World Bank sees offgrid energy projects a boon

Investments in offgrid energy generation projects are the quickest way to get electricity to the 1.6 billion people in the world without lights, a World Bank official said on Wednesday.

To that end, the World Bank has invested about $1.4 billion, or nearly three times as much as it had planned, in energy efficiency and renewable energy since 2004 from wind farms in Brazil to geothermal power in the Philippines.

We have been very aggressively moving on renewable energy and energy efficiency, but the least-cost solution is not always affordable because the cost can be high in remote areas, World Bank energy director Jamal Saghir said. On the other hand, sometimes it is the only solution for remote, small villages.

I see a lot of offgrid renewable technologies for clinics, for health services, for lighting for education, and we should see more and more of this, Saghir said in an interview ahead of World Bank-International Monetary Fund meetings this month.

British Finance Minister Gordon Brown in April called for a seed fund of $20 billion for alternative energy.

The World Bank has since prepared a draft of two proposed funds to present its members at Singapore's annual meetings: the Clean Energy Financing Vehicle proposal consisting of low-interest loans and the Clean Energy Support Fund grants.

SUB-SAHARAN AFRICA'S POWER CAPACITY EQUAL TO POLAND'S

Total power-generating capacity in Sub-Saharan Africa, excluding South Africa, is about 30 gigawatts or equal to Poland's power output, making the region a prime target for small-scale hydro dams to other renewables, Saghir said.

You can wait for a transmission line, but in some places it's so expensive it takes time, he said. Don't wait for the grid to come to your village, it could take 20 years.

While Africa adds about 1 gigawatt of generating capacity each year, China is adding that much every week, Saghir said.

But China expanded electricity access to more than 90 percent of its population from 50 percent in 30 years because its provinces set up offgrid energy distribution networks while they waited for transmission lines to reach them, he added.

Hydro projects are particularly appealing in Sub-Saharan Africa, which presently only uses about 20 percent of its potential and could add to farmland irrigation also, he said.

Kenya has potential to use geothermal generation, while Cape Verde, islands off West Africa's coast, could add wind farms as their benefits improve in the face of high fossil fuel costs.

The cost of alternative technologies has been going down, Saghir said.

In less developed countries higher oil prices hits more than in developed countries so you need to provide countries that are stuck with an energy bill with a solution that is adapted to what they can do, he added.