The contract for the advanced metering infrastructure (AMI) initiative with a value of Rs416.84 crore ($50.2 million) has been awarded to HPL Electric & Power.

The goal of the project, which is supported by funding from the World Bank, is to reduce losses and improve the revenue collection for the utility.

The proposal is that the smart meters will be deployed to high-value consumers in selected urban geographies, including Asansol and Kharagpur among others, by the end of 2026.

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The meters also are expected to improve peak load management and help in better integration of distributed energy resources such as rooftop solar in the grid.

They also should support demand side management by providing consumers with access to their consumption data and hence encourage them to reduce their electricity consumption.

The project marks HPL Electric & Power’s further inroads and broader role in India’s meter market – of which the company claims a 20% market share – with its first as the ‘advanced metering infrastructure service provider’ (AMISP) with responsibility for delivering other smart metering infrastructure and services, alongside its traditional role as supplier to the AMISPs.

“This achievement not only highlights our readiness for change, but also emphasises our preparedness to seize the opportunities in India’s smart metering evolution,” said the company’s joint MD and Chief Financial Officer, Gautam Seth, in an investor call.

As a World Bank-supported project, it is supplementary to but broadly following the guidelines of the national rollout under the Revamped Distribution Sector Scheme (RDSS).

Smart grid development

The smart meter rollout forms part of the smart grid component of the distribution grid modernisation.

Other elements include technology and capacity upgrades of the ICT systems and the deployment of distribution automation technologies and integration of communicable control devices with SCADA.

More broadly other aspects include the strengthening and augmentation of the distribution network in select districts and towns, with retrofits, new distribution and undergrounding of lines for storm protection, and the customary technical assistance for institutional development and capacity building.

The whole distribution grid modernisation is due for completion at the end of November 2026.

It will also support renewable energy trade “essential to Tunisia’s sustainable development and climate change strategy.”

The Bank said the ELMED project strengthens its longstanding partnership with the Tunisian government in the energy sector.

The project will position the country as a regional hub for renewable energy by connecting Tunisia’s power grid to Italy through a 600MW undersea cable.

“By enabling trade in clean and competitive energy, the project boosts energy security, integrates renewable energy sources, and reduces carbon emissions while making the power sector more financially viable and attracting investments in Tunisia.”

Project to diversify Tunisia’s energy mix

Alexandre Arrobbio, the World Bank country manager for Tunisia, said ELMED is the first World Bank project under the recently announced 2023-27 Country Partnership Framework (CPF). 

“Support for the Tunisian government’s 2035 energy strategy, which aims to rapidly increase renewable energy to 35% of total energy consumption, is one of the Bank’s main priorities within the new CPF’s implementation.”

The World Bank Group’s financing will cover part of the overall investments for building a main converter station and associated sub-stations on the Tunisian side, as well as support for implementation of the interconnector. 

Technical assistance by the World Bank Group will include helping to establish a renewable energy centre of excellence to position Tunisia as a training hub for renewable energy projects in North Africa.

The ELMED project is also supported by the government of Italy, the European Union, the European Bank for Reconstruction and Development, the European Investment Bank and the German Development Bank KfW.

Additional funding includes $25 million of concessional financing from the Green Climate Fund mobilised through the Sustainable Renewables Risk Mitigation Initiative.

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Tunisia’s energy grid has an over-reliance on imported fuel sources

In its project appraisal document, the World Bank said Tunisia’s energy sector is characterised by an over-reliance on imported hydrocarbons, high demand growth and waning national resources. 

“The country’s recovery in the post-revolution transition drove a strong growth in energy demand. 

“Between 2010 and 2015, the country’s energy demand grew by an average rate of 2.2% per year, with demand for gas quadrupling since 1990. 

“Electricity consumption also increased at a high pace growing on average by 3.6% annually, with peak demand increasing by 3.9%.” 

The country’s energy mix is based on natural gas (55%) and petroleum (44 %) with renewables accounting for only 1% of primary energy, the Banks said. 

“With its high dependence on hydrocarbons, the country is vulnerable to disruptions in the international oil and gas markets and to price volatility and to the continuity of its current energy supply options. 

“53% of national gas consumption is sourced from Algeria and the government expects a steep decline in its national production of hydrocarbons, from 5.35 Mtep in 2016 to 1.5 Mtep in 2030.”

The World Bank said the structural trend of increasing reliance on hydrocarbon imports and depleting local resources has considerably eroded Tunisia’s energy independence.

“While in 2010 the country relied only on 7% of imports to meet its energy demand, in 2014 imports satisfied more than 40% of national energy needs. 

Originally published by Yunus Kemp on ESI-Africa.

Agora Policy said that the “centrality of adequate and reliable electricity supply to individual welfare, economic growth and overall national development cannot be over-emphasised.” 

“This message is not lost on Nigeria. However, various initiatives and reforms aimed at creating an optimal power sector for the country have fallen short.” 

The organisation said there is a need for the government to stop thinking of installed generation capacity and start to think in terms of the amount of electricity delivered. 

It should also consider an increase in megawatt-hours delivered to electricity customers. This could be achieved “if there is a seamless conversion and flow of energy from the natural gas fields to the generation stations…”

“This is an important paradigm shift with positive impact for government, as having such policy mindset changes the prioritisation and allocation of public and private resources to projects, interventions and initiatives across the electricity value chain that will increase the energy output, availability, reliability and quality of electricity delivered to end-users.” 

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Citing data from the World Bank, the think-tank said Nigeria has the largest energy access deficit in the world – 85 million Nigerians, representing 43% of the country’s population, don’t have access to grid electricity. 

“In comparison, 85% of Ghana’s population have access to electricity, while 70% of Senegal’s population have electricity access.” 

The World Bank estimates that the lack of reliable power costs the Nigerian economy over $26.2 billion which is equivalent to about 2% of Nigeria’s GDP.

“This is not to say that Nigeria has not made some progress in the power sector since 1999. For instance, in 1999, Nigeria had nine power generating stations – three hydro and six thermal stations – with a total installed on-grid generation capacity of 5,906MW, but with available generation below 1,500MW.

Nigeria’s energy mix still dominated by fossil fuels 

“Today, Nigeria has up to 26 on-grid generation stations with a total installed capacity above 13,000MW. However, available generation capacity hovers around 4,000MW, with average daily energy output of about 100,000MWh.” 

Agora Policy said the little progress that has been made in the power sector since 1999 is “neither at par with our population growth nor adequate for the energy needs necessary to achieve our economic potential.”

“For reference purposes, Nigeria’s energy consumption per capita at 140kWh is relatively low and is three times lower than the average for Sub-Saharan Africa.”

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In terms of Nigeria’s energy mix, the report said it consists of fossil fuel and renewable energy sources, mainly hydropower generation and increasingly generation from solar energy. 

“However, our energy mix is still dominated by fossil fuel – natural gas and diesel/petrol (largely for self-generation). This is understandable as Nigeria has Africa’s largest crude oil and natural gas resources. 

“However, this presents a problem for Nigeria as the world moves to cut fossil fuel consumption in order to achieve carbon neutrality (net-zero CO2 emission).”

Renewable energy sector needs to be harnessed and fed into the national grid

At the United Nations Climate Change Conference event in Glasgow (COP 26), Nigeria committed to carbon neutrality by 2060, and to this effect has unveiled its Energy Transition Plan (ETP). 

“It is reassuring that the World Bank in a recent publication recognises that natural gas can be a transition clean fuel for developing countries like Nigeria with vast natural gas resources and existing natural gas generation plants.

“Consequently, the in-coming administration must continue the implementation of the ETP to achieve a faster transition to carbon neutrality by 2060.” 

Agora Policy said there needs to be targeted new investments in additional power generation.

“At the moment, there is no solar energy generation into the national grid – and for obvious reasons ranging from grid connection, grid instability, existing stranded generation and payment assurances for the power to be produced.”

See the full policy memo here

Originally published by Yunus Kemp on ESI-Africa.

The past week has been a key period for investment decisions, pleas and pledges within the financial community. Tuesday saw COP27’s finance day take the global stage with commitments and calls to action being announced across the board.

At the same time, the European Investment Bank (EIB) released its 7th annual investment survey, breaking down how firms have been faring in the energy space in the midst of the continuing effects of the war in Ukraine.

EIB Investment Survey (EIBIS)

On Tuesday, coinciding with COP27s Finance day, the EIB released the seventh edition of its annual investment survey, which provides unique firm-level information collected from April to July 2022.

The survey looks at investment decisions and investment finance across the EU and the US, covering investment activities in climate action and digitalisation, and investigating the impact of the war in Ukraine and COVID-19.

The EIB Group, EU institutions and EU Member States use the survey as a tool to identify needs and understand constraints holding investment back.

According to the EIB, EU firms continue to lead the fight against climate change compared to the US and across the EU. In the survey, 88% of firms say they have taken action to address Greenhouse Gas (GHG) emissions with more than half of EU firms having already invested in climate action.

However, the war in Ukraine and subsequent shocks are testing firms’ resilience. Firms’ perceptions of investment conditions have deteriorated starkly, driven by the energy crisis, uncertainty and decelerating global growth.

Economic climate expectations have turned negative once again (declining from +27% to ‑53%). The perception of business prospects in the sector also reversed its trend (declining from +34% to +3%), as did the outlook for both the political and regulatory climate (-40%) and the availability of external finance (-8%).

And in the face of this, EU firms are taking action. Firms have made progress in climate action investment, including both mitigation and adaptation-related activities. Across the EU, 53% have already invested in tackling the impact of weather events and dealing with the process of reducing carbon emissions.

More than half of EU firms plan to invest in climate action over the next three years; about 57% are making investments in energy efficiency, 64% in waste minimisation and recycling and 32% in new, less polluting business areas and technologies as a way to reduce greenhouse gas emissions.

EU firms have also largely closed the gap with the United States in terms of the use of advanced digital technologies, and can now reap the benefits.

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SCALE

As the EIB released its survey, COP27’s finance day was well underway.

The World Bank Group president David R. Malpass introduced SCALE (Scaling Climate Action by Lowering Emissions), a partnership to drive climate action through emission reduction programmes.

According to the World Bank, the programme – a global, multi-donor fund – will use results-based climate finance as a tool to support development goals and generate high-quality emission reductions.

In announcing the funding initiative, Malpass elaborated: “We haven’t had this [type of] fund available to the world and that’s what we’re presenting today. The SCALE trust fund within the World Bank will absorb [global] resources and apply them to projects that reduce Greenhouse Gas (GHG) emissions [and] regional efforts that bring reductions in emissions.

“It will pool funding from the global community, provide grant payments on a results-basis to client countries for lowering greenhouse gas emissions and expand funding sources for global public goods. This is the missing piece for the world community.”

Malpass added how the funding pool will allow recipient countries and stakeholders to “build a track record” of their GHG-related projects that will unlock “private sector financing for international carbon markets.

Drumming up climate investment

On the same day as the SCALE announcement, a climate financing report was released by the Independent High-Level Expert Group on Climate Finance, aiming to provide a framework for climate action financing.

Finance for climate action: scaling up investment for climate and development aims to cover the overall needs for a comprehensive approach to climate financing, as embodied in the Paris Agreement and by the UNFCCC.

The paper follows the goals of the Paris Agreement and the Glasgow Pact, analyzing the necessary investments needed, the different forms of finance and the key actions that can be taken through systems of international collaboration.

According to the report, a big investment push to enable Emerging Market and Developing Countries (EMDCs) to meet their climate and development goals will require external financing of $1 trillion per year by 2030.

The urgency of action means this financing effort must be frontloaded with a roadmap for delivery and implementation starting now. International action can move forward via four key pillars: strategy for investment; rapid scale up of Multilateral Development Banks (MDBs) and Development Finance Institutes (DFIs); new partnerships between private sector, countries and International Financial Institutes (IFIs); and concessional and innovative forms of finance.

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ETAF partnerships to mobilise $1bn

Wednesday saw an announcement come out of IRENA that three new partners officially joined their Energy Transition Accelerator Financing Platform (ETAF), a global climate finance platform aimed at mobilising capital to scale up renewable project funding in developing countries by 2030.

Cooperation agreements with the Asian Infrastructure Investment Bank (AIIB), Masdar and Swiss Re were signed on-site at the Conference.

The partnership will see:

• AIIB intend to deploy $300 million
• Masdar intend to contribute a potential investment of up to $200 million
• Swiss Re help de-risk these critical investments, with insurance solutions and risk insights

Joining the founding partner and prime investor Abu Dhabi Fund for Development (ADFD) who already anchored an investment of $400 million, the announcement is seeing ETAF close in on securing a minimum of $1 billion in total funding to start Calls for Projects as of the announcement.

Additionally, the Inter-American Development Bank (IDB) announced its interest in becoming a partner. According to the IDB, they will endeavor to co-finance up to $100 million of ETAF projects in renewable energy and decarbonisation technologies in Latin America and the Caribbean (LAC) region.

Launched by IRENA with strategic support from the UAE at COP26 in Glasgow, ETAF is an open-ended platform that will source projects on an ongoing basis, aligned with the implementation of the Paris Agreement and SDGs.

It will help finance feasible projects and mitigate investment risks in developing countries through new financing solutions, matchmaking of project partners, technical assistance and project facilitation.

Join Enlit Europe in Frankfurt and be part of the conversation about the energy transition in Europe and beyond.

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Make sure to follow Smart Energy Finance Weekly, our weekly column on the latest finance and investment announcements being made from across the energy industry.

Cheers,
Yusuf Latief
Content Producer, Smart Energy International

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They will pour into REPowerEU €30 billion ($29.9 billion) in loans and equity, which is expected to mobilise up to €115 billion ($114.6 billion) by 2027 in renewables, energy efficiency, grids and storage, EV charging infrastructure, and breakthrough technologies, such as low-carbon hydrogen.

Also on the radar are findings from the World Bank’s latest Commodity Markets Outlook, which forecasts that energy prices will drop by 11% in 2023, and an interesting strategic investment from Volvo Cars into an APAC virtual power plant startup.

EIB Group supercharges REPowerEu with €30bn in loans and equity financing

The European Investment Bank Group (EIB Group) will support the REPowerEU Plan with an additional €30 billion ($29.9 billion) in loans and equity financing over the next five years.

The package of new, targeted financing approved by the EIB’s board of directors is expected to mobilise up to €115 billion ($114.6 billion) of new investment by 2027.

The additional funds from the EIB Group (European Investment Bank, European Investment Fund) will be directed to renewables, energy efficiency, grids and storage, electric-vehicle (EV) charging infrastructure, and breakthrough technologies, such as low-carbon hydrogen.

In addition to raising expected energy-lending volumes for the next five years to unprecedented levels, the EIB’s board of directors also adopted a series of technical and policy measures aimed at accelerating the pace and maximising the impact of the new investment.

Key elements include higher upfront disbursements, longer tenors that will make EIB loans to the energy sector more attractive and a co-financing ceiling of up to 75% for projects contributing to the REPowerEU objectives, up from the typical 50% EIB limit per project.

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The board of directors has also introduced a temporary and exceptional extension of the exemptions to the EIB Group’s Paris Alignment for Counterparties (PATH) framework. The existing exemption under the EIB Group’s PATH framework for projects with high innovative content will be extended to include all renewable energy projects and EV charging infrastructure inside the EU.

This will allow EIB Group financing of a greater number of clean energy projects with a wider range of clients and utility companies contributing to the EU`s climate objectives and energy security. The extension will run until 2027, subject to a Climate Bank Roadmap review foreseen in 2025. Over this period the EIB will continue to engage with all its clients to support them in developing decarbonisation plans.

Put together, the package of additional financing, policy and technical flexibility, as well as dedicated support for high-risk investments, like pilot facilities, is hoped to help supercharge Europe’s transition to a more sustainable and secure future.

World Bank: Energy prices to drop by 11% in 2023

According to the World Bank’s latest Commodity Markets Outlook global energy prices are forecasted to drop by 11% in 2023.

This will result from a sharp global growth slowdown and concerns about an impending global recession. Commodity prices are expected to ease in the next two years, but they will remain considerably above their average over the past five.

Specifically, energy prices are expected to fall by 11% in 2023 and 12% in 2024. The outlook, however, is subject to numerous risks both in the short- and medium-term.

Energy markets face an array of supply concerns as worries about the availability of energy during the upcoming winter intensify in Europe.

Prices will likely remain volatile as the energy transition unfolds and demand moves from fossil fuels to renewables, which will benefit some metal producers.

Concerns about energy shortages, particularly in Europe, will require careful policy coordination among key importers to ensure the burden of high energy prices, or future energy disruptions, is equitably shared.

Recent government policy announcements to increase renewable installation and reduce overall energy consumption may feed through into lower energy prices, but this will take time, and a worsening supply outlook in the winter of 2023 is possible.

Furthermore, the current high inflation and high interest rate environment will make financing investment in new energy production (both fossil fuels and renewables) more challenging, even if recent declines in metal prices provide some reduction in project costs.

Volvo’s APAC investment into a VPP start-up

Volvo Cars has made a strategic investment in Shanghai Dianxiang Info Tech Company (PowerShare), an AI (Artificial Intelligence) and cloud-based energy management start-up, through the Volvo Cars Tech Fund, its venture capital arm.

PowerShare is a digital energy and intelligent power management company with operations in several Asian countries. They provide cloud-based energy management solutions, with over 100 AI algorithms in the field of battery performance, Virtual Power Plant (VPP) and smart charging technology.

This is the fund’s first investment in an APAC-based company since it was established in 2018 to invest in high-potential technology start-ups around the globe.

One of PowerShare’s core offerings is its VPP cloud solution, which can help foster more sustainable energy solutions.

Based on AI, IoT (Internet of Things) and big data, VPP’s can carry out electricity trading to match energy production with energy demand from the grid. The system can overcome challenges caused by extreme weather and other external factors that disrupt green energy power supplies.

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The Volvo Cars Tech Fund focuses its investments on technology trends that are transforming the auto industry, such as AI, electrification, autonomous driving, sustainability and digital commerce.

PowerShare has developed a range of advanced technologies that can be useful to Volvo Cars’ innovation and production lifecycles and Volvo Cars plan to explore VPP use cases with PowerShare to utilise the bi-directional charging function of its next-generation vehicles.

The announcement from Volvo came nearly two weeks after the launch of their first bidirectional EV, signalling their entry into advanced grid tech through their range of EVs and investment strategies.

Volvo has stated their belief that PowerShare’s VPP and battery technologies will help pave the way for one of the industry’s most ambitious electrification plans.

But what do you think?

For this and more news on the finance and investment scene of our energy transition make sure to follow our weekly column, Smart Energy Finance.

Cheers,
Yusuf Latief
Content Producer, Smart Energy International

Follow me on LinkedIn

The government of West Bengal will use the loan to fund the implementation of the West Bengal Electricity Distribution and Grid Modernisation Project.

The project aims to help utilities in the state address energy sector challenges and prepare for changing business models and consumer energy demands.

Challenges being faced by utilities include:

Increases in energy demand: Electricity demand has risen by 4.5% in the past five years with utilities such as the West Bengal State Electricity Distribution Company (WBSEDCL) doubling the number of consumers in the past six years to reach 20 million consumers. The increase in demand is also due to a rapid increase in economic and industrial activities.

Financial instability: The COVID-19 pandemic has negatively affected the Indian economy resulting in commercial and industrial consumers struggling to pay their bills. WBSEDCL’s revenue generation from industrial and commercial customers, the main sources of income for the utility, has plummeted resulting in a financial crisis for the energy distributor.

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Efforts by WBSEDCL to improve energy access across the state have led to more consumers from rural areas being connected to the grid. However, these consumers are struggling to pay their bills, resulting in an increase in the utility’s revenue deficit.

Junaid Ahmad, Country Director, India, on behalf of the World Bank said: “The financial stability of electricity companies is critical to providing efficient and reliable electricity to people. The pandemic has adversely affected the financial health of electricity distribution companies in India and in turn the financial health of the electricity generation companies.

“The West Bengal Electricity Distribution and Grid Modernisation Project will strengthen distribution networks, invest in smart-grid technologies, and ensure financial sustainability of WBSEDCL. This could serve as an example for other public distribution utilities across India.”

The grid modernisation project is also expected to help improve regional energy trading between India and neighboring countries since West Bengal is strategically located along the corridor to the Northeast and to Southeast Asia. Today, the state’s grid is enabling energy trading between India and Bangladesh.

By deploying smart grid solutions, WBSEDCL is expected to improve the efficiency and reliability of the grid and resistance to harsh weather events. The deal follows the state’s grid being heavily damaged by cyclone Amphan in May 2020.

In addition, distribution losses will be minimised and the integration of distributed energy resources increased for decarbonisation and stability purposes.

The Department of Economic Affairs, Ministry of Finance stated that, “Providing efficient and reliable electricity supply is a priority for the Government of India. The project will help improve the electricity distribution network in the state of West Bengal to ensure uninterrupted, affordable and quality supply of electricity to all homes, industries and commercial establishments in the state.”

The modernisation initiative is also expected to help India accelerate its electrification programmes, such as Deendayal Upadhyaya Gram Jyoti Yojana and Sahaj Bijli Har Ghar Yojana, as well as the implementation of the Government of India’s 24×7 Power For All Programme.

The programme aims to upgrade and expand the country’s distribution infrastructure for grid efficiency and reliability for some 40 million people in Dhaka and Mymensingh.

Over 31,000km of lines, 157 substations, a Supervisory Control and Data Acquisition System and Advanced Metering Infrastructure will be installed to ensure grid resilience against climate change and cyber threats and to ensure that modern services are provided to consumers.

The project is expected to help improve access to modern and reliable electricity for consumers served by 25 rural electric cooperatives in the Bangladesh Rural Electrification Board as well as enable the integration of renewable energy for decarbonisation purposes.

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Bipul Singh, World Bank senior energy specialist and task team leader said: “Since 2009, Bangladesh Rural Electrification Board (BREB) has implemented one of the largest rural electrification programmes in the World, delivering access to more than 90 million people.

“With the access agenda nearing completion, this programme will strengthen BREB’s ability to deliver reliable electricity supply and support the energy transition in Bangladesh.”

The upgrades will enable energy storage systems to be integrated with the grid, a move that will help allow the introduction of energy flexibility for grid reliability, according to the statement.

Dandan Chen, acting country director of the World Bank in Bangladesh added: “In the last decade, Bangladesh achieved a more than fourfold increase in electricity generation capacity and delivered electricity connections to more than 99 percent of its population. But the electricity distribution network could not keep pace with the remarkable increase in electricity generation.

“This programme will help modernise and ensure climate resilience of the distribution network, which is the backbone of a secure and reliable power system.”

The WePower India Partnership Forum was launched during an event organised by the two banks in partnership with India Smart Grid Forum.

The launch comes at a time when utilities in India are accelerating renewable energy deployment, grid modernisation and digitalisation, resulting in an increase in demand for skilled human resources. India has set a target to achieve 450GW of renewable energy installed capacity by 2030 and prime minister Narendra Modi pledged that India will generate 50% of its total electricity using renewables by 2030 and achieve net-zero emissions by 2070, during the COP26 summit held in Glasgow.

However, the number of women filling green jobs within the Indian energy market is very low, according to a statement.

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If India is to ensure its energy transition is just and inclusive, ensuring increased participation of women in the power sector is vital, one would argue.

In its latest report, Renewable Energy and Jobs Annual review 2021, the International Renewable Energy Agency (IRENA) calls for global governments to ensure more women are skilled with Science Technology, Engineering, and Math (STEM) education for them to fill more positions within the power sector as the energy transition is amplified.

The report states that roles occupied by women were mainly affected by the pandemic and with more jobs anticipated to be created by the energy transition than lost, it is vital for governments and energy stakeholders to prepare the women workforce for these jobs. IRENA predicts that some 25 million new green jobs will be created by 2030, surpassing the 7 million lost due to the pandemic.

Vishal Kapoor, Joint Secretary – Distribution, Ministry of Power, Govt of India, said: “Women will be needed to fill the increasing talent demand in the power sector, and their participation in technical and professional roles can contribute greatly to the sector’s effectiveness.”

Kapoor, added: “Indian power sector has made progress in terms of diversifying the workplace and increasing women’s participation, including in leadership positions. In a survey of 28 Indian DISCOMs it was found that 4/5th of them have at least one female at top positions. This represents the growth of women’s participation in the power sector.”

Energy stakeholders present during the launch of WePower India highlighted the need for increased collaboration between organisations and the private and public sectors in funding mechanisms that can help result in more women entering the power sector.

The initiative will bring together energy regulators and stakeholders in developing mechanisms that can be used to simplify the electrification of electricity generation, buildings heating and cooling, transport and industrial systems.

The aim is to ensure the use of secure, reliable, climate-friendly and affordable energy resources in the fight against climate change and to deliver a cost-effective energy transition.

Some 20 energy regulators across the globe have joined the Regulatory Energy Transition Accelerator and will work together to address pressing energy market challenges including the lack of adequate funding, rising energy demand and rapid increases in renewable energy. The initiative will support measures to address various challenges to drive the use of flexible energy, interconnecting grid systems and electrifying transport systems, according to a statement.

The initiative will also use collective knowledge and experience to ensure the energy transition across the globe equitable.

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Jonathan Brearley, chief executive of Ofgem, said: “Climate change is a global problem – and we need global solutions to the challenges we share as we build clean, secure energy systems to deliver our Paris climate commitments.

The initiative will leverage funding provided for the UK government to support its activities for the first year.

“The Accelerator will help regulators to learn from each other’s experiences and develop new approaches for the systems of the future. We are keen to see as many regulators as possible join the accelerator, particularly those from developing countries.

“We must think entirely differently to power the global economy without fossil fuels. It’s clear that the future for all of us lies in flexible energy systems powered by clean electricity, paid for fairly. In the long term this will better shield consumers from commodity price shocks as well as protecting the planet we all share.”  

Francesco La Camera, Director-General of IRENA, added: “IRENA’s World Energy Transitions Outlook clearly sees electricity becoming the main energy carrier of the future, with renewables providing 90 per cent of total global power by 2050. This initiative will help overcome the challenges in power sector decarbonisation and electrification of end-use and will support energy regulators across the world in the management of an accelerated energy transition.”

Fatih Birol, Executive Director of the IEA, reiterated: “Regulators around the world have a unique role in the development of the clean, affordable and secure energy systems of the future. Through collaboration and sharing best practices, this initiative can help step up the pace of change, which will be crucial to achieving global climate goals.”

The report released by the World Bank has found that Serbia has undertaken critical steps in cybersecurity and performs well across many areas of cybersecurity capacity.

The report has found that:

• Serbia has a substantial commitment to addressing the challenges of cybersecurity and has a strong cybersecurity policy and legal foundation, which has enabled the country to create protection mechanisms – including the National CERT – that can ensure the resiliency of critical infrastructure across the country.

• Serbia has substantial capacity to develop cybersecurity expertise – both through professional development and academic channels facilitated by a growing technology industry in the country.

• Strong industry demand for cybersecurity skills creates challenges for government retention of cybersecurity professionals – an area the study suggests should be addressed.

• Areas cited for improvement include strengthening public awareness of the risks to privacy posed by the Internet, as well as further adoption of cybersecurity standards and good practices in both small and large enterprises.

Stephen Ndegwa, World Bank’s country manager for Serbia, said: “We congratulate Serbia on successfully completing the CMM assessment, which will provide a benchmark for measuring the future advancement of cybersecurity and serve as a building block for a national consensus on a cybersecurity status-quo and future actions. We would like to commend Serbia for publishing the report, which will be a useful reference for both national and international stakeholders to understand the state of cybersecurity in Serbia.”

The assessment used the Cybersecurity Capacity Maturity Model for Nations (CMM) methodology developed by the Global Cyber Security Capacity Centre (GCSCC) of the University of Oxford.

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The CMM aims to enable governments to benchmark cybersecurity capacity across five dimensions:

1. Policy and strategy;
2. Cyberculture and society;
3. Education, training and skills;
4. Legal and regulatory frameworks; and
5. Standards, organisations and technologies.

The CMM has to date been deployed in 80 countries.

“This was the tenth country in Europe that did a CMM review and it provided us with very interesting insights into our research on the maturity of cybersecurity capacity across the world. The gaps that the researchers have identified provide evidence for important needs which are not only specific to Serbia but which could also be observed in other countries around the globe, but in particular in the Western Balkan region,” adds Professor Michael Goldsmith, co-director of the GCSCC.

Learn more about the report.

The $15 million in IFC funding is expected to take the island nation closer to its goal of sourcing 100% of its energy needs from renewable sources.

The project will reduce the country’s dependence on imported fossil fuels and at the same time cut harmful greenhouse emissions, boosting the nation’s resilience in the face of the impacts of climate change. It has the potential to transition as many as 14,000 households to solar energy.

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To date, about 45% of the country’s power needs are supplied through fossil fuels, 50% through hydropower and the remaining 5% from biomass and wind.

At least 90% of Fijians are connected to EFL’s grid, which needs a total generation capacity of 267MW daily.

Energy Fiji Limited and IFC will select a private-sector partner to deliver 15MW of solar power to the national grid. IFC will also assist the utility in exploring potential renewable energy sources in Vanua Levu.

EFL chief executive officer Hasmukh Patel, said: “EFL needs to meet Fiji’s demand for electricity, which is growing with the increase in connectivity to rural customers via grid extension and the ever-increasing demand from industries and the business community.

“Ideally, we would like to be self-sufficient in terms of energy sources and reduce our dependency on imported fuel. Fortunately, Fiji has a lot of renewable energy sources and we are working with our development partners to explore these.”

IFC resident representative in Fiji, Kiribati, Samoa, Tonga and Tuvalu, Deva De Silva, adds: “The private sector will be crucial in the Fijian Government’s target of sourcing 100 percent of its power generation from renewable energy by 2030.

“Through this partnership with EFL, we hope to demonstrate how the private sector can be attracted to invest in renewable energy through a transparent process and well-structured project, setting an example for other Pacific nations.”

The development of more renewable energy sources paves the way for Fiji to significantly lower its fuel import bill, which was about $500 million in 2019 and accounted for 20% of the country’s total imports.

The International Development Association (IDA) of the World Bank will provide up to $4 million of the additional financing as a grant and $2.9 million will be provided by the Energy Sector Management Assistance Programme Trust Fund.

Since the 2018 launch, which utilised a $19.62 million grant from the Strategic Climate Fund, the project aims to scale up the adoption of renewable energy in health infrastructure, households, businesses, and community services.

The Haiti government will use the additional funding to expand the provision of clean and reliable electricity for at least four priority healthcare facilities involved in the response to the pandemic.

Some solar PV and battery energy storage systems will be installed for health infrastructure and water facilities.

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The funding will also be used to complete the rehabilitation of the Drouet mini hydroelectric plant in the Artibonite Department, which will provide clean and reliable electricity to nearby communities and the regional grid.

The country’s hospitals rely heavily on backup diesel generators, as grid electricity is often available only for a few hours a day. Lack of reliable electricity is constraining the efficiency of laboratories to test for COVID-19, limiting the distribution and safe storage of medicines (and eventually vaccines), and can prohibit the use of life-saving equipment, such as oxygen concentrators.

Anabela Abreu, World Bank country director for Haiti, said:  “Access to reliable energy is essential to reinforce the ability of Haiti’s healthcare centers to power essential equipment needed to manage the COVID-19 pandemic as well as other priority health services. This timely intervention complements our existing support to the health sector, while strengthening the country’s resilience to future shocks.

“Clean and locally-available energy access will also foster inclusive growth in Haiti, facilitating new investments and innovations, which are fundamental for economic recovery from the pandemic.”

The Polish National Fund for Environmental Protection and Water Management (NFEP&WM), the World Bank and the European Commission have launched an initiative to facilitate a knowledge exchange between coal regions in Poland and Ukraine.

The aim is to help both countries prepare for an energy transformation in the coming years, as well as assist countries in developing and implementing inclusive strategies for transitioning to low-carbon energy systems.

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The NFEP&WM will support study visits, conferences, and meetings organised by the Institute for Ecology of Industrial Areas and the Central Mining Institute.

The World Bank’s Energy Sector Management Assistance Programme (ESMAP) and Extractives Global Programmatic Support (EGPS) Multi-Donor Trust Fund and the European Commission will support Ukraine’s participation in the knowledge exchange.

Representatives from Ukraine’s public and private sectors will visit numerous Polish cities, including several in Silesia – Poland’s main coal region.

They will meet with counterparts to share their experiences addressing the transformation challenges specific to the coal mining regions, including regulatory, organisational, economic, social, spatial, and environmental issues.

Although Poland is still the largest hard coal producer in the European Union, the country has made impressive achievements in decoupling energy growth from economic growth. The lessons learned throughout this process will assist the Government of Ukraine, as it works on a transition plan for its coal mining regions.

The project falls within the framework of the Platform Initiative for Coal Regions in the Western Balkans and Ukraine, created in September 2019.

By providing advice, developing scientific ma,terials, and promoting cooperation between regions, the Platform aims to facilitate the process of the energy transition as well as the economic transformation of coal regions towards a low-carbon economy.

Artur Lorkowski, deputy president at the National Fund for Environmental Protection and Water Management, said: “For 31 years, the National Fund for Environmental Protection and Water Management has been a big promoter and sponsor of many successful environmental projects in Poland, including those aimed at improving economic prospects in regions dominated by coal mining.

“This enables us to share extensive experience gained in the ‘just transition’ process in Poland. Many cities and regions can boast about considerable achievements in this respect. We are glad that the experience of Polish cities and regions may be inspiring for our partners in Ukraine.”

Marcus Heinz, resident representative of the World Bank for Poland and the Baltic States, adds:  “Our new cooperation with the National Fund for Environmental Protection and Water Management in the area of ‘just transition’ is a reflection of two basic objectives of the World Bank’s current program in Poland – supporting green growth and generating knowledge for the benefit of other countries.

“Our current flood protection projects on the Odra and Vistula rivers, or those carried out in cooperation with NFEP&WM, confirm that sustainable growth in Poland is of key importance to us.”

The Gap Fund has been launched by ministers and directors of the Governments of Germany and Luxembourg together with the World Bank, European Investment Bank and Global Covenant of Mayors.

The new initiative will be implemented by the World Bank and the European Investment Bank.

The programme will support city and local governments facing barriers to financing for climate-smart projects.

Filling a gap in available project support, the Gap Fund offers technical and advisory services to assist local leaders in prioritising and preparing climate-smart investments and programmes at an early stage, with the goal of accelerating preparation, enhancing quality, and ensuring they are bankable.

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The Gap Fund was announced at the UN Climate Action Summit 2019 as a key initiative of LUCI, the Leadership for Urban Climate Investment, which promotes financing for ambitious urban climate action until 2025. 

Core donors to the Gap Fund are Germany (€45 million – including €25 million from the Ministry for the Environment, Nature Conservation and Nuclear Safety, and €20 million from the Ministry for Economic Cooperation and Development) and Luxembourg (€10 million).

The Gap Fund investment is aiming to unlock at least €4 billion of final investment in climate smart projects and urban climate innovation.

EIB President Werner Hoyer, said: “There can be no return to business as usual. Our recovery from the COVID-19 crisis must be the opportunity to rebuild better, in particular with respect to the climate and environment. We must also ensure that this recovery leaves no one behind, supporting livelihoods and communities.”

The City Climate Finance Gap Fund is supported by Germany’s International Climate Initiative (IKI) of the Federal Ministry for the Environment, Nature conservation and Nuclear Safety (BMU), the Federal Ministry for Economic Cooperation and Development (BMZ), as well as Luxembourg’s Ministry of the Environment, Climate and Sustainable Development. Other partners include the Global Covenant of Mayors (GCoM) and city networks including Local Governments for Sustainability (ICLEI) and C40 Cities Climate Leadership Group.

The plan calls for countries to seize the opportunity to scale-up climate resilience to grow their economies and reduce poverty, redouble efforts to increase energy access, and take advantage of sustainable and innovative approaches to leapfrog into greener development pathways. 

The World Bank will focus on five key areas namely food security, clean energy, green and resilient cities, environmental stability, and climate shocks as part of the plan over the next six years.

The bank aims to train 10 million farmers on climate-smart agricultural approaches, expand integrated landscape management over 60 million hectares in 20 countries, increase renewable energy generation capacity from 28GW to 38GW to increase access to clean electricity, and outfit at least 30 cities with low carbon and compact urban planning approaches. 

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Without rapid deployment of inclusive, climate-informed development, 43 million additional people could be pushed below the poverty line by 2030 in Sub-Saharan Africa, according to the World Bank.

And as such, the World Bank is recommending Sub-Saharan African countries enact policy reforms that recognise the realities of climate change, in order to strengthen recovery and promote long-term growth.

The bank is calling for policies that help address the sizable infrastructure gap in a green and resilient manner, using less carbon-intensive materials and technologies while creating more competitive job opportunities. 

The launch of the plan follows the bank investing $33 billion in 346 climate action projects in Africa over the past six years.

Ousmane Diagana, World Bank vice president for West and Central Africa, said: “The climate challenge cuts across every priority – poverty reduction, agriculture, job creation, women’s empowerment, fragility, and more.

“Countries, therefore, have to tackle it in multiple ways, including by helping cities develop in clean ways, making climate-smart agriculture practices the norm, improving clean, green, and affordable energy, and putting people and communities at the forefront in order to improve lives and protect the future.” 

Hafez Ghanem, World Bank vice President for East and Southern Africa, adds: “Africa’s main challenge is to adapt to climate change by investing in more resilient agriculture and food systems, building infrastructure that resists extreme weather events, protecting its coastal cities, and enhancing disaster preparedness systems.

“At the same time, green technologies provide an opportunity for growth and job creation. This is especially true in the energy sector where renewables have become a source of clean and inexpensive energy, bringing the goal of universal access to electricity within reach.”

The Next Generation Africa Climate Business Plan is available for download here. 

FirstRand will use the funds to finance green projects for its South African corporate and SME clients and to support climate and water smart infrastructure, agriculture, and manufacturing initiatives in the country.

The $225 million loan includes $75 million from the Dutch entrepreneurial development bank (FMO).

The transaction is part of IFC’s broader objective to develop South Africa’s climate finance market and to support the Government of South Africa’s plan to shift to a lower-carbon economy.

South Africa has set the goals of reducing greenhouse-gas emissions by 42% by 2025 and diversifying its electricity production away from coal by 2050.

Andries du Toit, FirstRand’s Group Treasurer, said, “This transaction will provide FirstRand with valuable additional capacity to enable the group to assist our clients participating in the growth of South Africa’s green economy.”

Adamou Labara, IFC’s Country Manager for South Africa, said, “Supporting increased access to green and blue financing is critical to fostering a more inclusive, resilient, and sustainable response to growing climate risks on economic development. Our partnership with FirstRand is especially important now as South African businesses recovering from the COVID-19 crisis look to develop sustainable projects.”

IFC will support its investment with technical assistance in the areas of impact monitoring, water stress management, and other sustainability-linked solutions for clients looking to reduce their carbon footprints.

Supporting financial institutions to expand access to green financing is critical to a successful transition in South Africa, as commercial banks currently provide 45 percent of the financing for renewable energy and energy-efficient projects.

With the rating, the subsidiary of state-owned utility Vietnam Electricity, has been placed on a stronger footing to scale up financing through more diversified sources including international capital markets, for instance by issuing long-term bonds.

Fitch’s rating of EVNHANOI, announced on July 29, is on par with both Vietnam’s sovereign rating and that of EVN, making it the first such utility in Vietnam and one of a select few in the region to achieve this landmark.

EVNHANOI’s credit profile is supported by its dominant market position in electricity distribution in the capital of Hanoi, its stable and diversified customer base, and low receivables.

If EVNHANOI can maintain financial performance and establish a track record of independent tariff setting mechanism and automation, its stand-alone rating can be further strengthened.

The World Bank’s Energy and Extractives Global Practice supported the credit rating exercise through a combination of financing and advisory support, including by appointing Mizuho Bank to prepare for credit rating readiness and the subsequent rating exercise. This engagement was supported by the Public-Private Infrastructure Advisory Facility and the Global Infrastructure Facility.

This activity is part of the World Bank’s long-term engagement with the Government of Vietnam to find new ways to channel private investment into the electricity sector. The World Bank estimates that the sector will need to mobilize about $10 billion of investment annually through 2030, of which, EVN itself would need to mobilise estimated $5 billion annually.

Stefanie Stallmeister, acting country director for the World Bank in Vietnam, said: “This successful credit rating for EVNHANOI is a continuation of the World Bank’s support to the energy sector to develop a sustainable financing strategy.

“The credit rating demonstrates the strong operational and commercial performance of Vietnam’s power companies and is expected to attract much-needed commercial capital to the sector.”

The new programme calls on innovators from around the world to bring their climate-friendly cooling solutions to Latin America.

The match-making programme offers market access and funding to top innovators to pilot their cooling solutions in Mexico and Colombia, where highly urbanised, hot cities rely heavily on energy-intensive cooling technologies.

Mexico and Colombia are expected to double the demand for cooling over the next decade.

The BEIS and IFC will provide pilot projects with grant funding from a total pool of up to $1.5 million.

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The launch of the Latin American version of the programme follows its success in India, where innovators were matched with leading local health care providers to implement pilot projects reaching more than 18,000 patients. These initial pilots generated commercial contracts worth $1 million to scale-up innovations that are expected to benefit over 300,000 people each year.

The global market for cooling solutions is expected to reach almost $170 billion over the next decade, according to a statement.

However, cooling technology is often inefficient and costly, accounting for 15% of energy consumption worldwide. With 10% of all worldwide greenhouse gas emissions today coming from cooling, new solutions are critically needed to address the climate footprint of growing demand.

Alzbeta Klein, director and global head of climate business at IFC, said: “Sustainable cooling technologies represent a fast-growing business opportunity with particular importance to emerging markets.

“We are excited to support leading technology innovators develop cooling solutions across a full range of sectors.”

William Sonneborn, the senior director of disruptive technologies and funds at IFC, adds: “Sustainable cooling technologies help protect the most vulnerable from climate change, support health care services and food supply chains, can decrease costs for businesses, and increase productivity. These are all critical aspects of a climate-smart strategy for the future of our planet.”

For more information about the programme is available at www.techemerge.org/cooling.

The three parties want to boost Egyptian farmers’ access to finance for solar irrigation.

IFC will help four financial institutions including the National Bank of Egypt and MSMEDA develop financial services to enable easy access to funding for solar irrigation projects for farmers in Egypt.

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The project is being implemented in partnership with the governments of Denmark, Korea and Netherlands.

The partnership is expected to help start-ups in the country to commercialise their clean energy technologies. Start-ups make up the bulk of players in the photovoltaic (PV) solar water pumping market in Egypt but are currently unable to scale up because of a lack of payment and finance options for customers, and a limited understanding of the sector.

Around 960,000 diesel-powered water pumps are currently used for irrigation across Egypt, at a cost of about $250 million annually for the diesel. Replacing the pumps with PV systems would save farmers money in fuel and maintenance and help create a cleaner environment.

Nevine Gamea, minister of trade and industry in Egpyt, said: “Through our partnership with IFC, MSMEDA will deepen its understanding of solar irrigation systems and develop a financial product for farmers to purchase solar irrigation pumps. Not only can farmers use a clean and free source of energy, but they can also irrigate more land and increase their production. This initiative is in full alignment with MSMEDA strategy in exploring new feasible financial products that are environmentally friendly and using clean technology.”

The 55MW solar facility is also the first for the Caucasus and will be located in Mets Masrik municipality in the province of Gegharkunik. The project includes the construction of a nine-kilometer transmission line.

Fotowatio Renewable Ventures (FRV) will leverage a $35,4 million debt package comprising of two $17.7 million loans from the IFC and the EBRD to develop the project. The IFC will make use of an $8.9 million loan from its Finland-IFC Blended Finance for Climate Programme to raise the much-needed loan for the project.

The renewable energy firm will also use a $3 million grant from the EU.

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The project will generate 128GWh of energy per annum and will sell its electricity for of ȼ4.19 per kilowatt-hour to the Electricity Networks of Armenia.

The project will displace the release of 40,000 tons of carbon emissions annually, expand the country’s renewables portfolio and reduce dependence on imported fuels. Right now, nearly 70% of Armenia’s electricity generation depends on imported fossil fuels.

Mikel de Irala, the managing director of FRV in the Middle East and Africa, said: “Armenia has great potential when it comes to the development of renewable energy, in particular solar energy, and the country is a strategic priority for FRV.

“The financial close of our first solar project in the Caucasus-region is a milestone for FRV and it allows us to expand our reach and continue leading the utility-scale solar power industry worldwide. In connection with this project, we are extremely proud to contribute to the country’s sustainable economic growth, local generation of wealth and local employment, thus helping to build a more sustainable future.”

Aida Sitdikova, EBRD director of energy in Eurasia, said: “EBRD is delighted to support this landmark project, which builds on our active policy engagement and investments in the Armenian power sector since 1993. Following EBRD’s financing of electricity networks, private generation, and privatisations, we are pleased to provide financing for this first utility-scale solar project, as we are working with authorities on developing further renewable auctions in wind and solar. We are deeply grateful to our partner, the European Union, for co-financing this remarkable project with us.”

Andrea Wiktorin, the EU ambassador to Armenia, adds: “The Masrik Solar Energy Project will play a fundamental role in Armenia achieving its energy and climate objectives in line with the EU-Armenia Comprehensive and Enhanced Partnership Agreement and the Sustainable Development Goals. It also has the potential to provide a range of new jobs, create new industrial opportunities in the region and contribute to economic growth, just as the EU promotes with the new European Green Deal.”

Cheryl Edleson Hanway, IFC’s regional senior manager for infrastructure and natural resources, said: “Energy security is critical to business activity, which is why supporting Armenia’s renewable energy plan is an important part of IFC’s mission. The Masrik solar project is an additional milestone in IFC’s support of Armenia’s efforts over the years to attract private sector investment to power generation.  It is the first step in the country’s ambitious solar power plans and will serve as an example to be followed by many more projects in the years to come.”

The signing of the Results-Based Financing for Off-grid Solar grant agreement will enable more than 450,000 people in rural Myanmar to gain access to clean energy for the first time.

The programme is co-funded by the Global Partnership for Results Based Approaches (GPRBA) and the Energy Sector Management Assistance Programme (ESMAP).

The project will be implemented by the Department of Rural Development, which will provide sub-grants to the private sector to develop supply chains for quality solar products.

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IFC has supported the creation of the first commercial market for off-grid solar energy services in Myanmar under the Lighting Myanmar programme, spurring the sale and financing of nearly 90,000 quality verified solar products.

The grant funding will allow for further development of supply chains for quality lighting products in rural Myanmar, from companies to retailers and then onto consumers.

Half the population of Myanmar lacks access to grid electricity.  In rural areas, where most people live, over two-thirds of households rely on candles, kerosene, low-quality batteries and diesel generators to meet their energy needs.

The funding will enable the poor to access end-user finance and post-sale services, helped by the pay-as-you-go mechanism that is being developed in Myanmar.

IFC has provided support to help the private sector in Myanmar under the Lighting Myanmar initiative, through market research on people’s needs and willingness to pay for energy access, as well as on product quality assurance, support to business and access to finance.

Mariam Sherman, the World Bank country director for Myanmar, Cambodia and Lao PDR, said: “Energy access through off-grid solar technologies can play a key role in improving livelihoods and living conditions of people in rural areas.

“The new grant will not only help deliver economic and social benefits for rural families, it will also contribute to social inclusion by providing affordable, quality solar products and by creating jobs through the expansion of supply chains in rural and remote areas.”

The pilot complements the World Bank-funded National Electrification Project ($400 million IDA credit), which has provided electricity to more than 2 million people in Myanmar through grid, private sector led-mini-grid development and off-grid solar solutions for households, public institutions and street lighting implemented through public procurement.

Revisiting Reforms in the Power Sector in Africa and Rethinking Power Sector Reform in the Developing World consider whether the current model for reform is fit for purpose.

In the 1990s, in efforts to address challenges within the African power sector, attract private investment and improve operations, widespread reforms were suggested and introduced by multinational finance institutions to stimulate financial stability within the region’s power utilities.

These reforms, often referred to as ‘Washington Consensus reforms’ included:

• Commercialising electricity utilities and corporatising their management
• Restructuring monopolies into separate generation, transmission, and distribution services
• Creating independent regulation and adopting cost-refl ective electricity tariffs
• Opening the sector to private sector participation
• Introducing competition through largescale procurements, and eventually full competition for retail customers.

The result, thirty years down the line, is a mix of partial reform in some countries or a hybrid of reform and state-control. In very few countries were the changes as successful as initially anticipated.

THE RESULT THIRTY YEARS DOWN THE LINE IS A MIX OF PARTIAL REFORM IN SOME COUNTRIES OR A HYBRID OF REFORM AND STATECONTROL. IN VERY FEW COUNTRIES WERE THE CHANGES AS SUCCESSFUL AS INITIALLY ANTICIPATED.

Riccardo Puliti, global director, energy and extractive industries and regional director, infrastructure (Africa), The World Bank, says: “The various reform approaches based on the 1990s model alone will not be suffi cient to deliver on global energy objectives. We also need complementary, targeted policies to reach the 840 million people who live without access to electricity today and to rapidly increase the share of clean energy in the global energy mix.”

An examination of the reforms undertaken highlighted three key takeaways, as follows: Context dependence. The political and economic context of the host country is an essential frame for any reform efforts.

“The 1990s reform model was most successful in countries that had reached certain minimum conditions of power sector development and offered a supportive political environment,” according to the authors of Rethinking Power Sector Reform, Vivien Foster and Anshul Rana.

“When these same reforms were adopted in more challenging environments, the risk of policy reversal was high, while successful outcomes were by no means guaranteed. The 1990s approach to power sector reform is more compatible with political systems that are based on a market-oriented ideology and contestable power structures.”

In other words, relatively high levels of electrification, good operational and financial data and an already well-functioning framework of tariff regulation.

Outcome orientation

Reform efforts should be tailored toward achieving specifi c outcomes, and not be dependent on following a “predetermined process.” As objectives have expanded to include social and environmental goals, it is now clear that the original set of reforms will not deliver on these objectives and should be complemented with more targeted measures.

Pluralism

An interesting discovery by the World Bank team was that “among the best-performing power sectors in the developing world are some that decisively implemented the 1990s reform model and others that retained a dominant and competent state-owned utility, guided by strong policy objectives. … This evidence makes a case for greater pluralism of approaches going forward.”

Other findings included a realisation that:

• The private sector has made an essential contribution to expanding power generation capacity in the developing world.
• Wholesale power markets helped improve efficiency in the minority of countries that were ready for them.
• Good corporate practices, particularly for human resources and financial discipline, were associated with better utility performance.
• Regulatory frameworks have been widely adopted, but implementation has often fallen far short of design.
• Cost recovery has proved remarkably difficult to achieve and sustain; the limited progress made owes more to efficiency improvements than to tariff hikes.
• The outcomes of power sector reform were heavily influenced by the starting conditions in each country.

As the ultimate aim is still to ensure financial stability and ensure good governance, aligned and updated to accommodate changing goals and modern approaches, the following have been suggested:

• The design of power sector reforms should be informed by the enabling conditions of each country aimed at achieving better sector outcomes.
• The design of power sector reform and regulation needs to acknowledge the political realities of each country.
• Greater emphasis should be placed on building institutional capacity.
• Unbundling is not the aim in itself; it should be undertaken primarily to facilitate deeper reforms.
• Greater efforts should be made to strengthen the corporate governance and managerial practices of state-owned utilities.
• Private sector participation in distribution should be considered only when enabling conditions are met.

Adapted elements of ‘standard model’ reforms are still relevant for boosting sector performance.

Governance

Improving governance is vital for attracting investment and provides an enabling environment for reform and development efforts. Good governance is the enabler of “credible policy, improving regulatory capacity, increasing transparency in competitive bidding for IPPs, and enforcing resource, generation and distribution contracts,” says the authors behind the Revisiting Reforms in the Power Sector in Africa report.

Regulation

By enabling regulators to enforce contracts and consistent licensing rules, private sector participation will be encouraged. This, however, requires regulatory decisions to be made in a transparent, rules-based manner, uninfluenced by political interference. Regulations need to be somewhat defined and applied with particular consideration of social welfare and equity concerns and the impact on regulated entities. By way of example: Light-handed regulatory requirements have helped mini-grid industries flourish in Zimbabwe, Tanzania, and further afield.

Tariffs

Tariffs must be predictable and cost-reflective (as well as enforceable) in order to attract investment. This was an issue in Nigeria where sectoral reforms were implemented, but tariffs were not cost reflective. The authors report that “the technical, commercial and collection losses reported are higher than before privatisation, due to poor maintenance of the transmission network and unwillingness of customers to pay electricity tariffs. Introducing metering regulations that ensure adequate roll-out of meters to electricity consumers will reduce widespread illegal connection and electricity theft, which will in turn improve reliability, operational efficiency and financial viability of the utility.”[2]

Private sector participation

Widely recognised as being vital for sectoral development, private sector participation must be encouraged within a clear legal and regulatory framework. At the same time, the contracts, concessions, and investments with the private sector must be undertaken only with a “respected, mature” regulatory body in place. “Strategic, timely sequencing of reform interventions is key in this regard.”[2]

Incentives

Incentives are crucial to ensuring improved performance. Performance contracts “between shareholders and utility boards and between boards and management should include rewards and penalties linked to performance”[2] but cannot take place without significant capacity building. Investment in new technology and systems will further support the strengthening of core utility functions.

Conclusion

While the progress initially expected from the reform process has not been fully realised, there is a lot that has been successful.

Independent regulators and cost-reflective tariffs are being increasingly adopted, and private sector participation is becoming far more common.

Investment by independent power producers has increased, and private concessions including in the transmission and distribution sectors have been seen.

Innovation in power technology is driving change within energy markets, and energy production, digitalisation, smart information and communication are becoming ubiquitous.

Coupled with lower prices for renewable and distributed energy, it is likely we will also see transformation within the actual physical structure of the grid.

Vital to the future of Africa’s power sector is the need to be flexible in response to uncertainty, facilitate the growth of centralised and decentralised energy resources and ensure sector structures facilitate the minimisation of conflicts of interest.

Reform priorities and programmes should be undertaken with a clear understanding of the political economy dynamics and knowledge of stakeholders’ needs to allow durable, effective, and equitable reform.

Puliti perhaps says it best: “Reform approaches should be tailored to achieve desired policy outcomes.” He also believes that “multiple institutional pathways to achieve the desired outcomes must be possible. There is no one-size-fits-all framework, and the particular needs and challenges of low-income and fragile environments deserve special consideration.”[1] SEI

References:
[1] Foster, Vivien, and Anshul Rana. 2020. Rethinking Power Sector Reform in the Developing World.
[2] Sustainable Infrastructure Series. Washington, DC: World Bank. doi:10.1596/978 -1-4648-1442-6. License: Creative Commons Attribution CC BY 3.0 IGO 2 Eberhard, Anton, and Gabrielle Dyson, Olakunle Alao, Catrina Godinho and others. Revisiting Reforms in the Power Sector in Africa. Final Report prepared for the African Development Bank and Association of Power Utilities of Africa, 15 March 2019.

The programme will help address the knowledge gap amongst senior and mid-level regional government officials in the infrastructure sector.

The Growing Infrastructure – Enabling & Structuring for Private Sector Participation in Finance and Innovation programme will improve the awareness amongst government officials of solutions available to support sustainable and resilient infrastructure development.

Participants will be equipped with the knowledge and skills to create a regulatory environment that is friendly toward private sector involvement in infrastructure.

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The first phase of the project will focus on clean energy owing to the sector’s resiliency to COVID-19.

The clean energy sector’s ability to withstand the impact of the pandemic has increased interest amongst regional policymakers and financial organisations to focus on the industry in a bid to further improve its resiliency.

Infra Asia brings its experience in the regional infrastructure ecosystems, whilst the World Bank will bring global development expertise.

Singapore Management University will serve as the academic partner delivering the programme.

Interactive and collaborative sessions will be held as part of the programme. The sessions will comprise real-life case studies, site visits and fireside chats with international thought leaders.

The energy transition is a hot topic disrupting the utility industry in Asia and will be a key focus at Enlit Asia which takes place in Jakarta, Indonesia from 23-25 March. For more details click here.

Mr Seth Tan, the executive director of Infra Asia, said: “Given that the regional infrastructure funding gap can be closed by mobilizing private capital, it is important that governments create a regulatory environment friendly to private sector involvement. Through our continued efforts with valued partners, we hope to support Asia’s infrastructure development and at the same time spread the word about Singapore-based solutions.”

Ms Jvoti Shukla, the director of the World Bank in Singapore, adds: “The challenges posed by the COVID-19 pandemic reinforce the imperative of investing in well-designed infrastructure for sustained economic growth, with a unique opportunity to do so with greater sustainability and resilience. The World Bank Group is delighted to be a strategic partner in this critically important program to harness Asia’s collective expertise with collaboration between private players, governments and multilateral banks.”

Lily Kong, the president of SMU, reiterates: “By developing deeper expertise and skillsets of leaders within the sector, we aim to make a meaningful impact in Singapore and beyond. These senior executives will also be equipped with new knowledge to tackle unforeseen challenges and imagine a better world in which to live, work and thrive.”

The loan is the World Bank’s second in a series of three issued through the Development Policy Credit (DPC) which aims to support governments’ efforts to improve the financial viability and governance of the electricity sector.

Nepal will use the loan to recover its energy sector from COVID-19 and support key policy, regulatory and institutional reforms to unlock the economic potential of the electricity sector.

The government plans to enhance the operations of the Nepal Electricity Authority (NEA) and establish a regulatory framework that is autonomous, transparent, and accountable.

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World Bank releases a first-of-its-kind study on energy access in Nepal

The loan will also support the country’s efforts to improve the integration of its grid with the regional electricity market to ensure the optimal use of Nepal’s hydropower resource.

Nepal’s energy sector has been successful over the past years hence the need to fully optimise the industry through increasing competition amongst energy players and ensuring effective management of the market.

The country has recorded an increase in energy generation, reduced system losses and load shedding, enhanced cross-border transmission capacity and NEA has recorded profits in three consecutive years.

To date, the country has managed to electrify 88% of the population.

Due to the COVID-19 crisis, the sector has been hit hard by demand shocks, a cash flow crunch, and a halt of construction activities.

Faris Hadad-Zervos, World Bank Country Manager for Nepal, said: “Continued reforms to strengthen the electricity sector in Nepal is of utmost importance during the crisis and for post-crisis recovery.

“This operation will help refocus investment priorities and support the government’s commitment to developing a reliable, affordable, and sustainable electricity sector that supports poverty reduction and shared prosperity in the country.”

Xiaoping Wang, Senior Energy Specialist at the World Bank, added: “This operation builds on the important progress made under the first energy sector DPC operation and we will continue to support the government in addressing the immediate, medium- and long-term impacts of the crisis on Nepal’s energy sector through the third operation of the DPC series.” 

The loan will be used to fund the Energy and Mineral Sectors Strengthening Project II (META 2).

Public institutions and sectoral agencies will gain access to technical assistance activities including studies, training, methodologies, databases and IT equipment.

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The loan comes at a time Brazil’s energy sector is failing to realise its full development potential and promote environmental sustainability and social inclusion.

Using the loan, Brazil is expected to increase its production of more reliable power, at lower prices.

Brazil’s Ministry of Energy will utilise the loan to:

• Increase efficiency, long term infrastructure adequacy and climate resilience in the energy and mining sectors.
• Institutional strengthening of energy and mining institutions to establish and implement strategies, policies and regulation; and
• Implementation support, monitoring and evaluation, knowledge sharing and dissemination.

“The energy and mining sectors are among the main drivers of the Brazilian economy as they form the basis for the sustainability of the industrial and commercial sectors, in addition to leading to the provision of services that are essential for the quality of life of citizens. This project is a continuation of long-term collaboration with the World Bank. This new phase will promote changes to support the sustainable extraction and processing of minerals and metals to meet the needs of the global supply chain for inputs and new technologies. In energy, working together will make it possible to increase the efficiency and resilience of markets in Brazil,” said Bento Costa Lima Leite, Brazil Minister of Mining and Energy.

“META’s first phase provided technical assistance to strengthen the capacity of key public institutions to increase the sector’s contributions towards a lower carbon growth path that is environmentally and socially sustainable,” says Paloma Anós Casero, World Bank Director for Brazil. “This second stage aims at increasing efficiency, long term infrastructure adequacy and climate resilience in both sectors, allowing them to grow in a more efficient and competitive way.”

The grant will be leveraged to improve debt and public investment management as well as enhance the transparency and governance framework of State-Owned Enterprises.

The Gambia will ensure public investment projects are appraised as per National Development Plan priorities. The aim is to support the adoption of a new procurement bill to eliminate the use of single-source procurement as well as to tighten the emergency clause for its use.

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The energy sector will take advantage of the grant to provide cheaper, more reliable and cleaner energy to customers.

Elene Imnadze, resident representative of the World Bank, said: “This first in a series of two programmatic Development Policy Operations supports The Gambia’s efforts to undertake fundamental reforms to improve fiscal management for better public service delivery.”

Mehwish Ashraf, World Bank Country Economist and co-Task Team Leader, added: “This operation will support the government in strengthening fiscal transparency and reducing fiscal risks and promote a governance framework to ensure long-term sustainability of the SOE sector.”

African Utility Week and POWERGEN Africa will feature innovative companies accelerating decarbonisation at the African continent’s largest gathering of companies driving and leading the energy transition. Are you going to be there? Click here to join us in Cape Town.

The projects to be funded will help The Gambia to achieve some of its goals set under the National Development Plan for 2018-2021 – economic stabilisation, growth stimulation and structural transformation.

The funding will be dispersed through a new project called Climate Adaptation and Resilience for South Asia (CARE).

CARE will focus on helping the region to build resilience to climate threats and disasters through the sharing of regional data and knowledge.

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Countries in the region will cooperate on developing regional standards and guidelines for infrastructure as well as in developing climate-resilient policies and investments.

The CARE project, through funding the public domain platform Regional Resilience Data and Analytics Service, will inform economies in South Asia on climate planning and investments. CARE will also assess climate impact in Bangladesh, Nepal and Pakistan and fund innovative and disruptive technologies.

Hartwig Schafer, vice president of the World Bank in South Asia, said: “Climate change and severe weather ignore national borders. Our support will foster greater regional collaboration across South Asia and equip governments with the shared knowledge and technology they need to make their people and economies more resilient to climate threats and disasters.”

The energy transition is a hot topic disrupting the utility industry in Asia and will be a key focus at Enlit Asia which takes place in Jakarta, Indonesia from 23-25 March. For more details click here.

Between 1990 and 2019, more than 1,000 climate-induced disasters in South Asia affected 1.7 billion people and caused more than $127 billion in damages. The World Bank estimates that climate change could drive 62 million people in the region into extreme poverty; floods alone could cost an estimated $215 billion annually by 2030.

The $39.5 million CARE project includes a $36 million grant from the International Development Association, the World Bank concessional fund, and $3.5 million from the Program for Asia Resilience to Climate Change.

The fund supports a $49 million grant secured from the Partnership for Infrastructure Development Multi-Donor Trust Fund (PID MDTF) to improve operational and financial performance of the country’s energy sector.

The project will also help Palestine to diversify its energy sources and is part of the World Bank’s Securing Energy for Development initiative.

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The grant will be leveraged to promote sustainable funding of energy projects and policy reform measures. 

New infrastructure and modernization of existing distribution and transmission lines to enhance the reliability of the grid will be the main focus during phase one.

This will facilitate better electricity interconnections with Israel and Jordan. Metering systems will be modernized to reduce non-technical losses.

The program ensures funding is directed to female-led solar energy projects in Gaza and West Bank and that women engineers and entrepreneurs through private sector participation in renewable energy are supported. 

“Power demand in West Bank is fast outpacing supply and Gaza is already facing severe challenges with electricity supply. This multiphase programmatic approach, new to the region, is a model of collaboration between the World Bank, the Palestinian authority and the donor partners to ensure more stable energy supplies while enabling transformation of the sector.” said Kanthan Shankar, World Bank Country Director for West Bank and Gaza.  

“In the Palestinian fragile context, the multi-phase program will offer the flexibility to adapt the course of actions to new emerging challenges and opportunities while aiming for a more stable and sustainable energy sector. Over eight-years, the program will enable the sector to strengthen its creditworthiness and attract private sector investment,” said Monali Ranade, World Bank Senior Energy Specialist.

The proceeds from the gender bond will enable the bank to increase lending to women entrepreneurs and women-owned small and medium enterprises (WSMEs).

The green bond will support the bank to expand green financing, particularly the development of green projects and financing of green mortgages.

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Bank OCBC NISP’s gender bond is the first-ever in Indonesia, and second in Asia-Pacific, following Bank of Ayudhya’s Gender Bond issuance in 2019, also supported by IFC.

The bank’s green bond, also fully sponsored by IFC, follows a successful first project in 2018, which has been fully deployed. With this new project, Bank OCBC NISP is expected to further grow its sustainable portfolio.

WSMEs play a central role in the nation’s economy, with women owning 34% of medium enterprises and 50% of small businesses.

Yet, according to IFC’s MSME Financing Gap Study (2017), Indonesian WSMEs face a $60 billion financing gap.

Approximately, 40% of WSMEs in the country are financially constrained, and 17% of women-owned firms perceive financing as a major growth constraint.

“Increasing women’s participation in the Indonesian economy and reducing the gender gap is part of IFC’s core strategy in Indonesia,” said Azam Khan, IFC Country Manager for Indonesia, Malaysia, and Timor Leste.

Khan added: “Investing in Bank OCBC NISP’s Sustainable Bond Program, which aims to empower women entrepreneurs and WSMEs in addition to catalysing green projects, demonstrates IFC’s commitment towards Indonesia’s sustainable economic growth.”

Gender bond to boost green financing opportunities

As an archipelago nation and following decades of rapid carbon-intensive growth, Indonesia is vulnerable to climate change impacts. Green financing is therefore critical to help the country meet its greenhouse gas emission reduction targets — 29% by 2030.

In this context, IFC estimates that Indonesia’s green financing opportunities could be as high as $274 billion between 2016 and 2030.

President Director of Bank OCBC NISP, Parwati Surjaudaja, said: “As a pioneer bank in sustainable financing for green projects in Indonesia, IFC’s extension funds will help us continue our efforts to provide financing for green projects to reduce climate change footprint. In addition, this fund will also be used to empower women to build sustainable businesses.

“This initiative is one of our efforts to move business process towards sustainable development and ensure a better future for the next generations.”

As part of the project, IFC will partner with the bank to provide training to the bank’s staff as well as Indonesian property developers on green buildings.

The bank will also work with IFC to develop a targeted approach to support the growth of women entrepreneurs.

Read more on gender equality in the world of smart energy here.

Apart from demonstrating the viability of WSMEs as a distinct customer segment, the project aims to support the government’s efforts to establish climate finance as a distinct asset class.

The gender bond is supported by the Women Entrepreneurs Finance Initiative (We-Fi) programme and is aligned with the government of Indonesia’s development goals to reduce Indonesia’s gender gap.

The green bond, which has green building as one of the key priority segment, is supported by the United Kingdom Government’s Market Accelerator Green Construction Programme, aimed to promote market shifts towards green construction and support green mortgages development.

This initiative is also in line with the recent policy incentives for green mortgages issued by Bank Indonesia.

This story first appeared on our sister-site, ESI-Africa.

The energy transition is a hot topic disrupting the utility industry in Asia and will be a key focus at Enlit Asia which takes place in Jakarta, Indonesia from 23-25 March. For more details click here.

The grant is issued through the International Development Association and a new World Bank’s financing instrument the Programme-for-Results (PforR) to provide universal and reliable energy supply to the people of Tajikistan.

The grant will help state utility Barqi Tojik to rehabilitate and modernise grid network, improve collections, achieve cost-recovery tariffs, reduce energy losses, settle payables, ensure timely debt service, as well as integrate sound governance practices and transparency in operations and financial management.

Barqi Tojik faces several financial and operational challenges due to below-cost-recovery tariffs, unsustainable and increasing debt levels, low collection rates for billed electricity, operational inefficiencies, and poor governance practices.

The utility will leverage the government-adopted Programme for Financial Recovery of Bargi Tojik (2019-2025) strategy to disburse the grant.

Recently, the World Bank and the Government of the Republic of Korea have agreed to support Tajikistan in building the required infrastructure to increase the efficiency and transparency of public services. Read the full story here

Tajikistan experiences power outages, particularly during the cold winter months. “The inherent benefits of Tajikistan’s ambitious public investments in energy generation and transmission can only be reaped if managed through a modern, efficient, and financially sound power utility,” said Jan-Peter Olters, World Bank Country Manager in Tajikistan. “To this end, the support provided to ensure Barqi Tojik’s financial viability is expected to yield considerable impacts in its ability to provide quality services to the population, attract private investment, and take full advantage of regional power export opportunities.”

The energy transition is a hot topic disrupting the utility industry in Asia and will be a key focus at Enlit Asia which takes place in Jakarta, Indonesia from 23-25 March. For more details click here.