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Overseas Aid: Electricity Generation

Volume 461: debated on Monday 4 June 2007

To ask the Secretary of State for International Development what (a) expenditure and (b) proportion of the aid budget was used to support electricity generation projects in each of the last five years. (138102)

At the Gleneagles summit in 2005, the UK secured G8 agreement that the World Bank should lead on establishing a new clean energy for development investment framework (CEIF), which would operate across the international financing system. The aim of this framework is to increase public and private sector investment in cleaner energy in developing countries. The World Bank published their action plan in March 2007 to implement their part of the framework.

The Multilateral Development Banks have looked for ways to take forward this work. The Asian Development Bank launched an energy efficiency initiative, with an annual target of providing $1 billion in assistance for clean energy projects. The European Bank for Reconstruction and Development launched the sustainable energy initiative last year, which aims to leverage €5 billion of investment in cleaner energy over the next five years. The World Bank is working to increase its financial commitments on renewable energy and energy efficiency.

The World Bank's action plan for the CEIF has three main parts, one of which is to increase energy access in Africa. This includes giving greater attention to Africa's need for increased electricity generation, transmission and household electrification. The World Bank is starting discussions with some African governments about how the action plan can be implemented, aimed at improving access by households to modern energy services.

The UK has committed over £15 million to the CEIF so far, including £3 million for technical support in developing the CEIF and supporting discussions in developing countries; £10 million to fund posts and programme budgets across the multilateral development banks and the United Nations Development Programme over the next three years; and £3 million to the European Bank for Reconstruction and Development's (EBRD) sustainable energy initiative.

Except in a few special circumstances, DFID has not provided bilateral funding in support of electricity generation projects over the last five years. We work closely with international finance institutions such as the World Bank and the Asian Development Bank on financing arrangements they will apply to electricity generation projects in developing countries. A proportion of our funding to multilateral agencies such as these is spent on electricity generation projects.

The exceptions relate to our work for dependent territories and in Iraq. Over the past five years, DFID has spent about £260,000 on a wind turbine electricity generation project in St Helena. In Iraq, we have spent about £21 million on electricity generation projects to keep essential services running, through the installation of new equipment and the repair of existing assets.