Climate Action 2010-2011

Finance and Markets
Box 2: North Africa solar power could prove
‘transformational’
Several countries in the Middle East and North Africa
are moving swiftly to tap an energy source more
abundant than the region’s vast oil reserves – the sun.
Morocco, Egypt, Tunisia, Algeria and Jordan plan
to build concentrated solar power plants to supply
their own energy needs and help meet demand for
renewable energy in Europe. By 2020, solar power
capacity in the countries could reach five gigawatts,
according to a progress report to be presented to the
Clean Technology Fund (CTF) Board.
Since last December, the countries have scaled up
an already “ambitious” program to be “something more
transformational,” says Jonathan Walters, director of
regional strategy and programs for the World Bank’s
Middle East and North Africa region.
The first project in the program to go online in
2014 will be the first phase of Morocco’s 500 MW
Ouarzazate plant, expected to be largest concentrated
solar power plant in the world.
Other such solar plants will be clustered in the
region, helping to drive down technology costs and
launch a globally important climate change mitigation
technology. The Ain Beni Mathar solar plant in
Morocco is already supplying electricity to the grid.
The CTF Board endorsed a plan that would allow
these Middle East and North African countries to reduce
carbon dioxide emissions by millions of tons a year, while
enhancing energy security and forming closer economic
ties with Europe through renewable energy exports.
Learning lessons
As the international climate finance architecture is being
developed, experience by the multilateral development
banks in delivering and leveraging finance and supporting
implementation is worth looking at to clarify what
works, when, and why. The experience gained by the
Climate Investment Funds offers unique lessons in both
innovative governance and flexible financing at scale.
Whatever future climate finance structure emerges,
it should support recipient country priorities. It should
channel resources quickly and efficiently, focus on results,
tailor financial products to project needs, and maximize
synergies between development and climate finance.
Dedicated climate funds are not the full solution to the
problem of financing climate change mitigation, but
an important way of filling gaps, supporting the overall
development efforts of developing countries towards
lower emission paths and catalyzing finance from public
and private sources.
Last, it is vital to share lessons of successful innovations
for wider replication adjusting to national and sector
circumstances. The Climate Finance Knowledge Platform,
being launched in Cancun jointly by the UN Development
Program (UNDP) and the World Bank Group, in close
collaboration with the UNFCCC Secretariat, is such an
example: the platform seeks to provide comprehensive
information, knowledge and guidance to investment
planners and project managers in developing countries on
enabling policies, examples of successful combination of
different instruments, information on such funds and tools
to improve the quality of decisions.
Consequently, as of today, we are actively engaged
with well over 100 countries, supporting their efforts on
adaptation and mitigation. Recently, for example, the World
Bank launched a US$6.1 billion strategy to support antipoverty
efforts in Bangladesh through 2014, and reducing
vulnerability to climate change is one of the four pillars
of the strategy. But that is just one country. The collective
mitigation and adaptation needs of the developing world
over the next several decades add up to a hefty number.
Action on mitigation is also proceeding apace. With
support from the Clean Technology Fund, Algeria,
Egypt, Indonesia, Jordan, Kazakhstan, Mexico, Morocco,
Philippines, South Africa, Thailand, Tunisia, Turkey, Ukraine,
and Vietnam plan to radically rebalance their national energy
portfolios by investing in renewables at a large scale.
In addition to the CTF, six low income countries –
Ethiopia, Honduras, Kenya, Maldives, Mali, and Nepal
– intend to invest in renewable energy services as a means
to grow their citizens’ often badly-needed energy access
and leapfrog into climate-friendly development, with
support from the CIF.
The solar power program in North Africa, described
in Box 2, illustrates the scale of ambition of some of the
projects underway in developing countries. Importantly, this
once again illustrates the need to be able to bring together
financiers from public and private sources, grants, loans and
carbon markets if the scale of the challenge is to be met.
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Dr. Steer became Special Envoy for Climate Change at
the World Bank in July 2010. As such, he is responsible
for guiding the Bank Group’s work on climate change and
further advancing its internal capabilities in this area. In
his post, which ranks at the level of Vice President, he will
also oversee the multi-billion dollar Climate Investment
Funds and help mobilise climate financing. Prior to his
appointment, Dr. Steer served for three years as Director
General, Policy and Research at the UK Department of
International Development (DFID) in London.
The World Bank is a vital source of financial and
technical assistance to developing countries around the
world. It’s mission is to fight poverty with passion and
professionalism for lasting results and to help people help
themselves and their environment by providing resources,
sharing knowledge, building capacity and forging
partnerships in the public and private sectors.
The World Bank
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Washington, DC 20433 USA
Tel: +1 (202) 473 1000
Website: www.worldbank.org
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