World Bank Not Doing Enough to Resolve Energy Poverty, says new NGO report

October 31, 2017: The global rate of electrification has slowed down in recent years leaving 1.06 billion people still without access.  If progress is not substantially increased, the United Nations’ and World Bank’s Sustainable Energy for All goal to reach universal energy access by 2030 will not be met. Simply put, there are not enough new electricity connections taking place because there is not enough funding for it.

A new report released today by the Bank Information Center (BIC) and the Swedish Society for Nature Conservation (SSNC) argues that the World Bank itself suffers from the same shortfalls and that the World Bank needs to make energy access a true priority by dedicating more money and creating more electricity connections.

Despite the World Bank’s commitment to achieving the universal energy access goal, the new report points out that the World Bank has not adopted any targets for its own contributions to the 2030 goal.  More importantly, the report maintains the World Bank group is not prioritizing enough of its own budget for energy access.

The report notes that the World Bank provided $1.5 billion in 2016 towards “improving energy access” out of a total $11.5 billion or only 13 percent of the Bank’s energy budget.  With regards to a funding target, the World Bank’s GTF suggests overall a fivefold increase in energy access finance is necessary to reach the 2030 goal.

Nezir Sinani of the Bank Information Center argues “If the World Bank were to answer its own call to increase energy access financing by fivefold, the Bank’s contribution would need to go from $1.5 billion to $7.5 billion.

In addition, the report asserts that what the World Bank counts as ‘improving energy access’ is not well defined.  The report points to an example of a World Bank energy access project in Mozambique that provided considerably less funding for extending connections to communities than it provided for increasing access to power for coal-exporting operations.

The World Bank needs to heed the warning of the International Energy Agency’s Africa Energy Outlook (2017), which finds “the number of people without access to energy in sub-Saharan Africa is increasing and part of the problem stems from the fact that finance continues to focus on exporting fossil fuel resources instead of meeting domestic energy needs.”  The IEA report indicates that two out of every three dollars put into the sub-Saharan energy sector since 2000 have been committed to the development of resources for export.

Lastly, the report urges the World Bank to ensure an adequate number of new electricity connections are created annually to meet universal access by 2030.  The World Bank does not provide annual data on new electricity connections resulting from Bank assistance.  According to the World Bank’s Independent Evaluations Group, (World Bank Group Support to Electricity Access, FY2000-2014), over 15 years the Bank supported 13.2 million electricity connections (including grid and off-grid), which is an average of 880,000 per year or less than 1 percent of what is needed annually to reach the 2030 goal.

Anna Östergren of the Swedish Society for Nature Conservation insists “When it comes to electricity for the poor, it is not a lack of funding for the World Bank it is a matter of getting the priorities right.  The World Bank needs to ensure electricity for the poor is put ahead of using scarce public funds to support fossil fuel exports.”

The report advises the World Bank to adopt targets aimed at accelerating progress towards the 2030 goal, including:

  • $5.75 Billion for Access: The World Bank Group should dedicate at least 50 percent of its annual energy sector budget or around $5.75 billion to clearly defined energy access projects and programs.
  • 15 Million Electricity Connections: The World Bank Group should directly contribute to at least 15 million people gaining electricity annually.
  • Access before Exports: Ahead of any World Bank support for fossil fuel exports in a given country, the World Bank must first ensure support for annual increases in electrification rates are taking place at an adequate rate to meet universal access by 2030.

Notes to editors:

  •  Link to report: https://www.naturskyddsforeningen.se/sites/default/files/dokument-media/energy_access_full_report.pdf
  • It is estimated that approximately 156 million people a year need to gain access to electricity to reach universal access by 2030.  This figure is based on 1.06 billion people without access in 2014 divided by 15 years, which equals 70,666,667 people. Plus accounting for population growth, which stands at 85.5 million people per year, bring the total to 156 million people.
  • $5.75 billion represents 50 percent of $11.5 billion or the World Bank Groups FY2016 energy sector budget. If the World Bank dedicated $5.75 billion to energy access, it would represent a little more than 10 percent of the $48 billion the IEA estimates is needed annually to reach universal access by 2030.
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