As Egypt prepares to showcase its efforts to go green while meeting its energy needs at the 2009 United Nations Climate Change Conference in December, World Bank Vice-President for Sustainable Development Katherine speaks to Niveen Wahish about the country's efforts to meet the challenges of climate change What World Bank programmes are being implemented by Egypt to help mitigate climate change? There is a programme in place financed by the Global Environment Facility (GEF), of which the World Bank is one of the implementing agencies. This is $50 million grant to help finance a major solar power plant in Kuraimat, which is one of the first in the region and is being implemented as a pilot project. With that experience, we are looking to see what other kinds of projects could take place in Egypt as well as in North Africa. Egypt has also put forward $350 million worth of proposals to be financed under the Clean Technology Fund (CTF). These have been approved in principle, but each project has to receive final approval. We are going to be looking at projects that could be implemented with private- sector participation in renewable energy, wind energy, urban transportation and energy efficiency. The first one is likely to be a renewable energy project, namely the wind-energy project that is part of a large investment programme in the region of Gabal Al-Zeit south of Zaafarana. This project, bringing together both private and public-sector wind generation, will finance the transmission line from the project location to the power grid, so that power is accessible to the population. Why is wind energy increasingly becoming the focus of international financing institutions like the World Bank? There is a great interest on the part of international organisations to help countries move towards a lower carbon platform, so as to reduce pollution for local populations and to reduce greenhouse gases that cause climate change. Wind energy is reaching a level of price that is much lower than it has been and is certainly lower than solar energy. Many countries that want to increase the power that is no longer coming from fossil fuels are shifting into wind energy. The broader trend is the shift to renewable energy. This is happening in Egypt too, which is targeting to supply 20 per cent of its energy needs over the years to come from renewable energy. In Egypt, you have strong resources in wind as well as solar power. The problem with solar power is that costs are still high. However, the more people invest, the lower the costs. Organisations like the World Bank and other international financing agencies are providing subsidy money so that the government does not have to pay the full cost of the initial investment. What is your assessment of air pollution in Egypt? There are a number of organisations, not just the World Bank, which are helping out with the problem of air pollution, and in fact there have been some successes with lowering the levels of lead pollution. This is the result of actions such as the removal of a number of smelters from the city and the renovation of the car fleet, but the levels of pollution could be reduced further. The sources of pollution vary from vehicle emissions to industrial plants and agricultural waste. We are going to be working with the ministry of the environment on an overall study to look at the sources of pollution and then to see what would be the most effective way of reducing it. The study should take about a year to complete. Reducing air pollution is very complex. Some of it has to do with old facilities that have to be renovated, and some of it has to do with behaviour. What has worked in many cities is implementing technical solutions, such as regulations and investment in new facilities. Also, when people are more alert to pollution standards and whether or not the air is clean, they are more able to demand action. Did you address the issue of solid waste during your visit to Egypt? My mission was mainly related to air pollution, but solid- waste management undoubtedly came up in the discussions since solid-waste management is an essential part of a livable city. With modern solid-waste management, you can reduce greenhouse gases, and that provides the possibility of finance. Some countries have got access to that. We are working with the Egyptian government at the stage of identifying needs, but we are not at the stage of financing. We do not have a specific project yet. How much financing does the World Bank invest in the area of renewable energy? We have always had a strong energy portfolio, but we are trying to increase the amount of financing for energy efficiency and renewable energy. Across the globe last year we increased our lending in the area of low-carbon energy to $3.3 billion. That is about 40 per cent of our overall energy lending. Our goal is to increase this to 50 per cent. The rest of our lending is mainly directed at transmission, distribution and policy changes. We direct about 25 per cent for traditional energy like gas. The Clean Technology Fund, a World Bank facility, is part of the World Bank Group's expanded response to the challenge of climate change, and it promotes investment in clean technology. It was designed as part of a broader series of funds, so that we can demonstrate before the Copenhagen Conference on Climate Change what can be done if substantial amounts of financing can be blended with a country's own financing and private-sector financing. To get access to this fund of $5 billion, countries need to come up with an investment plan of what they need the money for, their priorities, and what subsidies are needed to shift to a lower carbon platform. The countries that came forward first were Mexico, Egypt and Turkey. Under the CTF, Egypt came forward with $350 million worth of projects, which is a large programme. The efforts exerted by Egypt so far in the area of renewable energy, particularly the renewable energy project in Kuraimat, will be showcased when we get to Copenhagen during the second and third week of December for the negotiations on climate change. The aim is to demonstrate how a country like Egypt is thinking about meeting its own energy needs and also trying to go greener. What is your overall assessment? A lot of good work has been done, but more is needed. Probably more needs to be done on energy efficiency and improving consumption, because this is growing at 6-7 per cent per year. The average growth of consumption worldwide depends on the growth rate. Here, it is a little bit higher compared to the growth rate. Many countries are trying to focus on reducing consumption while increasing production. This is already part of the Egyptian strategy, but it could witness a bigger push, and that would be something we would be quite interested in helping out with. Indeed, our current project, the Second Pollution Abatement Project (EPAP), aims to help reduce energy consumption by renovating plants. In terms of air pollution, all the building blocks are in place. The policy framework, leadership, the monitoring systems and results have been recorded. The question is how to get to the next stage and how to put the more difficult pieces together. For example, in agricultural waste, thousands of farmers are involved, and you need to find ways to give them incentives, such as helping them do more sustainable farming, or offering them capacity building that will improve their income and improve pollution. You need to look into increasing private-sector involvement in solid-waste management with medium and small-scale farmers. The study should show the smartest way to do that and should show how to involve people. Yet, it is the industrial countries that are largely to blame for climate change, while developing countries are being asked to do something about it. Most of the impact of climate change will fall on the poorest countries in terms of extreme weather conditions, such as drought or heavy rain and changing weather patterns. Historically, emissions have come from the richer countries. Unfortunately, to keep it within a safe range, the growth of emissions coming from all countries will have to be constrained. Because countries need to grow, financing and technology is going to have to come from the developed world: that is what the negotiations now are all about, how to get the finance to make these different technologies affordable and make sure technology transfer is done efficiently, so that countries can grow and meet the needs of their populations in energy and also contribute to reducing greenhouse gases. We hope that with the examples we have here, such as the solar-energy and wind-energy power plants, added to a good financing package, the latest technologies, and a government that has been forward-looking, you can get a win- win package, whereby there is a reduction in local pollution, improvement in energy diversity, energy security and a reduction in greenhouse gases. At the World Bank, we see it as our job to help developing countries access financing from the carbon market and specialised funds such as the Clean Technology Fund, so that they can get solutions that will be good for the country, as well as for the planet as a whole. THE KURAIMAT plant is an integrated solar combined cycle power plant that will be located at Kuraimat about 95km south of Cairo on the eastern side of the River Nile. The plant has a capacity of about 150MW, and will rely on natural gas and solar power for electricity generation. The project is designed not only to contribute to the diversification of Egypt's sources of energy, but also to contribute to the reduction of greenhouse gas emissions. In this $327.6 million project, the Global Environment Facility (GEF) is contributing $49.8 million to finance the solar portion of the new plant. Increases in demand for electricity in Egypt averaged about seven per cent between 1997 and 2004, and they are expected to remain in the 6-7 per cent range over the next decade. The Kuraimat project is co-financed by the Japanese International Cooperation Agency, GEF and the National Renewable Energy Authority (NREA). According to the World Bank, Egypt could face a 50 per cent increase in greenhouse gas emissions from 2007 levels in the electricity sector alone, with electricity generation and transport contributing over 70 per cent of greenhouse gas emissions in the country. Attempts to change that scenario include the Kuraimat project, as well as the construction of a 7,200 MW wind-power capacity by 2020, cuts in vehicle emissions in heavily populated regions through improved public transportation, and efforts to make industry more energy efficient.
