Energy Efficiency is a critical component of the World Bank Group’s (WBG’s) commitment to the Paris Agreement, SDG 13 (combating climate change), and SDG 7 (improving access to affordable and clean energy). The WBG’s Climate Change Action Plan (CCAP) recognizes energy efficiency as one of the most cost-effective ways to combat climate change and to support countries’ aims of achieving net-zero CO2 emissions through decarbonization. This report assesses the effectiveness and coherence of the WBG’s support to clients on demand-side energy efficiency (DSEE) projects and the opportunities to scale them up.

Demand Side Energy Efficiency (DSEE) projects focus on the energy use of industries, commercial entities, and households. The WBG’s DSEE approach aims to incentivize both public and private sectors to use energy in more efficient ways. In addition to helping save energy, DSEE approaches can also help avoid fossil fuel consumption and decrease global greenhouse gas (GHG) emissions. Global use of LED lightbulbs in 2017 alone reduced carbon emissions by 570 million metric tons, nearly 2 percent of total emissions. DSEE could also bring other economic, environmental and social benefits. Throughout the COVID-19 pandemic, there has been greater recognition of DSEE’s role in reducing pressure on public budgets and on achieving socioeconomic impacts such as increases in productivity and job creation.

In view of the critical importance of DSEE, the report analyzes the factors that drive the successful scaling up of WBG’s DSEE projects. It also explores some of the challenges that recur across projects and offers four recommendations in the near term for the Bank Group to scale up DSEE.