Transcript Multilateral Financing for Biofuels Judy Siegel President, Energy and Security Group Presentation Overview • World Bank • Inter-American Development Bank • Areas for Collaboration with IFAD.

Multilateral Financing for
Biofuels
Judy Siegel
President, Energy and Security
Group
Presentation Overview
• World Bank
• Inter-American Development Bank
• Areas for Collaboration with IFAD
The World Bank Group
World Bank Group
International Bank
for Reconstruction
and Development
(IBRD)
•Works with governments in middle income and
creditworthy poorer countries
•Provides loans, guarantees, analytic, and advisory
services
International
Development
Association (IDA)
•Works with governments in 81 poorest countries
providing highly concessional financing
•Provides interest-free credits and grants
International
•Works with the private sector
Finance Corporation •Invests in private enterprises in developing countries
(IFC)
•Provides long term loans, guarantees, and risk
management and advisory services
Multilateral
Investment
Guarantee Agency
(MIGA
•Provides political risk insurance against noncommercial risks to eligible foreign investors and
commercial banks for qualified investments in
member countries
World Bank and Clean Energy
• WB is actively supporting clean energy technology
solutions that bring about a truly diverse bioenergy mix,
not focused solely on fuels
• Since 1990, The World Bank Group committed more
than US$11 billion to RE/EE in LDCs
• Support for RE/EE rose to 1.4 billion dollars in FY 2007,
reaching 40% of total energy sector commitment
• Committed $2.5 billion for new RE/EE from June 2004 to
December 2007
– Exceeding their Bonn commitment 1.5 years ahead of
schedule
World Bank and Biofuels
•
•
•
•
Bank has long held a view of conditional & cautious support for biofuels
– Consistent since their assessment 3 years ago, on the commercial viability of
biofuels for transport in developing countries
Bank acknowledges in some cases, biofuels do promise benefits such as:
– Lower greenhouse gas and local air pollution emissions,
– Energy diversification
– Economically least cost compared to conventional fuels.
Bank’s approach to biofuels has been cautious, due to manifold
environmental & economic impacts accompanying large scale development
Sustainability concerns include:
– Biofuel production impact on the cost of staple food grains
– High lifecycle GHG emissions associated with intensive cultivation of some
biofuel feedstocks and fuels processing
– Ecological impact of land-use changes
– Competition for scarce water resources; biofuel production in some cases
channels water away from other productive activities.
Benefits and Costs of Biofuels
• Benefits and costs of biofuel development are largely site and
circumstance specific
• There is a crucial need for more research to:
– Inform the development of biofuels
– Determine range of technologies/feedstock best suited to varying economic,
environmental and social endowments
• Bank supports expanded R&D in sustainable biofuels, especially:
– Second generation fuel production systems, to include cellulosic materials
and agricultural wastes that do not compete with food
– Realizing the potential of second generation feedstock to utilize marginal
lands for production without bringing about large land-use and water use
changes
– Enabling developing countries and small-scale farmers to profit from the
resulting technologies
• Also concerned about trade, standards and certification issues
– Particularly as they affect developing countries
The Way Forward for The World
Bank
•
•
•
•
Given the many uncertainties regarding biofuel benefits/costs, The Bank will
continue to be cautious
Will put more emphasis into R&D leading to a better understanding of a
more effective strategy for biofuels.
Will support governments to assess economic, environmental, and social
benefits and the various options available for enhancing energy security,
before making large scale decisions and reforms
– Current wisdom on biofuels can be enriched by doing country and
region-specific analyses of agriculture, land- and water-use and trade
impacts
– More feedstock-specific studies of energy balances and lifecycle GHG
and the development of new processing technologies would also add to
understanding of the potential of different biofuels
More emphasis and investment needs to be directed towards improving that
state of R&D of second generation fuels to make them economically viable
and competitive with other fuel alternatives in the future.
– Will need to involve the private sector
Inter-American Development
Bank
IDB Jatropha Activities
• IDB has a couple of private sector projects
on jatropha in the pipeline, but none
approved yet
• IDB also has a:
– A small study being developed on jatropha in
Haiti
– Larger study with Fundacion Getulio Vargas
(FGV) of Brazil looking at range of feedstocks
Areas for Multi-lateral Collaboration
with IFAD
• Joint research on feedstock development and
processing
• Assessment of biofuels development on:
– Cost of staple food grains, GHG emissions, impact of land use
change, water impacts, etc.
• Pro-poor impacts of biofuels development
– Including opportunities for rural off-farm employment and
enterprise development
•
•
•
•
•
Policy development
Trades, standards, certification issues
Land ownership
Project co-financing
Above activities needed at national and regional levels