BONN (GERMANY) – Environmentalists and development advocates today decried the World Bank’s announcement of support for renewable energy as mere spin. Stating that the proposed increase is marginal at best and does nothing to address the Bank’s ongoing bias towards fossil fuels, the groups called on the Bank to adopt the recommendations of its own studies and phase out support for coal and oil while dramatically increasing its support for renewable energy.
“Marginally increasing the funding for renewables is not enough because the World Bank’s own numbers show that lending for polluting fuels is growing even faster.” said Stephan Singer of WWF International.
The targets were announced as the first public Bank response to its Extractive Industries Review (EIR), which was initiated in 2000 by Bank President James Wolfensohn. The EIR was formed to evaluate whether or not Bank support for Big Oil and King Coal contributes to the Bank’s mission of poverty alleviation. The answer, after two years of consultation and study, was that they do not. The EIR recommended phase-outs of Bank support for coal and oil, and a phase-in of renewables by increasing lending by 20% of the total energy lending portfolio each year.
“They’re not even close to the EIR recommendation. They’re pledging 20% of a cent when they were asked to give 20% of a dollar” said Steve Kretzmann of the Institute for Policy Studies (IPS). According to IPS’ analysis of the Bank’s lending, over the past decade (1994 to 2003), the World Bank Group approved over $24.8 billion in financing for fossil fuel extractive and power projects. At the same time, the World Bank Group approved just $1.06 billion in renewable energy projects. They preferred fossil fuels over renewables by a 23:1 ratio.
The new targets announced by the World Bank today are far short of the EIR recommendations, and would only increase the very small renewables and efficiency portfolio by 20% of itself annually – or about 1% of the total energy portfolio, which is less than projected global growth in demand for energy. “At this rate, it will take the Bank Group nearly twenty years before their renewables portfolio reaches current levels of funding for fossil fuels – it’s absurd” said Janneke Bruil of Friends of the Earth International.
“While we welcome the World Bank at least setting a target here in Bonn, the money is not enough and to be credible the Bank must phase out support for fossil fuels by 2008” said Daniel Mittler of Greenpeace International.
“The $200 million that the Bank is pledging for renewables is roughly the cost of their contribution to just one of the many fossil fuel projects they support annually” said Petr Hlobil of CEE Bankwatch.
Disturbingly, Bank Group figures for renewables include support for large dams, which are widely criticized for their high costs and social and environmental impacts. “The World Bank Group includes in its renewables portfolio some of its most controversial large hydropower projects. If it continues to perversely define large hydropower as renewable, this could consume the bulk of the Bank’s pledged increase in renewables support” said Patrick McCully, of the International Rivers Network
CONTACTS IN BONN:
Stephan Singer, WWF International, 32-496-550 709 (English, German)
Daniel Mittler, Greenpeace International, 49-171-876 53 45 (German, English)
Steve Kretzmann, Institute for Policy Studies, 1-202-497-1033 (English)
Regine Richter, Urgewald, 49-170-29 30 725 (German, English)
Petr Hlobil, CEE Bankwatch, 420-603-154 349 (Czech, English, Russian)
Janneke Bruil, Friends of the Earth International, 44-795-287 69 29 (Dutch, German, English, Spanish)
Antonio Tricarico, CRBM, 39-328-84 85 448 (Italian, English)
Patrick McCully, International Rivers Network, 1-510-213-1441 (English, Spanish)
Sebastien Godinot, Les Amis de la Terre, 33-6-68 98 83 41 (French, English)
Campagna per la riforma della banca mondiale, cee bankwatch network, friends of the earth international, greenpeace international, international rivers network, sustainable energy & economy network, urgewald, wwf international
 Analysis by Institute for Policy Studies
Note that the World Bank Group’s figures seem higher for renewables support because of their inclusion of large hydropower projects, efficiency (both supply and demand side) and a 14, rather than 10 year timeframe.