09 63220 Annual Report 2009 ANNUAL REPORT 1 MISSION To assist clients—low- and middle-income countries—to increase know how and institutional capacity to achieve environmentally sustainable energy solutions for poverty reduction and economic growth. 2 ENERGY SECTOR MANAGEMENT ASSISTANCE PROGRAM Table of Contents FOREWORD 3 4. CUTTING-EDGE SOLUTIONS 33 1. ESMAP IN A CHANGING a. Renewable Energy Market Transformation Initiative GLOBAL ENVIRONMENT 5 b. Energy Efficient Cities Initiative a. How ESMAP Works b. Global Energy Challenges c. Programs, Initiatives, and Partnerships 5. FINANCIAL REVIEW 40 a. Contributions Received b. Core (Unrestricted) 2. BETTER-INFORMED and Thematic Funding POLICY MAKING 15 c. Disbursements a. Vulnerability Assessments b. Low Carbon Growth Studies c. Regional Approaches to Energy ANNEXES 44-51 Development 1. Proceedings from CG Meeting d. Energy Efficiency and Transportation 2. Completed, New, and Ongoing Activities, Fiscal 2009 3. Publications, Fiscal 2009 3. ENHANCED CLIENT CAPACITY 25 ABBREVIATIONS & a. Rethinking Energy Pricing in Egypt b. Unshackling the Power Market in Turkey ACRONYMS 52 c. Harnessing Indigenous Gas Resources in Vietnam d. Bringing Light to Rural Bangladesh e. Boosting Renewable Energy Supply in Nepal f. Mobilizing Local Expertise for Electrification in Africa 2009 ANNUAL REPORT 1 2 ENERGY SECTOR MANAGEMENT ASSISTANCE PROGRAM Foreword Since ESMAP’s inception more than possible—in an efficient and environ- 25 years ago, its primary mission has mentally sustainable manner. They remained steady: to help its client must also harness the broadening countries increase their know how range of technologies and solutions to and institutional capacity to achieve ensure a sustainable energy future. environmentally sustainable energy solutions for poverty reduction and During fiscal 2009, ESMAP transitioned economic growth. Over the past from a three-year to a five-year year, ESMAP has taken significant business planning cycle, enabling steps, in line with its new 2008-13 ESMAP management to cultivate more Strategic Business Plan, to extend meaningful, longer term strategic its engagement with client countries partnerships to achieve “win-win-win” to encompass the nexus of energy energy solutions for poverty reduction security, energy access, and climate and sustainable economic growth. The change, mirroring the changing changes in ESMAP’s thinking are also landscape of global energy challenges. evident in the results-orientation of this report on the first year of the new The global economic recession business plan—on better-informed continues to take a toll on energy policymaking, enhanced client capacity, infrastructure financing. High and and cutting-edge solutions. volatile fossil fuel prices threaten the security of energy supply for low-income Despite the bleak global economic countries and pose unprecedented picture, ESMAP stayed on track by challenges for all client countries. receiving US$13.9 million from donors Climate variability is boosting (up US$0.6 million from fiscal 2008) and the costs and risks to economic disbursing US$14.9 million (up US$2.5 development, especially as energy million from fiscal 2008). In the years demand is rising quickly. ahead, ESMAP looks forward to helping its client countries grapple with new and ESMAP’s challenge is to more proac- emerging energy challenges while tively assist client countries to acquire maintaining the course towards poverty fresh ideas and insights on how to reduction and economic growth. reduce the vulnerability of their energy sectors to increasing climate variability, while transitioning to a low carbon development path that can support Jamal Saghir Director, Energy Transport and Water poverty reduction and economic Chair, Energy and Mining Sector Board growth. They need the capacity to provide clean, reliable, and affordable Amarquaye Armar Program Manager energy services to as many people as Energy Sector Management Assistance Program 2009 ANNUAL REPORT 3 4 ENERGY SECTOR MANAGEMENT ASSISTANCE PROGRAM 1. ESMAP IN A CHANGING GLOBAL ENVIRONMENT The global financial crisis, volatile fuel prices, and the emerging climate change agenda have provided additional challenges for ESMAP to carry out its mandate—to help developing countries better manage their energy sectors. The global economic and financial crisis is constraining the availability of infrastructure financing from private capital markets. In developing countries, the level of infrastructure financing dropped from US$200 billion in 2007 to US$135 billion in 2008 and declined further in 2009. Sharp fluctuations in world oil prices—which increased sevenfold between January 2002 and July 2008 and have since declined—contribute to the instability of the global economy and could worsen the current crisis, while natural gas and internationally traded coal prices moved in tandem with oil prices. Price volatility is one of the greatest obstacles to developing alternative energy since large energy price changes affect the relative costs of technologies. Climate change adds costs and risks to development, especially in the energy sector. Some regions and ecosystems are more vulnerable than others to increasing weather variability, rising temperatures, and extremes—such as droughts, floods, and heat waves. As temperatures rise, energy demand will increase for space cooling and decline for heating. The consequences vary by energy asset type, but may include financial loss, stress on energy supply, and environmental and social risks. Moreover, energy demand is rising quickly and is expected to rise 45 percent above its 2006 level by 2030, with China and India leading the charge. Over the 2009 ANNUAL REPORT 5 next 20 years, roughly 90 percent global energy practice as an honest of the projected increase in energy broker, addressing issues in a balanced consumption will come from develop- way. Its mission is driven by a Results ing countries, using 70 percent more Framework (figure 1.1). Consultative energy annually than developed Group (CG) members choose the countries. Nevertheless, large parts global thematic challenges—energy of the developing world lack adequate security, energy poverty, and climate access to electricity, especially rural change—that underpin funding areas where fewer than 25 percent priorities for each ESMAP business of people have access—despite the plan cycle. These global thematic known ability of rural electrification challenges, in turn, inform the choice to transform lives. The International of energy practice areas for ESMAP Energy Agency estimates that by during each business plan cycle. 2030, 1.4 billion people will still be without electricity, while 2.7 million will still rely on traditional biomass Figure 1.1 Results Framework fuels—especially in South Asia and Sub-Saharan Africa. “CLIENTS” Increased know-how and institutional Against this backdrop, during fiscal capacity to achieve environmentally sustainable energy solutions for poverty reduction and 2009 ESMAP has been rethinking how economic growth it goes about assisting low- and middle-income countries to increase know how and institutional capacity for environmentally sustainable energy BETTER-INFORMED ENHANCED CLIENT CUTTING-EDGE POLICY MAKING CAPACITY SOLUTIONS solutions for poverty reduction and economic growth. The ESMAP 2008–13 OUTCOMES Strategic Business Plan responded by introducing a new focus area on the energy-security and climate-change nexus. By reinforcing ESMAP’s KNOWLEDGE OPERATIONAL commitment to address energy CLEARINGHOUSE LEVERAGING poverty, the plan includes a heightened focus on social dimensions, especially the needs of low-income urban THINK TANK dwellers and gender equity. Additionally, ESMAP CORE FUNCTIONS ESMAP is stepping up its assistance to Sub-Saharan Africa through the Africa Electrification Initiative and partnerships, such as Lighting Africa. HOW ESMAP WORKS GLOBAL THEMATIC CHALLENGES Established in 1983, ESMAP has a comparative advantage as a client- “CONSULTATIVE GROUP” centered partner that serves the 6 ENERGY SECTOR MANAGEMENT ASSISTANCE PROGRAM To implement the CG’s mandate, ESMAP focuses “upstream” through ESMAP TEAM three core functions: think tank, knowledge clearinghouse, and opera- The ESMAP Unit is responsible for the day-to-day management of tional leveraging—all aimed at helping ESMAP, following the strategy laid out in its business plan as approved by the CG and annual work program managed by the Energy, Transport client countries make better informed and Water Department (ETWD) of The World Bank Group. choices, enhance capacity, and adopt cutting-edge solutions (box 1.1). Amarquaye Armar, Program Manager To ensure more effective delivery of Marjorie Araya* Feng Liu client outcomes during the current Heather Austin Vanessa Lopes Douglas Barnes* Marie-Gisele Morrisson business cycle (2008–13), ESMAP is Agnes Biribonwa Alain Ouedraogo strengthening its portfolio develop- Ranjan Bose Juliet Pumpuni* ment in two major ways. First, under Amadou Camara John Rogers* Rogerio Carneiro de Miranda Xiaoyu Shi* the Portfolio Management Method, it is Anne-Marie Coonan* Sheryl Silverman* better aligning its program implemen- Jonathan Coony Bipulendu Singh tation arrangements with The World Istvan Dobozi Jas Singh Jane Ebinger Cindy Suh Bank’s fiscal year cycle for executing Oluwafemi Faleye Lydia Kruse Tietz analytical and advisory activities and Magnus Gehringer Nyra Wallace technical assistance and expanding Soren Krohn* Christopher Walsh* Marlon Lezama* coverage of the Annual Block Grants across all core programs. Second, it is setting up a comprehensive, program- Regional Coordinators matic Monitoring and Evaluation Africa, Tjaarda Storm Van Leeuwen system to assess the effectiveness of East Asia, Frederic Asseline its programs in achieving timely and Europe & Central Asia, Peter Johansen sustainable outcomes for clients. Latin America & Caribbean, Xiaoping Wang Middle East & North Africa (vacant) South Asia, Sudeshna Banerjee Beginning with this fiscal year (July 2008–June 2009), ESMAP has * Left ESMAP before end of fiscal 2009 transitioned into a five-year strategic Box 1.1 ESMAP’s Core Functions As a think tank, ESMAP sponsors a broad range of analytical and advisory activities aimed at delivering high-quality advice to influence policymaking by its client countries and broaden knowledge horizons about cutting-edge energy solutions for global thematic challenges. Drawing extensively on knowledge from its think tank function, ESMAP’s knowledge clearinghouse sponsors knowledge exchange activities and training events to share best practices, tools, and lessons of experience, thus enhancing the client’s capacity to plan, manage, and regulate energy sector strategies and programs. For operational leveraging, ESMAP provides client countries with “just-in-time” technical assistance to resolve program design issues and offer additional options, helping achieve results on the ground. 2009 ANNUAL REPORT 7 business planning framework, which is underpinned by three-year rolling CONSULTATIVE GROUP plans formulated in consultation with the regional energy units (figure 1.2). ESMAP is governed by a Consultative Group (CG) made up of representatives from contributing donors and chaired by The World ESMAP monitors, updates and Bank Vice President, Sustainable Development Network. The CG presents these rolling plans for annual meets annually to review the strategic directions of ESMAP, its review at CG meetings. During the final achievements, and its use of resources and funding requirements. two years, an independent consultant, under the oversight of the Technical Katherine Sierra, Chair Jamal Saghir, Acting Chair, WBG Representative Advisory Group (TAG), will conduct a comprehensive evaluation of ESMAP results and emerging outcomes for Australia Iceland consideration at CG meetings. The AusAID Ministry of Foreign Affairs goal is to ensure that ESMAP’s efforts remain on target and relevant to the Austria Norway Austria Ministry of Finance Royal Ministry of Foreign Affairs global challenges highlighted at CG Austrian Development Agency meetings. The total budget for the Sweden ESMAP 2008–13 Strategic Business Canada Swedish International Development Canadian International Development Plan is estimated at US$55 million. Cooperation Agency Agency The Netherlands To position ESMAP’s results and Denmark Ministry of Foreign Affairs achievements on the developmental Royal Ministry of Foreign Affairs radar of both internal and external United Kingdom Finland audiences, ESMAP’s communications Department for International Development Ministry of Foreign Affairs efforts are now more proactive in Cosponsoring Organization sharing knowledge and best practices France The World Bank Group through a wider variety of media: Agence Francaise de Developement publications, CD-ROM, websites, Germany newsletters, fact sheets, user-friendly Federal Ministry for Economic Coopera- brochures, videos, and events. Over the tion and Development (BMZ) past fiscal year, the team worked more closely with The World Bank regional energy teams to highlight results achieved through web articles and a quarterly newsletter. Through external TECHNICAL ADVISORY GROUP partners, ESMAP has also disseminated a wide range of energy-related knowledge A Technical Advisory Group (TAG) of international experts selected by products to global audiences at such the CG provides informed, independent opinions to the CG about the international events as the International purpose, strategic direction, and priorities of ESMAP. The TAG also Energy Conference (Vienna), the United provides advice and suggestions to the CG on current and emerging Nations Framework Convention on global issues in the energy sector likely to impact ESMAP’s client countries. Climate Change (Bonn), Carbon Expo 2009 (Cologne), and the 5th Urban Elizabeth Cecelski Research Symposium (Marseille). Amitav Rath A redesigned ESMAP website will be Winfried Rijssenbeek launched in early 2010 to reflect priorities of the new Strategic Business Plan. 8 ENERGY SECTOR MANAGEMENT ASSISTANCE PROGRAM Box 1.2 ESMAP At a Glance ESMAP is a global, multidonor technical assistance program aimed at promoting environmen- tally sustainable energy solutions for poverty reduction and economic growth. It is managed by the Energy, Transport and Water Department of The World Bank Group and is governed by a consultative group of donors that meets annually. ESMAP’s mandate and products have evolved over time to meet the changing needs of its clients from low-income, emerging, and transition economies. It has operated in more than 100 countries through more than 800 activities since its inception. ESMAP-financed activities are led by World Bank Group staff in partnership with international, national, regional, and local organizations. In fiscal 2009, ESMAP received US$13.9 million from its donors–US$0.6 million more than in fiscal 2008–with about half of the funds coming from the Netherlands and Germany (see Section 5). About 41% of total contributions went into core (global, unrestricted) funding and 54% into thematic funding for various initiatives. Disbursements totaled US$14.9 million, increasing US$2.5 million from fiscal 2008. Program expenditures increased by US$2.7 million, most of it on regional work. For more information, go to the ESMAP web site: http://www.esmap.org. GLOBAL ENERGY reliable and affordable energy supplies CHALLENGES for sustainable economic development, many ESMAP client countries are ENERGY SECURITY unable to expand energy infrastructure. For the first time in 35 years, the world To increase resilience to supply faces sustained increases in fossil fuel disruptions, many countries are prices, resulting in substantial income choosing to restrain demand and redistribution. Although prices have pool their resources through regional eased in recent months as a result energy approaches. of slowing economic growth, they are expected to remain at historically high Moreover, the recent downturn in levels because of perceptions about global credit markets has created global supply and demand trends. uncertainty about the availability and Countries with large net oil imports cost of medium- to long-term financing relative to income are especially to meet energy sector investment vulnerable to the macroeconomic targets. Some energy projects have effects of price shocks. suffered withdrawal of potential financiers or an unsustainable increase In some developing countries, in funding costs. Others are finding higher oil prices may reverse years that potential lenders are requiring of progress in reducing poverty. Faced more stringent project approval with escalating equipment and service thresholds in a credit-constrained costs and difficulties in securing environment. Some commercial lenders 2009 ANNUAL REPORT 9 Figure 1.2 ESMAP 5-Year Business Plan Cycle Monitoring and Evaluation Updated 3-Year Rolling Plan CG Meeting Updated 3-Year Rolling Plan CG Meeting Updated 3-Year Rolling Plan CG Meeting CG Meeting CG Meeting are withdrawing from potential energy to mention delay the achievement of project loan syndications because of the 2015 Millennium Development capital constraints, while others are Goals (MDGs) aimed at raising living preserving their capital base to remain standards around the world (box 1.3). sufficiently liquid and meet reserve requirements. In the face of these Despite increased international obstacles, ESMAP client countries commitment of resources, providing may be tempted to ration resources quality energy services is expensive. or otherwise postpone essential Few poor people can afford the investments in the energy sector. Their upfront expenditure to secure best option to improve energy security, access to quality supply. The cost however, lies in greater energy efficiency, is especially prohibitive in remote diversification of energy sources, and and dispersed rural areas, where prioritizing the use of low carbon and low-density demand raises service renewable energy technologies. costs and reduces profitability for potential providers. Poor consumers POVERTY REDUCTION in rapidly growing urban slums The inability of ESMAP client countries and peri-urban areas face similar to meet their energy sector invest- constraints, despite higher ment targets will constrain economic urban distribution efficiencies. growth, employment, and access to Moreover, programs to close essential infrastructure services—not the energy access gap often 10 ENERGY SECTOR MANAGEMENT ASSISTANCE PROGRAM Box 1.3 Millennium Development Goals 1 2 Achieve 3 Promote 4 Eradicate Reduce child universal primary gender equality extreme poverty mortality. education. and empower and hunger. women. 5 6 7 8 Improve Combat HIV/ Ensure Develop a maternal health. AIDS, malaria, environmental global and other sustainability. partnership for diseases. development. involve cross-sector interventions. In Energy consumption and emissions have response to these challenges, ESMAP doubled since 1970 and are projected to client countries need help to develop do so again by 2050. The developing robust and collaborative institutional world’s contribution is also growing, frameworks to plan and implement accounting for more than 50 percent nationwide strategies to expand of global GHG emissions today and access to electricity and also promote projected to reach 70 percent by 2050. and facilitate productive uses of Efforts taken over the next two to three electricity, once it becomes available. decades will have a large impact on the ability to stabilize GHG concentrations CLIMATE CHANGE and limit climate impacts. The global community recognizes that deep cuts in global greenhouse Tackling climate change mitigation and gas (GHG) emissions—including along adaptation will require actions across the energy production chain and its multiple sectors—agriculture, energy, end use—are required to hold the forests, industry and transport—as increase in global temperature below well as changes in individual lifestyle 2 degrees Celsius. Warmer tempera- and behavior. It will also take the tures, reduced snow cover, and combined efforts of developed and changing hydrology have been ob- developing countries, whose popula- served as a direct result of increased tions are likely to be among the worst GHG emissions. Some regions and affected, to achieve this. Although ecosystems are more vulnerable than developed nations should carry out others to changing climatic conditions, the major effort to reduce GHG such as droughts, flood, and heat emissions, developing countries have waves; changes that can affect both multiple opportunities to grow in a energy supply and demand. sustainable manner. 2009 ANNUAL REPORT 11 Mitigation and adaptation measures efficient development trajectory, need not constrain further growth. while trying to cope with the global Stabilizing carbon emissions at credit crunch, volatile energy prices, manageable levels urgently requires and climate variability. They will also multilateral actions that offer policy need to make better informed incentives to remove barriers and build decisions for themselves, their capacity to implement a portfolio of neighbors, and the global community; low carbon energy approaches and and they will have to do this some- technologies (mature, pre-commercial, times with little advance notice and and yet to be developed), including great uncertainty, including the energy efficiency measures. Regions political environment. and countries experiencing more frequent and intense extreme weather What is ESMAP’s role? ESMAP events, as well as changes in endemic is assisting countries to carry conditions such as persistent drought, out vulnerability assessments will need enhanced hydro-meteorological for their power sectors, completing and technological capacity, risk three such activities in East Asia in management strategies, and formu- fiscal 2009; crafting indicative plans lated incentives for adaptation to for low carbon growth in emerging address energy sector vulnerabilities. economies; stepping up its support Implementing such an approach can of timely energy assessments help curb emissions growth, support and strategy work, not only for climate-smart development, and countries and regional organizations address the significant gap in science, but also for specific energy-consuming technology, and innovation capacity. sectors, such as transportation; and launching a new program to bring PROGRAMS, INITIATIVES, gender equity considerations into energy decisions. AND PARTNERSHIPS Fiscal 2009 was the first implementation ENHANCED CLIENT CAPACITY year for the ESMAP 2008–13 Strategic Developing countries setting Business Plan under which ESMAP’s out to provide more clean, reliable, assistance to client countries aims to and affordable energy services in an achieve the following three outcomes: environmentally sustainable manner to as many people as possible BETTER-INFORMED are going to need the institutional POLICYMAKING capacity to do so. However, this As ESMAP client countries map out capacity is not met given the reality their energy futures, they will rely of the inadequate institutional increasingly on fresh ideas to shift capacity levels throughout much to a low carbon and more energy of the developing world. 12 ENERGY SECTOR MANAGEMENT ASSISTANCE PROGRAM How can ESMAP help them? Fiscal is on reducing energy intensity, which 2009 activities have applied “learning means rethinking the relative use of by doing” approaches to help build coal and renewable energy resources institutional capacity of clients, for electricity production. ranging from developing natural gas services in Vietnam to hydroelectric CUTTING-EDGE SOLUTIONS power systems in Peru and Nepal, ESMAP was involved in two major expanding electricity markets in initiatives to explore cutting-edge Egypt and Turkey, and strengthening solutions in fiscal 2009: the Renew- the knowledge base of electrification able Energy Market Transformation agencies in Bangladesh. The Lighting Initiative, which supports an expanding Africa Initiative is exploring new role of renewable energy technologies technical innovations, such as the (some more tested than others) in latest LED, fluorescent, and solar achieving energy supply diversification technologies, to offer modern energy and the Energy Efficient Cities services to consumers throughout Initiative, a flexible, cross-cutting, Sub-Saharan Africa that are clean, demand-driven program that helps efficient, and reliable—and at price cities identify innovative ways to points comparable to typical expendi- improve energy efficiency in the tures for kerosene. In China, the focus delivery of city services. 2009 ANNUAL REPORT 13 COUNTRY ENERGY SECTOR VULNERABILITY ASSESSMENTS PROGRAM: Helping Countries Prepare an Effective Energy Sector Response 14 ENERGY SECTOR MANAGEMENT ASSISTANCE PROGRAM 2. BETTER-INFORMED POLICY MAKING VULNERABILITY ASSESSMENTS The global financial crisis, highly volatile energy prices, and climate variability have been creating a significantly more turbulent environment for energy sector management worldwide. Developing countries are particularly exposed, but their governments have little room to maneuver because of limited institutional capacities and fiscal resources. In response to these challenges, ESMAP has launched an initiative to identify existing and emerging vulnerabilities for policymakers and energy practitioners alike. The Country Energy Sector Vulnerability Assessments Program focuses on the effects of financial crisis, volatile oil prices, and climate change on the energy sectors of developing and transition economies. The program includes three components: Power sector vulnerability assessments help countries assess the impact of the global financial crisis on priority investments. The goal is to identify a pipeline of priority power projects; financing gaps and ways to fill them; “green” investments (using hydropower, wind, geothermal, and solar technologies); and at-risk public-private partnership projects and ways to support them. Oil price volatility assessments help countries assess the effects of oil price increases and heightened price volatility, including their ability to absorb price shocks. The assessments examine policy instruments to cope with price volatility, including hedging security stocks, price-smoothing schemes, taxation, and reducing oil dependence (such as diversification). Climate vulnerability assessments help countries assess their energy sector vulnerability in the face of climate change, including changing average temperatures and precipitation, increasing variability, and extremes. 2009 ANNUAL REPORT 15 Table 2.1 Power Sector Vulnerability Assessments in East Asia (US$ millions) Pre-crisis WB estimate Funding Funding gap funding estimate based on post- secured through 2009–10 2009–13 crisis demand end 2008 2009–10 EVN, Vietnam 7,847 3,897 2,553 787 PLN, Indonesia 8,071 4,333 3,047 1,286 PSALMTransco Phillipines PSALM NPC debt PSALM NPC debt Privatization Funding gap net (NPC debt overhang, Transco repayment repayment proceeds through of privatization costs, stranded costs) obligation obligation end 2008 proceeds of $US 2009–13 2009–10 2,190 mln 2009–10 5,280 3,750 935 1,560 Total 21,198 11,980 6,535 3,633 In fiscal 2009, ESMAP completed the banks (mainly foreign ones) lending first set of three country power sector less. For private power projects the vulnerability assessments in East Asia. sources of vulnerability range from The assessments reveal approximate a shortage of liquidity among foreign funding gaps in Indonesia (US$1.3 banks and limited lending capacity of billion for 2009–10), Vietnam (US$800 local banks to currency risk, banks million), and the Philippines (US$1.6 requiring sovereign guarantees, and billion; table 2.1). bilateral agencies capping exposure limits and lowering maturities. What are the sources of vulnerability in national power sectors? One source ESMAP is currently supporting is the ownership structure. In Indone- power sector vulnerability assess- sia there is a single buyer model with ments in 18 countries (fi gure 2.1) and ownership of generation assets has piloted a climate vulnerability diversified between public and private assessment in Albania. players, but tariff reforms in late 2003 hurt the “bankability” of electricity LOW CARBON GROWTH projects. Another is the anticipated COUNTRY STUDIES drop in gross domestic product (GDP) Further along the development in all three countries in 2009. Further, path, emerging economies have a efforts to fund public power projects different set of energy issues from must contend with a drying up of low-income countries, and several traditional sources (e.g., government governments are already taking steps budgetary transfer, commercial banks, to study alternative scenarios for a and bond markets); local banks shift towards a low carbon growth constrained by single-borrower limits; trajectory. With commercial energy local bond markets being largely demand projected to grow by 4.3 to 5.1 illiquid and offering only relatively percent annually, India is integrating short maturities; and commercial low carbon development options into 16 ENERGY SECTOR MANAGEMENT ASSISTANCE PROGRAM Figure 2.1 ESMAP Power Sector Vulnerability and Follow-Up Assessments Completed Assessments Ongoing Assessments Follow-up Assessments Indonesia Armenia Mexico Philippines Philippines Bangladesh Mongolia Vietnam Vietnam Colombia Morocco Egypt Egypt Pakistan India Peru Jamaica Romania Jordan Tunisia Kyrgyz Republic Ukraine its growth plans. China intends to capacity building, land use and scale up to 15 percent renewable forestry planning, renewable energy, energy generation by 2015, South energy efficiency, policy implementa- Africa wants to de-carbonize its tion, and macroeconomic modeling. power sector by 2050, and Mexico Together these studies identify some is implementing bus rapid transit broad messages (such as the need in multiple cities. for renewable energy and energy efficiency support) and some new With the help of ESMAP’s Low insights (such as low-cost transport Carbon Growth Country Studies options and untapped cogeneration Program in 2007–09, the governments investments). Highlights include: of six middle-income-countries—Brazil, In Brazil, measures to improve China, India, Indonesia, Mexico, agricultural productivity and and South Africa—initiated studies livestock management could slow to assess their development goals deforestation, but the potential and priorities for GHG mitigation. for mitigation in the energy sector These studies also examined the is low because hydropower additional costs and benefits of already constitutes a large share lower carbon growth and how to of the energy mix. There are finance such measures. Mitigation opportunities for ethanol exports. actions today are expected to reduce In China, the study is providing future expenditure on adaptation. policy support for locally directed Moreover, these actions can help areas of research (rather than attract international concessional sector or country assessments) to funding to cofinance programs with better understand renewable carbon reduction aspects in energy, energy, energy efficiency targets, industry, transport, and natural and low carbon growth consistent resource management. with China’s targets. In India, the economy is relatively Two years into the program, results low carbon, with energy intensity are beginning to center on common 20 percent below world averages themes: transportation, financing, and per capita emissions among 2009 ANNUAL REPORT 17 Box 2.1 India’s Low Carbon Growth Model The Government of India worked with the study team to build a Low Carbon Growth (LCG) model that can be used as a planning tool to analyze key sectors and assess the impact of policy choices on greenhouse gas (GHG) emission levels. Using Excel/Visual Basic programs, the bottom-up, engineering model is user-friendly, low-cost, and available for continuous use. The model considers five major sectors in the economy—electricity transmission, transportation, residential buildings, nonresidential buildings, and industry—which together accounted for 60% of India’s GHG emissions in 2004 and more than 400 possible interventions. These sectors are also considered the high growth sectors likely to increase faster than other sectors. The model enables planners to analyze future demand for emission-producing activities, estimate associ- ated costs, and calculate GHG emissions under different development scenarios to 2030. The India LCG model builds energy demand from the bottom up and matches supply with demand. Demand in each sector is assessed from a simulation analysis of such variables as GDP, population, age distribution, household size, income, and location (urban or rural). The model has been used in India to generate various low carbon scenarios based on India’s sector plans, the 11th and subsequent Five-Year Plans, and consultations with sector specialists. The annual growth of commercial energy demand for the nonresidential buildings, industry, and agricultural sectors is assumed to be between 4.3-5.1% based on the projections contained in the 2006 Integrated Energy Policy. Various growth and population projections have also been captured. Going forward, the Government of India can refine the model, change assumptions, and update the data to continually reflect the country’s reality. The model will be transferred to the Planning Commission after the study is completed. Adapted from “India: Strategies for Low Carbon Growth,” Preliminary Report, World Bank, June 2009. the lowest worldwide. But given hydropower, and biofuels. Fiscal the energy deficit and entrenched incentives could support a poverty, India’s priority remains to transition to energy efficient meet energy demand and sustain equipment, especially for small high growth. Opportunities and medium enterprises (SMEs). include curbing transmission Climate change could provide an losses, closing inefficient coal entry point for changing practices plants, adopting mandatory in forestry and land use. energy efficiency standards In Mexico, study results have shed for household appliances, and light on prospective low carbon rethinking its transport strategy. “wedges” and specific low carbon In Indonesia, there is a significant projects and underscored potential opportunity to develop renewable energy savings in the industrial resources—geothermal, sector from cogeneration and 18 ENERGY SECTOR MANAGEMENT ASSISTANCE PROGRAM better energy efficiency. An benefit from economies of scale to estimated 80 percent of Mexico’s generate power at a lower cost than industrial cogeneration potential smaller, national ones. remains unused and could provide 13 percent of new power capacity Regional energy integration requires in a low carbon scenario. There is regional economic cooperation, such also untapped mitigation potential as determining the level of participa- in forestry. tion of each utility and managing In South Africa, the majority of cross-border transmission. Cooperation emission cuts lie in the energy can begin with regional energy assess- sector, particularly industrial energy ments and sharing of best practices. efficiency and renewable energy. Standardizing design can reduce unit costs, permit faster implementation, ESMAP is setting up a partnership and lower the costs of spare parts, with The World Bank Institute and maintenance, and staff training. While The World Bank’s Climate Change for all local projects are different, some Development Professionals Program strategies may be useful elsewhere. to launch a global outreach program to share the knowledge, experiences In fiscal 2009, ESMAP continued and lessons generated from the work to work closely with client countries in these six countries, including for on regional energy integration example, India’s new model for assessments, embracing a diverse energy use (box 2.1). set of issues: For Sub-Saharan Africa, REGIONAL APPROACHES a study estimated the impact TO ENERGY DEVELOPMENT on petroleum refining operations Sustainable energy development is by switching to cleaner fuel often a regional concern. Many specifications. It explored refinery countries lack the capacity to meet investment costs, air quality, and demand or are not sufficiently endowed human health as effects of high with a diversified indigenous energy levels of exposure to particulates resource base (including hydropower, and other pollutants in the wind, geothermal, and biomass) that urban environment. would help assure security of energy For the Persian Gulf, a study supply. Additionally, fossil fuel prices explored the potential for increased are expected to remain volatile and at electricity and gas trade among historically high levels for some time to Yemen and the six Gulf Cooperation come. Given this context, energy Council countries and also assessed security for many developing countries the availability of gas resources depends on crafting a regional energy for electricity systems. strategy to buttress national ones. For the Middle East and North Instead of incurring high capital costs Africa, a study examined the to build additional power generating region’s energy intensity (the capacity, some countries may find energy consumed to produce a cross-border transmission lines a more unit of GDP) and explored options prudent option to access electricity to boost energy efficiency. Finding from big regional power plants that that the region’s energy intensity 2009 ANNUAL REPORT 19 is 60 percent higher than that of ESMAP is helping search for alternatives the Organization for Economic for Belgrade and the Balkan region, Cooperation and Development where ensuring energy provision is (OECD) countries and 40 percent increasingly difficult. Many countries are above the world average, it net energy importers, making them proposed an array of instruments vulnerable to volatile fuel costs. And to pursue energy efficiency energy demand is rising rapidly while investment and provided a supply is hampered by insufficient roadmap to develop a regional investment. Significant capacity energy efficiency strategy. additions have been envisioned to meet For South East Europe, a study the growing energy demand, but energy explored ways to realize the efficiency—a major source that could potential of natural gas, currently defer some of the costly supply-side playing a very limited role. It investments—and renewable energy showed the viability of developing have not yet been considered. a gas market and proposed establishing the Energy Commu- In its Western Balkans Energy Efficiency nity Gas Ring (EC Ring) to link up Study, ESMAP examined the potential to seven Balkan energy markets. use of cogeneration, the process of using waste heat from power plants. Other studies focused on the West Although almost nonexistent in the Balkans and Latin America and Balkans, cogeneration could be used in highlighted the need for harnessing more than 60 cities in the region, renewable energy resources, promot- including Belgrade. According to ing cogeneration by industry, and ESMAP’s study, instead of building new developing better regulatory and boilers, Balkan cities could use the heat commercial frameworks to underpin already generated by thermal power regional energy initiatives. plants. These plants are plentiful, often within a few kilometers of cities, and Steaming ahead in The Balkans. give off a tremendous amount of waste Like many cities in the Balkans, heat, an untapped resource for city Belgrade’s inhabitants heat their heating systems. A heat pump could homes and businesses from a district capture the heat from a plant’s heating system. Warmth is typically condenser, increase the water tempera- supplied by gas, coal, and oil-powered ture to a desirable level (for example, boiler plants, often 20 to 30 years from 25°C to 70°–80°C), and pipe it old. Belgrade’s power and gas into the city system. ESMAP estimates systems are subject to outages that just one of Belgrade’s power and shortages, but cold snaps cause plants, Obrenovac A, could generate the greatest problem. Peak heat 690MW in heat. demand (3,000MW) spikes fossil fuel use, making generation more The study also looked holistically expensive and straining an already at the existing efficiency of energy frail infrastructure. Capacity consumption in the six Balkan increases are costly and Belgrade countries—Albania, Bosnia-Herzegovina, remains at the mercy of unpredictable Kosovo, Macedonia, Montenegro, and oil and gas prices. Serbia—and evaluated potential 20 ENERGY SECTOR MANAGEMENT ASSISTANCE PROGRAM savings. Demand for energy services policies that can achieve 20 percent in the region will increase by more energy savings by 2020. than 3 percent per year until 2027, while energy consumption will increase Streamlining supply in Central by 2 percent per year, creating America. Rapid economic growth increased cost. However, if efficiency in Central America has spurred measures are implemented, average electricity demand, posing many energy savings could be 10 to 15 challenges for central governments. percent in the same period. To achieve Uncertainty in energy supply, due to these savings, countries should collect heavy reliance on foreign-sourced better data, eliminate cross-subsidies, fuels, and costly energy supply enforce existing legislation, and create disruptions, caused by poor an energy efficiency fund. transmission infrastructure, leave supply and demand in an This is good news for a region with increasingly tenuous balance. relatively high energy intensity and Problems are already occurring. thus high energy saving potential. On Uncharacteristic spikes in seasonal average, a dollar invested in efficiency demand and unreliable supply led avoids the need for two dollars in to drastic blackouts in Nicaragua supply-side investment. ESMAP in 2006, a situation threatening to estimates that efficiency measures replicate itself in Honduras and could reduce use by roughly 7 million Panama. Even Costa Rica—the tons of oil equivalent per year. At the strongest power sector in the equivalent of US$65 per barrel, this region—has suffered blackouts. could save US$3.4 billion. Efficiency investments would eliminate the need To streamline supply, six Central to build additional power plants and American countries—Costa Rica, transmission, and distribution facilities, El Salvador, Guatemala, Honduras, not to mention making the region less Nicaragua, and Panama—have beholden to unpredictable imports. The cooperated to build a 1,830km major barriers to realizing this vast transmission line that will allow them potential include cross-subsidies, to share generation capacity and insufficient energy meters, a high level create a regional electricity market of nonpayment of energy bills, and a to support the power needs of their weak institutional framework. roughly 40 million customers. The transmission line, known as the European Union regional integration Sistema de Interconexion Electrica is an incentive since all six Balkan para America Central (SIEPAC) project, countries want the economic benefits will allow reliable interconnection that come with it, making it prudent capacity of 300MW and has the to approach efficiency on a regional potential to connect with energy-rich level. Before this can happen, each grids in Mexico and Colombia. country must adhere to stringent regulations: the European Union Yet the SIEPAC project, expected to be Energy Directive, Energy Efficiency operational in 2010, cannot alone cure Directive, and an Action Plan for what ails the energy sectors of Central Energy Efficiency—the latter requiring America. Transmission lines will 2009 ANNUAL REPORT 21 prevent blackouts, but they do little to in 2004, about 75 percent from road avoid price shocks. The SIEPAC project vehicles. The central problem is that is a positive start toward full regional developing countries’ cities are cooperation, but Central America growing and motorizing very rapidly, urgently needs a unified regulatory even faster than urbanization. The and commercial framework, as well as cities house and transport too many locally sourced energy. While it lacks people on an insufficient number of oil resources, Central America is rich poorly maintained roads and rails, and in potential renewable energy, particu- generally lack the money and institu- larly hydropower, which could be tional vigor to fix the problems. harnessed if project costs were reduced by capturing economies of The critical challenge facing the scale through joint development. transport sector is ensuring low carbon growth in rapidly urbanizing ESMAP is assisting with this regional environments while encouraging energy initiative by providing stake- development that can lessen a city’s holders with just-in-time guidance on dependence on imported fuels and key tasks to leverage a regional reduce energy costs. This complex programmatic energy study for problem requires policymakers to Central America. This regional study make changes on numerous fronts, is helping them develop and follow a such as legal and regulatory frame- strategic approach to improve energy works, institutional reform, procure- security, reduce vulnerability to ment, technology, and collaboration external price shocks by tapping across traditional boundaries. into the region’s renewable potential, and support regional integration by To date, a wide array of policies has identifying joint development possibili- been tested worldwide to restrain ties for power generation projects. motor vehicle use, manage traffic, and The study provides a comprehensive reduce energy use, air pollution, and analysis of the regional energy sector GHG emissions. ESMAP intends to and offers advice on three areas: contribute to this effort by working meeting the short-term challenges closely with client countries on fuel for avoiding power cuts and ensuring efficiency assessments of transport stable supplies, addressing regulatory sectors. In fiscal 2009, ESMAP began barriers for regional cooperation, and supporting assessments in several determining the feasibility of regional regions, including the Middle East and renewable power plants. North Africa, where the transport sector’s energy consumption grew 4.5 ENERGY EFFICIENCY AND percent annually from 1990 to 2005, TRANSPORTATION twice the world average and almost as For most developing countries, high as Asia’s (4.7 percent). transport is usually the major energy consumer, followed by buildings and Upgrading the bus fleet in West Bank industry. As the largest and fastest and Gaza. For the West Bank and growing energy-using sector, transport Gaza, upgrading the entire aging bus was responsible for 23 percent of fleet which average 16 years old, is a world energy-related GHG emissions top priority. It is also an opportunity 22 ENERGY SECTOR MANAGEMENT ASSISTANCE PROGRAM to explore cleaner fuel buses that is the largest of any city in the world. would simultaneously cost less to Expanding greatly in recent years in operate and protect the environment response to a growing, more affluent through lower emissions and improved population that travels more, it still air quality. To better inform decision lacks a comprehensive, scientifically making, ESMAP supported a detailed developed plan. Meanwhile, personal evaluation of all possible commer- vehicle ownership has soared, with cially available clean fuel options in 1,000 cars added to the roads each fiscal 2009. Despite initial expecta- day, exacerbating congestion and tions that compressed natural gas emissions. Beijing’s subway system and liquefied petroleum gas (LPG) is continuing to expand to meet this engines could be a viable option to challenge, but the bus system will still renew the bus fleet, the study carry most public transportation concluded that establishing a EURO trips even after the planned subway 4 standards-based regime would expansion in 2015. ESMAP supported be a better option. It is up to the a study to develop a rigorous, key stakeholders—including the multi-criteria assessment of the Ministry of Transport and private bus suitability of each of the more than companies—to determine how best 50 major public transport corridors to replace nearly 400 buses to meet in Beijing. Based on the assessment, EURO 4 standards over the next two the Chinese authorities selected the to five years. Chaoyang Road Corridor, with more than 200,000 daily bus person trips An innovative bus transportation per day, for a pilot reorganization of strategy in Beijing. Beijing’s bus bus services to introduce a new type system, with more than 20,000 buses, of service, “Rapid Commuting Mode.” 2009 ANNUAL REPORT 23 PRO-POOR ENERGY ACCESS TECHNICAL ASSISTANCE PROGRAMS: Expanding Energy Access through “Learning-by-Doing” Partnerships (e.g., Africa Electrification Initiative) 24 ENERGY SECTOR MANAGEMENT ASSISTANCE PROGRAM 3. ENHANCED CLIENT CAPACITY RETHINKING ENERGY PRICING IN EGYPT In Egypt, energy prices have long guided energy demand and investment. Retail prices have been kept low as a way of providing social services to households and subsidizing industries to generate employment. But in recent years these low prices have been unable to cover required subsidies and investment in new generation capacity. The government recently decided to raise the natural gas price for industries over a three-year period and requested assistance in preparing a comprehensive energy pricing strategy covering natural gas, fuel, gasoline, liquefied petroleum gas (LPG), and electricity. In response, ESMAP funded a study to develop an energy pricing strategy that reflects the underlying costs of energy but considers the economic and social impacts of price increases, managing the potential negative effects of subsidy removal on vulnerable customers. The study developed an analytical framework for calculating economic levels of energy prices and for assessing economic, fiscal, social, and poverty impacts of energy price adjustments. It also proposed a plan for adjusting energy prices, accompanied by policies to mitigate the social impact of the adjustments. Why the big push to reform energy prices? Egypt’s current energy subsidy system involves substantial government funds, between 5.4 and 6.7 percent of GDP. Moreover, the government records do not transparently account for all financial subsidies, failing to incorporate the full investment costs required to fund the energy sector’s future operations. If energy subsidies were calculated using their full economic costs, the results would be a staggering 14.5 percent of GDP. On top of the budgetary costs, artificially low energy prices misallocate resources, hurt the environment, and encourage excessive energy consumption—Egypt’s energy and carbon intensity is two-and-a-half to three times higher than the OECD average. 2009 ANNUAL REPORT 25 The common rationale for instituting UNSHACKLING THE POWER untargeted energy subsidies through MARKET IN TURKEY energy pricing is to ensure access to affordable energy services, particu- Since 2001, Turkey’s electricity demand larly by lower income households. But has grown more than 8 percent the benefits of Egypt’s current energy annually. But with growth come fresh subsidy system are highly regressive, concerns: World Bank studies show mostly enjoyed by the well-off. that, without serious mitigation measures, Turkey could experience Phasing out subsidies would reduce supply shortfalls in the near term. Egypt’s fiscal burden and generate significant government savings that Turkey has moved swiftly to overhaul could fund other priorities, including the electricity sector to meet growing targeted assistance to deserving demand in an efficient and cost-effec- households. It would also reduce tive manner. The reforms—consistent energy consumption, encourage with the European Union Acquis energy saving, make energy use more Communitaire framework—unbundle the efficient, and enhance the security of sector, restructure state-owned entities, supply. Overall, energy price reform and create an independent market would provide correct pricing signals regulator and competitive electricity to producers, consumers, and inves- markets. On the renewable energy side, tors, creating the preconditions for a Turkey plans to develop more than more competitive economy while 15,000MW of wind capacity—currently curbing environmental pollution. about 400MW—by 2015. ESMAP is supporting these reforms by helping the government establish the framework and capacity for a competi- tive electricity market, to be run by the Turkish Electricity Transmission Corporation (TEÐAÐ). In phase one, ESMAP helped design and implement an innovative capacity incentive scheme, plus auction mechanisms, for procuring new generation. It also helped institute capacity in different aspects of market operations, such as using water value and dispatch models, determining system marginal prices based on bids and offers, and managing the settlement system 26 ENERGY SECTOR MANAGEMENT ASSISTANCE PROGRAM through workshops, training, twinning mitigate supply unpredictability. arrangements, and toolkits. The wholesale competitive electricity market has grown rapidly since its In phase two, under way since April 2006 launch, now transacting roughly 2009, ESMAP is supporting training 18 percent of generated electricity. Cut and capacity building on market loose from stringent public control, management systems and communica- private investment has increased and tion systems to enable TEÐAÐ to should continue to grow. More than transition to the final market design. 200 private market participants are It is hiring external experts to provide registered in the market and trading TEÐAÐ staff with on-call advice on volumes are growing steadily. implementation issues and market and system operations. Also it is helping carry out a needs assessment and HARNESSING INDIGENOUS conceptual design for a smart grid to GAS RESOURCES IN integrate substantial amounts of VIETNAM intermittent wind generation. Fuelled by economic growth above Together, Turkey’s reforms should 7 percent for the last several years, improve the efficiency of the electricity energy demand is growing rapidly in market, stabilize electricity prices, and Vietnam—15 percent annually. Much of Figure 3.1 Required Energy Generation Capacity for Vietnam by 2020 60,000 60,000 50,000 Generating Capacity (MW) 40,000 41,000 30,000 20,000 25,000 10,000 15,864 0 2008 2010 2015 2020 2009 ANNUAL REPORT 27 this demand is driven by expanding methodologies, and a roadmap for access to electricity (figure 3.1). implementing the market design. The Vietnam Petroleum Institute then Where will this energy come from? added these insights to the ongoing The government’s 2006–15 Gas Master Gas Master Plan for Vietnam. Plan for Southern Vietnam has identified the country’s gas reserves as a key resource for power generation to BRINGING LIGHT TO RURAL improve energy access and energy security. Vietnam hopes to meet more BANGLADESH than 40 percent of its power needs from In Bangladesh, energy often delineates gas-fired plants by 2015. the haves and have-nots. Only one- third of households have electricity. ESMAP first helped the government of Sixty percent of the rest cannot Vietnam by reviewing the Gas Master connect to an electricity grid. Then, Plan. Noting inadequate consideration there are still others who are able to of economic and financial planning and connect to electricity but cannot market development, the review afford to switch it on. emphasized the need for a qualitative framework—including sector planning Inequitable energy access is about principles, a method for determining more than light. It reinforces and optimal utilization, pricing principles widens income disparities. Low-income for gas, regulatory methodologies, gas populations are worse off without market design options, and energy electricity because lighting alternatives security—as the basis for specific gas often cost more. Switching from sector and policy development decisions. kerosene lamps—the most typical alternative—to electric lighting boosts Second, ESMAP provided follow-up household income by 40 to 45 technical support to help the govern- percent. Farm production is 15 to 20 ment make the framework a reality, percent higher with electricity-run covering sector planning principles irrigation systems. And homes with (including key trade-offs, such as electricity tend to have more of their between energy security and least-cost younger occupants attending school options), gas market design and sector and studying at night. management, pricing and regulatory There are other opportunity costs as well. Women and young girls are burdened with fuel collection (mainly manure and wood) in 75 percent of households, resorting to leaves and grass when biomass is scarce. Such chores are often at the expense of schooling and employment. Requiring 25 percent less biomass, modern stoves can reduce fuel collection labor and are cheaper and less time con- suming to operate. 28 ENERGY SECTOR MANAGEMENT ASSISTANCE PROGRAM Some development programs have ment, appropriate subsidy and helped, especially Bangladesh’s highly pricing policies, as well as government successful rural electrification and donor support. initiative, now powering roughly 7 million rural households (of 22 million). But progress has been BOOSTING RENEWABLE slow—only 3 percent of households gain access each year—and outages ENERGY SUPPLY IN NEPAL and power fluctuations are common. During 2006–07, Nepal’s electricity Programs with bilateral and nongov- demand increased 8.6 percent to ernmental organization (NGO) 3,134GW, but the Nepal Energy funding have also improved matters, Authority (NEA) could generate only including a program that installed 3,051GW. Peak electricity demand also more than 80,000 solar home rose by 7.5 percent, forcing the NEA to systems over three years. adopt load-shedding measures and rely on imported capacity (although In-country data and technical knowledge not enough) from India. The following lag behind recent developments in year (2007–08) was worse: low rainfall energy technologies and policies. And and maintenance problems limited government responses are uncoordi- hydroelectric generation while nated. Rural energy is a complex issue, bureaucratic delays kept new projects encompassing a broad and diverse on the drawing board. spectrum of resources spanning multiple sectors and ministries. In collaboration with the Dhaka-based Bangladesh Institute of Development Studies and The World Bank, ESMAP conducted a multiyear study of options to improve the situation. This is the first study to concentrate on Bangladesh’s energy systems and their effects on the lives of rural people that presented a pragmatic and inclusive rural energy strategy. The study’s broad aim was to identify ways to improve living standards through better and more efficient energy use while creating an environment conducive to growth and poverty reduction. The major recommendation of the study, released in mid-2009, is to develop long-term institutional capac- ity. Bangladesh needs better institu- tional coordination and a critical mass of technology and market develop- 2009 ANNUAL REPORT 29 As a result, only 40 percent of Nepal’s MOBILIZING LOCAL households have access to electricity. EXPERTISE FOR The disparity in access is stark, with more than 90 percent of the urban ELECTRIFICATION population connected but only about IN AFRICA 30 percent of the rural. And in recent years even people with electricity have Of the 1.7 billion people lacking faced daily power outages lasting as electricity globally, more than 500 long as 16 hours in the winter. million live in Sub-Saharan Africa— nearly half the continent’s population. What can be done to quickly remedy In many places swelling cities are the situation? ESMAP is taking a overburdening already moribund two-pronged approach to help the power infrastructures. In rural areas, government respond to these chal- only 2 percent of the population has lenges. First, it is conducting a study access to electricity and connecting to to identify and assess opportunities to national grids is prohibitively expen- improve efficiency and service quality, sive. Households compensate with reduce peak capacity deficits, and rudimentary fuel-based lighting reduce power supply costs through methods, often at high costs that can implementation of demand-side consume 10 to 30 percent of their management measures. One early income. Fuel-based lighting (most idea from the study is to create a often kerosene) is inefficient, second compact fluorescent lamp distribution rate, highly pollutant, and dangerous. program—quick to implement and The International Energy Agency reducing daily peak demand between predicts that by 2030, 1.4 billion 2.2 and 3.7MW. A pilot demonstration people globally will still lack access to project is now under way. ESMAP electricity for basic necessities, with hopes that such pilots will improve the the problem most acute in Africa. NEA’s ability to predict demand-side fluctuations and thus help reduce Since September 2007, The World costs through fewer energy shortfalls, Bank Group—led by the International targeted investments in new power Finance Corporation (IFC)—has been plants, and imports from India. spearheading Lighting Africa, a multifaceted initiative cosponsored by Second, ESMAP is helping Nepal ESMAP that aims to provide up to 250 find ways to boost its hydroelectric million people in Africa by 2030 with capacity. Nepal possesses some modern lighting services that are not 43,000MW of economically feasible dependent on fossil fuels (box 3.1). hydropower potential but has devel- oped only 1.3 percent—with no In fiscal 2009, ESMAP launched the significant generation projects complementary Africa Electrification commissioned since 2002. A study Initiative (AEI), a capacity building will identify hydropower development program that intends to create a living barriers and assess which barriers are body of practical knowledge, sustained amendable to mitigation (as opposed by a network of local practitioners in to absolute barriers, such as Sub-Saharan Africa—at electrification geographic constraints). agencies and funds, government 30 ENERGY SECTOR MANAGEMENT ASSISTANCE PROGRAM ministries, regulatory bodies, and state, community, or privately owned Box 3.1 Lighting Africa utilities. The initiative pools their individual and collective expertise This initiative is being implemented by the in designing and implementing Global Environment Facility, the Energy Sector electrification programs, both grid-tied Management Assistance Program, Good and off-grid, and also provides Energies Inc., The United Kingdom, Luxemburg, comprehensive assistance to enable The Netherlands, Norway, The Public-Private governments in the region–Ethiopia, Infrastructure Advisory Facility, The Renew- Kenya, and Rwanda were covered able Energy and Energy Efficiency Partner- during 2009–to use new planning ship, and the Asia Sustainable and Alternative tools, such as geo-referenced, least- Energy Program. cost expansion plans to develop sector-wide strategies to mobilize For more information, financing to invest in electrification visit www.lightingafrica.org. access programs. Consistent with The World Bank’s Sector Wide Approach (SWAp) for improving developmental effectiveness, the emphasis is to focus on the big picture—not just workshop in Maputo, Mozambique, the power sector. in June 2009, for more than 170 practitioners from 42 countries to Guided by the African Forum of Energy share practical information about Ministers advisory committee, ESMAP ground-level implementation issues in and its partners organized the first AEI both urban and rural communities. 2009 ANNUAL REPORT 31 RENEWABLE ENERGY MARKET TRANSFORMATION INITIATIVE: Scaling Up Deployment of Grid-Connected Renewabl¬e Energy Technologies for Power Supply Diversification 32 ENERGY SECTOR MANAGEMENT ASSISTANCE PROGRAM 4. CUTTING-EDGE SOLUTIONS RENEWABLE ENERGY MARKET TRANSFORMATION INITIATIVE As developing countries search for ways to adopt clean energy technologies, one of their biggest hurdles is limited institutional capacity. In 2009 ESMAP launched the Renewable Energy Market Transformation Initiative (REMTI), a multiyear initiative to help countries build their institutional capacity to develop, plan, and implement strategies to quickly deploy select renewable energy technologies—chiefly solar, geothermal, wind, and small hydroelectric power. ESMAP hopes to achieve “win-win-win” solutions to interlinked challenges: enhanced energy security through diversified supply, greater energy access, and a transition to low carbon paths. REMTI will treat each energy technology differently, depending on its stage of maturity. For example, technologies for harnessing small hydroelectric power, onshore wind, and geothermal resources are relatively mature, with no major technical obstacles or operating challenges, reliable operating histories when deployed at scale, and prices closer to conventional fossil fuel-based energy options. So pricing gaps can be addressed, at least partly, through existing financial support mechanisms, such as carbon finance. In contrast, technologies for harnessing solar resources, such as concentrating solar power (CSP) systems, have known technical obstacles, limited operating history or challenges, and prices well above alternative conventional options. REMTI fills a gap in renewable energy deployment in developing countries. It concentrates on preparatory work needed in the early stages of project development and provides technical assistance, knowledge sharing, and capacity-building support to help countries gain access to financing (figure 4.1.) 2009 ANNUAL REPORT 33 Figure 4.1 Renewable Energy Deployment in Developing Countries CAPACITY BUILDING & KNOWLEGE SHARING Resource Strategy Policy & Institutional Pilot & Scale up Assesment Development Building/Financial Demonstration Programs Framework Projects Clean Technology Fund Carbon Partnership Facility Global Environment Facility Scaling-Up Renewable Energy Program REMTI NOT AVAILABLE PARTIALLY AVAILABLE AVAILABLE It complements and leverages several Renewable energy technology existing and developing multilateral deployment roadmaps to scale up initiatives, facilities, and funds within investment by private/public The World Bank Group and related developers in grid-connected international financial institutions, power generation facilities using including the Clean Technology Fund, renewable energy resources. Global Environment Facility, Carbon Renewable energy market Partnership Facility, and Scaling-Up development support mechanisms Renewable Energy Program. These to help reduce the associated facilities and funds do not ignore early financing risks of private/public stages of project development but do developers of grid-connected not make them the main focus of their power generation facilities using activities and funding as REMTI does. renewable energy resources. Knowledge exchange to share REMTI focuses on four areas of ESMAP lessons and foster engagement: capacity building with clients Country renewable energy market using knowledge products transformation strategies that generated from country support the role of renewable renewable energy market energy technologies in achieving transformation strategies broader client goals of enhanced and technology development energy security, access, and roadmaps—modeling toolkits, supply diversification, as well as best practices, “how to” guidance, climate change mitigation. and interactive training. 34 ENERGY SECTOR MANAGEMENT ASSISTANCE PROGRAM TRANSFORMING COUNTRY- and Fujian. REMTI’s recommendations SPECIFIC MARKETS will align with the Chinese govern- During 2009, REMTI supported ment’s goals to improve operational market transformation activities in efficiency in the dispatch of thermal China and India. power generation to maximize coal (and oil) savings and reduce emissions, Dispatching renewable energy systems reduce energy intensity in electricity in China. China has set ambitious supply by prioritizing the dispatch targets to improve energy efficiency, of renewable energy and large scale up use of renewable energy, hydroelectric power, ensure system and use less coal and release fewer reliability, achieve sustainable power emissions to generate power. To sector development, and promote achieve these energy improvements, the market reform. Preliminary findings Government of China in 2007 issued the show that realizing international principles to implement new efficient best practices could decrease coal generation dispatch practices (the Fossil consumption by around 10 grams of Fuel Saving and Emission Reduction coal equivalent per kilowatt-hour in Dispatch) and instructed the piloting of each provincial grid, and therefore these principles in five selected provin- reduce CO2 emissions by about 7 million cial grids–Guangdong, Guizhou, Henan, tons per year in the two provinces. Jiangsu, and Sichuan. But the complete implementation of those pilots has been India’s investment climate for delayed, mainly due to potentially renewable energy. Facing significant adverse short-term financial impacts. power shortages in the foreseeable For China, a change in dispatch practices future, India is looking for additional will markedly reduce emissions and resources, including renewable energy, make a major contribution to addressing to help meet its significant power climate change because coal-fired deficit and diversify its energy genera- power generation is the dominant share tion portfolio mix (coal-fired plants of its total installed power capacity contribute about 80 percent of total and—under business-as-usual generation). Renewable energy-based scenarios—would double by 2020. power generation capacity exceeded 7,200MW in March 2006 (6 percent To help China reduce energy intensity— of India’s installed power capacity), the government’s target is a 20 percent and the government hopes to boost cut by 2010— REMTI is assisting the this share to 10 percent by 2012. But for Chinese authorities to identify key that to happen, the private investment barriers to transitioning to efficient climate needs an overhaul (box 4.1). dispatch, propose a strategy to address those barriers, and recommend more DEPLOYING ADVANCED efficient and transparent dispatch and TECHNOLOGIES pricing policies. REMTI’s methodology To date, REMTI is supporting the includes helping to quantify coal development of roadmaps in half savings and the financial impact of a dozen country and regional efficient generation by simulating, over activities, with others in the works, three years, two ways to dispatch coal covering wind, geothermal, small power in the provinces of Shandong hydroelectric, and CSP. 2009 ANNUAL REPORT 35 Box 4.1 Helping India Cut the Red Tape India hopes to convince investors to invest heavily in renewable energy, but bureaucracy, burden- some regulations, and a changing regulatory framework for renewable energy have discouraged them. Although the Electricity Act of 2003 provided a framework for introducing wholesale compe- tition and open access, the new market structure and rules remain unclear and inconsistent. Since 2007, The World Bank has been working with the Indian government, to study the investment climate for renewable energy. Assessing the availability of renewable resources and technologies and the economic and financial costs of alternative generation options, the study provided options and recommendations on a policy framework for facilitating investments in renewable energy projects—with the goal of achieving the government’s target of 10% renewable energy by 2012. Under REMTI, the scope of collaboration with the Ministry of New and Renewable Energy, state governments, regulators, and other stakeholders is being extended to cover India’s recently announced strategic initiative to install 20,000MW of CSP systems by 2020. Solar power in MNA. Solar energy its plans to build 1,500MW of power represents an enormous resource in generation capacity to meet demand many of the Middle East and North over the next five years. Still providing African (MNA) countries. Over the next 72 percent of Peru’s electricity, six to eight years, the region plans a hydroelectric power has been giving 1GW-level deployment of CSP systems ground to natural gas in the past from 8 to 10 commercial-scale power 20 years (down from 90 percent). plants in multiple countries—repre- Despite potential shortfalls in power senting 10 percent of the planned generating capacity, Peru’s investment global capacity. REMTI provided in hydroelectric power has been technical assistance to assess the limited, with only one large project potential of the local industry’s role in now under construction. To boost MNA countries where the CSP scale-up investment, REMTI is assisting the is to be implemented, including local government to simplify the permitting manufacturing of components. system for small hydroelectric projects (up to 10MW) and also to develop an Small hydropower in Peru. Peru is appropriate operational framework to asking what role hydroelectric power as encourage investment—a centralized a clean, renewable, and abundant local auction scheme instead of the current energy source, should play in decentralized system. 36 ENERGY SECTOR MANAGEMENT ASSISTANCE PROGRAM Wind in Egypt. Already growing more services, they will need to use—and than 6.5 percent annually during the supply—significantly more energy. past 10 years, peak electricity demand The International Energy Agency in Egypt is expected to rise to 20GW projects that city energy use will by 2010 and grow at 6 to 7 percent increase from 67 percent to 73 annually during the coming decade. percent of all energy use between To reduce the country’s overwhelming 2006 and 2030, and urban GHG reliance on natural gas for power, the emissions, from 70 percent to 76 government’s energy strategy seeks percent of global emissions. The to promote energy efficiency and urban built environment will triple, develop renewable resources. Wind from about 200,000km2 in 2000 to power is one way to increase capaci- more than 600,000km2 by 2030. ty—ideally contributing 12 percent of generated electricity by 2020. REMTI How can cities cope with this growing assisted the government to develop a energy demand? The best hope lies in framework for large-scale wind energy greater energy efficiency, helping cities development, leading to a transforma- reduce operating costs, free resources tive switch from donor-funded conces- for improved services, enhance sional financing of wind power to a competiveness, create local jobs, and privately led, sustainable, and com- reduce the environmental footprint. mercially based program. PRACTITIONER’S ROUNDTABLE City managers and mayors, especially ENERGY EFFICIENT CITIES in developing countries, typically prioritize expanding access to basic INITIATIVE services such as energy. But achieving In 2008 more people lived in cities than results on the ground has been rural areas for the first time, and the elusive, given constrained budgets urban share of the world’s population and limited technical expertise. could reach 60 percent by 2030 if the In October 2008, ESMAP invited current rate of urbanization holds. Most representatives from a dozen cities urban growth is expected in developing and several partner organizations regions, already accounting for nearly 75 to discuss past and ongoing energy percent of the world’s urban population. efficiency initiatives and draw lessons on scaling up energy efficiency This demographic shift will strain improvements. Responding to the existing urban infrastructure, sub- feedback from the roundtable discus- stantially boost demand for municipal sion and after consultations with staff services, and create new demands on of The World Bank’s urban practice, land. And if cities are to promote ESMAP designed and launched the growth and provide municipal Energy Efficient Cities Initiative (EECI). 2009 ANNUAL REPORT 37 LAUNCHING EECI efforts are underway in the West EECI has two goals. First, to help Bank, Ukraine, Armenia, Mexico, and countries build institutional capacity South Africa. Fiscal 2009 also saw at the city level to explore and deploy the completion of two key EECI innovative, energy efficient solutions knowledge products: Public Procurement for the delivery of basic urban of Energy Efficiency Services: Lessons services. Second, help countries from International Experience and the reduce the costs and environmental energy chapter of East Asia’s Eco2: impacts of related energy use. The Ecological Cities as Economic Cities initiative is a flexible, cross-cutting, Program. EECI also sponsored and demand-driven, and comprehensive participated in several global forums, five-year program to provide city including The World Bank’s Energy managers and planners with up- Week 2009 (Washington, DC), the stream, operational, and evaluation Energy Efficiency Global Forum support while disseminating tools, (Paris), the Senior Policy Seminar experiences, and results. Within the on Climate Change, Housing and first year of its launch, EECI has Liveable Cities in Asia and Africa successfully contributed to the design (Singapore), and the 5th Urban of two energy efficiency components Research Symposium: Cities and of proposed World Bank urban Climate Change: Responding to an development operations in China and Urgent Agenda (Marseilles). 38 ENERGY SECTOR MANAGEMENT ASSISTANCE PROGRAM ENERGY EFFICIENT CITIES INITIATIVE: Helping Cities Meet Their Energy Challenges of the New Century 2009 ANNUAL REPORT 39 5. FINANCIAL REVIEW CONTRIBUTIONS RECEIVED ESMAP received US$13.9 million from its donors in fiscal 2009, US$0.6 million more than in fiscal 2008. Table 5.1 and figure 5.1 show actual receipts by individual donors for fiscal years 2007–09. Table 5.1 ESMAP Receipts, Fiscal 2009 (US$ thousands) Currently under Agreement Total Receipts Of which Core Country 2007 2008 2009 2010 07-09 % 07-09 % Australia - 2,682 - 2,682 6.0% 2,682 11.8% Austria (ADA; MoF) - 658 588 1,247 2.8% 1,247 5.5% Canada - 396 396 0.9% - 0.0% Denmark - 1,962 1,762 3,724 8.4% - 0.0% Finland - - - - 0.0% - 0.0% France 860 1,052 885 2,798 6.3% 2,798 12.3% Germany 1,771 2,805 4,801 2,214 9,377 21.1% - 0.0% Iceland 300 200 300 800 1.8% 800 3.5% Netherlands 9,780 - 3,193 12,974 29.2% 12,974 57.2% Norway 750 750 750 750 2,250 5.1% 1,125 5.0% Sweden - 1,589 - 1,589 3.6% 95 0.4% United Kingdom 3,061 1,180 964 206 5,205 11.7% 948 4.2% World Bank 678 450 280 344 1,409 3.2% 0.0% GRAND TOTAL 17,200 13,329 13,920 3,514 44,449 100% 22,668 100.0% Note: Not included in this table are: United Kingdom contributions to the Clean Energy Investment Framework (CEIF) to the Environment Unit of US$ 3.36 million (actual fiscal 2009); and The Netherlands contributions to the CEIF to the Environment Unit of US$ 3.1 million (actual fiscal 2009) and Africa (AFREA Program) of US$ 17.5 million (actual fiscal 2009). 40 ENERGY SECTOR MANAGEMENT ASSISTANCE PROGRAM CORE (UNRESTRICTED) AND THEMATIC FUNDING Core contributions totaled US$5.7 million in fiscal 2009, 41 percent of total contributions. Austria, Canada, France, Iceland, the Netherlands, and Norway contributed to unrestricted funding (table 5.2). The United Kingdom provided thematic funding for the Clean Energy Investment Framework (CEIF). Thematic funding was also provided by Denmark (Renewable Energy) and Germany (Renewable Energy/Energy Efficiency and Energy Access). Norway provided unrestricted funding, as well as targeted funding for Africa. The World Bank also provided support to the administrative budget. DISBURSEMENTS Disbursements in fiscal 2009 totaled US$14.9 million, increasing US$2.5 million from fiscal 2008 (table 5.3). Program expenditure increased by US$2.7 million, most of it in the regional units. Program management and administration decreased temporarily because of several vacancies now filled. Figure 5.1 Receipts by Source Table 5.2 Receipts by Type of Funding, Fiscal 2009 WORLD BANK AUSTRALIA 3.2% 6% Type of Funding Amount (US$ AUSTRIA 2.8% millions) UNITED KINGDOM CANADA .9% 11.76% DENMARK 8.4% Core (global unrestricted) 5.74 SWEDEN (Austria, Canada, France, Iceland, Netherlands, 3.6% Norway) NORWAY FRANCE 5.1% 6.3% Thematic (Renewable Energy/Energy 7.53 Efficiency and Energy Access, CEIF) (Denmark, Germany, United Kingdom) Regional (AFR) 0.38 (Norway) GERMANY NETHERLANDS 21.1% 29.2% World Bank 0.28 ICELAND 1.8% TOTAL 13.92 2009 ANNUAL REPORT 41 Table 5.3 ESMAP Disbursements and Sources of Funding, Fiscal 2007–09 (US$ thousands) FY07 FY08 FY09 Regional Work Program $6,524.08 61.1% $8,042.30 % $10,547.08 70.7% Africa $819.85 $2,003.16 $1,628.40 East Asia $1,472.70 $938.34 $1,408.00 Europe & Central Asia $486.27 $1,184.40 $780.38 Latin America & Carribean $1,692.28 $1,282.83 $2,793.76 Middle East & North Africa $868.83 $ 1,119.99 $1,718.66 South Asia $463.95 $733.47 $1,183.13 Non-Regional VPUs $720.20 $780.10 $1,034.75 ETWES own-managed $3,058.69 28.6% $2,707.86 21.8% $2,882.92 19.3% Program management and $1,099.07 10.3% $1,667.31 13.4% $1,495.84 10.0% administration TOTAL $10,681.84 100.0% $12,417.47 100.0% $14,925.84 100.0% Funded by donors $9,707.66 11.7% $11,617.07 $14,213.89 Funded from World Bank budget $678.18 3.2% $450.40 $283.45 Funded from fee income $296.00 3.2% $350.00 $428.50 42 ENERGY SECTOR MANAGEMENT ASSISTANCE PROGRAM Figure 5.2 Relative Disbursement by Program, Fiscal 2009 Completed Activites New Activities 6% 1% 2% 20% 3% 51% 76% 41% Ongoing Activities Total Disbursements 11% 7% 5% 3% 59% 29% 58% 27% Energy Assessments and Energy Efficient Cities Strategy Programs (EASP) Initiative (EECI) Pro-Poor Energy Access TA Renewable Energy Market Program (PEA - TAP), excluding AFREA Transformation Initiative (REMTI) 2009 ANNUAL REPORT 43 Annex 1 Proceedings From CG Meeting CONSULTATIVE GROUP MEETING FOR ENERGY TRUST FUNDED PROGRAMS FRIDAY, 3 APRIL 2009, WASHINGTON, DC Draft Minutes publications prepared by ESMAP — People and Power: Electricity Sector Reforms and The Consultative Group (CG) meeting for the Poor in Europe and Central Asia; the Energy Trust-Funded Programs Financing Energy Efficiency: Lessons (ETFPs), managed by the World Bank Learnt from Brazil, China, India and Beyond; Group, was held in Washington, DC, on 3 Urban Household Energy Transition; China: April 2009. The meeting was chaired by Mr. Development of National Heat Pricing J. Saghir, Director for World Bank’s Energy, and Billing; and Accelerating Clean Energy Transport and Water Department and Chair Technology — that had pushed the envelope of the World Bank Group Energy and with regards to thinking on energy issues. Mining Sector Board. It was attended by CG members, ESMAP Program Manager, Program Manager’s presentation. ESMAP ESMAP staff and other guests and invitees. Program Manager, A. Armar, presented The 2009 CG meeting comprised of five ESMAP’s progress report for FY2009, sessions: the opening session, Program covering the closing out of the 2005-2007 Manager’s report on ESMAP, Technical Business Plan, overview of the strategic Advisory Group (TAG) report to CG, Business Plan 2008-2013, ESMAP FY2009 regional perspectives, and a closed door program delivery progress and ESMAP session. The CG meeting immediately budget and financial update. Mr. Armar followed the World Bank Group’s Energy informed the meeting that the CY2007- Week from 30 March to 2 April 2009. The FY2009 Annual Report had been used to following represents a summary of the close out the ESMAP 2005-2007 Business meeting’s proceedings: Plan. In this regard, Mr. Armar shared information about the portfolio clean up Chair remarks. The CG Chair used his undertaken at the end of the last Business welcome remarks to highlight ESMAP’s role Plan and ongoing retrospective review of the in advancing sustainable access to energy 2005-2007 Business Plan. Mr. Armar outlined across the world. Towards this, he invited the framework of the new Business Plan and H.E.A. Butare, the Minister of State for shared the steps that were being taken to Infrastructure in Rwanda, to present his make it operational through greater use of views on ESMAP’s role in helping Rwanda strategic partnerships and the adoption of a meet its energy challenges. Mr. Butare was new monitoring and evaluation framework. extremely complimentary about the Mr. Armar said that the 2008-2013 Strategic support provided by ESMAP in preparing a Business Plan would be implemented as three- roadmap and prospectus for Rwanda’s year rolling plans and would adopt a two-track energy sector. According to Mr. Butare, approach – one for operational leveraging Rwanda’s donors have responded very well and the other for think tank and knowledge to the roadmap and prospectus and have clearinghouse activities. Highlighting the fact agreed to fully finance the plan. Making that ESMAP had so far received commitments reference to the Minister’s presentation on equal to about half of the Business Plan Rwanda, Mr. Saghir noted that this was one funding requirements, Mr. Armar sought CG of many instances in which ESMAP had guidance on the appropriate funding scenario provided critical upstream project support for the FY2011-13 phase of the Business Plan. to client countries for improving energy access and had facilitated investments by CG members praised the approach taken by governments and other donors. Mr. Saghir the new ESMAP management in the prepara- then highlighted five recent activities and tion of the Business Plan. The annual report 44 ENERGY SECTOR MANAGEMENT ASSISTANCE PROGRAM was also commended for being insightful and form, effectively cover the program. In for accurately depicting ESMAP’s activity over addition, the presentation shared TAG plans CY2007-FY2008. CG members endorsed the for undertaking field visits in Uganda, decision to balance ESMAP’s past focus on Rwanda, and Mozambique in May- June operational leveraging with more think tank 2009. Overall, the presentation advised the and knowledge clearinghouse activities. There CG to approve the annual report and was also praise for ESMAP’s decision to business plan, to expand core funding engage with energy experts outside The support to the Business Plan, to clarify trade World Bank through activities such as the off between energy access and renewable Global Energy Assessment and virtual panels. energy and to draw lessons for Asia There was consensus on the overall objective Sustainable and Alternative Energy Program and aim of the monitoring and evaluation (ASTAE) in the establishment of Africa (M&E) framework proposed by ESMAP. In this Renewable Energy Access Program (AFREA). regard, CG members agreed on the need to design the system in a way that does not CG members expressed appreciation for reduce ESMAP’s flexibility to respond to the thorough and comprehensive report emerging challenges. With the new monitor- prepared by TAG. Clarifying the relative ing and evaluation framework proposed by priority of climate change and energy access, ESMAP allowing donors to track outputs and CG members stressed the need to not see outcomes in different areas, there was these two thematic concerns as being agreement regarding the need to allocate mutually contradictory and involving more core funds to ESMAP. Discussions were trade-offs. They instead urged ESMAP to also held regarding preparation of The World pursue increased energy access for the poor Bank’s energy strategy and ESMAP’s role in it. while at the same time taking into account Some CG members expressed the need for a climate change concerns. Responding to mid-year seminar in Europe to discuss TAG’s concern regarding the drop in emerging issues in the energy sector. renewable energy activities, Mr. Saghir, the CG chair, clarified that what was in fact TAG assessments of ETFPs to CG. Mr. taking place was a transition phase brought Amitav Rath, TAG moderator, led the on by retirement of staff and movement from discussion on the 2008 review of the ETFPs upstream work on renewable energy to more and presented the TAG report to the CG. The downstream work. Finally, discussions were presentation commended the direction also held on the need to revisit TAG’s terms adopted by the ESMAP Program Manager of reference in light of the growth in and the 2008-2013 Business Plan and workload and the impending departure of praised ESMAP for having responded to a some current TAG members. majority of issues raised by TAG in its reports. The TAG positively reviewed the Asia Sustainable and Alternative Energy completion of the CY2007-FY2008 Annual Program (ASTAE) status report. Mr. Report, the proposed monitoring and Frederic Asseline, Senior Energy Specialist, evaluation system, and ESMAP’s proposals Energy and Transport Unit, East Asia and for country energy assessments, virtual Pacific Region, presented the implementa- panels, Energy Efficiency Cities Initiative, and tion report on ASTAE. The presentation biomass. Issues highlighted included the illustrated ASTAE’s achievements in 2008, relative decline in number of ESMAP particularly activities undertaken for activities in renewable energy, shortage of improving energy access, increasing the staffing in biomass and renewable energy, integration of renewable energy and the need to transition to more advanced promoting energy efficiency. In light of media for dissemination of ESMAP products, ASTAE’s proposed scale up of renewable the ability of regional units to absorb block energy generation activities over 2009- grants, and the need for continued work on 2012, Mr. Asseline highlighted establish- SMEs once the Department for International ment of a multi-donor trust fund, improve- Development (DFID)- supported SME ment of ASTAE’s M&E system, the need for program comes to a close. Noting the large more staff as areas for further discussions increase in the size of the Africa program, with CG. CG members responded positively the presentation expressed reservations to the presentation and commended the regarding the ability of TAG to, in its current work done by ASTAE in 2008. 2009 ANNUAL REPORT 45 Presentation on credit crisis vulnerability according to Dr. Schaeffer, an increase assessments. Mr. Ranjit Lamech, Sector in demand for electricity could be Manager, Energy Unit, Europe and Central expected due to higher temperatures. Asia Region, presented the findings of the Both presentations were very well credit crisis vulnerability assessments received by the CG members. Some undertaken with ESMAP support in Indonesia, members stressed the need to replicate Vietnam, and Philippines. The presentation the study undertaken by Dr. Schaeffer highlighted the sharply reduced availability of in low-income countries. both domestic and international funding for power projects in these countries and the Presentation on the Africa Renewable delays faced by many power projects. Energy Access (AFREA) program. Mr. Mr. Lamech informed the meeting that Tjaarda P. Storm Van Leeuwen, Adviser, ESMAP-supported vulnerability assessments, Africa Unit, presented an implementation which would guide World Bank’s response to update on the ESMAP-CEIF – AFREA the credit crisis, would also be undertaken in program. Mr. Van Leeuwen informed the other regions and countries impacted by the meeting that the AFREA program will credit crisis. prioritize regional scale-up of generation capacity, improvement in the effectiveness Presentations on energy and climate and governance of utilities, and expansion change. Ms. Jane Ebinger, Senior Energy in access through sector-wide engagement Specialist, ESMAP, briefed the meeting and that a new organizational structure about ESMAP’s ongoing work in climate and staff had been put in place for this change. Ms. Ebinger shared information on purpose. He acknowledged the important ESMAP-supported, demand-driven, and role played by ESMAP in laying the country-tailored low carbon assessments in foundation for access scale-up effort and Brazil, China, India, Mexico, and South Africa underlined the need for its continued and said that the outputs of these assess- support to consolidate the progress ments would be disseminated in partnership achieved so far. Following the presenta- with the World Bank Institute. Ms. Ebinger tion, discussions were held on various also described a pilot program initiated by aspects of ESMAP support to Africa. It was ESMAP in two countries to assess climate noted that there was a need to use AFREA change vulnerability, adaptation options to disseminate the findings of ESMAP and their costs, and about ESMAP’s plan to studies on hydropower development and prepare a toolkit for broader dissemination for starting investment projects. ESMAP’s based on these two case studies. role in promoting regionalization of the Dr. Roberto Schaeffer, from Federal power sector through activities on Africa University of Rio de Janeiro, Brazil, used his Power Pool Development was also presentation to highlight the expected highlighted. impacts of climate change on renewable energy. Taking the case of Brazil, which Closed Door Session. The closed door relies heavily on renewable energy, Dr. session attended by Chair and Principals of Schaeffer informed the meeting that the Consultative Group discussed issues projected changes in climate would relating to ESMAP’s governance, monitor- adversely affect hydropower generation and ing and evaluation, Technical Advisory biofuel production while increasing the Group, funding pledges, and ESMAP potential of wind energy. At the same time, Business Plan 2008-13. 46 ENERGY SECTOR MANAGEMENT ASSISTANCE PROGRAM Annex 2 Completed, New, Ongoing, and Activities, Fiscal 2009 COMPLETED ACTIVITIES Activity Task Manager Initiative/ Country/ Program Region ENERGY ASSESSMENTS AND STRATEGY PROGRAMS Sub-Saharan Africa Generation and Transmission Projects Robert Schlotterer REISP AFR Modern Biofuels Assessment Boris Enrique Utria EASP Mozambique Sustainable Coal Sector Development Jianping Zhao EASP China Municipal Heating Reform and Regulation (Phase 1) Gailius J. Draugelis EASP China Generation Pricing, Trading, and Dispatch Ranjit J. Lamech EASP China Survey and Knowledge Sharing of Provincial Activities and Programs on Energy Bob Taylor EASP China Conservation Energy Efficiency Financing Leiping Wang EASP China Urban Transport Climate Change Strategy Shomik Raj Mehndiratta LCGSP China Regional Energy and Sustainable Development Joel J. Maweni REISP EAP Assessing the Impact of Recent Credit Constraints on Energy Sector Investment Arturo S. Rivera CESVAP Indonesia, Requirements Philippines, Vietnam Mitigation Sector Reform and Tariff Adjustment Tumentsogt Tsevegmid EASP Mongolia Urban Heat Pricing and Regulation Gailius J. Draugelis EASP Mongolia South Eastern Europe Gasification Study Franz Gerner REISP ECA Thermal Power Plant Rehabilatation: Assessment of Needs, Cost, and Benefits Dejan R. Ostojic EASP Ukraine Affordable Gas-Fired District Heating in Eastern Europe Peter Johansen EASP Ukraine Energy Efficiency Needs and Toolkit Assessment Ashok Sarkar EASP Global Strategy to Design Power Projects Under Stress Jonathan d’Entremont Coony EASP Global Global Energy Assessment Background Energy Papers Amarquaye Armar EASP Global Risk Assessment Methods in Power Systems Planning Soren Krohn EASP Global Accelerating Clean Energy Techology (Phase 2) Jonathan d’Entremont Coony EASP Global Sub-Saharan Africa Refinery Study Paulo De Sa REISP AFR Accelerating Clean Energy Technology (Phase 1) Jonathan d’Entremont Coony EASP Global Energy Efficiency Strategic Appraisal Todd M. Johnson EASP Brazil Benchmarking Analysis of Electricity Distribution Companies Luis Alberto Andres REISP LCR Low Carbon Growth Country Study (Medec) Todd M. Johnson LCGSP Mexico Design of Load Management Program and Time of Use Tariffs Anna M. Bjerde EASP Egypt Energy Pricing Strategy Vladislav Vucetic EASP Egypt Regional Energy Efficiency Study Alexander Kremer REISP MNA Structuring New Energy Agency Pierre Audinet EASP Morocco Energy Management Policy Review Silvia Pariente-David EASP Tunisia Best Practice in Energy Efficiency Improvement in Coal-Fired Generation Sunil Khosla, Mikul Kumar EASP India Private Sector Grid-Connected Renewable Power: Review of 10 Years of Experience Mudassar Imran REISP SAR Regional Power Trade Raghuveer Y. Sharma REISP SAR PRO-POOR ENERGY ACCESS TA PROGRAM Energy Access Scale-Up in Africa: Action Plan Implementation Kyran O’Sullivan PEA-TAP AFR Identification and Testing of Inputs for Enhanced Electricity Access Package Mohua Mukherjee PEA-TAP AFR 2009 ANNUAL REPORT 47 Capacity Building Among Small-Scale Off-Grid Energy Suppliers Koffi Ekouevi ESMED-TAP Burkina Faso Capacity Building Among Small-Scale Off-Grid Energy Suppliers Astrid Manroth ESMED-TAP Cameroon Scaling Up Small & Medium Enterprise Participation in Rural Electrification Dana Rysankova ESMED-TAP Guinea Integrating Small & Medium Enterprises Rural Energy Initiatives Dana Rysankova ESMED-TAP Tanzania Strengthening Small- & Medium-Scale Off-Grid Energy Enterprises Abdolreza B. Rezaian ESMED-TAP Zambia Decentralized Energy Services for IDA Countries Jie Tang ESMED-TAP Cambodia Small & Medium Enterprises in Decentralized Energy Service Jie Tang ESMED-TAP Laos Rural Enegy Project Arturo S. Rivera PEA-TAP Mongolia Decentralized Energy Services for IDA Countries Amarquaye Armar ESMED-TAP Global Gender and Energy Rogerio Carneiro de Miranda GEDS-TAP Global Solar Lantern Testing and Certification Proejct R. Anil Cabraal PEA-TAP Global Economics of Connecting the Poor to Natural Gas Franz Gerner PEA-TAP Global Strengthening Small-Scale Off-Grid Energy Suppliers Susan Bogach ESMED-TAP Bolivia Woodfuel Strategy: Promotion of Efficient Cooking Stoves Karen Bazex ESMED-TAP Haiti Technical Assistance to Improve Small-Scale Energy Supply Xiaoping Wang ESMED-TAP Nicaragua Small & Medium Enterprises for Energy Services Delivery Susan Bogach ESMED-TAP Peru The Poverty Impact of Rural Electrification: Evidence From Bangladesh Elahi, Raihan PEA-TAP Bangladesh ENERGY EFFICIENCY CITIES INITIATIVE Energy Efficient Cities Practitioners Workshop Jas Singh EECI Global RENEWABLE ENERGY MARKET TRANSFORMATION INITIATIVE Pre-Investment in Scale-Up Energy Leiping Wang REMTI China Grid-Connected Renewable Energy Policy Reform Soren Krohn REMTI Global Alternative Energy and Bioenergy Todd M. Johnson REMTI Columbia Small Hydropower Susan Bogach REMTI Peru Commercial Wind Development Framework Anna M. Bjerde REMTI Egypt NEW ACTIVITIES Activity Task Manager Initiative/ Country/ Program Region ENERGY ASSESSMENTS AND STRATEGY PROGRAMS Support for the Development of a National Energy Efficiency Program Lucia Spinelli EASP Chile Energy Intensity Strategy Carter J. Brandon EASP China Heat Regulation (Phase 2) Gailius J. Draugelis EASP China Revisiting Policy Options for the Market Structure in the Power Sector Maria Vagliasindi EASP Global Development of an Operational Toolkit for Energy Efficient Lighting Ashok Sarkar EASP Global Program Design and Implementation Global Energy Assessment: Capacity Building Istvan Dobozi EASP Global Smart Metering Istvan Dobozi EASP Hungary Environmental Issues in the Power Sector: Consequences of Coal-Based Generation Mudassar Imran EASP India District Heating Restructuring Gary Stuggins EASP Moldova Public-Private Partnership Options for Electricity Generation Franz Gerner EASP Montenegro Energy Supply Strategy Silvia Pariente-David EASP Morocco Natural Gas Study David Reinstein EASP Peru Capacity Building for Electricity Market Operations Sameer Shukla EASP Turkey Gas Sector Development Framework Sanjoy Ranjan EASP Vietnam Institutional Framework for Energy Efficiency Program Implementation Chandrasekar Govindarajalu EASP Yemen 48 ENERGY SECTOR MANAGEMENT ASSISTANCE PROGRAM Assessing the Impact of Recent Credit Constraints on Energy Sector Investment Rome Chavapricha CESVAP Egypt and Jordan Requirements Assessing the Impact of Recent Credit Constraints on Energy Sector Investment Alan Townsend CESVAP Bangladesh Requirements Study on the Impacts of the Financial Crisis on the Energy Sector Edon Vrenezi CESVAP Armenia, Romania, Kyrgyz Republic, Ukraine Assessing the Impact of Recent Credit Constraints on Energy Sector Investment Silvia Pariente-David CESVAP Tunisia, Morocco Requirements Regional Low Carbon Transport Strategy Michel Bellier REISP Tunisia Programmatic Energy Study Juan Cayo REISP LCR Policy and Capacity Building Support for Greater Mekong Subregion Power Trade Beatriz Arizu de Jablonski REISP EAP Regional Electricity Security Ariel Yepez-Garcia REISP LCR Maghreb Countries Energy Market Study Silvia Pariente-David REISP MNA Assessment of Energy Integration in the Mashreq Countries Husam Mohamed Beides REISP MNA South Eastern Europe Wholesale Market Opening Kari J. Nyman REISP South Eastern Europe, Balkans West Africa Power Pool Broadband Program Assessment Mavis A. Ampah REISP AFR PRO-POOR ENERGY ACCESS TA PROGRAM Review of Strategies for Sustainable Production of Commercial Fuelwood Rogerio Carneiro de Miranda PEA-TAP Global Economic Benefits of Electricity Supply Pierre Audinet PEA-TAP Global ENERGY EFFICIENCY CITIES INITIATIVE Ningbo “Energy Efficient” Township Shenhua Wang EECI China Energy Efficiency Project Development in Urban Investments Feng Liu EECI China, Ukraine, West Bank Programmatic Approach to Building Energy Efficiency Codes Feng Liu EECI Global Analytical Framework for Energy Efficient Cities Ranjan Bose EECI Global Energy Efficiency in Sub-Saharan African Water Utilities Feng Liu EECI Zambia RENEWABLE ENERGY MARKET TRANSFORMATION INITIATIVE Capacity Building in Renewable Energy for Implementing Agencies in Latin America Karen Bazex REMTI LCR & the Caribbean Regional Concentrating Solar Power Initiative Chandrasekar Govindarajalu REMTI MNA ONGOING ACTIVITIES Title Task Manager Initiative/ Country/ Program Region ENERGY ASSESSMENTS AND STRATEGY PROGRAMS Utility Performance Benchmarking Prasad V.S.N. Tallapragada REISP AFR Institutional Framework Development and Capacity Building Fanny Kathinka Missfeldt-Ringius EASP Guinea-Bissau Regulating Electricity Exports and Imports in the Southern Africa Development Community Wendy E. Hughes REISP AFR Southern Africa Power Market: Indicative Generation & Transmission Expansion Study Samuel A. O’Brien-Kumi REISP AFR Sub-Saharan Africa Downstream Petroleum Efficiency Study Masami Kojimi REISP AFR Sub-Saharan African Electric Utility Capacity Assistance Project Prasad V.S.N. Tallapragada REISP AFR Biomass Cogeneration Development Project Ximing Peng EASP China Technical Assistance for GEF Vietnam Demand-Side Management Ky Hong Tran EASP Vietnam and Energy Efficiency Program South Eastern Europe Regional Energy Efficiency and Renewables Assessments Peter Johansen REISP South Eastern Europe, Balkans 2009 ANNUAL REPORT 49 Supporting Electricity Market Operations Sameer Shukla EASP Turkey Needs Assessment of Hydropower Infrastructure Rehabilititation Daryl Fields EASP Global Regional Power Sector Integration Potential Jonathan d’Entremont Coony REISP Global Low Carbon Growth Country Study Christophe de Gouvello LCGSP Brazil Natural Gas Study David Reinstein EASP Peru Assessment of Climate Impact on Peru’s Hydrology: Development of a Methodology Walter Vergara EASP Peru Strategic Overview of Energy Procurement and Best Practices in Energy Auctions Luiz T.A. Maurer REISP LCR Programmatic Energy Study Juan Cayo EASP LCR Energy Savings Opportunities in Large Buildings Sunil Kumar Khosla EASP Afghanistan Energy Sector Master Plan Pierre Audinet EASP Djibouti Electricity Pricing and Power Sector Reform Vladislav Vucetic EASP Iran Energy Financing and Institutional Framework Vladislav Vucetic EASP Jordan Transport and Climate Change Jean-Charles Crochet EASP Morocco Energy Supply Strategy Silvia Pariente-David REISP Morocco Electricity Sector Strategy Husam Mohamed Beides EASP Syria Support to Develop Strategy for the Government’s Public Transport Subsector Ibrahim Khalil Dajani EASP West Bank, Gaza Exploring Potential Electricity Trade and Interconnection Waleed Alsuraih REISP Yemen, Djibouti, Gulf Coast Council Countries Regulatory and Planning Requirements for Rehabilitation of Coal-Fired Generation Mustafa Zakir Hussain EASP India Organization Transformation and Public-Private Partnerships in MSETCL Kwawu Mensan Gaba EASP India Low Carbon Growth Country Study Kwawu Mensan Gaba LCGSP India Assessing Social Impacts of Rural Energy Sudeshna Ghosh Banerjee EASP Nepal Nepal Energy Authority Energy Efficiency Study Jeremy Levin EASP Nepal Support for the Development of a Large-Scale Energy Efficient Lighting Program Raqhuveer Sharma EASP Pakistan PRO-POOR ENERGY ACCESS TA PROGRAM Lighting Africa Dana Rysankova PEA-TAP AFR Improving the Impacts of Oil, Gas, and Mining Development on Women and Youth Adriana Eftimie PEA-TAP Global Impact Assessment of National Rural Electrification Programs Shahidur Khandkar PEA-TAP Global Implementation of Action Plan for Africa Energy Access Scale-Up Program Kyran O’Sullivan PEA-TAP AFR Africa Electricfication Initiative: SWAP Investment and Policy Prospectuses Kyran O’Sullivan PEA-TAP Rawanda, Kenya Identification and Testing of Inputs for Enhanced Electricity Access Mohua Mukherjee PEA-TAP AFR Introducing Energy Efficient and Cleaner Technologies and Practices in the Brick- Maria Sarraf PEA-TAP Bangladesh Making Sector ENERGY EFFICIENCY CITIES INITIATIVE Public Procurement of Energy Efficiency Services Jas Singh EECI Global RENEWABLE ENERGY MARKET TRANSFORMATION INITIATIVE Renewable Energy Development Arturo S. Rivera REMTI Philippines Regulation of Renewable Energy Peter Johansen REMTI Bulgaria Establishing a Regulatory Framework for Renewable Energy Sources Peter Johansen REMTI Slovakia Policy Options for Renewable Energy Sources Walter Vergara REMTI Columbia Overcoming Barriers to Hydropower Investment Susan Bogach REMTI Peru Promotion of Renewable Energy Vladislav Vucetic REMTI Iran Renewable Energy Investment Climate Assessment Gevorg Sargsyan REMTI India Removing Barriers to Hydropower Development Michael Haney REMTI Nepal 50 ENERGY SECTOR MANAGEMENT ASSISTANCE PROGRAM Annex 3 Publications, Fiscal 2009 Pub. Country/ Title Author/Contact Date No. Region SPECIAL REPORTS* 006/09 Bangladesh Restoring Balance: Bangladesh’s Rural Energy Realities (ENERGY POVERTY THEME) Barnes/Asaduzzaman/Khandker Mar-09 FORMAL REPORTS* 338/09 Mexico Innovative Financial Mechanism to Implement Energy Efficiency Projects in Mexico Feinstein Jun-09 TECHNICAL REPORTS* 122/09 Global Study of Equipment Prices in the Power Sector Pauschert Feb-09 123/09 LCR Latin America and the Caribbean Region Energy Sector: Retrospective Review and Challenges Crouisillat May-09 124/09 AFR Promoting Productive Use in Rural Electrification Projects: Conceptual Framework Karhammar Jul-09 and Operational Suggestions Paraguay Paraguay: Estrategia para el Desarrollo del Sector Electric (Spanish only) Monari Mar-09 ECA Development of Power Generation in South East Europe: Implications for Investments in Stratos/Atur Mar-09 Environmental Protection 113/09 SP LCR Estrategia de Integración de la Red de Gasoductos del Cono Sur Mayorga-Alba Sep-09 Pakistan Enhancing Access and Rural Electrification: Costs and Benefits and Willingness to Pay Haider KNOWLEDGE EXCHANGE SERIES* 13 Bangladesh Improving Indoor Air in Rural Bangladesh: Results of Controlled Experiments Dasgupta/Huq/Khaliquzzaman/ Mar-09 Wheeler BROCHURES** 001/09 Global Energy Efficient Cities Initiative Singh Mar-09 002/09 Global Low Carbon Growth Country Studies Program Ebinger May-09 WEB STORIES Global New, Clean Energy Technology to Reconcile Emissions Reductions with Growing Energy Demand ESMAP Jul-08 SAR Changes in Construction Can Help Improve Indoor Air Pollution Risks ESMAP Jul-08 Global Power Plants, Materials Prices Rise Due to Elevated Energy Demand ESMAP Jul-08 EAP China to Improve Efficiency of Heating Services ESMAP Aug-08 Global Developing Institutions for Catalyzing Energy Efficiency Markets Sarkar Nov-08 Global Developing and Promoting Improved Biomass Stoves Carneiro de Miranda Jan-09 Global The Principles and Good Practices of Sustainable Off-grid Rural Electrification Shi Jan-09 Global Energy Week 2009 to Offer Solutions to Global Energy Challenges ESMAP Feb-09 ECA Albania Assesses Climate Change Risk to Energy Sector Ebinger Mar-09 EAP Domestic Private Sector Brings New and Improved Energy Services, Technologies to More than ESMAP Apr-09 8,000 Cambodian Families OPERATIONAL REPORTS** 48329- MENA Tapping a Hidden Resource: Energy Efficiency in the Middle East and North Africa Kremer Feb-09 MNA ACTIVITY REPORTS*** 012/09 AFR Sierra Leone: Power Sector Recovery Strategy (Phase I) Koljonen Jan-09 015/09 AFR Expanding SME Outsourcing Opportunities in the Ongoing Power Sector Reforms in East and Armar Jun-09 Southern Africa ADMINISTRATIVE REPORTS CY07- Global ESMAP CY07-FY08 Annual Report ESMAP Jan-09 FY08 2008-13 Global ESMAP Strategic Business Plan, 2008-13 ESMAP Jul-09 * Discontinued series as of June 30, 2009 ** Newly established series for fiscal 2009 *** Activity Reports are published for reporting and fiduciary purposes only. Some of the content may be confidential in nature, thus, they are not available for public distribution or web posting. 2009 ANNUAL REPORT 51 ABBREVIATIONS & ACRONYMS AEI Africa Electrification Initiative IFC International Finance Corporation AFR Africa Region (The World Bank) km kilometer AFREA Africa Renewable Energy km2 square kilometer Access Program LCG low carbon growth ASTAE Asia Sustainable and Alternative LCR Latin America and Caribbean Energy Program Region (The World Bank) BMZ Federal Ministry for Economic LED light emitting diodes Cooperation and Development LCGSP Low Carbon Growth Studies CEIF Clean Energy Investment Program Framework LPG liquefied petroleum gas CG Consultative Group M&E monitoring and evaluation CSP concentrated solar power MDG Millennium Development Goals DFID Department for International MNA Middle East and North Africa Development Region (The World Bank) EAP East Asia and Pacific Region (The MW megawatts World Bank) NEA Nepal Energy Authority EASP Energy Assessment and Strategies NGO nongovernmental organization Program OECD Economic Cooperation and ECA Europe and Central Asia Region Development (The World Bank) PEA Pro-poor Energy Access EC-RING Energy Community Gas Ring REISP Regional Energy Integration EECI Energy Efficient Cities Initiative Strategies Program ESMED Energy Small and Medium REMTI Renewable Energy Market Enterprise Development Strate- Transformation Initiative gies SAR South Asia Region (The World ETFP Energy trust funded Programs Bank) ETWD Energy, Transport and Water SIEPAC Sistema de Interconexion Electrica Department para America Central ETWES Energy, Transportation and Water SME small and medium enterprise Department, ESMAP SWAp sector wide approach GDP gross domestic product TAG Technical Advisory Group GEDS Gender and Energy Development TAP technical assistance program Strategies TEÐAÐ Turkish Electricity Transmission GEF Global Environment Facility Corporation GHG greenhouse gas VPU Vice President Unit GW gigawatts WBG World Bank Group IDA International Development Association 52 ENERGY SECTOR MANAGEMENT ASSISTANCE PROGRAM Photo Credits Cover: A. Trayler-Smith/Panos Pictures Cover ii: C. Carnemark/The World Bank Page 2: H. Tran/The World Bank Page 4: A. Trayler-Smith/Panos Pictures Page 13: D. Sansoni/The World Bank Page 14: D. Sansoni/The World Bank Page 23: stock.xchng Page 24 G. Mansfield/Panos Pictures Page 26: S. Wallace/The World Bank Page 28: stock.xchng Page 29: S. McCourtie/The World Bank Page 31: Cristiano Galbiati Page 32: stock.xchng Page 40: C. Carnemark/The World Bank Cover iii: shutterstock Production Credits Design: Patricia Hord Graphik Design Copyright © December 2009 The International Bank for Reconstruction and Development/THE WORLD BANK GROUP 1818 H Street, NW, Washington, D.C. 20433, USA All rights reserved Manufactured in the United States of America First printing January 2010 The findings, interpretations, and conclusions expressed in this report are entirely those of the author(s) and should not be attributed in any manner to the World Bank, or its affiliated organizations, or to members of its Board of Executive Directors or the countries they represent. The World Bank does not guarantee the accuracy of the data included in this publication and accepts no responsibility whatsoever for any consequence of their use. The boundaries, colors, denominations, other information shown on any map in this volume do not imply on the part of the World Bank Group any judgment on the legal status of any territory or the endorsement or acceptance of such boundaries. The text of this publication may be reproduced in whole or in part and in any form for educational or nonprofit uses, without special permission provided acknowledgement of the source is made. Requests for permission to reproduce portions for resale or commercial purposes should be sent to the ESMAP Manager at the address above. ESMAP encourages dissemination of its work and normally gives permission promptly. The ESMAP Manager would appreciate receiving a copy of the publication that uses this publication for its source sent in care of the address above. All images remain the sole property of their source and may not be used for any purpose without written permission from the source. www.esmap.org ENERGY SECTOR MANAGEMENT ASSISTANCE PROGRAM The World Bank 1818 H Street, NW Washington, DC 20433 USA email: esmap@worldbank.org