World Bank behind the curve on renewable energy

A new report shows that investment in wind and solar energy surpassed support for large hydro projects in 2007. The World Bank has missed the trend on emerging renewable technologies, and continues to focus its support on large dams.

According to its latest status report on renewable energy and energy efficiency, the World Bank spent $1,433 million on hydropower, new renewables and energy efficiency projects in FY 2007. The figure somewhat overstates the case in that it includes $151 million in carbon finance and $128 million in resources from the Global Environment Facility, neither of which are funded by the World Bank.

The World Bank continues to prioritize funding for large hydropower. Of the total figure, it spent $751 million on hydro projects of more than 10 megawatts, $421 million on new renewables (wind, solar, biomass etc) and $262 million on energy efficiency. Discounting the GEF and carbon finance, the World Bank Group invested $685 million (59%) in large hydro, $224 million (19%) in new renewables, and $245 million (21%) in energy efficiency.

The World Bank’s obsolete focus on large hydropower projects contrasts sharply with surging global investments in renewable energy. The 2007 Renewables Global Status Report which the REN 21 Network published on February 28 presents impressive figures. Worldwide, investment in renewable power and heating capacity reached an estimated $71 billion in 2007. Wind energy took up an estimated $33 billion, and solar photovoltaics, an estimated $21 billion. Large hydro projects, which are not included in these figures, attracted an estimated $15-20 billion.

In 2007, renewable energy added about 33,000 megawatts of new capacity, with new wind power plants alone contributing 21,000 megawatts. In comparison, large hydro projects added an estimated 7,000 megawatts. Yet the World Bank continues to focus on large hydro. It currently discusses new projects in Brazil, Ethiopia, Georgia, Guinea, India, Rwanda, Tajikistan and Vietnam, along with carbon finance projects in Madagascar and Sri Lanka.

Key elements facilitating the surge in renewable energy were tariffs which take the environmental benefits of renewable energy into account, and subsidies for capital investments. The World Bank has often rejected government subsidies for renewable energy. If the Bank cannot lead the way on renewable energy, it should at least not stand in the way in terms of policies, and join the crowd in terms of investments.

Peter Bosshard is the policy director of International Rivers. His blog appears at