ENERGY SECTOR MANAGEMENT ASSISTANCE PROGRAM
Mobilizing Climate Finance
for the Energy Transition
Energy Sector Management Assistance Program (ESMAP)
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01
INTRODUCTION
ESMAP has been instrumental in the establishment of five climate finance programs and expanding World Bank investments for energy transition, in partnership with Clean Technology Fund (CTF), Green Climate Fund (GCF), as well as bilateral donors.
The five climate programs that were initiated and developed by ESMAP are:
Sustainable Renewables Risk Mitigation Initiative (SRMI) Facility with the GCF and CTF
CTF Global Energy Storage Program (GESP)
CTF Accelerating Coal Transition (ACT) program
02
ESMAP'S APPROACH
03
04
PARTNERS
The external partners include the Health and Energy Platform of Action (HEPA), High-Level Coalition of Leaders for Clean Cooking, Energy and Health, World Health Organization, United Nations Development Program (UNDP), United Nations Department of Economic and Social Affairs (UNDESA), Clean Cooking Alliance (CCA), Loughborough University/ the Modern Energy Cooking Services (MECS) Program, Energising Development (EnDev), Hivos/Energia, and Global LPG Partnership (GLPGP).
The ECCH Program collaborates on outreach, advocacy, bringing political commitment, knowledge sharing, and research. The Program also coordinates and aligns with partners on country-level engagements and activities.
In addition, in 2018 the ECCH Program conceptualized with Loughborough University from United Kingdom and jointly led a US$40 million United Kingdom Aid research project, Modern Energy Cooking Services (MECS), to identify innovative, clean, and modern alternatives to traditional biomass fuels (e.g., charcoal and wood).
05
As of September 2020, a project pipeline of more than $100 million in IDA financing has already been identified (either approved or in the pipeline) to be co-financed with the Clean Cooking Fund. The structure of a country/regional investment project includes three interlinked areas of interventions that are needed to scale up investment in the clean cooking sector: (i) an enabling environment to fill the awareness, knowledge, policy, and capacity gap; (ii) an access-to-finance facility to support and enable enterprises and businesses to access commercial finance; and (iii) an RBF facility to provide results-based grants for the public goods currently under-delivered due to the affordability gap. Through replication and scaling up, the Clean Cooking Fund will accelerate progress toward universal access to clean cooking. The CCF has a second pillar dedicated to data gathering and knowledge that will provide teams with technical advice, analytical support and expertise built on the lessons from previous projects and operations.
Accelerating progress toward universal access
ACCELERATE
Mothers, pregnant women, and young children are disproportionately affected, as they are typically responsible for household cooking and firewood collection and thus are the main beneficiaries from the initiative. By July 2020, projects implemented in Bangladesh, China, Egypt, Indonesia, Mongolia, Senegal and Uganda have already helped nearly 20 million people gain access to cleaner and more efficient cooking and heating solutions.
Leaving no one behind
impact
The ECCH Program has supported a market-based approach that incentivizes the private sector to deliver clean cooking solutions that households are willing to adopt. Therefore, private enterprises that are involved in the clean-cooking value chain are also the ECCH Program’s beneficiaries. Special efforts are being made to encourage female entrepreneurs; for example, the Bangladesh clean cooking program has created more than 3,000 direct and indirect jobs for women in 2019. In Indonesia, a results-based financing (RBF) pilot provided incentives to ten private-sector suppliers, five of which were women-led businesses.
Changing lives, one household at a time
inclusion
Beneficiaries
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Steering the direction of the
global energy transition
Learn More
Learn More
Learn More
Project:
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Report: Mini Grids for Half a Billion People
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Report: Mini Grids and the Arrival of the Main Grid
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Live Wire Knowledge Brief: “Investing in Mini Grids Now, Integrating with the Main Grid Later: A Menu of Good Policy and Regulatory Option”
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Live Wire Knowledge Brief: “Ensuring That Regulations Evolve as Mini Grids Mature”
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Project Appraisal Document: Nigeria Electrification Project
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KEY WORDS
KEY WORDS
Key Words
Mini Grids, Access to Electricity, SDG 7, Off-Grid Electrification, Rural Electrification, Private Sector
07
MULTIMEDIA
Clean Cooking:
Why it Matters
Changing face of cooking in Nepal
The Experience of Improved Cookstoves in Bangladesh
Cooking helped us survive… modern energy cooking services can make us thrive
The Power of Dung: Biodigesters creating opportunities for farmers in Africa
Map of studies on modern energy cooking systems and related initiatives
Previous
Next
Welder in Kenya
Welder in Kenya powered by mini grid electricity.©
Super-clean cookstove, innovative financing in Lao PDR project promise results for women and climate
Solar hybrid mini grid
Solar hybrid mini grid in Nigeria. © World Bank.
Mini Grids by the Numbers
Source: ESMAP. 2019. Mini Grids for Half a Billion People: Market Outlook and Handbook for Decision Makers. Executive Summary. Energy Sector Management Assistance Program (ESMAP) Technical Report 014/19. Washington, DC: World Bank.
Solutions pour combler le déficit d’acceès à l’électricité: Les mini-réseaux
Source: ESMAP. 2019. Des mini-réseaux pour un demi-milliard de personnes: Perspectives du marché et guide pour les décideurs. Résumé Analytique. Energy Sector Management Assistance Program (ESMAP) Technical Report 014/19. Washington, DC: World Bank.
Nigeria Electrification Project
Social Media Coverage – Links and Images of Social Media Coverage of the Nigeria Electrification Project.
Mini Grids for Half a Billion People
Tweets about the Mini Grids for Half a Billion People Report by World Bank Twitter Account.
Mini Grids for Half a Billion People
Tweets about the Mini Grids for Half a Billion People Report by Former World Bank Chief Executive Kristalina Georgieva.
ESMAP has played the role of a think tank for climate finance by conceptualizing and developing high-impact programs that can leverage MDB financing for climate action. ESMAP provides a comprehensive offer to World Bank teams and their clients through a combination of clean energy advisory services and analytics, project development support, and partnerships with climate finance institutions.
For example, ESMAP’s Global Geothermal Development Plan (GGDP) mobilized $235 million from of the Clean Technology Fund (CTF) to shift Multilateral Development Bank (MDB) support from downstream to upstream investments – from the power plant to the exploratory well. By using concessional financing to overcome the primary obstacle to geothermal expansion, the cost and risk of exploratory drilling, ESMAP has been effective at scaling up geothermal investments across the globe.
This approach has been replicated for energy storage (CTF Global Energy Storage Program), renewable energy risk mitigation (SRMI Facility with GCF and CTF), and coal transition (CTF Accelerating Coal Transition Program), in all of which ESMAP identified the investment need, helped forge global consensus on the approach to addressing risks and costs, developed program proposals for climate finance, and supported countries to develop an investment project pipeline for IBRD/IDA blended with concessional climate finance. There is now further potential to do the same in efficient and clean cooling, offshore wind, net zero emissions buildings, industrial decarbonization, and green hydrogen through ESMAP’s programs in these areas.
CTF MENA Concentrated Solar Power Investment PlaN
geothermal program as part of CTF Dedicated Private Sector Programs (DPSPs)
ESMAP also contributed to development of the Canada Clean Energy and Forest Facility (CCEF) that supports energy transition away from coal as well as clean energy development in Small Island Developing States (SIDS).
ESMAP’s successful operating model to deploy climate finance at scale for the energy transition: geothermal case study
step two
step three
step four
step two
step one
An ESMAP report found that the greatest barrier to scaling up geothermal power was the high risk and cost of exploratory drilling, and inadequate capital and insurance markets to mitigate those risks, thus necessitating public financing; yet, only 7% of MDB funding in the geothermal sector was for this phase of geothermal development.
Identify a need: market imperfections that deserve application of concessional funding to open a market and develop an MDB investment pipeline
step one
ESMAP established the Global Geothermal Development Plan with the aim of refocusing MDB support towards the cost and risk of exploratory drilling. A series of global roundtables were held with industry stakeholders, development partners and World Bank clients to create a consensus on the approach to risk mitigation.
Create the authorizing environment
step two
ESMAP developed a program proposal for the Clean Technology Fund’s Dedicated Private Sector Programs that defined the rationale for, and role of, concessional climate, as well as criteria and priorities for CTF financing. This led to a US$ 235 million allocation for the CTF geothermal program.
Mobilize concessional climate finance to blend with IBRD/IDA
STEP THREE
ESMAP provided technical assistance through World Bank country teams for the development of IBRD/IDA project pipeline, with support for design of public-private risk mitigation schemes, geothermal resource assessments, policy and regulatory reform, and knowledge exchange across countries.
Identify IBRD/IDA operations co-financed with concessional climate finance
STEP FOUR
04
RESULTS
As a share of MDB financing for the geothermal sector, support for upstream geothermal development increased from 7% to 39%. World Bank-financed projects alone are expected to leverage about US$ 1 billion from IBRD/IDA and lead to more than 1 GW of capacity.
The MENA CSP initiative has successfully added 510 MW CSP generation capacity in Morocco, with another 380 MW planned. The geothermal program is expected to unlock 1,166 MW power generation capacity. The energy storage program targets to add 3 GWh energy storage capacity. SRMI is expected to add 3.1 GW of solar generation along with 1.3 GWh of energy storage with current pipeline projects. The following table summarizes the five climate finance programs developed by ESMAP, and their actual or planned results.
To-date, US$ 1.6 billion concessional climate finance has been mobilized for the five programs. Three out of five programs are in implementation status, one is in the process of starting up, and the other one is now in final design phase. Total expected IDA and IBRD mobilization for clean energy investment co-financed by climate finance is more than US$4 billion and a total of US$ 6.2 billion private sector investment is expected to be leveraged for the World Bank projects under the five climate finance programs.
ESMAP Program
MENA
CSP
Global Geothermal Development Plan
Energy Storage Program
SRMI
Energy Transition in Coal Regions
Climate Finance Program
Operational Status
Climate Fund Program Size
IDA/IBRD Mobilization
CTF Investment Plan (IP) for MENA CSP
CTF Dedicated Private Sector Program Phase I and II
CTF GESP
GCF SRMI Facility + CTF
CTF Accelerating Coal Transition (ACT) Investment Program
Approved in December 2009. Morocco CSP plants operating and new plants under development. Status
Approved in March 2015.
Approved in January 2019. Project preparation is underway.
GCF Phase I approved in March 2021. Phase II preparation underway for October 2021 GCF Board approval.
ACT program approved by CTF in March 2021. Program design underway.
CTF US$ 750 m to programmed by multiple MDBs
CTF US$ 235 million programmed by multiple MDBs
Approx. CTF US$ 340 million to be programmed by multiple MDBs, in addition to World Bank CTF funding of US$ 265 million already approved for energy storage projects in India and South Africa.
GCF US$ 280 million for the first phase to be programmed by the World Bank
(additional $255 million CTF financing already mobilized before GCF Facility approval)
To be determined
US$700 million invested in CSP plants in Morocco (US$ 600 million directly under MENA CSP IP and additional US$100 million for replicated CSP+PV project)
US$ 596 million (US $267 million directly under DPSPs and additional $329 million for exploration drilling projects co-financed by CTF and Scaling-up Renewable Energy Program (SREP))
US$ 345 million in IBRD financing mobilized for energy storage projects co-financed with CTF. Additional US$ 562 million expected for World Bank pipeline project to be funded under GESP.
US$ 1.2 bn in IDA and IBRD expected with GCF Facility. CTF funding leveraged US$162 million in IDA with another US$492 million planned.
Estimation not available as of March 2021
.
Results
Private Co-financing Leverage
US$ 126 million leveraged for Noor-Ouarzazate I project and additional US$ 927 million expected for subsequent projects in Morocco.
US$ 446 million expected for exploration drilling projects under GGDP and replication projects funded by CTF and SREP.
US$ 313 million for CTF co-financed World Bank energy storage projects. US$ 417 million expected for pipeline project to be funded by projected GESP .
Expected to leverage US$ 3.3 billion through the GCF Facility.
For CTF projects, US$ 114million private financing was confirmed at the time of WB Board approval and another US$512 million is planned.
Estimation not available as of March 2021
510 MW CSP commissioned and operating. Additional 300-380 MW underway
Expected to unlock 1,166 MW geothermal power generation capacity
Expected to add 1.2 GWh storage capacity under the projects funded by GESP, in addition to 1.8 GWh in previously-approved CTF funding.
2.5 GW of solar generation with 1 GWh of energy storage expected under GCF Facility Phase I. Additional 625 MW of solar generation and 335 MWh of energy storage expected under the CTF co-financed projects
ESMAP has a target of phasing out 5 GW of coal
In addition to developing these five programs under CTF and GCF, ESMAP is managing the energy transition window of the World Bank-Canada Clean Energy and Forest Climate Facility (CCEF), in the amount of US$ 227 million, drawing on its experience in supporting renewable energy, energy efficiency, and coal transition activities through the World Bank.
ESMAP's impact is not confined to the World Bank portfolio. The four CTF sub-fund programs are programmed and implemented by other MDBs as well. Six MDBs (ADB, AfDB, EBRD, IDB, IFC and IBRD) blend CTF funds with their own and mobilize other public and private sector financing which leads to scaling up of investments in energy transition. Besides, ESMAP shares the knowledge of best practices with development partners and other MDBs, informing their project design and operations. The global effort for energy transition led by ESMAP through both fund mobilization and knowledge sharing amplifies the impact and will drive the achievement of the Sustainable Development Goal 7 and Paris Agreement.
