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International energy policy

The World Bank and regional development banks


World Bank invests in clean energy

At the International Conference for Renewable Energies in Bonn in 2004 (Renewables 2004), the World Bank pledged to increase its commitments for so-called 'new' renewable energies (not including large-scale hydropower plants) and energy efficiency by at least 20 per cent a year, over the period from 2005 to 2009. It has fulfilled this pledge. Its commitments currently amount to over USD 400 million per annum.

At the 2005 summit in Gleneagles the G8 states called upon the World Bank to put forward proposals for the increased use of clean energy in developing and emerging countries. The World Bank responded to this through its Clean Energy for Development Invest­ment Framework (CEIF). The Bank administrates monies of other donors earmarked for climate protection, but increasingly is also employing funds of its own for renewable energies and energy efficiency.

Climate Investment Funds of the World Bank

In July 2008 the G8 states agreed to establish Climate Investment Funds (CIF) under the auspices of the World Bank. The German government is contributing at least USD 500 million to the Climate Investment Funds. The donor states are making a total of around USD 6 billion available.

The Climate Investment Funds were created to finance major invest­ment in climate protection and adaptation programmes designed explicitly to benefit also the poorest developing countries. At the same time the Funds are also being used to close the present funding gap in the climate sector, until a comprehensive new financing architecture is agreed upon within the scope of the international climate negotiations. The Climate Investment Funds are being implemented in close cooperation with the United Nations, and will remain in operation initially until 2013, when a new international climate agreement is planned to come into force.

Regional development banks

The BMZ is conducting an intensive dialogue with the regional deve­lop­ment banks in order to win support for the use of renewable ener­gies and climate protection measures. Since the Renewables 2004 conference and Germany's presidency of the EU and G8 in 2007, the themes of climate change, renewable energies and energy efficiency have been further mainstreamed within the development banks.

Cooperation with the Asian Development Bank

In its cooperation with the Asian Development Bank (ADB) the German government has sought to encourage the Bank to step up its commitment to renewable energies and energy efficiency. The BMZ is seeking to deepen practical cooperation with the ADB in these areas.

Although the Bank is very active in the energy sector, actual lending activity for projects has so far been concentrated on fossil fuels.

By establishing the Renewable Energy and Climate Change Pro­gram­me (REACH), the ADB has demonstrated that greater importance will be attached to renewable energies and energy efficiency in its future energy policy.

Cooperation with the African Development Bank

In its capacity as shareholder of the African Development Bank (AfDB), the German government is calling for greater use of re­new­able energies in Africa, and for climate issues to be addressed systematically.

The Bank has devised a Clean Energy Investment Framework (CEIF). This focuses on the utilisation of hydropower potentials. Furthermore, the Bank also sees geothermal energy, solar energy and wind energy as a worthwhile activity area. The AfDB plans to promote investment projects and measures to create more conducive frameworks for pri­vate investment. The CEIF also includes a proposal for a multi-donor trust fund on clean energy access and climate adaptation for Africa. In parallel to the CEIF, the Bank intends to put forward a climate change risk management strategy, and to design a compre­hen­sive action plan on clean energy and climate change.

Strategic partnership with the Inter-American Development Bank

On the occasion of the Renewables 2004 conference the BMZ and the Inter-American Development Bank (IDB) signed a 'Strategic Part­ner­ship Agreement for Cooperation on Renewable Energy Development'.

Latin America is heavily dependent on oil. Although a high oil price is favourable for oil-exporting countries such as Mexico, Venezuela or Ecuador, it places a significant burden on the oil-importing countries of the region, which are in the majority. This makes alternatives to oil all the more important.

Latin America possesses enormous alternative energy potentials (hydropower, agrofuels, wind energy, solar energy and geothermal energy). The partnership between the BMZ and the IDB pursues two objectives: firstly, it aims to encourage the Latin American countries to base their energy policy more strongly on renewable energies and energy efficiency; secondly, it aims to strengthen these themes within the IDB portfolio.

The BMZ is currently promoting the energy partnership to the tune of EUR 16.6 million.

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