We commend the World Bank on an increase in renewable energy and energy efficiency lending in 2009, but one year of figures hardly points to a trend. Although the bank reduced coal lending from over $1 billion in 2008 to $226 million in 2009, this value still exceeds coal lending in 2006 ($119 million) and 2007 ($140 million). Furthermore, if Saghir insists on examining the World Bank's energy lending on a year-by-year basis, then I can't help wondering how he would explain the bank's 2010 figures based on the projects that are currently being presented to the board. Significant loans for South Africa's Eskom coal power plan and several other Bank-financed coal projects currently in the pipeline will push up 2010's numbers, and the result won't be pretty.
Saghir states that renewable energy and energy efficiency financing constitutes more than 40 percent of the World Bank's 2009 energy financing. Yet while the bank deserves credit for increased funding for environmentally friendly projects, it has failed to reduce the absolute value of the funding it provides for coal. In essence, the proportion of coal to renewable energy and energy efficiency is shrinking not because actual coal lending has lessened from 2006 values but because the overall energy pot is much larger than it used to be.
The World Bank cannot claim ignorance about the dangers of its own lending portfolio. For at least half a decade, the World Bank has been aware that fossil fuel extraction is both bad for development and bad for the environment. The bank-commissioned 2004 Extractive Industries Review recommended an immediate moratorium on coal lending. And yet, despite the urging of five Nobel Peace Prize laureates, the bank has yet to fully implement these findings.
Saghir also misrepresented the realities of the World Bank's efforts to "clean up inefficient, polluting old plants." Refurbishing a coal plant extends its life for an additional 20 years, marginalizing if not completely diminishing the energy-efficiency gains. One of the bank's own studies, a September 2006 progress report on the Clean Energy Investment Framework, concluded that these very sorts of high-efficiency plants "would still emit more than twice the CO2 of efficient gas-fired technologies." New and rehabilitated plants commit the planet to decades of unnecessary carbon emissions and set developing countries on a path inconsistent with goals to reduce greenhouse gas emissions.