans, Solarnow.

** The NGOs signing the letter are: Frances Beinecke, Natural Resources Defense Council (NRDC); Agron Demi, Institute for Advanced Studies (GAP); Dr. Bharat Jhunjhunwala, Power Policy Analyst India; Carol Muffett, Center for International Environmental Law (CIEL); Chad Dobson, Bank Information Center; Danielle Hirsch, Both Ends; Ferdinand Nikolla, Forum for Civic Initiatives (FCI); Gregg Small, Climate Solutions; Henriette Imelda, Institute for Essential Services Reform (IESR); Jason Rainey, International Rivers; Jean Paul Brice Affana, Vital Actions for Sustainable Development; Kenneth Nana Amoateng, Abibimman Foundation Ghana; Kevin Knobloch, Union of Concerned Scientists; Krenar Gashi, Institute for Development Policy (INDEP); Kumi Naidoo, Greenpeace International; Manuela Monteiro, Hivos; Mel Denes, European Coal Finance Campaign; Michael Brune, Sierra Club; Peter Bahouth, US Climate Action Network; Raba Gjoshi, Youth Initiative for Human Rights (YIHR); Ramesh Agrawal, Jan Chetana India; Ranjan K Panda, Convenor, Water Initiatives Odisha, India; Robin Stott, Climate and Health Council; Saurav Raj Pant, Jeunes Volontaires pour l'Environnement-Nepal; Shankar Sharma, Power Policy Analyst India; Simon Trace, Practical Action; Srinivas Krishnaswamy, Vasudha Foundation; and Steven Kretzman, Oil Change International.