2015/47 97847 k nKonw A A weldegdeg e ol n oNtoet e s eSrei r e ise s f ofro r p r&a c t hteh e nEenregryg y Etx itcrea c t i v e s G l o b a l P r a c t i c e The bottom line Kenya: First Commercial Financing for Power Plants Made The $623 million financing included the first long-term Possible through a Series of IDA Guarantees commercial loans for private power plants in Kenya and Background Power is professionally managed and operates on commercial prin- marked the first time IDA ciples. Although the company showed losses in the 2000–04 period, When the projects supported by a series of IDA guarantees were guarantees were issued in it improved its operational performance and achieved satisfactory being structured around 2011, Kenya had one of the best-performing support of local investors. financial results after 2008. power sectors in Sub-Saharan Africa, thanks to a series of reforms The guarantees minimized By 2010 Kenya Power had signed six power purchase agree- undertaken by the Kenyan government since the mid-1990s. The the government’s contingent ments (PPAs) with private independent power producers (IPPs), reforms, which aimed to create the basis for the sector’s long term liabilities by limiting its exposure which sprang up after generation was opened to competition in sustainability, included (i) the separation of policy, commercial, and to two to three months of 1997. Kenya Power had a good track record honoring its commit- regulatory functions; (ii) the establishment of a sector regulator payments and guarantees. ments under the PPAs, none of which was canceled. To this point, (the Energy Regulatory Commission); and (iii) the requirement that They also helped to ensure therefore, the outlook for Kenya’s IPP program appeared strong. publicly owned electricity companies operate on a commercial basis consistency and predictability in The picture changed, however, when the electricity sector began supported by a system of performance contracts and with transpar- government support for Kenya’s to face major supply deficits and power outages owing to droughts in ent financial relationships. Independent Power Producer 2009 and 2011 that significantly diminished hydropower supply, the The reforms also established a regulatory framework that Program. Most important, they main source of electricity in the country. Kenya Power responded by enables electricity companies to maintain commercial viability. made possible the construction contracting for readily available emergency generation capacity to Kenya’s 2006 Energy Act established that although electricity tariffs of 298 MW of critically needed ease the supply deficit, but at a high cost—$0.321 per kilowatt hour should be “just and reasonable,” they should be set at a level that generation capacity. (kWh). This put Kenya Power under financial pressure and required enables the holder of an electricity supply license to: (i) maintain its retail tariffs to be increased, which made electricity less affordable. financial integrity, (ii) attract capital, (iii) operate efficiently; and, (iv) The expensive and unreliable power supply took a toll on Kenya’s Teuta Kaçaniku is an fully compensate investors for assumed risks. Kenya’s tariff method- gross domestic product, reducing the rate of GDP growth by 1.5 infrastructure finance ology provides incentives to Kenya Power,1 the national distribution specialist in the Financial percentage points in 2011. utility and single off-taker, to make efficiency gains while at the same Solutions Unit of the To reduce the need for emergency generation and to expand time passing through to end consumers fuel costs, exchange-rate World Bank’s Energy and Extractives energy access from 25 percent of the population in 2010 to 40 fluctuations, and adjustments for inflation. Global Practice. percent in 2030, the government decided that new thermal and geo- Majority owned by the government and with the balance of its Karina Izaguirre- thermal generation capacity should be developed. It was intended shares listed and traded on the Nairobi Securities Exchange, Kenya Bradley is a senior that these would be short- to medium-term options until a more infrastructure finance diversified portfolio of assets could be established, including imports 1 Before a rebranding in 2011, Kenya Power was known as the Kenya Power and Lighting specialist in the same of hydropower from neighboring countries. Because demand was Company. practice. Kenya: IDA Guarantees Enable First Commercial Financing for Power Plants 2 K e n y a : I D A G u a r a n t e e s E n a b l e F i r s t C o mm e r cia l F i n a n ci n g f o r P o w e r P l a n t s strong and power generation had already attracted private investors, tight debt ceiling previously agreed with the International Monetary the government was keen to attract more private financing into the Fund. sector, primarily for IPPs, so that public and donor funding could be In the new environment Kenya Power found it difficult to con- directed to other priority needs. tinue offering the security packages that it had provided to the first six IPPs. Those security packages had become financially onerous The projects for Kenya Power, mainly because commercial banks required that “Kenya Power, the payment security issued to IPPs on Kenya Power’s behalf be fully In 2011 four IPP projects were identified as priorities to meet Kenyan government, and collateralized with cash. This very inefficient use of Kenya Power’s Kenya’s urgent generation needs and pave the way for a more the World Bank Group liquidity diverted funds that were badly needed to finance operations diversified generation mix. Those projects were Thika Power Ltd, an and its investment program. agreed to explore credit- 87 megawatt (MW) combined-cycle diesel plant; Triumph Power Ltd, enhancement options an 82 MW combined-cycle diesel plant; Gulf Power Ltd, an 80 MW single-cycle diesel plant, and a 48 MW expansion of OrPower Ltd, an The solution that would make private existing geothermal plant developed as a private IPP . Kenya Power, the Kenyan government, and the World Bank Group investors more comfortable Kenya Power selected private sponsors for the first three (WBG) agreed to explore credit-enhancement options that would about financing the much- projects through a competitive tender process. In that tender, Kenya make private investors more comfortable about financing the needed new capacity. Power obtained levelized tariffs ranging from $0.22 to $0.24 per kWh. OrPower’s expansion had a levelized tariff of $0.11 per kWh. The total This had to be achieved cost of all four projects was $623 million. while minimizing the Box 1. Features of IDA guarantees for IPP projects in Kenya Kenya Power signed a 20-year PPA with each of the four IPPs in government’s contingent which capacity and energy charges were agreed. The tariff methodol- The IDA guarantees provide liquidity support to private financiers in liabilities and Kenya ogy provided that fuel-cost and exchange-rate risks would be passed case of: Power’s financial cost.” through to consumers and that interest-rate risk would be assumed • Kenya Power’s defaults on its ongoing payment obligations under by the private sponsors. the PPAs, including capacity, energy, and fuel payments; or • The government’s defaults on its payment obligations arising from The challenge an event of force majeure, natural or political, that constricts Kenya Power’s funding, as stipulated in the government’s Letter of Support. The priority projects were tendered at a time when financial markets Highlights of the guarantee structure were still suffering the impact of the 2008 global financial crisis and project financiers remained very risk averse. Moreover, the financial Objectives: To improve the creditworthiness of Kenya Power and the government of Kenya, and to limit the government’s direct support to situation of Kenya Power had begun to deteriorate, driven in part by manageable levels. ambitious network expansion plans. To complicate matters further, Letters of credit backstopped by IDA guarantees cover the following Kenya’s political stability came into doubt after the civil unrest that payment obligations of Kenya Power: followed the 2007 presidential elections and concerns over the • Three months of capacity and energy payments; upcoming 2013 presidential elections. • Two months of fuel payments; and, During the project tender process, it became clear to Kenya Power that it would not be able to attract investors unless it offered • Rolling cover. important credit enhancements, such as sovereign guarantees. To match the underlying financing terms, each letter of credit has a maximum term of 15 years from the date of effectiveness of each The Kenyan government, however, was constrained in its ability to IDA guarantee. The letters may be invoked from the date the covered provide such guarantees because of its limited fiscal space and a power plant is commissioned. 3 K e n y a : I D A G u a r a n t e e s E n a b l e F i r s t C o mm e r cia l F i n a n ci n g f o r P o w e r P l a n t s Figure 1. Structure of credit-enhancement package to facilitate private investment in new power generation capacity “IDA guarantees for the priority projects were structured … to ensure timely payments of energy, capacity, and fuel charges so that investors would know that the projects’ cash flow would be protected against payment defaults by Kenya Power, whether these stemmed from its own failures or from government Source: World Bank Group. interference.” Note: PRG = partial risk guarantee; L/C = letter of credit. much-needed new capacity. This had to be achieved while mini- projects’ cash flow would be protected against payment defaults by mizing the government’s contingent liabilities and Kenya Power’s Kenya Power, whether these stemmed from its own failures or from financial cost. After a market-sounding exercise, a credit-enhance- government interference. The second goal was to create a process to ment package for the priority projects was put together. The package make sure that if a payment default were to occur, remedial actions consisted of guarantees from the International Development would be taken over a 12-month period to reinstate the liquidity Association (IDA), a member of the WBG, to backstop ongoing protection and keep it in place for the full 15 years of the underlying payments under the PPAs, as well as insurance policies from financing. WBG’s Multilateral Investment Guarantee Agency (MIGA) to cover Both goals were accomplished with the use of standby letters termination payments (figure 1). In addition, the International Finance of credit backstopped by IDA guarantees (see figure 1). Commercial Corporation (IFC) provided long-term debt financing for two of the banks issued letters of credit to the project companies as a payment four projects. security for Kenya Power’s ongoing payment obligation under the IDA guarantees for the priority projects were structured with PPAs. The instruments allow project companies to withdraw funds if a dual goal (box 1). One was to ensure timely payments of energy, Kenya Power fails to make a payment on time. In case of withdraw- capacity, and fuel charges so that investors would know that the als, Kenya Power or the government of Kenya is obliged to repay the 4 K e n y a : I D A G u a r a n t e e s E n a b l e F i r s t C o mm e r cia l F i n a n ci n g f o r P o w e r P l a n t s commercial bank within 12 months. If they fail to do so, the IDA will WBG support secured several positive outcomes, such as: repay the bank. Through such a structure, IDA is able to work with • Minimizing the contingent liabilities of the government of Kenya Kenya Power and the government to ensure that remedial actions by making it unnecessary for the government to provide a full- are taken during the 12-month repayment period. fledged explicit sovereign guarantee to investors and lenders in After intensive negotiations, IDA and Kenya Power, on one support of Kenya Power’s entire payment flows over the duration side, and project sponsors and financiers, on the other, reached of the PPA (estimated at $4.3 billion). IDA guarantees limit the “WBG support ensured agreement that letters of credit for amounts equal to three months government’s contingent liabilities to $166 million, the amount the mobilization of private of energy and capacity charges and two months of fuel charges of the counterguarantee that the government was required to financing for badly needed were sufficient to mobilize the required commercial financing and provide for IDA guarantees. minimize the financial cost for Kenya Power. additional generation • Helping Kenya Power avoid the need to issue standalone MIGA provided insurance policies2 to equity investors and capacity that otherwise letters of credit with full cash collateral, thus allowing its scarce commercial lenders to cover a potential termination payment obli- resources to be redeployed for much-needed operational would not have been gation of Kenya Power arising from breach of contract as stipulated and investment purposes. Furthermore, the new generation achieved. The crucial value in the PPA, and potential termination payment obligations of the capacities allowed for a retirement of the expensive diesel fuel of the IDA guarantee was government of Kenya arising from a breach of contract under the emergency power plants. government’s Letter of Support. The risks covered by MIGA insurance in enabling the IPP projects • Ensuring consistency and predictability in government support to included transfer restrictions and breach of contract. to be bankable, thereby the Kenya IPP Program. catalyzing financing.” Benefits of World Bank Group support • Promoting South–South investment because IPP equity investors were either local or originated from other emerging markets WBG support ensured the mobilization of private financing for badly (table 2). needed additional generation capacity that otherwise would not have been achieved. The crucial value of the IDA guarantee lay in enabling Through the combination of IDA guarantees, MIGA insurance, and the IPP projects to be bankable, thereby catalyzing financing. The IFC long-term financing, the use of WBG resources was optimized for four supported IPPs reached financial closure between October 2012 and December 2013, ensuring that the much-needed additional generation capacity will be delivered. Three of the four IPPs attracted long-term commercial financing Table 1. Financing of the Kenyan IPP projects (US$ million) (table 1), the first to do so in Kenya. IFC and other development All sources 623 financial institutions played a critical role in providing debt financing. Debt 474 These projects have become benchmarks for long-term financing in IFC A 58 Kenya and Africa. IFC B (commercial loan) 27 IFC C 5 2 MIGA support was provided for Triumph Power Ltd, Thika Power Ltd, and OrPower. For African Development Bank 37 Triumph MIGA provided $102.5 million in coverage to Industrial and Commercial Bank of China and Standard Bank of South Africa for their long-term commercial financing and $11.1 million Commercial banks 181 in coverage to CfC Stanbic Bank Limited, covering its swap arrangement with Triumph to hedge against long-term interest rate risk. For Thika Power MIGA insured up to €81 million, covering Equity 86 equity investment and ABSA’s tranche of debt. For OrPower expansion, MIGA insurance for Project sponsors 149 equity investments was increased to $134 million, covering both initial investments and expan- sion. Source: World Bank Group. 5 K e n y a : I D A G u a r a n t e e s E n a b l e F i r s t C o mm e r cia l F i n a n ci n g f o r P o w e r P l a n t s Table 2. Sponsors of the Kenyan IPP projects Power plant Sponsor(s) Share (percent) Notes Thika Melec PowerGen 90 Affiliate of Lebanon-based Matelec Group African Energy Resources 10 “Three of the four IPPs Triumph Board Holding 40 Family-owned company whose largest shareholder is a Kenyan national attracted long-term Other African companies 60 commercial financing, the Gulf Gulf Energy Ltd 50 Africa-based first to do so in Kenya. Multiple Hauliers 30 These projects have Noora Power 10 Trustee of Kenya Power Pension Fund 10 Passive investor become benchmarks for OrPower (expansion) Ormat International Inc. 100 U.S.-based long-term financing in Kenya and Africa.” Source: World Bank Group. — = data not available. Kenya. Scarce IDA resources were sparingly used to provide payment The peer reviewers for this note were Clive Harris, who manages the Public– security, while more readily available MIGA resources were deployed Private Partnership Practice in the World Bank’s Cross-Cutting Solution Global to cover the relatively larger amounts of support required for termi- Practice, and Richard MacGeorge, a lead infrastructure finance specialist in the Bank’s Energy and Extractives Global Practice. nation coverage. IFC, for its part, provided critical long-term funding in a country environment where such a long tenor was scarce. IFC further supported South–South and local investors. These investors have an appetite for investments in Africa but relatively limited ability and experience in structuring and implementing projects. 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Once a year, the Energy and Extractives Global Practice takes stock of all notes that appeared, reviewing their quality and identifying priority areas to be covered in the following year’s pipeline. Please visit our Live Wire web page for updates: http://www.worldbank.org/energy/livewire e Pa c i f i c 2014/28 ainable energy for all in easT asia and Th 1 Tracking Progress Toward Providing susT TIVES GLOBAL PRACTICE A KNOWLEDGE NOTE SERIES FOR THE ENERGY & EXTRAC THE BOTTOM LINE Tracking Progress Toward Providing Sustainable Energy where does the region stand on the quest for sustainable for All in East Asia and the Pacific 2014/29 and cenTral asia energy for all? in 2010, eaP easTern euroPe sT ainable en ergy for all in databases—technical measures. This note is based on that frame- g su v i d i n had an electrification rate of Why is this important? ess Toward Pro work (World Bank 2014). SE4ALL will publish an updated version of 1 Tracking Progr 95 percent, and 52 percent of the population had access Tracking regional trends is critical to monitoring the GTF in 2015. to nonsolid fuel for cooking. the progress of the Sustainable Energy for All The primary indicators and data sources that the GTF uses to track progress toward the three SE4ALL goals are summarized below. consumption of renewable (SE4ALL) initiative C T I V E S G L O B A L P R A C T I C E ENERGY & EXTRA • Energy access. Access to modern energy services is measured T E S E R I E S F O R T H EIn declaring 2012 the “International Year of Sustainable Energy for energy decreased overall A KNO W L E D G E N Oand 2010, though by the percentage of the population with an electricity between 1990 All,” the UN General Assembly established three objectives to be connection and the percentage of the population with access Energy modern forms grew rapidly. d Providing Sustainable accomplished by 2030: to ensure universal access to modern energy energy intensity levels are high to nonsolid fuels.2 These data are collected using household Tracking Progress Towar services,1 to double the 2010 share of renewable energy in the global surveys and reported in the World Bank’s Global Electrification but declining rapidly. overall THE BOTTOM LINE energy mix, and to double the global rate of improvement in energy e and Central Asia trends are positive, but bold Database and the World Health Organization’s Household Energy for All in Eastern Europ efficiency relative to the period 1990–2010 (SE4ALL 2012). stand policy measures will be required where does the region setting Database. The SE4ALL objectives are global, with individual countries on that frame- on the quest for sustainable to sustain progress. is based share of renewable energy in the their own national targets databases— technical in a measures. way that is Thisconsistent with the overall of • Renewable energy. The note version energy for all? The region SE4ALL will publish an updated their ability energy mix is measured by the percentage of total final energy to Why is this important ? spirit of the work initiative. (World Bank Because2014). countries differ greatly in has near-universal access consumption that is derived from renewable energy resources. of trends is critical to monitoring to pursue thetheGTF in 2015. three objectives, some will make more rapid progress GTF uses to Data used to calculate this indicator are obtained from energy electricity, and 93 percent Tracking regional othersindicators primary will excel and data sources that elsewhere, depending on their the while the population has access le Energy for All in one areaThe goals are summarized below. balances published by the International Energy Agency and the the progress of the Sustainab respective track starting progress pointstowardand the three SE4ALL comparative advantages as well as on services is measured to nonsolid fuel for cooking. access. Accessthat they modern to are able to energy marshal. United Nations. despite relatively abundant (SE4ALL) initiative the resources and support Energy with an electricity connection Elisa Portale is an l Year of Sustainable Energy for To sustain percentage of by the momentum forthe the population achievement of the SE4ALL 2• Energy efficiency. The rate of improvement of energy efficiency hydropower, the share In declaring 2012 the “Internationa energy economist in with access to nonsolid fuels. three global objectives objectives, andathe means of charting percentage of the population global progress to 2030 is needed. is approximated by the compound annual growth rate (CAGR) of renewables in energy All,” the UN General Assembly established the Energy Sector surveys and reported access to modern universalAssistance The World TheseBank and data are the collected International using household Energy Agency led a consor- of energy intensity, where energy intensity is the ratio of total consumption has remained to be accomplished by 2030: to ensure Management Database and the World of theenergy intium of 15 renewable international in the World Bank’s Global agencies toElectrification establish the SE4ALL Global primary energy consumption to gross domestic product (GDP) energy the 2010 share of Program (ESMAP) relatively low. very high energy services, to double Database. measured in purchasing power parity (PPP) terms. Data used to 1 t ’s Household provides Energy a system for regular World Bank’s Energy the global rate of improvemen and Extractives Tracking Framework Health (GTF), which Organization in the energy intensity levels have come and to double the global energy mix, Global Practice. (SE4ALL 2012). based on energy. of renewable The sharepractical, rigorous—yet energy given available calculate energy intensity are obtained from energy balances to the period 1990–2010 global reporting, Renewable down rapidly. The big questions in energy efficiency relative setting by the percentage of total final energy consumption published by the International Energy Agency and the United evolve Joeri withde Wit is an countries individual mix is measured Data used to are how renewables will The SE4ALL objectives are global, economist in with the overall from renewable energy when every resources. person on the planet has access Nations. picks up a way energy that is consistent 1 The universal derived that isaccess goal will be achieved balances published when energy demand in from energy their own national targets through electricity, clean cooking fuels, clean heating fuels, rates the Bank’s Energy and countries differ greatly in their ability calculate this indicator are obtained to modern energy services provided productive use and community services. The term “modern solutions” cookingNations. again and whether recent spirit of the initiative. Because Extractives Global rapid progress and energy for Energy Agency and the United liquefied petroleum gas), 2 Solid fuels are defined to include both traditional biomass (wood, charcoal, agricultural will make more by the refers to solutions International that involve electricity or gaseous fuels (including is pellets and briquettes), and of decline in energy intensity some t of those of efficiency energy and forest residues, dung, and so on), processed biomass (such as to pursue the three objectives, Practice. depending on their or solid/liquid fuels paired with Energy efficiency. The rate stoves exhibiting of overall improvemen emissions rates at or near other solid fuels (such as coal and lignite). will excel elsewhere, rate (CAGR) of energy will continue. in one area while others liquefied petroleum gas (www.sustainableenergyforall.org). annual growth as well as on approximated by the compound and comparative advantages is the ratio of total primary energy respective starting points marshal. where energy intensity that they are able to intensity, measured in purchas- the resources and support domestic product (GDP) for the achievement of the SE4ALL consumption to gross calculate energy intensity Elisa Portale is an To sustain momentum terms. Data used to charting global progress to 2030 is needed. ing power parity (PPP) the International energy economist in objectives, a means of balances published by the Energy Sector International Energy Agency led a consor- are obtained from energy The World Bank and the SE4ALL Global Energy Agency and the United Nations. Management Assistance agencies to establish the the GTF to provide a regional and tium of 15 international for regular This note uses data from Program (ESMAP) of the which provides a system for Eastern Tracking Framework (GTF), the three pillars of SE4ALL World Bank’s Energy and Extractives on rigorous—yet practical, given available country perspective on Global Practice. global reporting, based has access Joeri de Wit is an will be achieved when every person on the planet The universal access goal heating fuels, clean cooking fuels, clean energy economist in 1 agricultural provided through electricity, biomass (wood, charcoal, to modern energy services The term “modern cooking solutions” to include both traditional and briquettes), and Solid fuels are defined the Bank’s Energy and use and community services. biomass (such as pellets 2 and energy for productive petroleum gas), and so on), processed fuels (including liquefied and forest residues, dung, involve electricity or gaseous at or near those of Extractives Global refers to solutions that overall emissions rates other solid fuels (such as coal and lignite). with stoves exhibiting Practice. or solid/liquid fuels paired (www.sustainableenergyforall.org). liquefied petroleum gas Contribute to If you can’t spare the time to contribute to Live Wire, but have an idea for a topic, or case we should cover, let us know! 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ERGY PRACTICE work (World Bank 2014). E G E N O T E S E R I E S F O R T H E E N to electricity, and 93 percent of A K N O W L g regiona l trends is critical monitoring the GTF in 2015. data sources that the GTF uses to Trackin The primary indicator s and the population has access s of the Sustain able Energy for All the three SE4ALL goals are summari zed below. the progres track progress toward Understanding CO Emissions from the Global Energy Sector nonsolid fuel for cooking. is measured to modern energy services THE BOTTOM LINE to Your Name Here t (SE4ALL) initiativ e Energy access. Access connection despite relatively abundan 2 population with an electricity ional Year of Sustainab le Energy for by the percentage of the access to nonsolid fuels. 2 hydropower, the share the energy sector contributes In declaring 2012 the “Internat objectives percenta ge of the population with establish ed three global and the and reported about 40 percent of global of renewables in energy All,” the UN General Assembly using household surveys Why is this issue important? access to modern These data are collected 2030: to ensure universal and the World Become an author has remained emissions of CO2. three- consumption to be accomplished by of renewable energy in in the World Bank’s Global Electrification Database high energy knowledge the share of the 2010 . energy requires very relatively low. Mitigating climate change services, to 1 double ld Energy Database quarters of those emissions rate of improvement Organization’s Househo CO2 intensity levels have come and to double the global Figure 1. CO2 emissions Health Figure 2. energy-related The share of renewable energy in the energy come from six major the global energy mix, sources of CO question s2 emissions to the period 1990–201 0 (SE4ALL 2012). by sector Renewab le energy. emissions by country consumption down rapidly. The big economies. although coal-fired in energy efficiency relative countries setting percenta ge of total final energy mix is measured by the of Live Wire and global, with individual LICs evolve les will opportunities to cut emissions of greenhouse aregases used to plants account for just are how renewab Identifying The SE4ALL objectives le energy resources. Data 0.5% picks upunderstanding of the main sources ofin those a way that is consistent with emis- the overall that is derived from renewab energy balances published 40 percent of world energy when energy demand requires a clear their own national targets in their ability are obtained from calculate this indicator Other Carbonrates for more than 80 percent of differ greatly countries Residential production, they were again and whethersions.recent dioxide (CO2) accounts spirit of the initiative. Because 6% sectors progress Other MICs nal Energy Agency and the United Nations. will make more rapid 15% intensity gas emissions globally, 1 primarily from the burning s, some 10% by the Internatio China improvement of energy efficiency is contribute to your responsible for more than of decline in energytotal greenhouse to pursue the three objective on their Other HICs . The rate of energy sector—defined include toexcel elsewhere, depending Energy efficiency 30% growth rate (CAGR) of energy will continue. of fossil fuels (IFCC 2007). The will 8% in one area while others by the compound annual Energy 70 percent of energy-sector as well as on 41% approxim and heat generation—contributed and compara tive advantages 41 ated Japan 4% energy the ratio of total primary Industry emissions in 2010. despite fuels consumed for electricity respective starting points 20% Russia energy intensity is that they are able to marshal. in 2010 (figure 1). Energy-related intensity, where USA product (GDP) measured in purchas- improvements in some percent of global CO2 emissions the resources and support 7% gross domestic practice and career! up the bulk of such ent of the SE4ALL Other consump tion to India 19% intensity is an at the point of combustion make for the achievem calculate energy countries, the global CO2 Elisa 2 emissions COPortale To sustain momentum transport Road 7% EU terms. Data used to andinare generated by the burning of fossil is needed. global progress to 2030 6% transport fuels, industrial ing power parity (PPP) the International economist objectives, a means of charting balances published by emissions 11% emission factor for energy energy 16% EnergyandSector nonrenewable municipal waste to generate nal Energy Agency led electricity Internatio a consor- are obtained from energy The World Bank and the thewaste, generation has hardly changed United Nations. ent Assistance venting and leakage to establish the emissions SE4ALL Global Energy Agency and the sector at the point and over the last 20 years. and heat. Black carbon and methane Managem tium of 15 international agencies Notes: Energy-related CO2 emissions are CO2 emissions from the energy from the GTF to provide a regional of the for regular This note usesanddata domestic Program (ESMAP) are not included in the analysis presented in this rk note. which provides a system (GTF), of combustion. Other Transport includes international marine aviation bunkers, of SE4ALL for Eastern Extractives Tracking Framewo available Other Sectors rail and pipeline transport; perspect ive on the three include pillars commercial/public World Bank’s Energy and given aviation and navigation, country on rigorous—yet practical, services, agriculture/forestry, fishing, energy industries other than electricity and heat genera- Global Practice. global reporting, based elsewhere; Energy = fuels consumed for electricity and Where do emissions come from? tion, and other emissions not specified as has in the opening paragraph. HIC, MIC, and LIC refer to high-, middle-, access Joeri de Wit is an will be achieved when on the planet heat generation, every person defined The universal access goal of countries heating fuels, energy economistare Emissions concentrated in 1 in a handful to modern energy services provided through electricity, fuels, clean and low-income clean cooking countries. cooking solutions” to include both traditional biomass (wood, charcoal, agricultural The term “modern Source: IEA 2012a. Solid fuels are defined and briquettes), and the Bank’s Energy and use and community services. biomass (such as pellets 2 and come primarily from burning and energy coal for productive electricity or gaseous fuels involve (including liquefied petroleum gas), of and forest residues, dung, and so on), processed Vivien Foster is sector Extractives Global refers to solutions that overall emissions rates at or near those other solid fuels (such as coal and lignite). with stoves exhibiting or solid/liquid fuels paired emissions closely manager for the Sus- The geographical pattern of energy-related CO Practice. gas 2 (www.sustainableenergy forall.org). liquefied petroleum middle-income countries, and only 0.5 percent by all low-income tainable Energy Depart- mirrors the distribution of energy consumption (figure 2). In 2010, ment at the World Bank countries put together. almost half of all such emissions were associated with the two (vfoster@worldbank.org). Coal is, by far, the largest source of energy-related CO2 emissions largest global energy consumers, and more than three-quarters globally, accounting for more than 70 percent of the total (figure 3). Daron Bedrosyan were associated with the top six emitting countries. Of the remaining works for London This reflects both the widespread use of coal to generate electrical energy-related CO2 emissions, about 8 percent were contributed Economics in Toronto. power, as well as the exceptionally high CO2 intensity of coal-fired by other high-income countries, another 15 percent by other Previously, he was an power (figure 4). Per unit of energy produced, coal emits significantly energy analyst with the more CO emissions than oil and more than twice as much as natural 2 World Bank’s Energy Practice. Gas Inventory 1 United Nations Framework Convention on Climate Change, Greenhouse 0.php gas. Data—Comparisons By Gas (database). http://unfccc.int/ghg_data/items/380