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close this bookRural Energy and Development: Improving Energy Supply for Two Billion People (WB, 1996, 132 p.)
close this folderChapter seven - The role of the world bank group
View the document(introduction...)
View the documentPolicies and operations since the 1970s
View the documentRural electrification
View the documentThe sustainable in a production and use of wood-fuels
View the documentRenewable energy
View the documentProject innovations and advisory services
View the documentThe way forward: a renewed commitment by the world bank group
View the documentBroadening the scope of energy sector reform
View the documentInvestments
View the documentOpportunities for partnerships

Broadening the scope of energy sector reform

The Bank's policy papers on the electric power subsector and energy efficiency (World Bank 1993a.b) fundamentally redefined its energy sector and policy work. It was to lend only to countries committed to operating the industry on commercial principles; to introduce less intrusive and more transparent forms of regulations and, by implication. to be more open to private investment. the importation of energy services. and market pricing. Environmental concerns were also central in the form of a greater commitment to energy efficiency and the introduction of "clean" energy technologies. Box 7.1 summarizes the main points and indicates the added dimensions this paper brings to the Bank's approach.

The Bank's country economic and energy sector work is devoting significant attention to sector reform (World Bank 1994d). which is now the principal focus of most Bank ladling operations in electricity, oil. and gas The policy dialogues on options for energy sector reform are therefore the ideal stage at which to review the energy problems rural (and unserved urban) consumers face These dialogues engage the attention of those responsible for framing energy policies at precisely the right time. that is, when the policies are being framed.

The Bank is well placed to broaden the scope of energy policies during discussions with governments of structural and macroeconomic adjustments (when energy sector reforms often serve a fiscal purpose). of country assistance strategies, of energy sector reviews. and of sector and project loans Table 7.2 at the end of this chapter provides a checklist of the sorts of questions that need to be raised, based on the analysis of previous chapters. The first set of questions deals with the general scope of the problem: the numbers of people without service, the extent and use of biofuels and their health and environmental effects, experience with policies and investments so tar. and so forth. Other questions deal with prices and taxes, finance. the analysis of investment alternatives, and the institutional matters discussed in chapters 3 through 6. Often. when working on policy reform, it is not possible to address all, or even most. of the specifics at the time when policies are being discussed. as much depends on the background work already done. In such instances the technical assistance components of loans and credits may serve an invaluable function by fuming general principles agreed upon at the time into functioning policies later:

BOX 7.1 BROADENING THE SCOPE OF ENERGY OPERATIONS

Bank

Commitment lending
Promotion of clean technologies

Countries
Sector reform

· Transparent regulation
· Commercialization/corporatization
· Private involvement
· Importation of services
· Market pricing
· Demand management

· Added dimensions - a renewed commitment to

· Extend modern energy supplies to unreserved populations
· Promote sustainable supply and use of biofuels
· Introduce new and renewable energy technologies

And thus to

· Promote commercial pricing and private involvement in distribution
· Providing incentives for extension of service
· Supporting agroforestry and biofuel programs

In 1992 the World Bank Board of Directors approved a single set of policies that were outlined in two papers The World Bank's Role in the Electric Power Sector and Energy Efficiency and Conservation in the Developing World. The Bank would he committed to lending only where there was demonstrated commitment to power sector reform and its projects would promote clean technologies and practices. These policies take on added importance in the context of this paper.