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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

The sustainable in a production and use of wood-fuels

The Bank's lending in the area of wood-fuels has mostly been integrated with its work on forestry and agro-forestry. Projects typically have the following components:

· Tree planting. once based mainly on wood lots but now more commonly based on agro-forestry and participatory approaches to forestry management.

· Institution buildings, or general support for the development of forestry services.

· Technical assistance. training services, anti research.

· Resource and forestry management focused 011 maintaining or improving existing forests or wood lots. Sometimes, this category will include project management costs.

· Stove and charcoal kiln programs. which have evolved as discussed in chapter 6.

During 1980-95. the Bank committed US$1.1 billion to sixty projects in thirty-two countries in support of sustainable wood-fuel supply and use in rural areas (see the annex and figure 7.2) - about a third of its forestry lending. Most of the support went to low-income countries (Sub-Saharan Africa had about a third. and Asia about halt: of the projects).

In contrast to rural electrification. the Bank's work on biofuels did not languish in the mid-1980s. but intensified. This initially resulted from the long-standing public concerns reflected in the Bank's Forestry Policy Paper (World Bank 1978) about deforestation and the losses of tree stocks on farmlands and woodlands, and all that this implied for the sustainability of agriculture. The Tropical Forest Action Plan (World Bank 1987) provided a further stimulus when the "mining" of the forests by fuelwood suppliers and the charcoal industry was recognized as a major cause of deforestation along with logging and land clearance. Sector studies of forestry and agro-forestry practices in the 1980s, together with the early work of the United Nations Development Programme World Bank Energy Assessment Programme, and later ESMAP, were also influential, and provided a basis for operations.

Figure 7.2 Lending Commitments for Sustainable Supply and Use of Wood-fuels

The emphasis of the Bank's work on biofuels shifted consider-ably during the period. however, almost wholly in the directions described in chapters 2 and 6. The afforestation components of the early loans were mostly for community wood lots. and generally yielded poor results. Although community wood lot programs aimed at a high level of local participation. the notion of community' was often too vague a concept and too broad a social unit to be operational. overlooked the diverse needs and functions of different social groups within their communities and left property rights and administrative and other matters unaddressed.

As the Bank's 1978 paper on forestry policy had anticipated. the agro- or farm-forestry projects that followed have yielded better results. Indeed. they have generally exceeded expectations (see chapter 6): form an excellent basis for continued Bank operations in the inter-related erects of rural energy, forestry. and agricultural development: and are now a mainstay ill the Bank's work (see World Bank 1994c). The Bank has also begun to support a promising approach in areas where local forest resources are still good: providing property rights to local people to manage and maintain the resources (see box 6 3)

Chapter 6 reviewed the Bank's anti others experience with wood-stove programs. As with biofuel supplies, the early projects got off to a poor start, with the projects often relying on the results of laboratory experiments. with tar too little involvement by users and by artisans who would manufacture them Evaluations of field experience. in the Bank's case facilitated by ESMAP. led to a fundamental redefinition of the approach such that local participation was central.

We can thus conclude approaches to investment in biofuel supplies and use have taken a distinct step forward since the early efforts some fifteen years ago.

The transaction costs of developing projects and new policies in the biofuels area can be high; leading per project is typically only about one-quarter of that for energy in the modern sector, and the preparation of investments requires considerable knowledge of local ecology and natural resources and of communities social units, and tenurial issues. Furthermore. for the reasons outlined in chapter 3, establishing the capacity simply to support particular investment without developing local institutional capacity more generally is insufficient. We are only beginning to understand what is involved Attending to such matters will often require a significant investment in assistance for preparing programs and developing policies. Collaboration with bilateral donors and nongovernmental organizations. who frequently support pilot projects and undertake field work and project preparation activities. is indispensable. Yet even taking such partnerships into account, the transaction costs to the Bank have proved to be [aloe.