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The World Bank
The World Bank Europe and Central Asia (ECA) Region—Energy Sector Program
Washington DC, November 6, 2013Salvador Rivera, Lead Energy Specialist
The World Bank
Discussion Outline
Directions for Energy Sector Investments
World Bank Group Energy Lending
Who are we? Energy Program in Europe and Central Asia (ECA) Region…a Region with a Spectrum of Challenges.
Regional Energy Sector Challenges
Energy Program Overview
2
The World Bank3 / 16
Directions for the World Bank Group’s Energy Sector
Universal Access
Accelerate efficiency
gains
Expand renewable
energy
Creating an enabling
environment
Intensify global
advocacy
5 Guiding principles for energy sector investments: Engage holistically with clients to catalyze the
transformation of the energy sector in the context of long-term system-wide planning
Continue emphasizing improvements in the financial, operational, and institutional environment of the sector
Seek market solutions and help governments foster private sector participation and investments
Embrace a multi-stakeholder, inclusive approach to energy development
Diversity of energy challenges calls for an approach that is tailored to individual countries and regional circumstances
Objective: Support client countries in securing the affordable, reliable, and sustainable energy supply needed to end poverty and build shared prosperity
Endorsed in July 2013
The World Bank
World Bank Group Energy Lending
4
AFR EAP ECA LCR MNA SAR0
2000
4000
6000
8000
10000
12000
WBG Energy lending* by region (US$ millions)
2009 2010 2011 2012 2013
6,389
2,682 2,810
5,404
10,296
4,631
2008 2009 2010 2011 2012 20130
2,000
4,000
6,000
8,000
10,000
12,000
14,000
WBG Energy lending by thematic investment focus (US$ millions)
Energy Efficiency Renewable EnergyNew Thermal Generation Other EnergyTransmission and Distribution Upstream Oil, Gas, Coal
7,2047,965
12,205
7,3127,284 7,005
* Excludes IFC due to change in reporting methodology
The World Bank
World Bank Group Energy Lending
Bank-wide, the majority of investment projects in the energy sector are > US$100 million and rely heavily on large goods contracts
In ECA, there are many smaller scale energy projects (<US$100 million)
5
Water Transport Bankwide Energy0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Value distribution of contract types (%)
Services Civil Works Goods
0-25 25-50 50-100 100-300 300 and above
0%5%
10%15%20%25%30%35%40%45%
Shares of Total Investment Commitments by Project Size (all regions)
Project Size ($m)
The World Bank6 / 16
World Bank – Europe and Central Asia (ECA) Region
Energy Program in ECA Programs in 22 countries
About US$ 6.4 billion in energy lending since 2009
New lending of about US$2.5 to 3 billion in the next 2-3 years
The World Bank
ECA Regional Energy Sector Challenges One of the most energy inefficient regions worldwide
5% of global GDP and 10% of global energy consumption
Large energy (cost) savings and co-benefits through energy efficiency investments
If ECA were as efficient as OECD average, it could save the equivalent of South Americas entire energy consumption in 2009
7
0
100
200
300
400
500
600
700
Energy use (kg of oil equivalent) 2011 per $1,000 GDP (constant 2005 PPP)
EU World ECA EAP OECD
The World Bank
ECA Regional Energy Sector Challenges
Looming energy crunch – growth constraint Both in electricity and primary fuels such as natural gas Demand for energy is expected to increase by as much as 50% over 2005 levels
by 2030 Identified as a significant constraint by investors in “Doing Business” surveys
Aging infrastructure and maintenance deficit Over half of the energy infrastructure over 30 years old Poorly maintained – lower effective capacity, efficiency and reliability More than 60% of the primary energy used to provide electricity is lost in processing
or delivery Projected needs for primary energy development for 2010-2030 are estimated at
almost US$1.3 trillion
Decline in post-crisis capital flows and commercial financing private capital flow decline has not reversed bond spreads increasing
8
The World Bank
ECA Regional Energy Sector Challenges
9
High CO2 emissions relative to GDP Substantial reliance on
domestic coal ECA faces an
estimated US$ 19 billion in health costs from fossil fuel power generation
Data source: CARMA/CGD
The World Bank
Energy Program Overview
1. South East Europe (Western Balkans)
2. South Caucasus
3. Central Asia
4. Ukraine, Belarus, Moldova (EU Eastern Neighborhood)
5. Turkey
6. Russia
7. Central/South Europe/Baltics (EU Member States)7
1
4
5
23
6
10
The World Bank
Energy Program in South East Europe
Support implementation of the Energy Community Treaty Supporting the Energy Community Dialogue
Scaling-up implementation through investment support for Energy Community programs and technical assistance
- Investments to strengthen regional power interconnection (Macedonia – Serbia; US$44.1 million)
Development of a regional Energy Sector Strategy
Advisory services on South East Europe Gas Power Consortium – Western Balkans Gas Ring
Enhance energy security and supply reliability Optimizing hydro cascades and rehabilitation in Albania (US$56.9 million) and Macedonia
(in preparation: US$ 70 million)
In Preparation: Power Recovery Project in Albania (US$150) and facilitating construction of new generation facilities in Kosovo (US$50 million)
Technical assistance to help prioritizing energy sector investments (Macedonia)
11
The World Bank
Energy Program in South East Europe
Scaling up energy efficiency in public buildings throughout the Western Balkans
Strong investment and technical assistance program to support scaling up energy efficiency in public buildings
- Recently closed: Energy Efficiency Projects in Macedonia and Serbia
- Ongoing: Energy Efficiency Project in Montenegro (US$9.4 million)
- Pipeline: Montenegro, Bosnia and Herzegovina, Kosovo, Serbia (US$72+million)
- Regional and country specific studies on scaling up energy efficiency in buildings (Serbia, Macedonia, Kosovo)
12
The World Bank
Energy Program in South Caucasus
Supporting use of renewable energy and improving energy efficiency Support development of renewable energy potential in Georgia and Armenia
- Supporting preparation of SREP Investment Plan with other IFIs- Technical assistance to support development of hydro power potential in Georgia - Preparing technical assistance activity on renewable energy assessment in Azerbaijan
Scaling up energy efficiency improvements in public and social facilities in Armenia (US$1.8 million GEF)
Strengthening power supply reliability Ongoing Electricity Supply Reliability Project (US$39 million) and two new projects under
preparation (US$80 million) in Armenia – Electricity Supply Reliability Project and Power Transmission Improvement Project
Facilitating regional power trade In preparation: Investment project in Georgia (Transmission Grid Strengthening Project;
US$60 million), which would also help to facilitate regional power trade
Azerbaijan: Transmission Strengthening Project (tbc).
Regional power trade study: Underpinning our lending portfolio
13
The World Bank
Energy Program in Central Asia
Strengthen Energy Security and Supply Reliability Strengthening transmission network in Kazakhstan (US$78million) and Uzbekistan (US$110
million)
Energy Loss Reduction Project in Tajikistan (US$35.5 million)
Advanced Electricity Metering Project in Uzbekistan (US$180 million)
In preparation: Electricity Supply Accountability and Reliability Project in Kyrgyz Republic (US$15 million); District Heating Rehabilitation Project in Uzbekistan (US$150 million); Electricity Distribution Rehabilitation Project in Uzbekistan (US$200 million)
Technical assistance to assess and identify viable heating options in Tajikistan and Kyrgyz Republic
Introduce international standard for assessing the development of new HPP projects (assessment studies for Rogun project in Tajikistan)
Catching up on energy efficiency with the rest of ECA – most inefficient sub-region
Improving energy efficiency in public and social facilities in Kazakhstan and supporting development of sustainable energy financing mechanisms (TF US$21.8 million)
Enhancing energy efficiency in industries in Uzbekistan (US$125 million)
14
The World Bank
Energy Program in Central Asia
Support energy market development Improve accountability and financial sustainability of power utilities in Tajikistan and Kyrgyz
Republic (e.g. technical assistance for tariff setting methodology and development of performance monitoring framework in Kyrgyz Republic)
Strengthen regional energy trade Central Asia South Asia Regional Electricity and Trade (CASA 1000) Project – connecting
Tajikistan and Kyrgyz Republic with Afghanistan and Pakistan to provide clean energy to energy deprived South Asia
Development of Central Asia regional electricity trade
Central Asia Energy Water Development Program
15
The World Bank
EU Eastern Neighborhood
Strengthening District Heating Sector In preparation: District Heating Energy Efficiency Project in Ukraine (US$300 + $50 million
CTF), District Heating Efficiency Improvement Project in Moldova (US$40 million and US$80 million coverage of debt restructuring using PCG), and Biomass District Heating Project in Belarus (US$90 million)
High level energy pricing dialogue in coordination with IMF and other IFIs in Ukraine
Technical assistance to regulator in Ukraine to reform heat billing practices (SIDA TF)
Support for heat tariff reforms and social impact measures in Belarus
Improving Energy Efficiency Credit-line for industrial and municipal energy efficiency investments in Ukraine (US$200
million)
Energy Efficiency Project in Belarus focusing on CHPs (US$ 215 million)
Support for energy sector reforms and efficiency improvements in Moldova (SIDA TF US$2.6 million)
Technical assistance on municipal energy efficiency investment financing in Ukraine
16
The World Bank
EU Eastern Neighborhood
Scaling up Climate Change Action Supporting carbon market development in Ukraine (Partnership for Market Readiness)
Strengthening Power Sector Ongoing and planned investments in transmission and hydropower rehabilitation in Ukraine
(US$716 million), including support for power market reforms
Energy Community Treaty alignment with specific focus on ENTSO-integration in Ukraine
Assessment of Power Market Options in Moldova
Supporting Gas Sector Reforms in Ukraine Ukraine is member of the Extractive Industries Transparency Initiative (EITI)
EC Ukraine Gas Trust Fund to support implementation of the gas sector reform program (scope defined and agreed with EC-EBRD-EIB and awaiting Government endorsement)
17
The World Bank
Turkey Scaling up private sector investments in renewable energy and energy efficiency
Increase private sector investments in renewable energy and energy efficiency (US$1 billion + $100 million CTF)
Credit-lines for energy efficiency investments in SMEs (US$201 million + $3.6 million GEF)
In preparation: Renewable Energy Integration Project (US$300 million)
Review and assessment of the energy efficiency institutional framework
Improve electricity and gas supply security and reliability Gas sector development project (US$325 + $225 million AF in preparation)
Adaptable program loan (US$220 million) to support strengthening and expansion of transmission system and electricity market development
Support energy reforms EU/IPA technical assistance program for energy sector reforms, energy efficiency and
renewable energy (US$14 million)
Support Climate Change Action
Support development of carbon market (Partnership for Market Readiness)
18
The World Bank
EU Member States Strategic Focus in new EU Member States
Policy and program support to achieve EU 20-20-20 goals
Advisory services to help prioritizing and support more effective use of EU structural funds
Policy support in energy market development
Program Developing financing and implementation mechanisms for energy efficiency and renewable
energy in Poland
Support development and implementation of climate change and green growth strategies, policies and mechanisms, including energy efficiency, in Romania
Review of district heating sector and related energy efficiency potential in Croatia
Energy sector dialogue and power sector assessment in Bulgaria
19
Russia Scaling up energy efficiency in industry and municipalities
In pipeline: Credit-line for energy efficiency investments in industries and municipalities (US$500 +$23 million GEF)
The World Bank
Thank you
Outage – Investment Shortfalls in the Power Sector in Eastern Europe and Central Asia, April 2011
Lights Out? The Outlook for Energy in Eastern Europe and Central Asia, May 2010www.worldbank.org/eca/energyreport
Future of the Natural Gas Market in South East EuropeJuly 2010http://go.worldbank.org/ZM7XE8RM10
For information about the World Bank’s energy work:www.worldbank.org/energy
Project documents – appraisal reports for investment projects and program documents for DPLs also available:www.worldbank.org > projects and operations > documents
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