Bretton Woods Project, CRBM, Urgewald, and Bank Information Center
World Bank Group Financing for Fossil Fuels Update:
Supplemental Background Information for CSO Consultations
March 2010
The following document is intended to provide CSOs with updated and supplemental information on the World Bank Group’s
financing for fossil fuel development to be used by CSOs in their engagement on the World Bank Group’s Energy Strategy
consultations. Some of the information is extracted from a forthcoming analysis jointly undertaken by the Bretton Woods Project,
CRBM, Urgewald, and the Bank Information Center due out in April 2010. In addition to providing updated figures on energy project
investments, the document provides a breakdown of recent and proposed coal projects as well as fossil fuel-based investments taking
place through infrastructure lending and financial intermediaries. The main updated findings include:
Fossil Fuels Still Favored over Renewables and Energy Efficiency – Given the scale of projects can vary greatly year to year, a
three-year average is taken to be more representative. Table 1 illustrates that for the most recent three-year time period (FY07 –
FY09) World Bank Group lending to fossil fuels is still greater than new renewable energy and energy efficiency combined, $2,197
compared to $1,788 million. Moreover, it is important to note that the financing for fossil fuels is significantly under-reported as
explained below.
Heavy emphasis on Coal - From FY2007 to the present, the World Bank Group has provided $3.5 billion for coal-based energy
development and added nearly 5,000 MW in new coal-generation capacity. For the remainder of FY2010, the Bank is considering
over $3 billion in additional financing for coal representing another 7,000 MW of new coal-generation capacity. (See Table 3)
Substantial Contributions through Infrastructure and Financial Intermediaries - In addition to energy infrastructure that is
typically accounted for by the World Bank, from FY08 to FY10 there appears to be more than an additional $1 billion linked to fossil
fuel-related infrastructure, including additional financing to support India’s Tata Mundra Ultra Mega Coal Plant (see Table 3, India
and Mozambique examples).1 Furthermore, over $4 billion in investments taking place through Financial Intermediaries (FIs) have
been identified with linkages to energy development that does not specify low carbon, renewable energy sources, or energy efficiency
(see Table 4). When renewable energy or energy efficiency is a target of an FI investment, it is both specified and accounted for in the
World Bank Group’s annual energy sector figures. However, the Bank does not report fossil fuel financing that is taking place
through FIs in their annual energy sector figures. Please note, it is not known how much of the $4 billion can be attributed to fossil
fuel development, but it is clear that FIs represent a substantial pathway of fossil fuel investment that is not being accounted for by the
Bank.
1
This figure specifically does not include projects with a stated aim to improve access for households, to support low-carbon projects, or small-scale energy infrastructure for the
rural poor.
1
Bretton Woods Project, CRBM, Urgewald, and Bank Information Center
Table 1. World Bank Group Energy Sector Financing
Three-Year Average (million US$)
Fossil Fuels
Coal
Large Hydro Power
Energy Efficiency
New Renewable Energy
New RE & EE*
FY06-FY08
Three-year Ave
2,064
433
829
571
366
937
FY07-FY09
Three-year Ave
2,197
469
828
1,005
783
1,788
Table 2. World Bank Group Energy Sector Financing (2007$)
FY2006
Fossil Fuels
Coal
Large Hydro Power
Energy Efficiency
New Renewable Energy
New RE & EE*
million $
1,505
119
180
399
176
576
annual
percent
change
78%
1283%
-46%
91%
15%
59%
FY2007
million $
1,551
140
777
206
435
641
FY2008
annual
percent
change
3%
18%
333%
-48%
147%
11%
million $
3,137
1,041
1,529
1,108
485
1,593
annual
percent
change
102%
642%
97%
438%
11%
148%
FY2009*
million $
1,902
226
177
1,701
1,427
3,128
annual
percent
change
-39%
-78%
-88%
54%
194%
96%
* FY2009 RE, EE, and large hydropower are taken directly from the World Bank and have not been independently verified. FY2009 figures are not adjusted for inflation. New
renewable energy excludes large hydropower projects, defined as larger than 10 MW. For methodology on how BIC compiled these figures, please refer to the following report:
World Bank loans exacerbate climate change, by Heike Mainhardt-Gibbs, Bank Information Center, February 10, 2009 (BIC website).
2
Bretton Woods Project, CRBM, Urgewald, and Bank Information Center
Table 3. World Bank Group Financing for Coal FY2007 – FY2010
Note: FY2010 ends June 30, 2010, thus this table only includes those projects that have already been approved or proposed. All project information in this table
was obtained from project documents available on the World Bank and IFC websites.
Institution
Country
Project
Activity
Amount
(mil. $)
Production
Capacity
Fiscal Year
Approved
(MW)
IFC
India
Lanco Amarkantak
Thermal Power Station
Tata Mundra Ultra Mega
IFC
India
GEF
India
Coal-fired generation
rehabilitation
IBRD
India
IBRD
India
Coal-fired generation
rehabilitation
Fifth Power System
Development Project
IFC
Indonesia
IFC
Philippines
IFC
Philippines
IFC
Chile
CTA - Central
Termoelectrica Andino
IBRD
Botswana
Morupule B Generation
PT Makmur Sejahtera
Wisesa
Masinloc Power Partners
Co. Ltd
Calaca Power
Build coal-generated power plant.
Build and operate supercritical coal power
plant.
Restore original coal generation capacity,
extend plant life, and modify some
equipment to enable coal units to operate
with higher fuel efficiency.
Same as above.
Coal generation infrastructure – primary
activity is to strengthen transmission
network to be able to handle large bulk
power transfers stemming from two newly
commissioned thermal coal plants, the
Sasan Ultra Mega Power Project (UMPP)
and Tata Mundra UMPP (see IFC loan
above).
Construct, own and operate a mine-mouth
coal-fired power plant in South Kalimantan.
Financial assistance to privatize an existing
coal-fired 600 MW power plant.
Financial assistance to privatize an existing
coal-fired 600 MW power plant.
Construction and operation of circulated
fluidized bed (CFB) technology thermal
power units in northern Chile to be fired by
a combination of coal, petroleum coke, and
biomass fuels.
Construction of a coal-fired power station
8
450
2007
4,000
2008
45.5
2009
180
2009
1,000^
2010
121.8*
60
2007
271.2
2008
300*
2008
740*
330
2010
242.66
600
2010
3
Bretton Woods Project, CRBM, Urgewald, and Bank Information Center
guarantee
IBRD
and Transmission Project
Botswana
Morupule B Generation
and Transmission Project
Total
Approved
Proposed
Projects
IBRD
South Africa
Eskom Power Investment
Support Project
IBRD
Botswana
Mmamabula Coal to
Power IPP
IDA /
guarantee
Mozambique
Mozambique Regional
Transmission
Development Program
APL Series, Phase 1.
and associated power transmission lines and
water supply system. Part of the project
will also go towards developing a “lowcarbon” strategy.
Same as above.
136.4
$3,496
2010
4,990 MW
new capacity
Construction of the Medupi coal-fired super
critical thermal generation plant. In
addition to $3 billion for coal plant, the
project involves $750 million for renewable
energy and energy efficiency.
Develop, own and operate a coal-fired
supercritical power plant and an associated
coal mine in eastern Botswana.
Support for the North-South Transmission
Backbone project - required for the
Southern Africa Power Pool (SAPP). New
export-based mega generation projects
identified include: combined gas (500
MW), coal generation plant (1,200 MW),
hydropower (1,500 MW & 1,000 MW) and
potentially 1,000 MW coal generation.
3,000
4,800
150
2,100
140^
1,200
Total
Proposed
Proposed
Projects
Board date
March 2010
Decision
Meeting May
2010
Board Date
forthcoming
7,100 MW
new capacity
under
consideration
*These projects involve both IFC A and B loans. Under B loan structures, the IFC makes a loan to a private-sector borrower, thereby becoming the "lender of record," i.e., the sole contractual lender on
the books of the borrower. However, instead of maintaining the entire loan on its own books, the IFC maintains only a portion-the "A" loan-and participates the remainder-the "B" loan-to commercial
banks and/or institutional lenders. Loan agreement documentation ensures that both "A" and "B" loans receive identical treatment. The B loan is considered part of the IFC loan package.
^ The total amount of the WBG financing does not go only to support coal development, but the WBG did not indicate a specific breakdown.
4
Bretton Woods Project, CRBM, Urgewald, and Bank Information Center
Table 4. Examples of World Bank Group Energy Sector Lending through Financial Intermediaries
Note: All project information in this table was obtained from project documents available on the World Bank and IFC websites.
Institution
Country
Project
IFC
India
Macquarie India Infrastructure
Opportunities Fund
IFC
India
India Infrastructure Fund
IBRD - DPL
Indonesia
Public Expenditure Support
Facility (DPL-DDO)
Capital Alliance Private
Equity Fund III Limited
Central American Mezzanine
Infrastructure Fund LP
(CAMIF)
draw down option
IFC
Western Africa
Region (Nigeria)
IFC
Central
America
IBRD
India
Financing Public-Private
Partnerships in Infrastructure
through Support to the India
Infrastructure Finance Company
Limited Project
Activity
Private Equity Fund: specifies power generation,
transmission and distribution
Fund specifies energy and utilities including oil
and gas pipelines/import terminals.
Central government (31%), finance (38%), trade
and industry (23%), energy and mining (8%)
40% of the $500 mil Fund expected in energy
Fund focuses on energy, transportation and
utilities
Identified sub-projects include power (approx. 25%)
and gas pipelines. Current IIFCL portfolio is 53%
power infrastructure. World Bank identified 18 projects
in the roads and power sectors that were running into
difficulties due to the financial crisis.
Amount
(mil. $)
150
Fiscal Year
Approved
2008
100
2008
2,000
2009
40
2009
50
2009
1,195
2010
5