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The World Bank, Laos and RenewableEnergy Revolution in the Making:Challenges in Alleviating Poverty andMitigating Climate ChangeMira Käkönen a & Hanna Kaisti aa Finland Futures Research Centre, University of Turku, Finland

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The World Bank, Laos and Renewable Energy Revolution in theMaking: Challenges in Alleviating Poverty and Mitigating ClimateChange

Mira Kakonen and Hanna Kaisti

Finland Futures Research Centre, University of Turku, Finland

The World Bank is among the most dominant actors in defining objectives forenergy development. It has announced that it is committed to nothing less than arevolution in the rate and scale of investments in renewables. Renewable energyproduction is seen to create win–win situations, where both poverty alleviationand climate change mitigation targets can be met. Synergies within the energy–poverty–climate nexus are, however, not self-evident. This article analyzes,firstly, how the win-win policy narrative has emerged in the World Bank’s energypolicy. Secondly, it assesses how the World Bank has responded to the twinchallenge of poverty alleviation and climate change mitigation in its renewableenergy projects. In recent years, the two main renewable energy forms the Bankhas financed have been large-scale hydropower as an on-grid solution and solarhome systems (SHS) as an off-grid solution. Laos is an illustrative case for thesetrends. There, the World Bank has on the one hand supported controversial large-scale hydropower development that is linked to regional power trade scheme inthe Mekong region. On the other hand, it has also funded rural electrificationprojects that include an off-grid component implemented with SHS. The articlediscusses what these developments in Laos tell about the World Bank’s role inconducting a revolution in renewables. The research material consists of policyand project documents, expert interviews and village-level fieldwork.

Keywords: World Bank; Laos; renewable energy; solar home systems;hydropower

1. Introduction

Climate change represents one of the greatest environmental, social and economic

threats facing the globe. A majority of countries have set a dual – and to great

extent contradicting – challenge to on the one hand sustain economic development

by securing the sufficiency of energy supply at affordable prices and on the other

hand to mitigate climate change. In the context of developing countries, there is also

a third challenge: that of providing access to modern energy services for the poor

and reducing poverty. Currently, at least 3 billion people rely on traditional biomass

globally, mostly wood and animal dung, as their primary source of energy (UNDP

ISSN 0803-9410 print/ISSN 1891-1765 online

# 2012 Norwegian Institute of International Affairs (NUPI)

http://dx.doi.org/10.1080/08039410.2012.657668http://www.tandfonline.com

Forum for Development StudiesVol. 39, No. 2, June 2012, 159–184

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and WHO, 2009), and around 1.4 billion people do not have access to electricity (IEA,

2010). Access to sustainable energy has been increasingly noted as the missing millen-

nium development goal and United Nations’ Secretary-General Ban-Ki-moon has

launched a target of universal energy access by 2030 (UN, 2010). Renewable energy

is expected to offer a way to mitigate climate change and provide access to energy

in pro-poor manner. An additional interest can also be traced to current dynamics in

the relationship between climate and development finance. New and additional funds

for climate finance have been hard to find (e.g. Stadelmann et al., 2010, WRI, 2011).

To address the concerns that climate-oriented development agenda might divert

resources from the poorer and less emitting target groups, countries, sectors and

regions to more emitting and better-off groups, it has become relevant to stress the

synergies and co-benefits of the two agendas and objectives (Gupta 2009; Michaelowa

and Michaelowa, 2007). As a result, mitigating climate change, increasing energy

access, and alleviating rural poverty are increasingly seen as complementary issues,

and their overlap can be defined as an energy–poverty–climate nexus (Casillas and

Kammen, 2010).

Multilateral Development Banks (MDBs) are key actors in defining the energy

agendas in developing countries. They have become part of the global energy govern-

ance structure and their economic and technical assistance projects and programs both

reflect and shape global agendas on how countries should develop their energy structure

(Florini and Sovacool, 2009). The World Bank Group (WBG) is the largest single

source of funds for energy projects in the developing countries (Tirpak and Adams,

2008, p.144). However, it is not only the World Bank’s financial lending that is rel-

evant, but also what it says about development. The capacity to gather and disseminate

knowledge and ideas is a tremendous source of influence (Goldman, 2005; Stone and

Wright, 2007; Weaver, 2008). It is probably the largest single organizational producer

of knowledge on development and its ideas and policies are transferred to diverse and

distant locales (Stone and Wright, 2007, p.9). As a result, the World Bank and other

development banks have significant power to shape other multilateral, bilateral and

national development strategies and define conventional wisdom on global energy

development. In relation to current energy policies in developing countries, it is of

great importance to understand how the World Bank is articulating its views on the

energy–poverty–climate nexus.

The energy policies of the World Bank have been severely questioned during the

past decades. They have been blamed for failures in reducing poverty as well as for sup-

porting solutions harmful for the environment and climate. The World Bank is now

trying to form a new energy agenda that could meet both pro-poor and low-carbon

requirements. This can be seen as an attempt to define a win–win policy narrative in

which a dual challenge of poverty alleviation and climate change mitigation is

tackled with providing improved energy services by using renewable energy. Policy

narratives consist of discursive storylines that can be described as subtle mechanisms

to create and maintain discursive order (Hajer, 1995, pp.56–60). The discursive

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storylines in policy narratives structure perception and action (Fairhead and Leach,

1997). They are formed around definitions of problems and their consequences in

such a way that certain kinds of solutions become outlined and justified as appropriate

responses (Leach, 2008; Leach et al., 2009). Focusing on multiple positive outcomes

and synergies is often characteristic for policy narratives as their role is to construct

consensus and unify disparate perspectives. However, policy narratives often end up

being overly consensual and optimistic which can result in a situation where difficult

questions on possible trade-offs and contradictions get sidelined (cf. Hirsch et al. 2010).

In this article, we analyze, firstly, how the win–win policy narrative on poverty alle-

viation and climate change mitigation has emerged in the World Bank’s energy policy.

Secondly, we examine how the World Bank has been able to respond to the twin chal-

lenge of poverty alleviation and climate change mitigation in the renewable energy pro-

jects implemented in Laos. In recent years, the two main renewable energy forms the

Bank has financed have been large-scale hydropower as an on-grid solution and

solar home systems (SHS) as off-grid solutions (World Bank, 2010). Laos is an illustra-

tive case country as the World Bank has supported both of these renewable energy

forms there. Laos, which has a high hydropower potential, is representative also for

the World Bank vision to support renewable energy through regional schemes. In

this vision, low-carbon hydroelectricity is exported from Laos to neighboring countries

where it replaces fossil fuels. However, in the past, the World Bank has been criticized

for its support to large-scale hydropower which is known to have many negative

environmental and social impacts (WCD, 2000). Therefore, the Nam Theun 2 hydro-

power project in Laos has become an important show case for the Bank. It wants to

prove that it has learned from past mistakes, and that large-scale hydropower can be

provided in a sustainable manner. The World Bank has defined both Nam Theun 2

and the solar panel program implemented in Laos as success stories. However, both

of the cases seem to have questionable outcomes in terms of providing sustainable posi-

tive support for energy–poverty–climate nexus, especially if looked at from a long-

term perspective.

The research material includes World Bank documents and policy papers, expert

interviews and village case studies made in Laos in January and February 2010. The

expert interviews included, for example, the World Bank, the Laotian Ministry of

Energy and Mines and Village Off-Grid Promotion and Support (VOPS) office,

which has coordinated the off-grid activities. The village level fieldwork was conducted

in two provinces, Khammouane province in Central and Champasak province in

Southern Laos1 (see Figure 1). The Khammouane province was selected because in

the Nakai district the two renewable energy programs – NT2 and SHS program –

have been implemented. In some case villages, these projects actually overlapped as

the SHS fieldwork was partly done in the villages that are influenced by the Nam

1Special acknowledgement is due to Sirixai Phanthavongs who was instrumental in facilitatingthe fieldwork and the interviews.

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Theun 2 dam. A somewhat ironic detail is that these case study villages in the backyard

of NT2 were included in the solar panel program as a result of the huge hydropower

dam built in their neighborhood – from which most of the electricity is exported to

Thailand. In addition, we visited and made interviews in a village that has been resettled

due to the Nam Theun 2 dam. With regards to the SHS program, the villages in Kham-

mouane represent a remote area where solar panels have been installed only recently.

The case villages in Champasak province were selected because there the villages

Figure 1. The fieldwork was conducted in Nakai and Phongthong districts in Khammouane and Champsak provinces.

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were better connected to services, and they had a longer experience from SHS than in

Khammouane province.2

Following Section 1, the remaining part of the article is divided into four sections.

Section 2 analyzes the development of the win–win policy narrative in the World

Bank’s energy policy and the Bank’s commitment to revolution in renewables.

Section 3 introduces the World Bank’s renewable energy projects in Laos, and is fol-

lowed by sections which discuss the two projects in more detail, namely Nam Theun 2

large scale hydropower dam and SHS program. Section 6 concludes the article and dis-

cusses what the findings from the World Bank documents and the two cases from Laos

tell about the World Bank’s current renewable energy policy and implementation, as

well as about the dilemmas related to the energy–poverty–climate nexus.

2. Recent changes in World Bank’s energy policy: responses to criticism

Since its earliest years, the World Bank has made loans to the power sector including

power generation, transmission and distribution. At the beginning, the focus was very

much on infrastructure and hardware. In the 1980s, the main lending in the power gen-

eration went to coal, oil and gas as well as large hydropower projects. Support for trans-

mission lines and distribution networks has also been a priority, and this has included

substantial amounts channeled to rural electrification programs. In the 1990s, the Bank

significantly increased its lending to policy reforms and technical assistance. The aim

was to commercialize the energy sector in recipient countries. At the same time, finan-

cing for more direct energy infrastructure declined (Gartwick and Eberhard, 2008). In

tandem with the promotion of commercialization, there has been significant support for

setting up regional electricity markets. The Asian Development Bank (ADB)-led and

World Bank-supported regional scheme for energy markets in the Greater Mekong

Sub-region is one example of this. During the past decade, more direct investments

in power generation have increased again. The past approaches have been criticized

for not being designed to meet the needs of the poorest and for causing environmental

degradation especially by accelerating the emission of global greenhouse gases. This is

the dual challenge the World Bank is facing in the energy sector.

2.1 Simplistic assumptions on serving the needs of the poor

The Bank has been criticized for assuming too simplistically that any increase in elec-

tricity generation or transmission translates into electricity access for the poor. Until

the end of the 1970s, no special attention was given to the poorest groups in policy objec-

tives as the power sector infrastructure was assumed to create economic growth that

2Semi-structured interviews were conducted in altogether six villages where the solar panels hadbeen installed. The case study villages were selected to provide variation in two respects, namelyin the village location (near the road vs. remote area) and the period how long solar panels hadbeen in use in the village (long experience from solar panel use vs. newly installed panels).

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would trickle down to the poor as well. Only at the beginning of the 1990s, due to con-

cerns of failures of the trickle-down effect, the improvement of access of disadvantaged

groups to electricity became a separately articulated objective (Barnett, 1993). However,

the 1990s did not seem to bring successes in this objective. The critics have said that the

lending for policy reforms that promoted commercialization did not accelerate, but in

some cases actually lowered, the electrification rate especially in rural areas. One of

the main problems has been that for private utilities rural electrification, especially in

the most remote and poorest areas, is simply not financially viable (Dubash, 2003). In

2003, even an internal evaluation of the WBG’s power sector support concluded that

poverty reduction had not ‘for the most part, been intrinsic component of designing

sector reform and private sector development in the electric power sector’ and the strat-

egies for the cost-effective patterns had failed in increasing the access of the poor. There

have also been problematic assumptions of direct causal linkages between electrification

and poverty reduction and on how access to electricity has almost automatic positive

welfare outcomes (Jacobson, 2007; World Bank, 2008a). However, unless there has

been a special program to promote productive uses of electricity, the benefits for house-

holds have often been less than expected (World Bank, 2008a, p.46).

Also other issues in the World Bank’s energy sector support have been noted to be

in tension with the aim of increasing access to the poor. The Bank has received criticism

on helping for decades to open developing countries’ fossil fuel sectors in order to

satisfy the growing energy needs of Northern industrialized countries (BIC et al.,

2006; Vallette et al., 2004). Export orientation is also a dominant feature of regionali-

zation policies. The regional grids are often planned to be fed by export-oriented fossil

fuel or hydropower megaprojects and the central idea is to move electricity via regional

transmission lines to locations where it is most needed. However, this need typically

does not refer to areas without access to energy but rather the areas with the highest

industrial energy demand.

2.2 Committment to revolution in renewables

The criticism of the Bank’s support to dirty energy at the end of the 1990s and begin-

ning of 2000 culminated in many ways in the Extractive Industries Review (2003),

commissioned by the Bank itself. It called the Bank to re-consider its projects which

contribute strongly to climate change – particularly oil and coal extraction projects.

As a response in 2004, the World Bank stated that it was ‘committed to nothing less

than a revolution in the rate and scale’ of investments to renewables (World Bank,

2004, p.2) and it announced a 20 per cent annual increase in the finance of renewable

energy and energy efficiency projects (WBG, 2004a). This target has later started to be

called the Bonn Commitment. The bold announcements have, however, been ques-

tioned by several civil society actors and groups which claim that although the

World Bank has shifted its rhetoric, it has not yet clearly proved to have substantially

changed its actual funding and actions. For example, the Sustainable Energy and

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Economy Network has accused the WBG of a ‘renewable deception’ and claimed that

the Bank uses questionable baselines and counting techniques and that with different

calculation methods the achievements and commitments look much more modest (Vall-

ette et al., 2004). The World Bank figures on its energy portfolios have continued to be

contested until now (Is e.g. BIC et al., 2006; BWP, 2010; WRI, 2010; WWF, 2008).

Currently, it has been acknowledged that even though the WBG has made gains in

financing renewable energy and energy efficiency, simultaneously its finance for

fossil fuels has increased significantly (Mainhardt-Gibbs, 2011).

One of the concerns among civil society groups has been the increased finance for

large-scale hydropower. The Bonn Commitment to renewables included geothermal,

solar, wind, biomass and small, mini and microhydro (up to 10 MW generating

capacity). However, the Bank clarified soon after in the Management Response to

the Extractive Industries Review that it considers all hydropower, regardless of scale,

as renewable and emphasized a difference between renewables and ‘new renewables’

where the latter includes only small hydropower (WBG, 2004b). For reporting pur-

poses, the Bank promised to give separate figures for projects in which the installed

capacity exceeds 10 MW. Nonetheless, in many instances this has not been the case.

For example, in 2006, civil society groups complained that 60 per cent of the funds

the Bank presented to be directed for renewable energy and efficiency financing actu-

ally had gone for financing large hydropower. The figure included, for example, the

US$152 million for Nam Theun 2 dam in Laos despite its possibly high amount of

greenhouse gases (BIC et al., 2006, p.6).

2.3 Large hydropower and off-grid renewable energy in meeting the dual

objective

Currently the World Bank is preparing an updated energy sector strategy that was sup-

posed to be ready in April 2011, however, until the time of writing this article it has not

yet been released. In a circulated approach paper (WBG, 2009) and in the current draft

version of the energy strategy (WBG, 2011) it becomes clear that in the new energy strat-

egy the World Bank aims to respond to the criticism it has received concerning on one

hand the failures in reaching the poor and serving their needs with its energy-related pro-

jects, and on the other hand the high carbon footprint of the past lending. The new draft

energy strategy sets two guiding and overarching objectives. Firstly, its aim is to increase

access to modern energy services and to increase the reliability of the supply with a

special emphasis on the poor. Secondly, it intends to facilitate the shift to environmen-

tally sustainable and low-carbon energy sector development (WBG, 2011, p.vii). In

order to meet these objectives, it is said that new generation capacity, electricity trans-

mission and distribution, policy lending and market design need to be supported.

Renewable energy has been given a central role in meeting these objectives.

In the new energy strategy draft, hydropower is highlighted as the main large-scale

solution which ‘helps to meet the dual challenge of increasing access and reliability and

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supplying low-carbon electricity’. It is said to be the largest source of affordable renew-

able energy and that it can contribute not only to mitigation but also to adaptation objec-

tives. Also regional hydropower projects are highlighted (WBG, 2011, pp.55–58) and

the Greater Mekong sub-region is mentioned as an example of the opportunities that

renewable energy and hydropower trade provide (WBG, 2011, p.79). The WBG says

it has learnt many lessons from the past and it is committed to ‘utilize the maximum

strategic value of hydropower resources in environmentally and socially sustainable

manner’. In addition, renewable energy is presented as a solution in expanding rural

access to electricity via off-grid solutions. Distributed energy systems based on renew-

able energy are said to ‘offer important avenues to address energy poverty, affordabil-

ity, and environmental sustainability’. SHS are especially highlighted even though, at

the same time, they are said to serve as a ‘transition toward integration into mini-grid or

a grid system’. Thus, in the new energy strategy draft, the World Bank is focusing on

two renewable energy sources, large hydropower and off-grid solutions, such as

SHS. These are said to have synergies in increasing access to poor and being

climate-friendly.

These two forms of renewable energy are being framed as answers to previous criti-

cism, and as ways to create easily implemented responses to the energy–poverty–

climate nexus. Looking at recent funding patterns, this focus is not surprising. As an

independent evaluation (World Bank, 2010) has noted, the WBG’s direct lending for

renewable energy has been dominated by hydropower which has been the main renew-

able grid technology. On the other side, the largest single area of off-grid renewable

energy investments has been the SHS.

The recent increases in the support for hydropower seem to hint that the climate

turn in the World Bank’s energy policies has been accompanied with the return of

large hydropower on the Bank’s agenda. In the 1990s, the World Bank funding for

hydropower projects had declined due to protests and lawsuits. The public concerns

about the risks relating to environment, water equity, population displacements and

social justice, for example, led to the World Bank withdrawing from large and contro-

versial projects such as the Narmada hydropower development in India in 1993

(Khagram, 2004; McCully, 2001). Along with the establishment of the World Com-

mission on Dams and its famous report (WCD, 2000) where lot of the criticism of

the anti-dam movements culminated, problems related to large dams became widely

acknowledged (McCully, 2001). In 1999, the Bank did not fund any hydropower pro-

jects (Berliant, 2009). In 2003, the hydropower projects begun to enter the Bank’s

energy portfolio again – 67 projects were approved in a single year (World Bank,

2009a). Since then new lending has increased significantly: from less than $250

million per year from 2002 to 2004 to $500 million per year from 2005 to 2007. In

2008, the lending exceeded $1 billion (World Bank, 2009a). It seems that the stronger

the climate change agenda has become the more large scale hydropower has been pre-

sented as the most affordable and thus pro-poor source of renewable energy. Despite

the criticism, it seems that World Bank is determined to create a new opportunity for

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large hydropower, framing hydropower as a key low-carbon solution for combating

climate change.

The other main renewable energy support, that is, the off-grid components of rural

electrification in the form of SHS started in the 1990s and increased significantly in

the first decade of 2000. Since 1992, the WBG has contributed $790 million to SHS

components in 34 countries (World Bank, 2010, pp.x–xi). The strengthened focus on

poverty in the early 2000s was an important motivation for this as at the same time it

had become evident that on-grid electrification had tendencies of failing to reach the

remote areas where the poor often disproportionately live (World Bank, 2008a, p.14).

As the cost of renewable energy technology had decreased, they became the least-

cost energy solutions to the areas difficult to reach with the grid. Also the Bank

needed to show that it had taken environmental issues seriously – renewable energy

technologies in off-grid projects were seen as one way to prove this. The environmental

emphasis possibly also related to the fact that there were grants available from the Global

Environment Facility (GEF) for renewable energy technologies. In fact, the off-grid

components of the World Bank’s rural electrification projects have almost always

used GEF-funded subsidies (World Bank, 2008a). However, the renewable off-grid sol-

utions have not been a fully unproblematic solution. Although off-grid solutions, such as

SHS, can often reach the remote areas better than grid connections, the poorest house-

holds often cannot afford them unless they are strongly subsidized (World Bank, 2008a).

Some have stated that the expectations of environmental benefits and poverty alleviation

fall short especially because of over-reliance on SHS (Jacobson, 2007). Seventy five per

cent of all Bank off-grid projects have promoted SHS, and other technologies such as

micro hydro and wind power have been more marginal (World Bank, 2008a, p.14).

Still, SHS provides very little electricity and thus its productive uses are limited. In

addition, it normally does not replace environmentally and health-wise problematic

fuel wood or other biomass uses (Jacobson, 2007; Karekezi and Kithyoma, 2002).

Next we will turn to Laos and look at two exemplary World Bank funded energy

projects. First, we will look at the World Bank’s energy agenda in Laos. Laos has

been the main scene for the World Bank’s return to hydropower development with

Nam Theun 2 serving as the show case of the new environmentally and socially sustain-

able hydropower project models. Laos has also been the country where the World Bank

and GEF funded off-grid rural electrification program consisting of SHS has been

claimed as a success story. Through the cases of Nam Theun 2 hydropower project

and the SHS project, we try to shed light on the World Bank’s role in fostering revolu-

tion in renewables while at the same time attempting to alleviate poverty.

3. World Bank and the energy sector of Laos: solar panels in the backyard of

large dams

As described by Rigg (2009, p.707), the development story of Laos is not simply about

‘submission to global economic structures and forces, and regional political

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incorporation’ but still its policies during the past two decades have been greatly influ-

enced by the aim to open up the country and its resources to regional and global

markets. Out of the Southeast Asian countries, Laos has been among those most signifi-

cantly influenced by the multilateral development agencies and its capital Vientiane ‘is

dotted with the offices of the multilateral agencies and agents of these institutions are

intimately involved in the formulation of the country’s development policies’ (Rigg,

2009, p.205). The power sector development in Laos has largely been defined by its

significant hydropower potential, its location close to countries where demand for elec-

tricity is steadily increasing, and by the MDBs’ energy agenda.

According to the World Bank, the potential of hydropower in Laos is up to 23,000

MW (World Bank, 2009b). Currently about 90 per cent of hydroelectricity produced

in Laos is exported to neighboring countries. Only 10 per cent is available for domestic

consumption. This makes the electricity sector the country’s third largest export earner.

In the future Laos is hoping to increase the revenue from electricity export even more

(The Draft Seventh National Socio-Economic Development Plan, 2011–2015).

The World Bank’s assistance to Laos began in 1977. A significant share of the

lending has been directed to the energy sector in which it has worked in close

cooperation with the ADB (Phraxayavong, 2009, pp.217–221). Since the late 1980s,

the World Bank and the ADB have advised Laos to develop its hydropower potential

and have viewed it as one of the few plausible development options for the country

(Middleton et al., 2009). Already since the 1990s, the Banks have fostered a scheme

of regional energy markets enabled by a regional grid in which Laos is the main pro-

vider of energy harnessing its huge hydropower potential (Yu, 2003). Therefore, the

vision of Laos serving as a hydropower battery for the whole Mekong region, and

even for ASEAN is not a new one (Bakker, 1999; Molle et al., 2009). In the latest

turn, Laos has been presented as the region’s green and low-carbon battery. According

to the World Bank, the development of an efficient regional power trade market fed by

large-scale hydropower ‘increases access for the poor’ and ‘maximizes environmental

benefits through the displacement of fossil fuel thermal generation with renewable

energy’ (World Bank, 2007, p.xv). The regional power dynamics have received less

attention in the policy texts. In rhetoric, it is suggested that the energy trade will

benefit equally all partners involved in the exchange but it is likely that the reality is

much more complex. Countries like Laos and especially the local communities

hosting the mega-projects are not easily equal to the ‘economic powerhouse’ of Thai-

land and its influential energy companies (Greacen and Greacen, 2004, pp.538–539). It

has been pointed out that for Thailand where the opposition to large dams is strong, it is

a convenient option to build dams in its authoritarian neighbors of Burma and Laos,

import the energy and export the negative environmental and social impacts

(Simpson, 2007).

Even though the ADB has the lead in the Greater Mekong Sub-region program, the

World Bank works in tandem with it and has a supportive role. It has, for example, sup-

ported the construction of transmission infrastructure to create interconnections

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between Laos and other countries in the region. Regional activities are also included in

the World Bank’s country assistance strategies for Laos. The Bank considers for

example the financing of Nam Theun 2 project as an indication of a new phase of

power trade market development (World Bank, 2007).

In addition to supporting electricity export, the World Bank is also involved in dom-

estic electrification. In recent decades, the electrification rate has steadily increased. In

1995, the electrification rate was 16 per cent, whereas in 2010 it was already 71 per

cent. The World Bank funding for rural electrification has been significant in this devel-

opment. The support has been channeled in the form of International Development

Association (IDA) grants for four separate rural electrification projects since the late

1980s (Table 1).

The Government of Laos has a goal of electrifying 90 per cent of the country’s

households by 2020. Of this target, 75 per cent will be covered with an electricity

grid extension. The low population density and mountainous terrain in many parts of

the country make it difficult and expensive to connect all households to an electricity

grid. Thus 25 per cent of the electrification targets are planned to be covered with

decentralized off-grid electrification (World Bank, 2008b, p.1). The World Bank

funded electrification projects have also included off-grid components. The World

Bank first implemented the off-grid electrification in seven Central and Southern pro-

vinces. Later this pilot program was expanded in 2006 to cover all provinces. The off-

grid components have also received funding from the GEF. However, the on-grid elec-

trification has always taken the main bulk of the finances (Table 1). As often has been

the case in World Bank funded schemes, SHS have been selected from the different

renewable energy options as the main model (cf. World Bank, 2008a).

4. Laos as the stage for the World Bank’s return to hydropower: have past

lessons been learnt?

One of the Bank’s flagship projects in Laos has been the Nam Theun 2 hydropower

project which has the remarkable capacity of 1080 MW. Nam Theun 2 is jointly

Table 1: Recent World Bank support to rural electrification in Lao PDR (Bambawaleet al., 2011, p.42; World Bank, 2008b).

Project Time Cost (US$ million) Connections (households)

Southern ProvincesElectrification Project

1987–1995 IDA funding: 26;total: 31

On-grid: 8354; off-grid:–

Provincial grid integration 1993–1999 IDA funding: 36;total: 49

On-grid: 40,100; off-grid:–

Southern Provinces RuralElectrification

1998–2004 IDA funding: 35;total: 42

On-grid: 51,805; off-grid:4910

Rural Electrification Phase I 2006–2010 IDA: 10; GEF: 4;total: 36

On-grid: 42,000; off-grid:10,000

Rural Electrification Phase II 2010–2013 IDA: 20; total: 36 –

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implemented by the Nam Theun 2 Power Company and the Government of Laos and

supported by financing from 27 parties including the World Bank and the ADB. The

main investors are from Thailand and France, but the guarantees for millions of

dollars of loans come from the MDBs. As Laos is perceived as a high economic risk

for foreign investment, the WBG’s guarantees ($130 million to other financiers to

cover political risks) have been crucial for the main private sector investors, and for

the project to go forward. In addition the World Bank has provided a grant of $20

million for a Nam Theun 2 social and environment project for the impact mitigation

activities (World Bank, 2005).

Because of the 1990s legitimacy crisis of large dams, Nam Theun 2 is an important

project for the World Bank. It is a kind of showcase to the world by which the Bank

wants to demonstrate that large dams can be built sustainably. This is also important

for the recent vision of promoting renewable energy primarily through large hydro-

power (WBG, 2011). The project is thus under the gaze of civil society groups and

is closely monitored by NGOs like International Rivers, assessing whether the

project can keep its promises of setting new standards for social and environmental sus-

tainability (see, e.g. IR, 2010).

In many aspects, the Nam Theun 2 does differ from previous hydropower projects

in the past decades. The investments in resettlements have been higher than ever and

there are programs developed to create alternative livelihoods for affected communities

downstream of the dam site, which are ambitious at least on paper (NTPC, 2005). Also

there are unique mechanisms set in place to assure that the government of Laos uses

earnings from the dam operation toward poverty alleviation. Still, there seem to be

many unclear questions on how these promises could be met. These are highly relevant

as the project does not directly benefit the poor in Laos. If we consider the twin goal of

‘increasing access and reliability and supplying low-carbon electricity’ that has been

given for large hydropower in the Bank’s latest energy policy documents (WBG,

2011), clearly the first objective of increasing access and reliability is not achievable.

Nam Theun 2 is producing renewable energy as part of regional trade but it is not

expanding access to energy for the poor. Nor it is directly providing affordable electri-

city for Laotians in remote or even non-remote areas. Ninety five per cent of the pro-

duced electricity is exported to Thailand and 5 per cent consumed domestically.

Thus, what it is doing is providing affordable electricity with externalized environ-

mental impacts mainly for the already connected consumers and commercial sector

in Thailand (cf. Greacen and Greacen, 2004; Simpson, 2007). The irony is that to

satisfy the needs of the energy-poor in Laos would not require the construction of

such mega-scale hydropower projects as NT2. Therefore, the issue of the negative

environmental and related social impacts is sensitive. If the impacts cannot be truly

mitigated the claimed pro-poor approach of the whole project becomes highly

questionable.

In terms of poverty reduction the primary benefit, according to the World Bank, is

the revenue flow to the Laos government which ‘will be used to finance additional

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spending on poverty reduction and environmental protection programs’ (World Bank,

2007, p.27). Furthermore, the implementation of revenue management arrangements

could support broader public expenditure management and governance reforms. It is

also expected to encourage multinational companies to invest in Laos (World Bank,

2005, p.18). Nam Theun 2 is forecasted to generate an average of US$80 million

annually in direct revenues for the state in the form of taxes, royalty charges and divi-

dends over the 25-year concession held by Nam Theun 2 Power Company Ltd (www.

powerinprogress.org). With regard to this, it is important to keep in mind that Laos is

ranked by Transparency International as one of the 10 most corrupt countries in the

world. Therefore, there are no guarantees that the revenue from electricity exports to

Thailand will be used to benefit the poor. Even when used transparently, the World

Bank has actually already complained that too low a share has been used for the

expected services in health, education and rural roads sectors and too significant a

share has gone to the salary increases in the ministries’ staff (World Bank et al.,

2007). Further, there are even less mechanisms to assure that those suffering from

the losses would be blessed with the revenue-created benefits. In addition, there are

expectations that the revenues will be even greater when the concession period ends

as then the Project will be transferred to the Government and all revenues will thereafter

accrue to the Lao state. The fear is, however, that due to sedimentation the electricity

production capacity will lower significantly after the concession period. In the long

term, revenues may therefore be smaller than expected now.

In terms of proving that large hydropower projects now can be built in an environ-

mentally and socially sustainable manner, as stated in the Bank’s current drafted Energy

Strategy (WBG, 2011, p.7), an important test case is formed by the measures designed to

resettle villagers from the areas inundated by the reservoir and to mitigate the harmful

downstream impacts. The situation of the resettled 6300 people, mainly from ethnic

minorities living on the Nakai Plateau, remains under debate. Whereas the World

Bank claims that the project has succeeded in lifting all the households above the

poverty line, critics maintain that there is not enough evidence yet of the long-term sus-

tainability of the newly introduced livelihood patterns. Due to the permanent or seasonal

inundation of all grazing land, families have needed to give up their traditional

livelihood of water buffalo raising. The land allocated to each family in resettled

village consists of only 0.66 ha and the quality of the soil does not seem to be very

good. This was the main complaint of the people interviewed during our field visit.

Fishing has been proposed as an alternative livelihood, but the future of the fisheries

stock in the reservoir is still uncertain. The same goes for the suggested prospects for

tourism. What was positively acknowledged by the interviewees was that houses

were better, and there was now a school, health centre and electricity. The villagers

now did have access to electricity, but suffered a big trade-off by losing their traditional

means of livelihoods. It is also possible to speculate that the area could have had the con-

nection earlier without the project. One argument questioning the positive aspects of the

resettlement project is that the construction of Nam Theun 2 actually hindered positive

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development in the area before the project started because a large area was expected to be

inundated which may have led donors to give priority to other areas and because NT2

was expected to ultimately assist the area anyway (cf. Les Amis de la Terre et al., 2003).

Even more importantly, there is the question of the 120,000 people who live down-

stream from the dam along Xe Bang Fai river and who depend on fisheries and river

resources. Tens of thousands of them have already suffered from impaired water

quality and declining fisheries. At the same time, the schemes for alternative livelihoods

have not yet been proven to be successful in truly mitigating the negative impacts

(Lawrence, 2009; Stone, 2010).

The dual objective of poverty alleviation and climate change mitigation seems to be

difficult to reach in the case of the Nam Theun 2, even though it represents the approach

that the World Bank is promoting in its recent Energy Strategy drafts (WBG, 2009,

2011). It appears that the World Bank has attempted to use the climate change

debate as a way to present large-scale hydropower as a low-carbon option for electricity

production and poverty alleviation. Despite all the controversies, large hydropower is

now increasingly presented as clean energy, and the environmental concerns of

climate change mitigation and adaptation are seemingly over-riding other environ-

mental and social concerns. The concerns of the environmental impacts of large hydro-

power dams, and the security of local natural resources and fisheries-based livelihoods

seem to have taken a backseat in this vision. This approach is well manifested in the

remarks of an interviewed World Bank official:

The overall priority is to provide renewable, affordable and sustainable electricity to sustaineconomic growth and poverty reduction in the country [Laos]. In order to achieve the firstpriority we need to develop the hydropower resources for export revenue earning. So faronly about 7% of the potential is developed. It’s more than double of the demand in thiscountry. If you look the future and the 93% of the hydropower potential, the majortarget is for the regional market. From climate change point of view there is greater con-tributions from this point of view. (Interviewed World Bank expert in Feb 2010)

Interestingly an open question remains over the actual benefits for the global climate.

In Laos, there are also plans for run-off-river dams, but several of the dams planned actu-

ally have reservoirs. The size of the reservoir area in NT2, especially, is remarkably

large. It is also unique in the sense that in the rainy season it covers 450,000 ha but in

dry season only 8000 ha. This means that the reservoir can be a significant source of

methane (cf. e.g. Gunkel, 2009; Kemenes et al., 2011; McCully, 2006).3 According

3The greenhouse gas emissions from reservoirs has been a heatedly discussed topic not onlybetween dam developers and civil society groups, but also among scientists. A number ofstudies, however, already do seem to agree that reservoirs especially in the tropics are a signifi-cant source of emissions and in some cases can be comparable event to fossil fuel plants (see,e.g. Giles, 2006; Parekh, 2011). So far most of the research has concentrated in Brazil and thefindings may not be easily comparable to Laos and Nam Theun 2. However, one of the fewstudies in South East Asia has studied the Laotian Nam Ngum and Nam Leuk reservoirs andconcluded that that the findings were similar to other tropical reservoirs and that Nam Leuk

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to some interviewed experts, there are calculations done on greenhouse gas emissions of

the reservoir but these have not been made public. It is possible that this is done in order

to avoid the questions on the dam’s climate friendliness.

5. SHS falling short of expectations

Small off-grid electrification projects are not associated with similar potentially irre-

versible social and environmental impacts as large scale hydropower. Off-grid electri-

fication can also reach remote communities in the areas where the electricity grid will

not be connected in the near future. The communities targeted in the off-grid electrifi-

cation programs are often small and dispersed, consisting of low-income households.

Even though the amount of electricity produced by off-grid systems such as SHS is

much smaller than on-grid electricity, it is believed to improve the quality of life as

lighting alone can bring benefits such as increased study time, extended working

hours and improved security. Use of radios and TVs is often considered a step

forward in terms of increased knowledge (Phongsavath and Harvey, 2004).

SHS consists of solar panels (size varies from 20 to 50 W), and batteries which stores

the electricity collected during the day for use at night, as well as load controllers and high-

efficiency lamps. In Laos, the SHS program has been implemented with a rent-to-buy

scheme, in which the solar panel user pays a monthly fee, and after the payment

scheme is completed, the user will own the SHS. In theory, the panel becomes an impor-

tant economic asset to poor families, since it retains a high re-sale value (Harvey, 2004).

The panel user can pay the whole sum also at once, but this is rare. Tariffs were set by

spreading the capital and installation costs over either a 5- or 10-year period, depending

on the household. The usual monthly fee is 30,000 kip (about 3 USD) for 10 years. The

costs of battery and light bulb replacements have to be covered by the users.

The SHS program in Laos has been defined as a success story both by the World

Bank, the Government of Laos and the program coordinator VOPS Office (interviews

in January–February 2010). The success has been mainly evaluated by the number of

households electrified. By the end of 2009, about 10,000 households had been electri-

fied by SHS. However, if the off-grid program is analyzed from the perspective of

poverty alleviation and climate change mitigation, which are the main goals of the

World Bank’s new energy agenda, the impacts are less impressive.

5.1 Temporal solution or alternative pathway?

In Laos, even though the off-grid electrification was intended mainly for remote areas

such as mountainous terrains and islands, the program has mostly failed to reach them.

On the contrary, there was a tendency to implement the SHS program in areas that

even after 10 years of impoundment was still emitting methane significantly (Chanudet et al.,2011; Parekh, 2011). This indicates that emissions from Nam Theun 2 can be high and evenmore serious as the reservoir is larger, shallower and fluctuates in size. Thus data would beseriously needed to estimate the climatic implications of NT2.

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either had road connections, or were close to roads, rather than in the very remote

locations which are supposed to be the main target of the off-grid program. The

main reason for this was institutional, that is, the way in which the program was

implemented in Laos. The World Bank support to off-grid electrification was done

through a private business model, so social concerns had to be weighed against finan-

cial viability. The main implementers of the off-grid program are local companies, Pro-

vincial Electricity Service Companies (PESCOs). They are supported by Village

Electricity Managers (VEMs) who provided technical assistance at the village level.

PESCOs role is to select the villages and households where the program is implemented

and install the equipment. They are also supposed to provide maintenance of the equip-

ment. PESCOs and VEMs receive a portion of each monthly hire-purchase payment.

Therefore for PESCOs it was economically sensible to promote the SHS program in

villages which were easy to access. In this way PESCOs could have more customers,

and less time and money were spent in reaching the remote areas. However, the villages

that are situated by the roads are also those where the grid will most likely be extended.

In some cases, the electricity grid was extended to a village where the solar panels had

been installed just a few years – or in some cases only few months – earlier. Also infor-

mation gaps and lack of a detailed master plan of electrification resulted in installing the

solar panels in areas where the grid was extended soon after (cf. Bambawale et al.,

2011). As a result, in many areas the SHS program was only a temporary, pre-

electrification phase before grid connection:

Yes of course Solar Home System program is a pre-electrification phase. It cannot be apermanent electrification system, because everybody needs to have better life and moresatisfaction, you know. Solar is not the best option, because it is basically just for lighting.(Interviewed expert from the Village Off-grid Promotion and Support Office in January2010)

This was also recognized by the World Bank, but it was not considered a major

problem. An interviewed World Bank officer actually commented that the SHS

program will first cover the areas which are easier to reach, and only later the

PESCOs would go to the more remote areas. This indicates that the SHS program is

to a significant extent only intended as a temporary phase before grid connection.

Also in the truly remote areas where the grid would probably never replace the SHS,

temporality was a problem, but in these cases it was caused by the technological failure

of the panels. Even though the payment scheme usually lasts for 10 years, the panels

often stopped working before the end of the scheme. The panels have been said to

last several decades, but according to field observations and interviews many panels

started to be dysfunctional already after six to seven years:

When the SHS program promoters came to the village they said that the panels will last for50 years. So that is why people wanted to get it. But as the systems already now [after 7years of use] are not working well, or not at all, they don’t feel happy. (VEM 29 January2010)

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Even though PESCOs are supposed to provide the maintenance of the panels

together with VEMs, they sometimes fail to do this especially if the panels are in the

remote areas, or if the panels are old and require more repairing. The more maintenance

is needed and the further the villages are, the less economically viable it is for PESCOs

to maintain them. Therefore, in many cases the solar panels did not become an impor-

tant asset for a family, as had been presumed in the program. The old broken panels

were not replaced by new ones, and the communities were left in the same situation

they were in before the program.

5.2 Increasing access, reducing poverty and providing environmental benefits?

The way in which increased electricity supply translates into increasing electricity

access for poor households on one hand, and how electricity access translates into

poverty reduction on the other hand, is not as straightforward as often presented in

the World Bank’s policy narratives. As discussed above, the off-grid program has

had difficulties in reaching the remote communities. Even when succeeding in this,

the poorest households are not necessarily the ones reached. In the case study villages,

the success in providing access to electricity for the poorest households in the commu-

nity seemed modest. This was mostly due to problems of affordability. In Laos, like in

most countries where the World Bank has implemented rural electrification, increases

in electricity coverage come from extensive growth, that is, extending electricity to new

communities, rather than intensive growth, that is, connecting the unconnected in

already electrified villages (World Bank, 2008a). In Laos, as well as in many other

countries, it has been common that around 20 per cent of villagers remain without con-

nection for both on-grid and off-grid electrification projects (World Bank ,2008a). Also

in our case study villages the poorest were often not reached. Thus infrastructure or

availability of the off-grid systems as such does not necessarily translate into access

for all. Still, when SHS is introduced to rural villages it often transforms into a

status symbol which everyone desires to have. In some of the villages, there were

many families that could not really afford the SHS but who were nonetheless deter-

mined to have them. This brings us to the question of the linkages between electricity

access and poverty alleviation.

What we found was that in terms of welfare outcomes such as increased income, the

result was more positive in the better connected areas. In the villages that had road con-

nections, markets and services nearby, people were able to get extra income by selling

handicrafts and brooms made in the evenings in the light provided by the solar panels.

In the most remote areas, the welfare improvements were more questionable. In some

cases, impacts were actually negative. In upland areas of ethnic minorities in Kham-

mouane province, the villagers used very little cash and lived more or less in a subsis-

tence economy. In these kinds of villages, almost all interviewed solar panel users said

that they had had to sell a chicken or pig to cover the monthly fee for the panel. For

some respondents this was a regular way to cover the solar panel costs.

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Solar panel is more convenient than kerosene but it is more expensive. We have to sellanimals every month to cover the costs. I sell my chickens in town. I also grow vegetablesbut I cannot sell them because they would get spoiled on the way to town. It is so far. (SHSuser, 19 January 2010)

Even though the panel users in the very remote areas were happy about the easiness

of the new technology, the smokeless light, the sense of modernity and the social status

that the solar panel provided, in the long run the panel could also threaten the food

security of the panel users among the poorest solar home user households.

Also other expected positive welfare outcomes associated with electrification were

limited, especially in the remote areas. In the remote villages of Khammouane province,

SHS users seemed to know the so-called right answers about the benefits of SHS and

they often mentioned that thanks to the electrification their kids could study at night.

However, in many of the villages the teacher had left the village, and the old schools

had not been in use for a long time. The often claimed health, environmental or

climate benefits from displacing firewood and kerosene were in vast majority of

cases not significantly realized as electricity is rarely used in cooking.

In short, even though the SHS is defined as a success story in Laos, in the six case

study villages the SHS program seemed to provide only limited benefits in terms of

poverty alleviation, environmental sustainability and climate change mitigation. It

seems that the almost universal applicability and easy installation, rather than the

poverty and environmental impacts are the main reasons for the World Bank’s

support for SHS programs (cf. Smits and Bush, 2010). At the same time, it seems

that as long as the SHS is the main off-grid solution used by the World Bank, decen-

tralized electrification will remain as a marginal and temporary alternative.4 Experi-

ences from the off-grid electrification also indicate that more attention should also be

given to the so-called software of rural electrification, that is, the institutional design

of the programs and careful consideration should be undertaken on how to balance

financial viability with social concerns. Business models in rural electrification most

probably continue the path in which the main share of benefits is captured by the

non-poor (cf. World Bank, 2008a).

6. Conclusions: challenging energy–poverty–climate nexus

The World Bank has since its early years supported energy projects, programs and

policies. In the past decades, however, the Bank’s energy financing has faced severe

criticism on the one hand for being anti-poor and on the other hand for being environ-

mentally damaging, especially with regards to the climate. As a response, the Bank has

4There are many over-looked local solutions such as pico-hydropower which is a non-donorsupported source of off-grid renewable energy for approx. 60 000 households in Laos (Smitsand Bush, 2010). In the neighboring country of Thailand, there are several lessons to belearnt from independent small and very small power producers that have grasped the potentialof decentralized renewable solutions better than SHS (Greacen, 2007).

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set a twin objective for its new energy funding: to increase access to modern energy as

means to alleviate poverty and to support low-carbon energy trajectories.

Renewable energy is set to the core of the new policies and the World Bank has

announced that it is committed to a revolution in renewables. The role of renewable

energy role is constructed through a win–win policy narrative where it is presented

as increasing access to electricity in rural areas, which in turn alleviates poverty

without negative impacts on the climate. Thus to a great extent the World Bank has

been successful in responding to the two-fold criticism by producing new stabilizing

energy policy discourses and formulations. It has followed a regular pattern common

to powerful actors who often aim at closing down the debates and at creating new

policy narratives that rebuild stability and controllability (Leach, 2008; Leach et al.,

2009). The greener and more pro-poor the Bank has become at a discursive level,

the more attention has been given on whether the rhetoric really matches the actual

energy-related funding.

The case of Laos is illustrative due to the two important trends in the World Bank’s

revolution in renewables: the funding of large-scale hydropower and the selection of

SHS for off-grid electrification. In both programs the impacts on poverty alleviation

and climate change mitigation are less evident than what the win–win policy narrative

implies. The renewable revolution in Laos does not seem that different from the energy

plans the World Bank and ADB have promoted for the Mekong Region since the begin-

ning of 1990s in which Laos, through a regional electricity grid, produces hydropower

electricity for its neighboring countries. Only now Laos is not presented as the battery

but as the green, low-carbon battery of the region. The new frames for large-scale

hydropower have not, however, solved the old problems in relation to different

social and environmental problems relating to large scale hydropower. The Nam

Theun 2 hydropower dam has been an important demonstration case for the World

Bank to show that hydropower can be built in an environmentally and socially sustain-

able manner. However, this does not seem to be clearly successfully achieved. There

are still many unanswered questions, for example, related to the sustainability of liveli-

hoods in resettled villages and affected communities downstream along the Xe Bang

Fai River, as well as with regard to the reliability of the government’s revenues distri-

bution in a poverty alleviating manner. Also the climate-friendliness of the dam is not

proven because there are not yet any calculations made public on the greenhouse gases

produced by the reservoir.

In rural electrification, the main target in Laos has been to extend the national grid,

and the main source of power has been large-scale hydropower. The off-grid com-

ponent of rural electrification has been implemented with relatively expensive high-

tech SHS. The rationale behind the priority given to this model has more to do with

its universal applicability and easiness, rather than local appropriateness. The

implementation of the SHS program is based on a private sector model in which it is

not economically viable for local companies to target remote areas. As a result, solar

panels are distributed to villages close to roads, where the electricity grid is likely to

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reach in the near future, rather than very remote areas. Only in the very remote areas,

where the grid connection is not economically viable, off-grid solutions like solar

panels are considered a more permanent solution. Even in remote areas, panels can

end up being temporary, if they break down before the owners have finished the

payment scheme as was often the case in our case study villages. Furthermore, the

small amount of electricity produced by the solar panels is mainly used for

lighting and it thus has less potential for welfare and environmental benefits

than many other renewable energy forms. The institutional arrangements are relevant

as well: so far it seems that the difficult balance between financial viability and

social concerns is yet to be found. In the worst cases the SHS even had negative

impacts as some of the poorest SHS users sold important livelihood assets to cover

the SHS costs.

The World Bank’s policy and funding patterns in renewable energy seem to res-

onate with the sui-generis logic which Ferguson (1994) has been said to be typical

for development actors: the ills are identified and diagnosed in such a way that they

appear susceptible to the cures that are already there in the repertoire of the Bank’s tech-

nological solutions (cf. also Goldman 2005). The World Bank has thus been successful

in closing off criticism to the extent that it has succeeded in keeping energy issues in its

own domain of agency. At the same time, it has acted in a way Leach et al. (2009) have

argued to be typical for powerful actors, that is, giving priority to the routine responses

that are most easily available. Neither large-scale hydropower nor SHS are new targets

of finance, and they seem to be promoted and framed more strongly as green and pro-

poor, even though they both have histories of projects failing to achieve that dual objec-

tive. This resonates also with Brooks et al. (2009, p.742) who have found that main-

streaming climate change and low-carbon growth have mostly been ‘incremental

responses within what is essentially a business-as-usual approach to development’.

And yet, the most readily implementable approaches rarely are the most locally appro-

priate and sustainable solutions in the long-term perspective. One of the difficulties for

the World Bank to re-structure its finance to match with its pro-poor rhetoric is that

essentially its projects still need to be bankable (Goldman, 2005). As already discussed

above, projects dealing with rural energy provision especially with sustainable renew-

able energy are not easily rendered into projects which could match private sector

understanding of financial viability.

It is important to acknowledge that national governments and the private sector are

the key actors that influence energy development, but because of its financial and long-

lasting normative power the World Bank occupies a unique position by which it can

influence these actors. The World Bank also sets standards for the regional develop-

ment banks such as ADB which have had similar negative track records of their

energy projects in past decades (WRI, 2010). The standard setting extends also to

most of the private banks (at least the two-thirds of private banks that are committed

to follow the so-called Equator Principles) as well as for the public banks who all

look for guidance from World Bank on their investment guidelines (WRI, 2010).

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Thus the development banks’ decisions on project lending, financial guarantees and

promotion of best practices have enormous influence on the energy strategies and

policy choices of the recipient countries, but it also has impact on global energy gov-

ernance agenda (Florini and Sovacool, 2009). If the World Banks takes seriously its

mission to fight poverty in a climate- and environmentally friendly manner, it could

have a positive role in shaping the nexus of energy development, poverty reduction

and climate change. Simultaneously, it would need to seriously weigh the long-term

impacts of different renewable energy options and aim at learning faster what works

and what does not. It should also examine the complexities of the energy–poverty–

climate nexus and avoid overly optimistic simplifications. With large-scale hydropower

there are serious risks that the climate agenda over-rides other equally important

environmental and social concerns (cf. While et al., 2010). With decentralized renew-

able energy technologies there is already experience of several decades of different

experiments, but still there have too often been duplications of inefficient policies

(Green, 2004; Jacobson 2007; Karekezi and Kithyoma, 2002). Especially the

preference in World Bank funding for SHS requires serious revisions. The model is

easy to replicate and thus it provides good figures on renewable energy support but

the temporality of the model and its low potential to alleviate poverty and produce

environmental benefits, suggest that other forms of renewable energy should be

preferred.

Notes on contributors

Mira Kakonen, doctoral student (b. 1978) is a member of the Mekong Research

Group at the Finland Futures Research Centre of University of Turku. She has

worked in various research projects in the Mekong region since 2004, especially in

Vietnam, Cambodia and Laos. Her research interests relate to expertise and power

relations in the field of environment and development. Currently, she works as a

researcher in a project ‘Why Renewable Energy Projects Fail? Design and Implemen-

tation of Energy Assistance Projects in Cambodia and Lao PDR’, which is funded by

the Academy of Finland. Her educational background is in sociology and development

studies.

Hanna Kaisti M.Soc.Sc. (b. 1968) is a member of the Mekong Research Group at the

Finland Futures Research Centre of University of Turku. She has graduated from

University of Tampere in 1997 and has since then worked in various research projects

relating to environmental policy and sustainable energy in Laos, Cambodia and

Indonesia. Currently, she is a researcher in a project ‘Why Renewable Energy Projects

Fail? Design and Implementation of Energy Assistance Projects in Cambodia and Lao

PDR’, which is funded by the Academy of Finland. Her educational background is in

international relations, environmental policy and Asian studies.

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