Renewable energy investment by the World Bank

World Bank Group lending for renewable energy accelerated in the 1990s and resulted in 17 approved projects with $700 million in Bank loans and $230 million in grants by the Global Environment Facility. The Bank's 1999 energy-sector strategy Fuel for Thought charted new directions for renewable energy investment. The present paper considers the implementation challenges of Fuel for Thought strategies and the opportunities For carrying them out. The paper distinguishes between agendas in the energy and rural-development sectors, and reviews limitations to implementing these agendas. Lessons from projects are just emerging, but suggest five areas of support for renewable energy by the Bank in the future: renewable energy financing, electric power policy frameworks, rural energy enterprises, regulated rural energy concessions, and domestic technology manufacturing. Interviews with the private sector suggest additional forms of support: assist with business plans, finance pre-feasibility studies, reduce commercial risks, support joint ventures, build market volume and stability, and pilot and test innovative business models. The effectiveness of the Bank in following through on its ambitious agenda fundamentally rests on the willingness and commitment of developing countries to pursue these strategies and the degree to which renewable energy applications are seen to serve countries' development priorities. (C) 2001 Elsevier Science Ltd. All rights reserved.