Should the World Bank Insists on Maintaining the IOUs-AF in Developing Countries?

First Update. This comments come from the original EWPC Blog.

Comments

Wed, 10/13/2010 - 10:07am

World bank supplies only a very small part of finance to country like India. Then it is never in a position now for some umpteen years even to appoint consultants even though it does some semblence of selecting them.ButThe bank officials will admit that the couyntries where they are supposed to work often decide who is going there and who is not going there.Having said this please note that World bank is not a pure bank but a Political Economic bank and it has its own limitations. Often it futhurs the interest of the private enterprise from countries that have a major say. So yo can not wexpect these people to write the energy policies for countries to whom they lend except the ones who are so small that in a map you have to use a Looking Glass.There is much talk and no fire!Then again Going to demand side often means encouraging the Industries to produce such goods and services which do not exist in the coutry in Question.The world bank is not really bothered till the country experts themselves say so and Minister concerned then takes up the case. There is also a problem of scale of production and people who can take up such projects. Sometimes it may be there and at other times it may not be there. In case of India world bank will leave it to Private sector like Siemens etc to do the work.So let be clear about what this World bank is about.They are there to initiate development and letting the private sector from their member countries take over in one form or other. they have a develpment arm but the purpose is not altruistic

Alok Misra

Wed, 10/13/2010 - 1:19pm

Thank you Alok,

Essentially what I am saying is that there are two competing energy policies at the most highest level. The IOUs-AF (with many incremental extensions) and the EWPC-AF. I believe that a shift at the WB away from the IOUs-AF is in accordance with what is says at the World Bank Website:

At the World Bank we have made the world's challenge--to reduce global poverty--our challenge.

The Bank focuses on achievement of the Millennium Development Goals that call for the elimination of poverty and sustained development. The goals provide us with targets and yardsticks for measuring results.

Our mission is to help developing countries and their people reach the goals by working with our partners to alleviate poverty. We address global challenges in ways that advance an inclusive and sustainable globalization--that overcome poverty, enhance growth with care for the environment, and create individual opportunity and hope.

Six strategic themes drive our efforts. By focusing on these strategic themes, the Bank delivers technical, financial and other assistance to those most in need and where it can have the greatest impact and promote growth: to the poorest countries, fragile states and the Arab world; to middle-income countries; to solving global public goods issues; and to delivering knowledge and learning services.

Jose Antonio Vanderhorst-Silverio

In response to the Oct 10, 2010, energybiz.com article Bringing Electricity to Poorer Countries: Electrification tops UN Agenda, by Ken Silverstein, I wrote on Oct 11, 2010, the following comment under the title "Strategy for the Development of the Resources of the Demand Side:"

Hi Ken,

You report that "… the United Nations has established a goal of bringing power generation to the under-developed regions so that they can improve their quality of life." Such a goal could be very misleading as it can be interpreted as a policy in accordance with the Investor Owned Utilities Architecture Framework (IOUs-AF) that concentrates the attention into the resources of the supply side, with generation as the key technology.

That IOUs-AF policy has led to such a development of the resources of the supply side, which has been saturated for quite some time. During that time, that IOUs-AF policy has kept the development of the resources of the demand side highly underdeveloped. That is why the potential of the development of demand side is where most of the value creation is available to both develop and even more so for the developing countries, with for example net zero energy buildings as a goal.

So what is needed is not just to bring power generation to the under-developed regions of the world, but to also design an emergent power system with the highest systemic leverage possible. That involves a paradigm shift from the status quo IOUs-AF to the Electricity Without Price Controls Architecture Framework (EWPC-AF).

In order to find out which is the best way to satisfy the needs of underdeveloped regions of the world, I strongly suggest that the UN, as an integral part of the socio-technical whole power system, should concentrate their active attention in the EWPC article Which Country Will Take the Leadership of a Global Vision for Advancing Grids for Customers? In that article, I give the example of a developing country, the Dominican Republic, “… as one of the potential candidates to initiate the transformation of the electric power industry. I did that because that transformation is more dependent on a mental model shift about energy policy than a technological one to satisfy customers’ needs and to reduce industry strategic risk.”

Should the World Bank, as an active investor arm of the UN, insists on maintaining the IOUs-AF in South Africa, the Dominican Republic, and elsewhere?

Best regards,

José Antonio