Energy Subsidy Reform Facility

The Challenge

Every year billions of dollars are spent on fossil fuel subsidies globally—many times the amount required to, for example, achieve universal access to electricity and clean cooking by 2030.

Often, energy subsidies disproportionately benefit higher income groups while diverting public funds that could otherwise be invested in health, education, and infrastructure. They are responsible for excessive fossil fuel consumption, hamper investments in renewable energy and energy efficiency, and undermine global efforts to reach climate change goals.

ESMAP’s Response

ESMAP’s Energy Subsidy Reform Technical Assistance Facility (ESRF) was established in 2013 to help countries remove fossil fuel subsidies while protecting the poor. Between fiscal years 2013 and 2020 the facility allocated $22 million for technical assistance that supported the implementation of pricing, policy, and regulatory reform in 22 countries.

Support provided by the facility operates around the Energy Subsidy Reform Assessment Framework (ESRAF), which recognizes that achieving and sustaining energy subsidy reform requires a comprehensive approach that considers the political economy context; analyzes the environmental, fiscal, and household impacts of reform; and communicates reform efforts effectively.

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