...and the World Bank Group has a responsibility to meet it head-on.

Access to electricity is transformative in improving education, healthcare, water supply, essential communications, and opportunities for income generation.  But about 1.1 billion people around the world, mostly poor, have no access to electricity. Of these, 591 million are in Sub-Saharan Africa (SSA). At current rates of population growth and electrification, this number will increase to 935 million by the year 2030. Suffice it to say, in the absence of a quantum leap in access, another generation in the region will be denied the benefits of electricity access.  

Meanwhile, South Asia and East Asia (with 378 and 99 million without access respectively) are broadly on track to narrow the access gap by 2030.

And, of those around the world who do have access to electricity, another 1 billion contend with chronic shortages and outages, undermining productivity and overall economic growth.

 

The #SE4All Challenge

Recognizing these issues, the World Bank Group (WBG) and the United Nations committed to the Sustainable Energy for All (SE4All) initiative for achieving universal access to electricity by 2030.  This initiative complements the WBG's goals of increasing shared prosperity and ending extreme poverty by 2030.

The SE4All challenge is most firmly centered in SSA: 40 of the 51 "low-access" (less that 50 percent population connected) countries in the world are in SSA. Of those, 22 countries have less than 25 percent access, and seven countries have access below 10 percent.

The SE4All goal for all low-access countries requires a quantum leap from the present pace of 1.6 million connections per year to 14.6 million per year until 2030. The corresponding annual investment required, including generation needs, is $37 billion.   By comparison, these countries receive an average $3.6 billion per year investment in electricity from public and private sources, including $1.5 billion per year from the WBG.

In our recent evaluation World Bank Support to Electricity Access, 2000-2014 we examined the World Bank Group's performance and preparedness to put its country clients on track to achieve universal access to electricity.

The World Bank Group provided $63.5 billion to the electricity sector during FY00-14, about 9 percent of all World Bank Group commitments.  IEG finds that the associated development outcomes were favorable overall.  But low access countries, particularly in SSA, were not particularly well served:

  • Low-access countries received only 22 percent of World Bank, and 6 percent of IFC lending for the sector;

  • Among 51 low access countries, the World Bank approved zero projects in 14 countries, only one project in each of 10 countries, and two projects each in 7 countries. IFC and MIGA had no activities in 29 and 43 countries respectively. 

  • We found the median duration of a World Bank electricity sector investment project to be 9 years.  At this rate, most low-access countries are likely to benefit from just two World Bank projects in the next 15 years.

The Shining Lights

But there is also good news.  IEG's evaluation highlights several good practice national access scale-up experiences worldwide, some with significant WBG  involvement - Vietnam, Lao PDR, Indonesia; and Bangladesh and Mongolia (off-grid solar home systems)- and more recently in Rwanda and Kenya.  These experiences highlight common underlying principles adapted to each country context: adhering to a nationwide least-cost national access rollout plan using coordinated grid and off-grid means; maintaining the financial sustainability of sector institutions, to ensure investment financing on a sustained basis; targeting the poor to ensure affordability; and not the least, a unifying government vision and committed leadership that stays the course over the duration of the implementation program.

Showing the Way Forward

The SE4All challenge requires the WBG to reposition itself as a global solutions provider in the sector, going well beyond the confines of its own direct support for access.  IEG's evaluation highlights the urgency for the World Bank Group's energy practice to adopt a new and transformative strategy to help country clients orchestrate national, sustained, sector-level engagement for universal access.  We recommend that the World Bank Group should: 

  • Engage decisively and focus intensively on countries with low electricity access (most of which are in SSA)

  • Move from a predominantly project-by-project approach - which lacks the requisite scale and speed - to a far greater use of a sector-wide organizing framework and process for implementing rapid access scale-up.  The scope and timing of this transition should be led and coordinated by relevant governments, taking into account sector context and readiness in each instance;

  • Design an investment financing platform led by government to crowd-in necessary financial resources from both public and private sources, well beyond the limitations of the World Bank Group's own conventional project and transaction modes of operation. 

Achieving universal access to electricity by 2030 presents a formidable challenge, especially in Sub-Saharan Africa.  But it is a challenge that the WBG can innovatively work to overcome along with country clients and partners, employing strategies informed by experience and evidence.  

Read the Report: World Bank Support to Electricity Access, 2000-2014

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Comments

Submitted by Nikhil Desai on Sun, 08/09/2015 - 02:38

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Generally agree, except: 1. Reliability of grid access is as important as new grid access because unreliable supplies are a waste of investment resources on both the supplier side as well as consumer side (except that power outages mean more business for small generators, battery-banks, and kerosene suppliers). Every single Sub-Saharan country - with possible exception of Mozambique - I worked on since 1997 or so experienced power shortages, sometimes severe. Starting up massive grid extension programs was of questionable value except when new, lower-cost generation sources were anticipated to come online in five years or so. The Bank had failed to anticipate and timely respond to the power supply crises that emerged in the mid-2000s, with the result that in many countries, HIPC debt relief was wiped out by the financial burden of relying on higher-cost oil products whose nominal prices also rose ten-fold from around 1999 to 2008. 2. The "investment financing platform" - already in use in some countries - must also look at efficiencies of end-users, and particular help to the more remote and poorer communities in enabling the transformative use of electricity. What happened in the 20th Century was essentially "middle class electrification" - grid supplies to areas and households that had a productive base (including receptivity to human capital). What's lying ahead is "electrification at the bottom of the pyramid", and 20th Century approaches of generation and network investments will not be sufficient. Productive efficient use is a pre-condition for sustainable electricity access expansion, and transformative use require working on the "other side of the meter". SE4All paradigm of household electricity access - without regard to how the electricity is utilized, and how that use can be made transformative, so as to generate human and physical capital accumulation by the poorest - is a strategy of one-legged walking.

Submitted by Varadarajan Atur on Mon, 08/17/2015 - 07:15

In reply to by Nikhil Desai

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Dear Nikhil, Thank you for your thoughtful comments with which we broadly agree. As noted in the evaluation, the WB has gradually increased attention to reliability aspects in the electricity sector, though much needs to be done in this area as you have pointed out. The evaluation also brings out the lack of depth and breadth in the WBG’s interventions in many countries, especially low access countries in SSA, and recommends that focus and attention to these countries needs to be intensified inter alia, using both grid-based and off-grid options appropriately in country contexts. The report also recognizes and highlights examples of how other enabling factors need to be in place to bring about a transformative change in the human welfare and economic well-being of the poor. As SE4All also incorporates energy efficiency, the expectation is that WBG and other donors work with countries to enhance the impact of investments in the electricity sector and their sustainability. Operational and strategic points in your comments are of value to WBG management and operational staff. Thanks again, for your comments. Varadan.

Submitted by Eric Mair on Tue, 12/08/2015 - 20:35

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Africa has the potential to become the world's power house. We have the renewable resources and the technology to harvest these is available, some can even be manufactured here. What is missing is the ability for these variable resources to deliver dispatchable or even peaking power. The need for bulk power storage is pivotal, without adequate storage none of these aspirations will manifest. To date, only conventional pumped hydro has had the capacity to deliver the level of storage required to realise Africa's power potential but the geographical, environmental and financial constraints seriously limit the effectiveness of PHS. Gravity Power LLC (www.gravitypower.net) has developed a high head underground pumped storage system which can offer the same benefits as PHS without any of the aforementioned constraints. The system can usually be sited where it is needed and can deliver GWh of storage. This, I believe is the "Holy Grail" for Africa's power aspirations, we can harvest all the renewable energy available and deliver it as and when it is required. Gravity Power's storage system will also stabilse unreliable grids by providing the necessary ancillary grid services such as frequency control and load following etc. All this can be provided with local labour and materials at lees than US$1000/kW installed and an expected lifespan of >50 years.

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