ENERGY SECTOR MANAGEMENT ASSISTANCE PROGRAM ANNUAL REPORT 2019 esmap.org 1 Cover photo by © Peter Kapuscinski / The World Bank 2 AnnualReport | Annual ESMAP | 2017 Report 2019 TABLE OF CONTENTS S ECT IO N 1 03 LEADING THE ENERGY TRANSITION 04 Reaching the Sustainable Development Goal 7 05 Global Energy Transition: Opportunities and Challenges 05 ESMAP and the World Bank Group: Driving Change, Delivering Results 11 FY2019 by the Numbers 12 Convening the Global Community for Impact 14 Benchmarking and Guiding Efforts through Knowledge 15 Continuing to Build Sector Fundamentals and Reform Fossil Fuel Subsidies SECT IO N 2 17 OUR IMPACT: PEOPLE, CLIMATE, FINANCING 20 Accelerating Electrification with a Focus on the Poorest 24 Helping to Achieve Climate Change Targets 30 Scaling Up Energy Efficiency 32 Maximizing Finance for Development SECT IO N 3 35 FINANCIAL REVIEW ANNEX A | Summary of The Consultative Group Meeting for Energy Trust-Funded Programs ANNEX B | Results and Targets Achieved for FY2017-20 Business Plan ANNEX C | Completed, New, and Ongoing Activities, FY2019 ANNEX D | Publications, FY2019 SECTION 1 LEADING THE ENERGY TRANSITION The world is making progress towards achieving universal access to electricity 03 ESMAP | Annual Report Report 2019 2019 Photo by © Oluwakemi Solaja / Unsplash REACHING THE SUSTAINABLE DEVELOPMENT GOAL (SDG) 7 Over the past few years, the world has seen progress Despite these encouraging developments, progress on many Sustainable Development Goal 7 (SDG7) is still far from where it needs to be for the world to indicators as new and promising solutions are leading reach SDG7. Under current policies, an estimated 8 to real gains — particularly on access to electricity. percent of global population will not have access to electricity in 2030, 90 percent of them in sub-Saharan Data from the latest Tracking Sustainable Africa. The Energy Progress Report also finds that Development Goal 7 (SDG7): The Energy Progress of all four energy targets in SDG7, access to clean Report released in 2019 shows that the global cooking continues to lag the furthest behind and electrification rate reached 89 percent with the remains one of the most overlooked and underfunded number of people without electricity access development priorities. If the current trajectory dropping to approximately 840 million, from continues, 2.3 billion people will still use traditional 1 billion in 2016 and 1.2 billion in 2010. cooking methods in 2030 — leading to significant health, economic, and environmental impacts. Charting Global Progress towards SDG7 Targets Through its global knowledge work, the Energy Sector Management Assistance Program (ESMAP) continues to play a central role in benchmarking progress toward SDG7: The core report, Tracking SDG7: The Energy Progress Report launched in May 2019, is the most comprehensive look available at the world’s progress towards the global energy targets. It is a joint effort among the International Energy Agency (IEA), the International Renewable Energy Agency (IRENA), United Nations Statistics Division (UNSD), the World Bank, and the World Health Organization (WHO). (https://trackingsdg7.esmap.org) Taking a deeper dive, ESMAP’s Multi-Tier Framework (MTF), assesses and measures the quality of household access to energy through in-depth country studies. In FY2019, three new reports were released that explore the energy access levels of Myanmar, Sao Tome and Principe, and Zambia in greater detail. The complementary Regulatory Indicators for Sustainable Energy (RISE) report tracks where countries stand on the adoption of sustainable energy policies. It rates 133 countries from 2010-17 on policies for electricity access, renewable energy, energy efficiency and access to clean cooking to help policymakers and the private sector to make informed decisions about investing in energy projects. (https://rise.esmap.org/) esmap.org 04 GLOBAL ENERGY TRANSITION: OPPORTUNITIES AND CHALLENGES Recent changes in the global energy sector are now energy around the world, especially in countries with offering possibilities for many developing countries to available water bodies, high population density and reach their energy access and service delivery goals in constraints on land. As stated in the new Floating a lower cost, more sustainable manner, while combating Solar: When Sun Meets Water market analysis climate change. New technologies, and new ways of report released by ESMAP, the global potential of using existing technologies such as geospatial data floating solar is around 400 gigawatts (GW). systems, smart grids, and smart meters are helping In terms of accelerating the rate of electrification to develop resilient energy infrastructure and operate for universal energy access, successful countries are it more efficiently. These developments, combined adopting comprehensive and long-term energy planning with major cost reductions in renewable energy and that combines grid, mini grid and off-grid solutions, and storage solutions are presenting a strong prospect of a innovations in policy, financing and technology. Mini complete re-orientation of the energy sector towards a grids now have the potential to provide electricity to more decentralized, decarbonized and digitalized path. as many as 500 million people by 2030, according Renewable energy continues its upward trend in the to a new report released by ESMAP. energy mix. Solar and wind power uptake is accelerating On the policy front, the world has seen an uptake in in Africa while technologies such as battery storage are sustainable energy policies over the past decade being deployed to maximize the potential of intermittent according to the latest edition of ESMAP’s Regulatory renewable resources. In addition, offshore wind is picking Indicators for Sustainable Energy (RISE). The report up momentum globally. According to a report released finds that the number of countries with strong policy by ESMAP, the offshore wind industry has grown nearly frameworks for sustainable energy has more than five-fold since 2011 with 23 gigawatts installed at the tripled since 2010, with a dramatic increase in the end of 2018, representing about US$26 billion in annual uptake of renewable energy and energy efficiency investments — or 8 percent of new global investments policies. To reach global energy goals, however, in clean energy. This proportion is set to increase stronger political commitment, long-term energy dramatically, with about US$500 billion expected to planning, increased public and private financing and be invested in offshore wind projects by 2030. Other adequate policy and fiscal incentives will be crucial. innovative solutions such as floating solar photovoltaic (PV) systems are helping to scale up the use of solar ESMAP AND THE WORLD BANK GROUP: DRIVING CHANGE, DELIVERING RESULTS The World Bank Group (WBG) and ESMAP are at the frontier of this transformation, helping developing countries to take advantage of technological, financial and policy innovations and implement approaches that best suit their needs to address energy poverty in an equitable way. Through World Bank (WB) country programs, ESMAP is supporting energy sector reforms that maximize finance for development. 05 ESMAP | Annual Report 2019 World Bank Energy Financing Trends grid and off-grid solutions, with the record value of US$650 million in FY2018, up from As the world moves towards a more resilient, about US$200 million/year in FY14-17 period. sustainable energy trajectory the WB is responding Most of these commitments are in Sub-Saharan to challenges and opportunities as defined by its Africa. The clean cooking portfolio remains client countries. It supports countries in their energy comparatively smaller at more than US$350 million transition and their efforts to expand energy access, in 21 countries, but it is still the largest among the underpinned by energy sector reform, with a focus on development financing institutions. improving the efficiency of the sector (for example, by reducing fossil fuel subsidies), enhancing the financial The WB’s catalytic work on renewable energy viability of utilities, and mobilizing commercial finance. and energy access benefit greatly from ESMAP Based on country demand, the WB’s support for and concessional climate finance such as from energy transition includes utility-scale and distributed the Climate Investment Fund (CIF) and the Green solar power, investments in shared infrastructure Climate Fund (GCF) to turn knowledge and technical and grid enhancements, innovations such as floating assistance into policies and investments. and hydro-connected solar, and industrial and urban Currently, WB Energy has a portfolio of energy efficiency. The WB also supports the continued US$2.8 billion in concessional climate finance roll-out of competitive bidding and deploys innovative which is co-financing US$9.1 billion IBRD/IDA financing instruments, such as guarantees. operations, enabling significant climate co- The WB’s commitment to the energy transition benefits in WB lending. In addition, ESMAP’s is reflected in its financing. Of a total US$30.2 disbursements of about US$40 million per year billion IBRD + IDA lending to the energy sector is essential for innovation, technical assistance, over FY15-19, US$9.4 billion was in clean energy business development and implementation support. (hydropower, renewable energy and energy Enabling the energy transition also requires phasing efficiency). Out of this total, US$5.5 billion went out subsidies to fossil fuels. These subsidies lead to non-hydro renewable energy. Over half of the to the overuse of fossil fuels, deter investment in portfolio is in Africa and South Asia regions. The renewables and energy efficiency, and divert public total financing on energy efficiency for FY2010- money that could otherwise be directed to health, 19 is US$16 billion, mostly in East and Central education or other priorities. Recognizing that Asia, Africa and East Asia and the Pacific. reforming and reducing energy subsidies is both technically and politically complex, the WB, On the energy access front, the WB has been through ESMAP, supports countries in the process. focusing on scaling up new, climate-friendly distributed technologies, such as solar PV, mini- In FY2019, ESMAP provided US$5.21 million grids and battery storage to close the access gap. in country grants towards energy subsidy reform and supported 13 countries in reducing The WB has been increasing its financing for or removing subsidies. The technical assistance energy access, establishing itself as the leading and analytical work funded by ESMAP helped development financing institution in this area. The define country policies and actions for subsidy WB’s annual financial commitments for energy reduction or reform whose implementation access averaged US$1.5 billion in FY2018-2019. was supported by US$4.1 billion of WB lending. About a third of these commitments is targeting distributed renewable energy investments in mini esmap.org 06 ESMAP’s Strategic Relevance: Responding to Global Challenges and Opportunities New ESMAP Initiatives in FY2019: Energy Storage Initiative Offshore Wind ESMAP has designed and is implementing Thanks to funding from the UK, ESMAP, a US$5 billion World Bank Group initiative in partnership with the International launched at the One Planet Summit in Finance Corporation (IFC) initiated a September 2018 to accelerate investments new US$5 million program to fast-track in battery storage. The groundbreaking the adoption of offshore wind energy initiative aims to finance 17.5 gigawatt in developing countries. The program hours (GWh) of battery storage by 2025— will help developing countries advance more than triple the 4-5 GWh currently bankable offshore wind projects and installed in all developing countries. raise the concessional funding needed to carry out feasibility studies. Modern Energy Cooking Services Program Efficient and Clean Cooling ESMAP and Loughborough University joined In collaboration with the World Bank’s forces in leading a research project to find Montreal Protocol unit, ESMAP launched innovative, clean and modern alternatives a US$3 million program with support to biomass fuels, such as charcoal and from the Kigali Cooling Efficiency wood. The £39.8 million program was Program (K-CEP) to accelerate the made possible by funding from UK Aid. uptake of sustainable cooling solutions, including air conditioning, refrigeration and cold chain in developing countries. Energy Transition Thanks to a £20 million contribution by Electrification of Transport UK’s Department for Business, Energy ESMAP is supporting countries to reduce and Industrial Strategy (BEIS), ESMAP the local and global environmental launched an initiative that will scale impact of the transport sector through up its support for renewable energy, electrification of transport based on energy efficiency, and development clean power. The new report Electric and implementation of appropriate Mobility and Development was launched strategies for the energy transition at the 24th Conference of the Parties and for helping countries address some to the United Nations Framework of the barriers to phasing out coal. Convention on Climate Change (COP24) in Katowice, Poland and reveals that developing countries also stand to benefit significantly from the technology. 07 ESMAP | Annual Report 2019 07 ESMAP | Annual Report 2019 Floating and Rooftop Solar Sustainable Hydropower ESMAP will continue to support an With support from Austria, Iceland increase in investments in floating and and Switzerland, ESMAP launched the rooftop solar to help countries expand Hydropower Development Facility (HDF) solar deployment. According to the new to support the development of bankable report Where Sun Meets Water released hydropower projects through managing in FY2019, floating solar photovoltaic risks and careful preparation. (PV) systems could double the current global installed capacity of solar PV. Upcoming Initiatives in 2020 Clean Cooking Fund Industrial Decarbonization ESMAP aims to establish a Global CO2 emissions from industry are US$500 million Clean Cooking Fund expected to decrease in absolute terms, (CCF) to scale up public and private but their relative share in total emissions investment and accelerate progress is expected to increase. Decarbonizing toward universal access to clean cooking the industrial sector is especially by 2030. The CCF will provide financial challenging compared to the buildings, and technical support, primarily through transport and power sectors. First, the results-based grants, to help countries high-temperature heat used in many incentivize the private sector to deliver industrial processes is often generated modern energy cooking services. The by burning fossil fuel and there are only CCF will also complement and support a few clean options capable of producing work by several international partners. this heat. Second, industrial processes produce ‘feedstock’ emissions that cannot be decreased by switching to cleaner Solar Risk Mitigation fuels but only by changing industrial Jointly with the International Solar processes. Changing these complex and Alliance (ISA), Agence Française interlinked processes is challenging De Développement (AFD), and other because it might negatively impact partners, ESMAP will implement the industrial competitiveness. ESMAP plans Solar Risk Mitigation Initiative (SRMI) to tackle these challenges by promoting to help scale up solar energy use by the use of innovative technologies to de-risking and reducing the cost of reduce the demand for carbon-intensive financing for solar projects. This is feedstocks and products through expected to lead to the successful circular economy, by improving energy mobilization of the private sector efficiency at scale, and by deploying to deploy solar solutions at scale. new decarbonization technologies. esmap.org 08 Responding to Regional Priorities ESMAP responds to country priorities and regional infrastructure continues to be a priority as shown challenges. During FY2019, ESMAP continued to by the support provided to countries in the Greater support energy market design, policy and regulatory Mekong Sub-Region Power Market Development reform, power system planning, and integration Programmatic Technical Assistance project. of regional infrastructure that are pre-conditions In Europe and Central Asia (ECA), ESMAP activities for the achieving universal energy access and are aligned with regional priorities such as sector decarbonization of the energy sector. reform and regional market integration, utility financial In Africa (AFR), ESMAP focuses on priorities such recovery and subsidy reforms, and decarbonization reforming the power sector, boosting regional of the energy sector. The majority of ESMAP grants energy trade, and expanding energy access while supported activities focusing on the decarbonization scaling up the use of renewable energy. While of the sector through the provision of policy, regulatory, electrification efforts are now for the first time technical or financial advice on renewable energy and in history outpacing population growth in Africa, energy efficiency. Support for policy and regulatory progress is uneven across countries. For example, frameworks, and capacity building is helping to in Malawi, ESMAP funded a review to identify and strengthen linkages between renewable energy and address policy gaps and improve the performance energy efficiency with the overall sector strategy. of the national power utility to attract private Specific examples include the support to Armenia’s sector financing. This resulted in the approval renewable energy development (e.g. distribution grid of the National Energy Policy 2018, the Independent code, model PPA for small-scale renewables and grid Power Producer Framework and the Renewable integration analysis) and Uzbekistan’s sector reform Energy Strategy. It also laid the groundwork for strategy, which are leading to further investments in the design of the WB US150 million Malawi renewable energy and energy efficiency. Electricity Access Project. The WB US$5.8 million In Latin America and the Caribbean (LAC), ESMAP Somali Electricity Access Project also benefited continues to support regional priorities such as by an ESMAP-funded Power Sector Master Plan comprehensive sector reforms and regional market and an Off-Grid Market Assessment. integration, utility financial recovery and subsidy In East Asia and the Pacific (EAP), ESMAP focused on reforms and decarbonization of the energy sector strengthening utilities, regulations and power system by scaling up energy efficiency and the use of planning. This is reflected through activities supporting renewable energy. The analytical work done as part sector planning for least-cost, low-carbon supply of of the Assessment of Geothermal Potential in LAC electricity and heating in countries such as China, that has looked at best practices, resource risk Myanmar, Mongolia, and Vietnam, and activities mitigation, attracting qualified developers, and supporting sustainable hydropower development and environmental and social safeguards considerations rural electrification in Indonesia, PNG, the Philippines, has helped to shape the design of several geothermal Myanmar, and Solomon Islands. Power sector reform investment operations under preparation and is another priority for the region. As such, ESMAP grants implementation in St. Lucia, Nicaragua, Dominica, supported China, Myanmar, Vietnam, Indonesia, El Salvador, and Chile. Another example is Brazil, and Lao PDR on overall reforms, including to integrate where ESMAP supported power sector reform by renewable energy and ensure overall financial viability recommending steps for sector modernization and of the sector. Regional integration of energy reforms in the gas sector. 09 ESMAP | Annual Report 2019 In South Asia (SAR), ESMAP activities In Middle East and North Africa (MENA), ESMAP supported countries in creating sustainable activities aligned with regional priorities such as energy sectors, improving governance, and sector reform and regional market integration, strengthening key institutions. Aligned with utility financial recovery and subsidy reforms, the evolving and cross-cutting priorities of maximizing finance for development, supporting SAR countries, the ESMAP grants allowed the energy transition through scaling up renewable country energy teams to respond to client energy and energy efficiency, and expanding demand through designing and implementing energy access in fragile, conflict and violence (FCV) comprehensive activities intended to deal environments. For example, ESMAP supported the with multiple challenges facing specific client government of Lebanon on electricity tariff and counterparts. For example, ESMAP funded other reforms which influenced the WB’s dialogue. an activity to support the modernization of The work supports the adoption of fuel indexation electricity distribution systems in Andhra for the national utility’s (EDL) tariffs, which would Pradesh focusing on electricity distribution be a first in Lebanon’s history and help limit subsidy companies in the state. In Sri Lanka, transfers to the utility. ESMAP funded consultations on the Energy Infrastructure Sector Assessment Program (InfrasAP) that enabled stakeholders to endorse its recommendations. The InfraSAP resulted in the development of a roadmap for mobilizing private sector financing and the government pursuing competitive procurement of renewable energy with the aim to develop a renewable energy project/park site of solar photovoltaic (PV) and wind generation capacity. ECA EAP MENA SAR AFR LAC esmap.org 10 FY2019 BY THE NUMBERS Fiscal year (FY) 2019 was the third year of implementation A total of 227 activities of ESMAP’s four-year business plan for FY2017-20, supported by ESMAP’s active which focuses support on the three main thematic areas, US$49.2 million portfolio, corresponding to the SDG7 targets on Energy Access, as of June 30, 2019 Renewable Energy , and Energy Efficiency , as well as the cross-cutting areas of Energy Governance , Markets and Planning, Energy Subsidy Reform, Small Island Developing US $31 million was States (SIDS DOCK), Gender and Global Energy Knowledge. allocated for new activities: With an active portfolio of US$49.2 million, as of the end of  46 activities in 33 countries June 2019, encompassing more than 225 activities across (excluding regional activities) 70+ countries, ESMAP is helping to shape global energy policies 13 activities with a global focus while underpinning significant WB development financing. Concrete program results are illustrated throughout the report. Number of Activities by Region (US$ Millions) Grant Amount (US$ Millions) 60 20 50 16 40 12 30 8 20 4 10 0 0 AFR EAP ECA LAC MENA SAR Global AFR EAP ECA LAC MENA SAR Global FY2019 Grant Amount by Thematic/Cross-Cutting Area SAR MENA LAC ECA EAP Regions AFR 0 1 2 3 4 5 6 7 8 Allocations in Millions (USD) Annual Block Grants Energy Access Energy Efficiency Subsidy Reform MultiAllocation Renewable Energy 11 ESMAP | Annual Report 2019 11 ESMAP | Annual Report 2019 CONVENING THE GLOBAL COMMUNITY FOR IMPACT Partnerships lie at the heart of ESMAP’s work. In FY2019, ESMAP brought together global stakeholders from client countries, private companies, donors, non-governmental organizations, academia and others to share knowledge and build a common vision around the most promising areas in the energy sector. Energy Storage Partnership (ESP) Knowledge Exchange Forum on Energy Subsidy Reform  ESMAP and the WBG convened the Energy Storage Partnership (ESP) that was launched in Vancouver In October 2018, the Swiss State Secretariat for during the 10th Clean Energy Ministerial and 4th Economic Affairs (SECO) and ESMAP hosted a two-day Mission Innovation Ministerial. This global partnership conference in Geneva on energy subsidy reform and comprises the WBG and more than 30 international its implications for developing countries. The forum organizations with the aim to expand deployment brought together more than 70 decision-makers of energy storage in developing countries. The from country governments, World Bank staff, non- requirements of developing countries’ grids are not governmental organizations, donors and others yet fully considered in the current energy storage to share experiences on subsidy reform programs. market – even though these countries may have Building on the momentum, ESMAP organized an the largest potential for battery deployment. The event during the WB Spring Meetings in April 2019 current battery market is driven by the electric to help increase awareness about the importance vehicle industry and most mainstream technologies of reforming wasteful fossil fuel subsidies in the cannot provide long duration storage or withstand context of climate change, and to call for urgent harsh climatic conditions and low operation and action. Discussion at the KEF led to follow-up maintenance capacity. There is a clear need to catalyze requests from client countries for WB technical a new market for batteries and other energy storage assistance and knowledge sharing. The niche group solutions that are suitable for electricity grids for a of participants had the opportunity to exchange variety of grid and off-grid applications and deployable notes and dig deeper into subsidy reform challenges. on a large scale. To enable the rapid uptake of variable For example, delegations from Algeria, Morocco and renewable energy in developing countries, the WBG is Tunisia shared experiences in fuel price subsidies. convening an Energy Storage Partnership (ESP) that will foster international cooperation. By connecting WEPOWER Conference on Gender stakeholders and sharing experiences, the ESP will and Energy in South Asia help bring new technological and regulatory solutions to developing countries. The ESP will take a holistic, With support from ESMAP, the Asian Development technology-neutral approach by looking at all forms of Bank (ADB), and the Australian Department of energy storage, including but not limited to batteries. Foreign Affairs and Trade (DFAT), the event held in Activities coordinated by the ESP will identify technical Katmandu, Nepal brought together more than 250 and research gaps, pilot innovative storage concepts, representatives from 60 institutions, including local and strengthen knowledge sharing and capacity and international power utilities and multi-lateral building, among others. The first meeting of the ESP agencies. The conference focused on increasing took place in Brussels in June 2019 to determine the women’s participation in the energy sector and Working Groups of the Partnership. A second meeting STEM education, with partners agreeing to endorse will be held in South Africa in January 2020. esmap.org 12 the objectives of the network along WePOWER’s Solar Workshop five pillars: (i) Science, Technology, Engineering, and Mathematics (STEM) education; (ii) Recruitment; In Morocco, over the course of three days, ESMAP (iii) Development; (iv) Retention; and (v) Policy convened country representatives from 45 countries and Analysis. Partners from 11 organizations and practitioners from several regional organizations have started to implement activities that have to share experiences about solar deployment in their successfully increased women’s employment in the countries. The learning event covered utility-scale solar energy sector and trained almost 3,500 women (PV and CSP), rooftop solar, floating solar, storage, through workshops, study tours, internships and grid integration, competitive bidding (solar auctions), mentorship programs. A second WePower Forum project financing, and a range of other issues related is scheduled to take place in Manila in late 2019. to solar deployment. It provided country delegations the opportunity to learn from Morocco’s experience in developing the Noor Solar complex at Ouarzazate and Offshore Wind Workshop see firsthand what it takes to advance large scale solar projects. For example, the delegation from Afghanistan In support of the newly launched offshore wind saw MASEN’s model, as Afghanistan is progressing with program, ESMAP brought together global stakeholders solar development under the World Bank Group’s Scaling for a seminar in London to share knowledge in Solar, while delegations from Burkina Faso, the Gambia, offshore wind development, followed by a study tour Guinea Bissau, Mali, Niger and Central African Republic of the North-East of England to witness potential learned about solar with storage in order to apply them economic opportunities such as job creation and in their first PV and batteries projects. The event also the creation of new industries. Representatives helped to jump start the WB’s dialogue on solar with from 11 client countries (including Argentina, Algeria, Algeria, and Botswana and Namibia, among others, Brazil, Costa Rica, India, Indonesia, Morocco, Sri and the WB team plans to build on this opportunity. Lanka, South Africa, Turkey and Vietnam) had the opportunity to participate and share their reflections. The visit to the UK led directly to follow-up requests Global Action and Learning Event on Mini Grids for scoping visits and stakeholder events in countries such as Brazil, India, South Africa, Sri Lanka, Turkey, In June 2019, ESMAP brought together global and Vietnam. The ESMAP-IFC team is working with stakeholders in Accra for its 6th Mini Grids Action WBG country teams to carry out these visits, prepare Learning Event. The event gathered around 300 funding applications, and initiate roadmap studies practitioners representing governments, multilateral and geospatial planning in consultation with the financing institutions, private sector representatives, relevant client agencies. NGOs and academia who came together to exchange global knowledge around mini grids and discuss prospective opportunities for new investments. Discussions also focused on a follow up WB investment in mini grids to help Ghana achieve universal access by 2025. The event received a strong positive response from participants and enjoyed significant coverage in the local media. During the event, ESMAP also launched the anticipated Mini Grids for Half a Billion People: Market Outlook and Handbook for Decision Makers, a first-of-a-kind report that outlines the state of the market for mini grids. 13 ESMAP | Annual Report 2019 BENCHMARKING AND GUIDING EFFORTS THROUGH KNOWLEDGE ESMAP has led the way in energy data, benchmarking and keeping the global community aware of what needs to happen to reach SDG7. Key global reports and knowledge products launched in FY2019 include: Tracking SDG7: The Energy Progress Report 2019 primary source of electricity. In terms of access to clean cooking solutions, most households are in Tiers 0 and 1 The fifth edition of the report, launched in May 2019, as they still use open fire or traditional biomass stove. found that at current rates, the world is making progress towards achieving some elements of SDG7, but will Mini Grids for Half a Billion People: Market Outlook fall short of meeting the targets by 2030. and Handbook for Decision Makers Regulatory Indicators for Sustainable Energy A first-of-a-kind report launched in June 2019 that (RISE) 2018 gives the global energy community a rundown of the state of the market for mini grids. It shows that mini Launched in December of 2018 during the 24th grids can provide electricity to approximately half a Conference of the Parties to the United Nations billion people in a cost-effective way while promoting Framework Convention on Climate Change (COP 24), productive uses of electricity. It also outlines the five RISE is a tool for policymakers to compare national market drivers to take mini grids to scale such as policy frameworks for sustainable energy and i) adopting a portfolio approach to develop around identify opportunities to attract investment. 1,500 mini grid projects in each access-deficit country per year by 2030; ii) providing superior- Beyond Connections: three new country diagnostics quality service of 97 percent uptime by 2020, as reports under the Multi-Tier Framework (MTF) well as increasing the average load factor of 3rd- generation mini grids to 45 percent; iii) creating enabling Myanmar: About 70 percent of households business environments with the aim of raising the in Myanmar have access to Tier 1+ services. average RISE (Regulatory Indicators for Sustainable Particularly, off-grid energy solutions substantially Energy) score in the top-20 electricity access- supplement national grid in Myanmar. Almost half deficit countries to 80 out of 100; iv) leveraging (48 percent) of rely on off-grid energy solutions development partner funding to crowd in private- such as standalone solar system or mini-gird. sector finance, attracting almost US$220 billion  of investment by 2030; and v) reducing the cost of Sao Tome and Principe (STP): Around 70 percent solar-hybrid mini grids to US$0.20/ kWh by 2030. of households in STP are connected to the national grid and among them, more than a quarter (27.5 Where Sun Meets Water: Benefits and percent) are in Tier 5. Improvements in electricity Challenges of Floating Solar reliability, availability and quality could shift nearly two-thirds (63.9 percent) of the grid-connected This new ESMAP report presents an overview of households to higher Tiers (4-5) floating solar technologies, market opportunities, deployment challenges, policy and regulatory Zambia: About 40 percent of households in Zambia considerations, costs, and project structuring. are in Tier 1 or above for electricity access. Less than 5 The greatest advantage of floating solar is that it percent of households use off-grid energy solutions as a esmap.org 14 avoids land acquisition and site preparation issues sees potential for this technology also beyond associated with traditional solar installations. Asia to boost performance of underperforming In some cases, floating solar allows for power hydropower plants or in joint hybrid operations generation to be sited much closer to areas where of hydropower and solar plants where solar helps demand for electricity is high. While up-front costs with water management and hydro serves as are slightly higher for floating solar, the costs over storage for solar power. time are at par with traditional solar PV, because of higher energy yield due to the cooling effect Electric Mobility & Development of water. Floating solar is an attractive option for countries with high population density and This report aims to help governments design and competing uses for available land. Large plants implement electric mobility programs that are are currently being installed or in China, India and effective at achieving their intended development Southeast Asia but over 35 countries globally have aims across climate, economic, fiscal, technical, plants under development or construction. ESMAP institutional, and policy dimensions. CONTINUING TO BUILD SECTOR FUNDAMENTALS AND REFORM FOSSIL FUEL SUBSIDIES ESMAP’s commitment to improving energy sector fundamentals – such as financially stable institutions, regional energy trade, and policies that set the conditions for public and private investment — is illustrated through several examples in FY2019 Georgia Ghana In Georgia, the ESMAP-funded analysis on Maximizing In Ghana, an ESMAP grant helped to identify Finance for Development in the Power Sector has Independent Power Producers (IPP) Procurement fed into design of the FY2019 Georgia Energy Supply Options and triggered reforms that were linked Reliability and Financial Recovery Project to help to the first of a series DPF - Enhancing Growth the state-owned transmission company (GSE) raise and Reducing Vulnerability. These reforms are long-term commercial financing from capital markets. evident by the government’s decision in May 2019 The assessment focused on specific constrains and to adopt a policy on Competitive Procurement recommended key steps to remove the bankruptcy for Energy Supply and Service Contracts, based protection status of the company so it can access on the report’s recommendations on electricity markets. The study also offered intelligence on the demand forecasting, supply planning, and availability of and appetite for commercial lending to competitive tendering processes. In addition, GSE and outlined actions that GSE would need take the Ghanaian Cabinet has approved the Energy to carry out transactions. These recommendations Sector Recovery Program (ESRP) which identifies directly helped design the IBRD guarantee included revenue shortfalls and includes policy actions under the project. to achieve financial balance by 2023. 15 ESMAP | Annual Report 2019 Tunisia ESMAP has been supporting Tunisia in its effort to improve the performance and financial viability of the energy sector. In FY2019, the World Bank approved the Tunisia-Italy (Elmed) Power Interconnector Project to explore the feasibility of a 600 MW undersea link between Tunisia and Italy’s power grids, a significant step towards a Euro- Mediterranean electricity grid to reduce Tunisia’s energy costs, while scaling up the use of renewable energy. A US$ 5.5 million grant from ESMAP and a US$ 7 million grant from the Global Infrastructure Facility (GIF) have funded feasibility studies and advisory services for project structuring, focusing on critically important technical, environmental, social, and financial feasibility studies. The terrestrial feasibility study, a critical component for budgeting and building the proposed interconnector, will determine potential routes and landing points for Elmed. Together, these studies are necessary to confirm the feasibility of the interconnector, optimize its design, and apply for funding from the European Union. ESMAP is also supporting the Tunisian Government in its effort to reform energy subsidies and create an energy regulatory authority. Madagascar Afghanistan Earlier support from ESMAP has helped Madagascar The ESMAP-supported Afghanistan Energy Study laid to eliminate all direct fossil fuel subsidies, which in part of the groundwork for the FY2019 Afghanistan 2013-2014 absorbed an average of 1.2 percent of Gross Incentive Program Development Policy Operation Domestic Product (GDP). The initial step to an automatic (DPO). Recommendations from the study were used price adjustment of pump prices in 2016 was guided by the Ministry of Finance and DABS — the country’s by the ESMAP-funded analysis Pump Price Structure. main power utility — to establish a Partnership However, this price adjustment only partially reflected Agreement to support DABS’ financial recovery the market, resulting in accumulation of liabilities to and strengthen its operational performance. This private oil distributors. To address this challenge, in step was a necessary policy action for the DPO FY19, ESMAP helped the new government to begin to start disbursing funds to the government. The negotiations with private distributors to clear the comprehensive study is also expected to help other arrears. By the end of June, an agreement was reached, WBG projects get off the ground and serve as the basis resulting in a revision of the pump price structure, a plan for multi-year programmatic support to Afghanistan for clearing the liabilities, and renewed commitment to to promote long- term planning, institutional reform, maintain the automatic adjustment of pump prices. and energy service quality in off-grid areas. esmap.org 16 SECTION 2 OUR IMPACT:* PEOPLE, CLIMATE, FINANCING 17 ESMAP | Annual Report Report 2019 2019 Photo by © Stephan Gladieu / The World Bank OVERALL IMPACT $11.6 BILLION 24.2 MILLION World Bank development beneficiaries expected financing informed to be reached $3.7 BILLION 56 MILLION external financing mobilized, metric tons of CO2 emissions including private sector expected to be reduced 13.5 MILLION 12.9 GIGAWATTS people expected to be provided renewable energy expected with access to electricity to be installed 1.62E ... projected lifetime energy and fuel savings * The Impact Indicators are expected results of: (a) WB lending operations approved in FY2019 informed by active/ existing ESMAP activities; and (b) active/existing WB lending operations informed by ESMAP activities which were approved in FY12019 The expected results are based on these lending operations which are to be implemented primarily by WBG client country governments and other public sector entities. For IFC and MIGA, private sector entities are the implementing partners. esmap.org 18 OUR IMPACT: 13.5 MILLION people expected to be provided with access to electricity In recent years the World Bank (WB) has financed an average of US$1 billion per year for energy access projects. That jumped to US$1.7 billion in FY2019. The WB’s off-grid portfolio continues to grow. Out of the US$6.2 billion of overall access commitments in FY2015-19, US$1.6 billion was for projects supporting mini-grids and solar home systems. ESMAP’s technical assistance, policy advice, and project development support have driven the marked increase in financing for these off-grid and mini grid solutions and mini grids. 19 ESMAP | Annual Report 2019 Photo by © The World Bank ACCELERATING ELECTRIFICATION WITH A FOCUS ON THE POOREST Innovative Off-Grid Solutions Improve Half a Million Lives in Rural Peru A decade of WBG support has helped rural communities home systems, delivering power to more than in Peru to access affordable and sustainable energy. 31,000 people in remote rural areas. Innovative efforts, such as scalable models for solar Based on the success of RE1, the Second Rural home systems and the promotion of productive uses Electrification Project (RE2) aimed to provide of electricity, funded by ESMAP, were instrumental in electricity service in localities that were even more reaching the poorest and most remote communities distant from the grid. Expanding on the off-grid while contributing to Peru’s efforts to diversify the model introduced in RE1, ESMAP helped Peru to energy mix with renewables. establish well-regulated and efficient services. With In 2006, the Rural Electrification Project (RE1) set ESMAP support, training was provided for staff of out to increase rural access with a unique approach the distribution companies, and online tools were — introduce incentives to encourage the existing developed to help utilities manage solar home network of electricity distribution companies, systems, optimizing service and reducing costs. already serving urban areas, to expand coverage In addition, effective commercial arrangements to rural communities. The project was highly were established for billing and collection among successful—installing 105,000 connections in rural the dispersed households. RE2 successfully and poor households, benefitting 450,000 people. connected almost 143,000 households to the The project also brought electricity connections grid and installed an additional 12,000 solar to almost 3,000 schools, clinics, and community home systems, exceeding targets by 10 percent. centers. This increased rural electricity coverage by Approximately 34 percent of the beneficiaries almost 6 percent. ESMAP was instrumental in the were women, and 15 percent—21,000 people— development of an innovative model for bringing were part of Peru’s indigenous population. power to remote populations. An ESMAP-funded ESMAP also helped design and implement a pilot program provided regulated services through pilot program in villages near Cusco to increase two distribution companies using solar home productive uses of electricity by partnering with systems. While the pilot successfully delivered local nongovernmental organizations (NGOs). The power to 2,000 customers and the distribution NGOs carried out promotional activities to encourage companies strongly supported the model, an people to adopt tools and equipment that would ESMAP-funded analysis found that incomplete further their productivity. The results of the pilot regulatory frameworks limited growth in the were promising—almost 1,500 families adopted off-grid renewable energy market. Based on this electric equipment to process cereals, coffee, cocoa, assessment, the government passed a law and baked goods, meat products, milk, wood, and metal established regulations that created standards, products, as well as to pump water for expanded tariffs, and subsidies for rural electricity systems agricultural production and processing. and incentives for distribution companies to provide service through solar home systems. This resulted Read Full IMPACT STORY Here in the installation of more than 7,000 solar esmap.org 20 OUR IMPACT: 24.2 MILLION beneficiaries expected to be reached Achieving universal energy access by 2030, will require a significant acceleration in the rate of new connections and a scale-up in investment. ESMAP promotes large-scale approaches that combine grid, off-grid and mini grid electrification to close the energy access gap while ensuring that the poorest are not left behind. 21 ESMAP | Annual Report 2019 Photo by © Larm Rmah / Unsplash Off-Grid Solutions to Expand Electricity Access across West Africa and the Sahel ESMAP was instrumental in the design of the IDA was designed to harmonize policies and introduce Regional Off-Grid Electrification Project (ROGEP). regional quality standards that will make the region The project will help expand off-grid access to more attractive and easier to navigate for private electricity across 19 countries in the ECOWAS sector companies. The project will also provide region of West Africa, as well as in Cameroon, support to local entrepreneurs through training, Central African Republic, Chad, and Mauritania. and by breaking down barriers in accessing finance. It is expected to benefit about 1.7 million people Business models to electrify schools and health by increasing electricity access for households, clinics will also be piloted. businesses, and public institutions. ESMAP also helped to secure US$75 million from The project draws heavily on the experience and the Clean Technology Fund (CTF) to mitigate expertise of the ESMAP-supported WBG programs risks for commercial banks to facilitate access to Lighting Africa and Lighting Global to help facilitate financing for the solar systems market, technical the development of a sustainable off-grid solar support for entrepreneurs, as well as for providing energy market in response to the vast electrification market entry grants. As part of ROGEP, ESMAP’s needs in the region. Based on market intelligence, Africa Gender Program is targeting gender gaps Lighting Africa recognized that private companies in terms of economic opportunities and access to offering stand-alone solar systems were only credit – improving access to credit for women-led operating in four of the 19 countries in the region. companies in the solar and non-solar energy sectors Surveys conducted in cooperation with Global Off- and strengthening the capacity these companies Grid Lighting Association (GOGLA), found that the through training to enable them to enter the private sector viewed the West African markets stand-alone solar systems market. as fragmented, with a high cost for entry and low market potential. There was low access to finance and landlocked countries meant increased costs to navigate borders, which increases the cost of the product for the consumer. In order to increase access to these transformative products, ESMAP tapped into Lighting Global’s successful approach for unlocking market potential. As a result, ROGEP esmap.org 22 OUR IMPACT: 56 MILLION metric tons of CO2 emissions expected to be reduced The World Bank is one of the largest providers of finance for renewable energy and energy efficiency projects in low- and middle-income countries: nearly US$9.4 billion between FY2015-19, representing 31 percent of the total World Bank energy portfolio in this period. ESMAP has played a critical role in the evolution of this portfolio by helping to develop investment projects focusing on scaling up renewable energy and promoting energy efficiency. 23 ESMAP | Annual Report 2019 Photo by © Thomas Hafeneth / Unsplash HELPING TO ACHIEVE CLIMATE CHANGE TARGETS Helping India’s Water Sector to Reduce Emissions and Save Energy The Water Utility of Shimla, the capital of Himachal ESMAP’s technical assistance was key to passing Pradesh in India, has faced many challenges, one of the main policies outlined in the DPL. It including limited availability of local water sources, focused on conducting an extensive energy and water quality issues, intermittent water supply, and water audit, developing bidding documents and increasing demand due to population growth and outlining specific recommendations. The audit urbanization. The high altitude of the city creates also explored the feasibility for demand side additional challenges, requiring most of the water management, where large pumping stations are supply to be pumped from sources at a much lower turned off during peak loads of electrical power. altitude and increasing operating costs. Investing The recommendations were discussed among key in energy efficiency has the potential to create stakeholders from both the power company and substantial savings for the water utility. the water utility, and consensus was built to explore these synergies. As a result, Himachal Pradesh has To avoid an imminent water crisis, the government approved a policy to improve energy efficiency of India has requested support from the WBG for in water supply and sewerage operations. The a Programmatic Development Policy Loan (DPL). DPL will contribute to projected lifetime energy The $40 million DPL — the first in a series of three savings (electricity and fuel) of 388,000 MWh — will support the government to increase the energy and a projected reduction of GHG emissions of efficiency of the water supply and sewerage operations, 290,000 tons of CO2e. among other objectives. Facilitating China’s Energy Transition to Renewable Energy through Battery Storage ESMAP has provided technical assistance for the design A national-level study concluded that installing 8 of a US$300 million loan for the China Renewable GW/32 GWh battery storage systems in China could Energy and Battery Storage Promotion Project to reduce CO2 emissions by 3.8 million tons and reduce increase the integration and use of renewable energy coal consumption by 1.42 mtce annually. The project by deploying battery storage systems at scale. The will be implemented by Hua Xia Bank, a publicly listed project will help accelerate the on-going clean energy commercial bank in China. Hua Xia Bank will provide transition in China and contribute to the country’s co-financing of at least US$450 million to achieve the emission reduction targets by addressing technical development goals of the project. ESMAP and the Global constraints in the transmission networks and gaps in Environmental Facility (GEF) are providing technical regulations for electricity trade, among other things. assistance for policy and regulatory reforms, shaping esmap.org 24 technology and safety standards, and developing and ESMAP have been supporting China’s energy institutional capabilities. ESMAP’s Energy Storage transition for over two decades as trusted partners Partnership (ESP) will also act as a platform to share to help the country tackle multi-dimensional challenges lessons and experiences from China’s deployment of associated with scaling up cleaner and more efficient batteries in power systems with other developed and sources of energy, and lowering the carbon footprint developing country stakeholders. The World Bank of its cities. Reducing Emissions through Clean Cooking Solutions in China and Bangladesh In addition to renewable energy and energy efficiency, distributed, putting it on course for achieving the ESMAP helps countries reduce emissions and create target of 4 million households by December 2021. healthier environments of their populations by The program has also reduced GHG emissions by transitioning to modern, cleaner cooking solutions. 3 million metric tons of CO2 equivalent and is For example, the China Hebei Air Pollution Prevention expected to help curb a total of 10.5 million metric Program-for-Results Project that is now completing tons of CO2 equivalent when it is completed. ESMAP the implementation of an US$80 million clean stove finance supported preparation of the GCF proposal component designed with ESMAP support, has helped and the application process to mobilize US$20 million 1.22 million households to switch from traditional solid GCF grant to co-finance with US$20 million IDA to fuel stoves to gas and electric appliances, exceeding the make it one of the largest clean cooking programs original target of 0.8 million households. The transition currently under implementation. The project has to cleaner cooking methods has reduced fine particulate also achieved significant gender impacts. Seven of matter (PM2.5) emissions by a total of 5,000 tons, the NGOs selected to carry out the program in rural contributing significantly to air pollution prevention. communities are being led by women, and specific NGOs that participate in the cookstove dissemination Bangladesh’s Additional Financing II for Rural have more than 58 percent staff as women in various Electrification and Renewable Energy Development capacities, from senior managers to masons. As a result, project continued to show great success in FY2019, the project has created more than 3000 jobs for women. with nearly 1.7 million improved cookstoves 25 ESMAP | Annual Report 2019 Photo by © The World Bank esmap.org 26 OUR IMPACT: 12.9 GIGAWATTS renewable energy expected to be installed ESMAP helps to shape WBG strategies and programs to achieve the targets set as part of the WBG’s Climate Change Action Plan that includes a significant scale up of renewable energy generation and the integration of variable renewable energy sources into grids. Dominica: the Caribbean’s First Investment in Geothermal Energy Like many other small island developing The project will support the construction states in the Caribbean, Dominica’s energy of a 7MW small geothermal power plant in sector is dependent on expensive imported the country—the WB’s first investment in fossil fuels and affected by extreme weather. geothermal energy in the Caribbean. ESMAP’s The WB US$27 million Dominica Geothermal SIDS DOCK Support Program was instrumental Risk Mitigation Project aims to help the in establishing the building blocks for the country diversify its energy mix while geothermal sector in Dominica. Capacity building providing affordable and sustainable efforts led to the approval of a Geothermal Law energy for its population. and a robust Power Purchase Agreement. 27 ESMAP | Annual Report 2019 Photo by © Antonio Garcia / Unsplash ESMAP support also helped establish benchmarks for A portion of the project’s funds—US$10 million the development of the Wotten Waven-Laudat field from the Clean Technology Fund (CTF)—will allow and identify key steps to meet industry best practices the government to undertake further drilling to and international standards. The successful completion support production and conduct a feasibility study of the exploration and drilling, along with an ESMAP to expand the plant’s capacity to 40–100 MW for grant to assist with project preparation, led to the future electricity exports to neighboring islands. development of the project. A Comprehensive Approach to Scaling Up Solar Energy in Vietnam With help from ESMAP and the WB, Vietnam has and framework to prepare the ground for recruiting a made tremendous progress in developing its solar PV transaction advisor to launch the bidding in FY2020. market, expanding its installed solar PV capacity from The mapping of rooftop solar potential prepared virtually zero in 2017 to over 4 GWp in 2019. In FY2019, in FY2018 with support from the Korean Green Vietnam released a Solar PV Action plan based on a Growth Trust Fund (KGGTF) and ESMAP culminated solar resource measurement campaign, a geospatial in the development of sustainable rooftop solar analysis and a VRE integration analysis as well as a PV PV business models and overall deployment strategy supply-chain assessment funded by ESMAP. During in Ho Chi Minh City and Da Nang, two of the largest the development of the Action Plan in FY2018, the cities in Vietnam. These activities opened the government of Vietnam, with World Bank assistance, dialogue for potential WB investment in the country piloted a solar competitive bidding of 500 MW of solar to support the integration of the newly built 4 GWp capacity. ESMAP and the Global Infrastructure Facility of PV under the FIT, the development of solar parks, (GIF) funded the preparation of a bidding strategy and the deployment of rooftop PV in the main cities. Laying the Groundwork for Renewable Energy Investment in Uzbekistan ESMAP has helped the government of Uzbekistan underlying model is now helping the newly created design a strategy to transition to a market-oriented Ministry of Energy to assess generation expansion energy sector and identify the investments plans. The government also requested support from necessary to improve dispatch efficiency. Based the WBG’s Scaling Solar Program for the development on the recommendation of the Uzbekistan Power of the first 100 MW pilot solar project in the country. Sector Reform Options Study, the government It is expected that a total 1,000 MW of solar plants formed a Ministry of Energy to consolidate policy could be procured in the future. An ESMAP analysis and operations for gas, coal, nuclear power and of opportunities for improving dispatch efficiency electricity. Activities supported by ESMAP also helped estimated potential savings of US$34 million per year the government to finalize and adopt renewable and based on its findings, the National Dispatch Center regulations for developing renewable energy projects is now operationalizing enhanced dispatching tools. The with stronger private sector participation. Least-Cost Plan and dispatch studies have informed the government’s decision to develop and adopt a new At the request of the government, an updated least- Electricity Sector Investment Program by December cost planning analysis was also developed, and the 2019, building on the outputs of these analyses. esmap.org 28 OUR IMPACT: 1.62E MEGAWATT HOURS projected lifetime energy and fuel savings Making cities and buildings more energy efficient can help mitigate climate change and contribute to the achievement of many SDGs, including SDG7. ESMAP helps countries to harness to full potential of energy efficiency by bridging policy gaps, promoting effective regulations, codes and standards, attracting investment through innovative financing models, and prioritizing energy efficiency across sectors such as transport and water. 29 ESMAP | Annual Report 2019 Photo by © Jason Lam / Unsplash SCALING UP ENERGY EFFICIENCY Better Energy Efficiency Regulations and Standards for Panama Panama is expected to face rapid growth in by an implementation guide and other capacity electricity consumption posing significant challenges building activities for government officials. to its stretched energy sector. ESMAP’s technical ESMAP also helped design a communications assistance aimed to strengthen capacity within strategy to increase awareness among key groups the public sector to implement targeted energy and supported regional dialogue to scale-up the efficiency initiatives. These initiatives are helping Panama experience. Finally, to mobilize more to curb electricity demand, especially during peak investment in energy efficiency, ESMAP helped times including space cooling and refrigeration design the legal and financial structure of an in the residential, commercial and public sectors. energy efficiency fund. Specifically, the technical assistance helped to develop national energy efficiency regulations It is expected that the energy efficiency appliance including standards, labelling of appliances, regulations will contribute to reductions of around and green building codes — currently, 12 energy 300 MW of peak demand by 2030 and aggregated efficiency standards and labeling for appliances savings of 6,564 GWh in electricity consumption, have passed through a public consultation process as well as to about US$530 million savings in and been approved. The Sustainable Buildings consumer electricity bills. Code has been approved which is accompanied Mobilizing Financing to Make Vietnam’s Industry Energy Efficient Vietnam continues to rely on imported energy aims to improve energy efficiency in Vietnam’s resources to meet its energy demand, raising issues industrial sector, contributing to energy savings and of energy supply security and vulnerability to price greenhouse gas emission reductions. fluctuations. Meeting future energy demand by ESMAP played a significant role in mobilizing financing improving energy efficiency is the lowest cost option for energy efficiency investments while removing to improve energy security, help consumers save barriers to sustainable private sector solutions. and cope with potential rate hikes, reduce pollution, Specifically, ESMAP helped to develop a US$78 and mitigate climate change. Estimates show that million risk sharing facility (including a US$75 million Vietnam could save up to 11 GW of new generation GCF Guarantee and a US$3 million GCF Grant) to capacity by 2030 if comprehensive demand-side provide partial credit guarantees (RSF Guarantees) to energy efficiency investments are implemented. participating financial institutions to cover potential Despite numerous efforts to increase investments defaults on loans. The RSF Guarantee is expected to in this sector, significant barriers remain, such as mobilize private sector lending and equity and help limited public financing and unattractive financing open a market for commercially financed energy terms, lack of institutional capacity, and limited efficiency investments. This effort is expected to incentives to implement energy efficiency measures. mobilize US$250 million of commercial financing. The WB Vietnam Scaling Up Energy Efficiency Project esmap.org 30 OUR IMPACT: $3.7 BILLION external financing mobilized, including private sector ESMAP aims to mobilize significant private investments by strengthening the policy environment, mitigating risks, and building capacity, following the principles under the WBG’s approach for Maximizing Finance for Development (MFD). 31 ESMAP | Annual Report 2019 Photo by © Samrat Khadka / Unsplash MAXIMIZING FINANCE FOR DEVELOPMENT Closing Funding Gaps to Help Ethiopia Reach Universal Electrification Over the past decade, the government of Ethiopia has Another important millstone in crowding in financing launched one of the most successful electrification to the sector is the US$1.2 billion WB Growth and programs in Sub-Saharan Africa, expanding grid Competitiveness Development Policy Operation (DPO) coverage to nearly 60 percent of its population. Despite approved in FY2019, with a focus on maximizing these major strides, the country still has the second finance for development by improving efficiency largest energy access deficit in Sub-Saharan Africa and restoring financial sustainability in the power with 70 percent of the population still living in the dark. sector. ESMAP’s Energy Subsidy Reform Facility helped to define key policy reforms in this DPO. ESMAP has been central to Ethiopia’s continuing For instance, ESMAP analysis under the cost of efforts by facilitating new investments, strategies and service and tariff study component was a critical approaches. The initial ESMAP-funded Ethiopia Energy input to the comprehensive tariff reforms Sector Review and Strategy (ESRS) has guided the approved by the government. design and launch of Ethiopia’s National Electrification Program (NEP) in 2017, which is now supported by the ESMAP’s work in resource mapping also benefited the World Bank Ethiopia Electrification program (ELEAP) WB US$200 million Renewable Energy Guarantees and other WB projects. The NEP2.0, launched in March Program (REGREP) to leverage private sector financing 2019 outlines a nationwide off-grid program which uses for solar and wind energy generation to develop over diagnostics from ESMAP’s multi-tier framework (MTF) 1,000 MW. The government utilized ESMAP’s Global and geospatial analysis. Wind Atlas to identify areas with high potential. In collaboration with the government of Denmark, ESMAP To close the US$1.5 billion gap to provide one million is also financing wind measurements in 17 sites for last-mile household connections over five years, validation, including 6 priority sites for a future wind Ethiopia’s Electrification Program has mobilized over Independent Power Project. US$214 million so far from development partners and the private sector for grid reinforcement and off-grid With the help of ESMAP’s Africa Gender and Energy electrification. It has also leveraged policy, strategy, and Program, Ethiopia continues to pioneer a first-of- planning expertise from different development partners a-kind model to achieve gender equality across the including the African Development Bank, EU Delegation energy sector, shifting from ad-hoc interventions to a to Ethiopia, DFID, and GIZ. transformational, programmatic approach. The second phase of the NEP builds on early success and defines new engagement areas, together with partners. esmap.org 32 Boosting Financing for Electricity Access in Cote d’Ivoire In Cote d’Ivoire, increased access to electricity is a World Bank Electricity and Transmission Project. key element needed to generate income and jobs, The investment prospectus was presented to promoting productive uses of electricity, thereby development partners including the African spurring growth and development. To help the Development Bank (AfDB), the European Union (EU) government of Cote d’Ivoire to increase electricity and West African Development Bank (BOAD) which access, ESMAP funded the development of an expressed interest in financing the implementation of investment prospectus for a medium-term national the program. Specifically, AfDB indicated financing electricity access scale up program. The investment commitment of about US$30 million, BOAD of prospectus for electricity access scale up focuses US$20 million while the EU initially committed to on 15 cities, through the Electricity Access Scale US$10 million with possibility to further increase UP program set up in 2014 and has mobilized about the financing. In addition, Arab donors including US$ 60 million in external financing to increase OFID, BADEA and Saudi Fund for Development also electricity in 15 selected administrative capitals. expressed interest in financing the implementation This additional financing complements the ongoing of the program. 33 ESMAP | Annual Report 2019 Photo by © Max Lederer / Unsplash esmap.org 34 SECTION 3 FINANCIAL REVIEW This chapter outlines the FY2019 financial information for the two multi-donor trust funds (MDTFs) that are under ESMAP’s management and administration, namely, ESMAP and SIDS DOCK. 1 35 ESMAP | Annual Report 2019 Contributions In FY2019, ESMAP received a total of about US$78 million from 13 donors, including from new donors Climate- Works and the United Kingdom’s Department for Business, Energy & Industrial Strategy (BEIS), a 92 percent increase from FY2018 receipts.2 SIDS DOCK did not receive any contributions in FY2019. Table 1 presents actual receipts in FY2019 from individual donors for the two MDTFs, as well as cumulative receipts for the FY2017- 2020 ESMAP Business Plan. At the end of FY2019, ESMAP has mobilized over US$212 million for its FY2017- 2020 Business Plan, compared to the target of US$215 million. TABLE 1:  Donor Contributions to ESMAP and SIDS DOCK MDTFs, FY2017-19 (US$ thousand) FY2019 Paid-in ESMAP FY2017-19 Contribution / Receipts FY2012-18 Cumulative Cumulative Cum. Receipts Country ESMAP SIDS DOCK Pledges Receipts over Cum. Pledges SIDS DOCK Australia 1,154 1,154 100.0% Austria 1,709 1,709 1,709 100.0% Canada 2,298 2,298 2,298 100.0% ClimateWorks 750 3,000 750 25.0% Denmark 7,118 22,459 21,364 95.1% 7,093 EU 7,298 14,343 7,298 50.9% Finland 144 144 100.0% France Germany • BMUB 7,344 7,344 100.0% • BMZ 866 2,240 2,240 100.0% Iceland 700 2,733 2,433 89.0% Italy 6,054 6,054 100.0% Japan 15,000 Lithuania Luxembourg 1,124 1,124 100.0% Netherlands 8,152 35,378 27,226 77.0% Norway • MFA 4,773 4,773 100.0% • Norad 3,551 6,532 6,532 100.0% Rockefeller Foundation 250 250 100.0% Sweden 7,425 24,367 18,617 76.4% Switzerland 4,000 12,050 12,050 100.0% United Kingdom 64,613 45,817 70.9% • BEIS3 11,532 24,135 11,532 58.1% • DFID 22,258 40,478 34,309 84.8% World Bank Grand Total 77,657 277,179 215,018 22,093 1 As set out in the Administration Agreement with ESMAP donors, the current financial information relating to the three multi-donor trust funds  under ESMAP management can be accessed via the Bank’s Trust Funds Donor Center secure website. The Bank’s Financial Statements, as well as the Single Audit Report on Trust Funds can be accessed via the Bank’s public website for Financial Reports. The ESMAP MDTF consists of TF071398 and its Parallel/Successor TF072490. 2 About $27.1 million of these contributions is preferenced as co-financing grants for specific World Bank projects. 3  U.K. Department for Business, Energy & Industrial Strategy (BEIS) provides contribution in Promissory Notes. Paid-in amount denotes encashed amount esmap.org 36 Disbursements ESMAP disbursed over US$42 million in FY2019, an increase of about 10 percent from FY2018. Disbursement for SIDS DOCK totaled about US$2.1 million, an increase of about 31% from the prior fiscal year. Table 2 presents disbursements for the two MDTFs for FY2017–19. Costs are separated into: (i) project disbursements by region and for global programs and (ii) disbursements for program management and administration, portfolio management, communications, and knowledge management. Regional activities accounted for about 94 percent of disbursements, with country engagements in Africa constituting about 28 percent of regional disbursements. It should also be noted that the Global Programs include technical support by the central ESMAP unit to country/regional activities. TABLE 2: ESMAP, ASTAE, and SIDS DOCK Disbursements, FY2017-19 (US$ thousand) FY17 FY18 FY19 ESMAP SIDS ESMAP SIDS ESMAP SIDS Project Cost $34,511 $1,559 96% $38,110 $1,649 93% $40,062 94% Africa 10,971 264 12,387 161 11,249 East Asia 3,787 482 3,733 576 4,373 Europe & Central Asia 3,025 2,926 3,662 Latin America & Caribbean 2,676 813 2,281 912 1,718 Middle East & North Africa 3,128 1,435 3,423 South Asia 2,349 2,373 3,813 Global Program 8,575 12,975 11,823 Program Management, $1,281 $40 4% $2,815 $13 7% $2,550 6% Comm & KM Program Management 781 40 1,453 13 1,531 & Administration Portfolio Management 27 453 373 (Monitoring and Evaluation) Knowledge Management 7 258 149 Communication and Outreach (publications, website, and 466 651 496 other dissemination) Total $35,792 $1,599 100% $40,925 $1,661 100% $42,611 100% 37 ESMAP | Annual Report 2019 Breakdown, by Region and Thematic/Cross-Cutting Areas Table 3. presents disbursements by region and ESMAP’s Thematic and Cross-Cutting areas. Annual Block Grants (ABGs) comprised the largest portion of ESMAP’s portfolio at nearly 20 percent, followed by Energy Subsidy Reform at 14 percent of total disbursements for ESMAP in FY2019. Within the ABG portfolio, disbursements in the Africa Region was 26 percent of the total ABG disbursements and 5 percent of the total ESMAP project disbursements in FY2019.  SMAP, ASTAE, and SIDS DOCK Disbursements, by Program Area, FY2019 (US$ thousand) TABLES 3: E CROSS-CUTTING ENERGY RENEWABLE ENERGY SOLUTIONS ACCESS ENERGY EFFICIENCY Annual Energy SEforALL Block Subsidy Knowledge SEforALL Mini Host Lighting RE Solar EE EE City Other Grants Reform Hub ECCH TA Grids Comm. Global GGDP Mapping VRE TA Buildings Services Programs Africa 2,119 2,513 2,196 664 565 248 68 1,095 6 1,191 182 353 161 East Asia 1,133 201 24 275 59 71 68 420 252 689 314 672 Europe & Central Asia 1,113 695 69 221 18 86 38 1,052 376 Latin America & Caribbean 341 472 156 21 22 93 117 34 219 258 Middle East & North Africa 1,659 450 135 953 21 36 107 67 South Asia 863 452 268 323 125 49 13 1,192 325 63 144 Global Program 583 2,516 432 821 1,053 821 1,958 178 387 526 715 70 653 553 614 Program Management, 2,550 KM & Communications Total $8,060 $5,835 $2,516 $1,916 $3,296 $2,389 $401 $1,624 $1,684 $3,518 $1,423 $1,825 $2,760 $2,231 $3,164 Total Disbursement ESMAP SIDS Total Africa 11,361 468 11,829 East Asia 4,177 318 4,494 Europe & Central Asia 3,667 3,667 Latin America & Caribbean 1,733 1,314 3,046 Middle East & North Africa 3,427 3,427 South Asia 3,817 3,817 Global Program 11,879 11,879 Program Management, Knowledge 2,550 20 2,570 Management & Communications Total $42,611 $2,120 $44,730 esmap.org 38 ABOUT ESMAP ESMAP is a multi-donor trust fund administered ESMAP’s program includes both regional and country- by the World Bank, anchored in the Energy & focused activities implemented primarily by World Bank Extractives Global Practice in Washington, DC. regional energy teams and global initiatives managed As a long-standing partnership between the World by the ESMAP program unit. The ESMAP core unit Bank and bilateral partners, ESMAP helps low- and of about 40 staff is responsible for the day-to-day middle-income countries reduce poverty and boost management of the program and implementation of growth through environmentally sustainable energy ESMAP’s business plan. The unit comprises teams solutions. ESMAP’s analytical and advisory services working on several areas such as energy access, are fully integrated within the World Bank Group’s renewable energy, energy efficiency, energy subsidy country policy dialogue and lending programs in reform, gender, communications, and monitoring the energy sector. Through the WBG, ESMAP works and evaluation. The unit is also responsible for the to accelerate the energy transition required to management and administration of the Small Island achieve Sustainable Development Goal 7 (SDG7) to Developing States (SIDS) DOCK Multi-Donor Trust Fund. ensure access to affordable, reliable, sustainable ESMAP is governed by a Consultative Group (CG), and modern energy for all. It helps to shape WBG comprising representatives from contributing donors strategies and programs to achieve International and chaired by the Senior Director of the World Development Association (IDA) policy commitments Bank’s Energy & Extractives Global Practice. The and the WBG’s Climate Change Action Plan targets. CG meets annually to review the strategic direction of ESMAP, its achievements, use of resources, and funding requirements. OUR DONORS Australia | Department of Foreign Japan | Ministry of Finance Affairs and Trade Lithuania | Ministry of Foreign Affairs; Austria | Federal Ministry of Finance Ministry of the Environment Canada | Global Affairs Canada Luxembourg | Ministry for Sustainable Climate Works Foundation | Kigali Cooling Development and Infrustructure Efficiency Program (K-CEP) The Netherlands | Ministry of Foreign Affairs Denmark | Royal Ministry of Foreign Affairs Norway | Ministry of Foreign Affairs; Norwegian The European Commission Agency for Development and Cooperation (NORAD) Finland | Ministry for Foreign Affairs The Rockefeller Foundation France | Agence Française de Développement Sweden | Swedish International Development Cooperation Agency (SIDA) Germany | Federal Ministry for Economic Cooperation and Development(BMZ); Federal Switzerland | Swiss State Secretariat for Ministry for the Environment, Nature Economic Affairs (SECO) Conservation, Building, and Nuclear Safety United Kingdom | Department for International Iceland | Ministry of Foreign Affairs Development (DfID Italy | Ministry of Foreign Affairs The World Bank and International Cooperation 39 ESMAP | Annual Report 2019 ABBREVIATIONS KEF – Knowledge Exchange Forum KGGTF - Korean Green Growth Trust Fund ABG - Annual Block Grant MDTF - multi-donor trust fund ADB - Asian Development Bank MFD - maximizing finance for development AFD - Agence Française De Développement MTF - Multi-Tier Framework BEIS -  D epartment for Business, Energy and NGO – non-governmental organization Industrial Strategy PPA – Power Purchase Agreement BOAD - West African Development Bank PV - photovoltaic CCF – Clean Cooking Fund RE - renewable energy CG - Consultative Group RISE - Regulatory Indicators for Sustainable Energy CIF – Climate Investment Fund SDG - Sustainable Development Goal CTF - Clean Technology Fund SIDS - Small Island Developing States CY - calendar year SRMI - Solar Risk Mitigation Initiative DPF - development policy financing TA - technical assistance DPL – development policy loan VRE - variable renewable energy DPO – development policy operation WB – World Bank ECCH - Efficient, Clean Cooking and Heating WBG - World Bank Group ESP - Energy Storage Partnership EU - European Union FCV – Fragility, Conflict and Violence WORLD BANK REGIONS FY - fiscal year AFR - Sub-Saharan Africa GCF - Green Climate Fund EAP - East Asia and Pacific GEF - Global Environment Facility ECA - Europe and Central Asia GGDP - Global Geothermal Development Plan LCR - Latin American and the Caribbean GHG - greenhouse gas MNA - Middle East and North Africa GIF - Global Infrastructure Facility SAR - South Asia GOGLA - Global Off-Grid Lighting Association IBRD -  International Bank for Reconstruction and Development IDA - International Development Association IFC - International Finance Corporation IPP - Independent Power Producer ISA – International Solar Alliance K-CEP - Kigali Cooling Efficiency Program esmap.org 40 Copyright © 2019 The International Bank for Reconstruction and Development/ THE WORLD BANK GROUP 1818 H Street, N.W. Washington, D.C. 20433, U.S.A. All rights reserved Manufactured in the United States of America The findings, interpretations, and conclusions expressed in this paper are entirely those of the author(s) and should not be attributed in any manner to the World Bank, or its affiliated organizations, or to members of its Board of Executive Directors or the countries they represent. The World Bank does not guarantee the accuracy of the data included in this publication and accepts no responsibility whatsoever for any consequence of their use. The boundaries, colors, denominations, other information shown on any map in this volume do not imply on the part of the World Bank Group any judgment on the legal status of any territory or the endorsement or acceptance of such boundaries. The material in this publication is copyrighted. However, it may be reproduced in whole or in part and in any form for educational or nonprofit uses, without special permission provided acknowledgment of the source is made. Requests for permission to reproduce portions for resale or commercial purposes should be sent to the ESMAP Manager at the email address provided. ESMAP encourages dissemination of its work and will normally give permission promptly. The ESMAP Manager would appreciate receiving a copy of or link to the publication that uses this material for its source addressed to: ESMAP Manager, The World Bank, 1818 H Street NW, Washington, DC, 20433 USA; esmap@worldbank.org. All images remain the sole property of their source and may not be used for any purpose without written permission from the source. Production Credits Task Team |Nansia Constantinou, Jacqueline Kistler, Priyanka Ripley, Marjorie Araya, and Janice Tuten Production Editor | Priyanka Ripley and Jacqueline Kistler Design | Bittersweet Creative All images covered under license: CC BY-NC-D 2.0, unless otherwise noted. 41 ESMAP | Annual Report 2019 esmap.org 42 Energy Sector Management Assistance Program The World Bank 1818 H Street, N.W. Washington, DC 20433 USA esmap.org | esmap@worldbank.org esmap.org 43