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This issue of Handshake, focused on public-private partnerships in the power sector, brings diverse expert voices together to discuss how to increase access to energy in developing countries. Features on hydropower and renewables together with examples from Africa and Latin America provide an up-to-the-minute look at one of the most important and rapidly evolving sectors today. This issue includes the following headings: power and mining: digging deep to power up; market mover: intraday electricity trading; timeline to transformation: Nigerias privatization; energy for development: Massachusetts Institute of Technology (MITs) new research; and interview: United Nation (UN) sustainable energy for all (SE4ALL) special representative Kandeh Yumkella. Whats it like to be energy-poor? Kandeh Yumkella, Special Representative of the United Nations Secretary General for Sustainable Energy for All, answers that question and many more in this issue of Handshake. Yumkella recalls his own experiences in Sierra Leone to illustrate the link between energy poverty and income poverty and explains how PPPs can help.

Increasing energy demands and concerns about global warming call for an increase in energy generation from renewable sources. Small hydropower plants represent a significant contribution to meet this demand. But the optimal use of this resource in a sustainable manner still remains a challenge. A cascade of small dams may have detrimental impacts on the environment and water use without implementation of proper mitigation measures and planning. To obtain more insight in the consequences of hydropower cascades and possibilities to improve the cascade planning process in order to reduce such impacts, the Vietnamese Ministry of Industry and Trade and the World Bank jointly initiated the study on cumulative impacts and joint operation of small-scale hydropower cascades Supported by the Renewable Energy Development Program (REDP) in Vietnam. Chapter two provides a brief background on the small-scale hydropower development in Vietnam including its current planning procedures, while Chapter three provides a description of the six studied river basins. Chapter four describes the approach, methods and definitions of the study. During the first phase of the study all six rivers were screened for potential significant cumulative impacts. The results of this screening were presented in a separate report, of which the summary is given in chapter five. This screening showed that for four of the rivers significant cumulative impacts can be expected, which merited further detailed analysis. These four rivers are Ngoi Xan, Nam Tha, Nam Chien and Sap. For each of the four detailed study cases a description of the river basin and hydropower cascade has been made, the hydrological and environmental impacts were assessed and opportunities for joint operations quantified. This report presents summaries of the cumulative impact analyses (chapter six) and draws general conclusions with respect to present and future environmental conditions (chapter seven). It also summarizes the results of the optimization modeling for each cascade (chapter eight) and provides recommendations for future planning and cascade operation (chapter nine).

This paper focused on the delivery mechanisms for bilateral, multi-lateral, host government subsidy, and consumer cross-subsidy funding to enhance private sector investment. However, the specific source of funds is not deemed to be especially relevant for the purposes of this working paper. Focus on some of the useful characteristics of Output-Based Aid (OBA) experience to date that may be relevant. Propose an option for how OBA experience could be used to deliver national and programmatic supports to projects in middle- and low-income countries in coordination with other multi-lateral development bank instruments such as concessional loans and credits. This working paper does not: specifically address strengths and weaknesses of the clean development mechanism and only briefly touches on issues with using carbon finance in the current market. Carry out an assessment of experience with feed-in tariffs or advanced market commitments, or indeed other results orientated schemes.

This document provides an overview of baseline setting for greenhouse gas (GHG) crediting mechanisms. The first section briefly explains the general purpose and objectives of setting a crediting mechanism baseline. The second section summarizes key policy considerations in defining and setting baselines. The final section covers important technical elements of baselines and provides an overview of various methods that can be used to estimate baseline emissions. The main purpose of this technical note is to examine key issues for baseline setting in the context of scaled-up crediting mechanisms. Many of the technical and policy considerations presented here, however, are relevant to existing project-based crediting mechanisms as well, and the discussion takes into account concepts developed and experience gained under these mechanisms. In addition, most of the concepts and examples presented here are relevant to setting baselines in the energy and industry sectors. Where relevant, however, examples from other sectors, including forestry and land-use, are used to illustrate important ideas.

Energy poverty is a global problem: access to energy services is crucial to meet basic household needs, deliver and access public services, and generate income. Less than 10 percent of Sub-Saharan (SSA) rural households have access to electricity, with an overall access rate below 25 percent. One of the main obstacles for SSA electrification practitioners is the difficulty in obtaining practical and timely knowledge on how to overcome economic, technical, institutional, and political barriers to electrification in their day-to-day work. Launched in 2008, the Africa Electrification Initiative (AEI) seeks to create and sustain a living body of practical knowledge and a network of SSA practitioners for the design, development, and implementation of rural, peri-urban, and urban on-grid and off-grid electrification programs. AEI supports the network by organizing workshops and promoting online discussions and knowledge exchanges on topics important for its members. The workshop set out to address a number of relevant electrification topics previously identified through in-depth discussions and ongoing knowledge exchanges among a growing network of SSA practitioners. The workshop's main focus was on ground-level implementation of different institutional approaches to electrification, with particular focus on the experiences of rural energy agencies/rural energy funds (REAs/REFs) across SSA. The workshop lasted two and a half days, comprising 21 sessions, including regular session panels and discussion clinics with a longer duration. It also featured exhibition space for posters submitted by participating institutions, an expo of approved lighting products from the lighting Africa program, and an awards ceremony to recognize the best papers submitted by SSA electrification practitioners in response to the AEI call for papers.

Mitigating climate change while addressing development needs will involve a massive scale-up of investments in Renewable Energy (RE) and Energy Efficiency (EE). Most of these climate investments will come from the private sector, which will be the main driver of low-carbon growth in both developing and developed countries, provided that countries have the right investment climate for climate investment. The enabling environment for climate investment in each country depends on a variety of factors. These include macroeconomic determinants such as a functioning bureaucracy and banking system; as well as a narrower set of policy determinants such as renewable energy targets, mandatory standards, preferential power tariffs, waiver of import duties, and other fiscal incentives. While the exact mix of policies, regulations and incentives will depend on country-specific circumstances, the fact that they exist sends the right signal to climate investors, by providing them with legal certainty and lowering their costs and risks. Policies, regulations and incentives also help to level the playing field for climate investors in the face of market realities that tend to favor the continued use of carbon intense energy sources, such as support for fossil fuels and the high costs of renewable energy technologies.

This issue includes the following headings: renewable energy: wind and solar; energy efficiency: green building; and green finance: infrastructure finance.

Concentrating solar thermal (CST) technologies have a clear potential for scaling up renewable energy at the utility level, thereby diversifying the generation portfolio mix, powering development, and mitigating climate change. A recent surge in demand for solar thermal power generation projects in several World Bank Group (WBG) partner countries shows that CST could indeed become an important renewable energy technology that would be able to provide an alternative to conventional thermal power generation based on the central utility model. At present, different CST technologies have reached varying degrees of commercial availability. This emerging nature of CST means that there are market and technical impediments to accelerating its acceptance, including cost competitiveness, an understanding of technology capability and limitations, intermittency, and benefits of electricity storage. Many developed and some developing countries are currently working to address these barriers in order to scale up CST-based power generation. Given the considerable growth of CST development in several WBG partner countries, there is a need to assess the recent experience of developed countries in designing and implementing regulatory frameworks and draw lesson that could facilitate the deployment of CST technologies in developing countries. Merely replicating developed countries' schemes in the context of a developing country may not generate the desired outcomes.

The World Bank Group (WBG) has focused on reducing the environmental impacts of its internal operations and improving corporate environmental practices since 2002, when the WBG President announced WBG's commitment to Corporate Social Responsibility (CSR). The objective of this document is to summarize the actions WBG has taken thus far to reduce environmental impacts from internal operations and present an action plan to further integrate sustainability into WBG's internal operations. Although this work focuses on the environmental impact associated with WBG daily operations, the links between WBG policies and actions related to environmental management and the financial/social considerations are significant. The International Finance Corporation (IFC) footprint and World Bank corporate responsibility teams facilitate the sustainability commitment of the WBG and monitor and track its progress. These teams provide technical information and research support to a dedicated group of champions throughout the WBG who implement emission reduction activities. Budget for these activities flows primarily through the environment department, the general services department, and IFC facilities management and administration. The environment department and IFC facilities management each resource one staff member to provide back-up research support and to monitor and report on environmental metrics, with building engineers and managers and project officers from across the WBG contributing.

The global financial crisis severely affected economies in Eastern Europe and Central Asia (ECA). Currencies depreciated across the region. Government tax revenues declined sharply leading to high budget deficits and rising levels of public debt. Tightening credit supply and deteriorating financial conditions have limited the ability to borrow in the public and private sector. The financial crisis slowed demand enough to delay an imminent energy shortage by a few years. In this sense, the financial crisis bought ECA countries some time. This report analyzes the impacts of the global financial crisis on power sectors in five countries in the ECA region: Armenia, Kyrgyz Republic, Romania, Serbia and Ukraine. It estimates the investment gap and proposes a prioritization of critical investments in each country. The report also proposes actions needed to mobilize financing for the sector, including a continued commitment to legal, regulatory and policy reform in the sector. The global financial crisis has created a window of opportunity to meet investment needs and avert a potential power shortage, but Governments need to recognize and act on this opportunity. This report serves as a starting point to facilitate further World Bank engagement in the region that can help Governments make timely, critical investments and foster sustainable investment in the sector over the long-term.

The World Bank Group (WBG) has been active in public and private sector pollution management for the past several decades. The Bank has mainstreamed environmental health concerns into its rural and urban services through projects that improved the management of solid and hazardous waste and wastewater, and controlled pollution related to a large variety of sectors including transport, industry, energy, and mining, with each decade having its flagship issues and projects. The changing global context illustrated by the wave of global crises, the rising acknowledgement in different countries of the impacts of climate change and the necessity to address greenhouse gas mitigation, the challenges in reaching the Millennium Development Goals pertaining to environment and poverty, and the voices calling for new approaches through green new deal, green growth, and green development require that pollution management be addressed within a new context.

The Strategic Framework for Development and Climate Change (SFDCC) approved in 2008 guides and supports the operational response of the World Bank Group (WBG) to new development challenges posed by climate change. One activity pursued by the SFDCC is to further develop and test methods to analyze climate risks and greenhouse gas (GHG) emissions at the project level. The SFDCC emphasizes the need to improve GHG accounting activities at the project level to understand the implications of the World Bank's interventions. The objective of this study is to contribute to the SFDCC goal of improving GHG accounting in the energy sector by reviewing, assessing, and recommending GHG accounting methodologies for electricity Transmission and Distribution (T&D) projects. Existing methodologies are examined to test whether they can provide simple and accurate estimates of net project emissions. In addition, the study identifies and conceptually designs a methodological approach for T&D projects. The study focuses on the T&D sector due to its importance in the World Bank's energy lending portfolio and the lack of comprehensive methodologies to determine the impact of such interventions on GHG emissions. The study builds on existing information and relies on methodologies developed under different climate finance mechanisms such as the Clean Development Mechanism (CDM). The study also considers some of the fundamental principles in other accounting procedures, such as corporate GHG accounting. Methodologies that have the objective of emissions accounting for climate finance mechanisms need to have specific characteristics, such as additionality and ex post monitoring. These methodologies must calculate a project's emissions reductions or increases by estimating the project's net emissions impact.

The objective of this study is to identify lessons for improving cookstoves in Bangladesh through an evaluation of existing programs, the international experience on improved stoves, and the lessons from successes in the sanitation sector. Bangladesh's new renewable energy policy endorses creating a better environment for renewable energy technologies and promoting market development for improved cookstoves (Government of Bangladesh 2009). This study supports this policy direction by examining possible strategies to move forward the development of markets for improved stoves in Bangladesh. The study consists of several components: a national review of household energy programs; an evaluation of national sanitation programs; and an examination of improved cookstove programs from around the world, including China, Guatemala, Haiti, Mongolia, Nepal, and Uganda. The study is based on published literature, consultations with organizations throughout Bangladesh, site visits, and structured discussions with beneficiaries and other stakeholders.

This report was prepared in response to a request by the government of Honduras for assistance in the preparation of a power sector strategy for the country. Specifically, the government asked for help in identifying the main issues in the power sector, and in addressing them through formulation of a clearly defined, achievable strategy. Left unresolved, these issues risk derailing the country's macroeconomic framework, potentially damaging the competitiveness of the country and its prospects for poverty reduction. The main issues to be analyzed in the study were identified at a workshop held on September 19, 2006, in Tegucigalpa, jointly with the Secretaria de Recursos Naturales y Ambiente (SERNA) and the Comision Presidencial de Modernizacion del Estado (CPME), and with the participation of representatives from the Empresa Nacional de Energia Electrica (ENEE), civil society, the private sector, Congress, public sector agencies, donors, utilities, and ministries. It was decided that the study would be divided into two components: (a) the first would identify and evaluate options on institutional reforms, particularly ENEE's restructuring and management, and securing electricity supply; and (b) the second would formulate a power sector strategy. Two reports will be prepared, with the second report to be finalized according to the timing of the government's decision. This first report analyzes the institutional and policy issues; financial and fiscal concerns; social aspects, such as tariffs and subsidies, and access to electricity; and investment requirements including the development of renewable resources. The report is divided into two parts. Part A presents a diagnostic of the electricity sector, including ENEE's financial performance, fiscal impacts, and reliability of supply, institutional and legal framework, pricing policy, and electricity coverage. Part B evaluates the options available to improve sector efficiency, ensure financial sustainability, promote the diversification of energy sources, and increase electrification coverage.

The rapid growth of Vietnam's economy, industry, and consumption has resulted in unprecedented growth in energy demand, and its infrastructure for extracting, generating, and distributing energy is expanding to try to meet those needs. Between 2000 and 2005, total primary energy consumption in Vietnam grew 10.6 percent per year. Growth in fossil-fuel consumption was correspondingly high, with coal use growing at 14.9 percent per year, oil use at 8.2 percent per year, and natural gas use at 37 percent per year. From 2002 to 2030, Vietnam's primary energy demand is expected to grow at a rate of 4.4 percent, increasing from 42 megatons oil equivalent (MTOE) in 2002 to 142 MTOE in 2030. This note will focus on Vietnam's potential Greenhouse gas (GHG) emission reductions and possible interventions associated with resource extraction and power generation for grid electricity. Emissions from power generation in industry and transport are covered under the respective sector notes, and reduction of greenhouse gases through management of end-use demand is covered in the context of industry (as the largest energy user) in the industry sector note.

The 2005 Gleneagles G8 summit in July 2005 stimulated a concerted effort of the Multilateral Development Banks (MDBs) to broaden and accelerate programs on access to energy and climate change mitigation and adaptation through the Clean Energy Investment Framework (CEIF). At the Gleneagles summit, it was agreed that a report on the implementation of the CEIF would be prepared for the 2008 G8 (Group of Eight: Canada, France, Germany, Italy, Japan, Russia, the United Kingdom, and the United States) summit hosted by Japan. This joint report of the MDBs to the G8 summit in Hokkaido is intended to provide information on the outcomes and lessons learned under the CEIF, describe the collective MDB objectives for addressing the energy access and climate change challenges, and outline how the MDBs plan to build on the CEIF experience to date to more fully achieve these objectives. The report builds upon the 'the MDBs and the climate change agenda' report that was presented at the December 2007 Bali climate change conference. This report describes actions taken by each MDB to develop climate change strategies and programs of actions tailored to their particular client needs, based on resources and funding mechanisms currently available. Under the CEIF, the MDBs have strengthened collaboration on analytical work and programming and committed to expand this collaboration to optimize the impact of their collective actions. In addition to reporting on the status of the CEIF, this report outlines the collective ambition of the MDBs with respect to assisting the developing countries in meeting the climate change challenge, summarizes their evolving strategies designed to meet these objectives and the mechanisms through which they intend to achieve the necessary collaboration to optimize the collective impact of their climate change interventions.

This strategic framework serves to guide and support the operational response of the World Bank Group (WBG) to new development challenges posed by global climate change. Unabated, climate change threatens to reverse hard-earned development gains. The poorest countries and communities will suffer the earliest and the most. Yet they depend on actions by other nations, developed and developing. While climate change is an added cost and risk to development, a well-designed and implemented global climate policy can also bring new economic opportunities to developing countries. Climate change demands unprecedented global cooperation involving a concerted action by countries at different development stages supported by "measurable, reportable, and verifiable" transfer of finance and technology to developing countries. Trust of developing countries in equity and fairness of a global climate policy and neutrality of the supporting institutions is critical for such cooperation to succeed. Difficulties with mobilizing resources for achieving the millennium development goals and with agreeing on global agricultural trade underscore the political challenges. The framework will help the WBG maintain the effectiveness of its core mission of supporting growth and poverty reduction. While recognizing added costs and risks of climate change and an evolving global climate policy. The WBG top priority will be to build collaborative relations with developing country partners and provide them customized demand-driven support through its various instruments from financing to technical assistance to constructive advocacy. It will give considerable attention to strengthening resilience of economies and communities to increasing climate risks and adaptation. The operational focus will be on improving knowledge and capacity, including learning by doing. The framework will guide operational programs of WBG entities to support actions whose benefits to developing countries are robust under significant uncertainties about future climate policies and impacts-actions that have "no regrets."

The challenge for the development community is to exploit the links between energy and poverty to combat global poverty. The human scale of this challenge is huge. Today, 1.6 billion people lack access to electricity and 2.4 billion rely on traditional biomass for cooking and heating. Indoor air pollution is among leading causes of illness and death in developing countries. It leads to 2 million premature deaths a year. In 2004, the richest 20 percent of the world s population consume 58 percent of total energy, while the poorest 20 percent consume less than 4 percent. The majority of those underserved are the poor in Sub-Saharan Africa and South Asia. With increasing populations, 25 years from now, business-as-usual energy scenarios project that even after an expenditure of 16 trillion US dollars on energy investments of which half will be in developing countries, 1.4 billion people will still lack access to electricity. This is a reduction of only 200 million people from today. Over 2.6 billion people in developing countries will continue to rely on traditional forms of biomass for cooking and heating in 2030, even more than today. This scenario expects renewable energy share to increase from 2 percent to 3 percent between 2000 and 2030. Under this scenario, by 2030, the more than doubling of coal, oil and gas consumption will lead to increases in greenhouse gas emissions from the energy sector. The impacts will affect the developing countries the most, and hence rendering the poor more vulnerable. Projected impacts are increased deaths and risk of infectious disease epidemics; increased floods, mudslides and coastal and soil erosion; increased property and infrastructure damage; decreased crops, higher crop damages and a general drop in agricultural productivity.

The CDM is a project-based mechanism to promote flexibility in mitigation climate change, by promoting investment in mitigation projects in developing countries. There has been concern about potential perverse incentives for developing countries like South Africa not to adopt progressive national policies, fearing that CDM projects implementing such policy would no longer be additional. The CDM rules on additionality require that emissions are reduced ‘below those that would have occurred in the absence of the registered CDM project activity’. The paper shows that recent decisions by the CDM Executive Board make it clear that such perverse incentives will not be created. The paper suggests concrete interpretations of this guidance for two possible project types. Projects implementing national policies that promote zero- or low-carbon emission technologies (e.g. South Africa’s renewable energy target) can still go through the CDM process. Where there are local regulations, as for landfill gas, projects would not be ruled out entirely, but would receive credit for the difference between actual methane capture and that needed to meet local safety, health and environmental standards. The author concludes that projects implementing progressive energy policies are still eligible for CDM investment.

Implementation of renewable energy projects (RES) involves very complex processes which are based on the latest creative techniques to give adequate solutions teaching practitioners of this multidisciplinary field. The need for a complex transfer of knowledge at the administrative level, technical level and technological level of RES projects, constitute prerequisites for success in projects implementation of this type. The present paper proposes using creative educational methods for implementing investment projects in renewable energy using a combination of methods of Goldratt. To exemplify bottleneck situations in the management of certain flows within the supply chain of the RES implementation projects, the paper proposes Drum-Buffer-Rope philosophy. In order to underline the effectiveness in fast obtaining and implementing the right solutions along the lifecycle of RES projects, the paper illustrates the steps of Theory of Constraints Thinking Process (TOCTP) integration by problem diagnosing, designing the solutions plan and integrating the solutions plan through the conceptualization of adequate diagrams communication within these types of projects.

Renewable energy (RE) is emerging as a solution in order to replace fossil fuels and become the primary source of energy consumption. Investments in the RE sector involve huge amounts of capital but also many risks. Public sector plays an important role in promoting RE projects but due to the need for reducing public expenditure the private sector becomes essential in financing this type of projects. Project Finance is widely used in RE projects and is especially attractive to the private sector because it can fund major projects off balance sheet. The objective of this paper is to present a decision making tool for helping the private sector on the selection process of RE projects to be funded. The problem could be considered as a multiple criteria decision-making problem where both, financial and non-financial criteria have to be taken into account. Objective aggregation weights for those criteria are obtained using the Moderate Pessimism Decision Making approach and a final ranking of the projects is obtained.