12. International Renewable Energy
International Renewable Energy Projects Supported by the World Bank
The Global Environmental Facility (GEF) is a financial mechanism created in 1991 that provides grant and concessional funds to recipient countries for projects and activities that aim to protect the global environment.^a^ It is jointly implemented by the United Nations Development Program, the United Nations Environment Program, and the World Bank.
In March 1994, some 73 participating governments successfully concluded negotiations to restructure the GEF and replenish its Core Fund with $2 billion over a 3-year period.^b^ A total of 147 projects have been funded at a total of about $870 million, allocated as follows: 46 percent for biodiversity, 14 percent for international waters,^c^ 33 percent for climate change, 5 percent for ozone, and 2 percent for other projects. The following is an example of a GEF project:
Outside the GEF, the World Bank's International Bank for Reconstruction and Development (IBRD) has approved the following projects for fiscal year (FY) 1994:^d^
- Philippines: Development of a geothermal energy field in the Eastern Visayas, Luzon, that will expand power plant capacity from 200 to 640 megawatts-electric and construction of related transmission systems that will interconnect most of the country. Institution-strengthening measures are included. In addition to support from the World Bank, cofinancing is expected from the Export-Import Bank of Japan, the Swedish Agency for International Technical and Economic Cooperation, and the GEF. The total cost of the project is estimated at $1.3 billion.
- China: Construction of the 154-meter-high Xiaolangdi rockfill dam and a power station with an installed capacity of 1,800 megawatts (total cost $2.3 billion).
- Indonesia: Environmentally sustainable (renewable) expansion of electricity generation and transmission capacity, with cofinancing anticipated from Austria and Australia and from export credits (total cost $689 million).
Renewable energy also has begun to play a role in the energy projects funded by the International Financial Corporation (IFC), a member of the World Bank group. For FY 1994, the IFC approved $2.5 billion for new projects in 65 countries as part of $4.29 billion in total financing■of which energy accounted for $271 million¯including syndications and underwriting on the projects, the total worth of which is $15.8 billion.^e^ For FY 1995, the IFC approved a total of 183 projects totaling $2.9 billion.^f^ IFC projects approved for FY 1994 include the following:g
- China: With support provided through its Technical Assistance Trust Funds Program, the IFC conducted a feasibility study to expand an existing joint venture for producing photovoltaic equipment.
- Nepal: Himal Power Ltd. will build and operate a 60-megawatt run-of-the-river hydroelectric project on a build-operate-transfer (BOT) basis on the Khimti Khola River in the Janakpur Zone of the country's central region. The $125.7 million project will receive $28 million in loans, $5 million in syndications, and $3 million in equity financing from the IFC.
- Chile: The IFC will provide $50 million in syndications for additional financing of a $500 million
hydroelectric project of Empresa Eléctrica Pangue S.A. The project received $120 million of financing in fiscal
- Costa Rica: Hidroelectrica Aguas Zarcas S.A. will build, own, and operate an 11.1-megawatt, $15 million hydroelectric generation plant in San Carlos. The project will sell power directly to Instituto Costarricense de Electricidad, Costa Rica's main public electric utility. IFC assistance includes $3.3 million in loans, $6.1 million in syndications, $400,000 in initial currency or interest rate swap, and $700,000 in quasi-equity. In addition, through its Technical Assistance Trust Funds Program, the IFC has secured funding for a feasibility study for three small hydropower projects.
aUnless otherwise noted, the source for information in this section is personal communication between Maria Subiza, GEF Secretariat, and Gabriel Sanchez, Science Applications International Corporation, on September 8, 1995.
bAll funding and cost values are shown in year dollars in which funds were obligated.
cProjects on saltwater or freshwater resources that span more than one country.
d"Renewables Getting More Attention from World Bank, IFC, ESMAP," Solar Letter (September 20, 1994), pp. 240-241.
eInternational Financial Corporation, Annual Report 1994.
fInternational Financial Corporation, Annual Report 1995.
g"Renewables Getting More Attention from World Bank, IFC, ESMAP," Solar Letter (September 20, 1994), pp. 240-241.