Can you imagine how much money and natural resources could be saved if the world adopted energy efficiency as a priority in sectors such as public lighting or industry?
Although this is an essential concept for the future of infrastructure, it’s still little known in countries such as Brazil. In 2016, for example, when the American Council for an Energy-Efficient Economy (ACEEE) examined policies and performance of the world’s 23 top energy-consuming countries, the Latin American giant ranked 22nd.
Insufficient investment in infrastructure helps explain this outcome, as well as Brazil’s lagging economic growth over the past seven years. Over the last two decades, investments were well below the estimated cost to replace or repair existing infrastructure (estimated at 3 percent of GDP). Energy saw investments decrease from above 2 percent of GDP in the 1970s to 0.7 percent of GDP in 2016, according to a recent report.
However, a new initiative – combining financing and technology innovation – can help fill this gap, and render Brazil’s energy sector more efficient and sustainable. Over the next 15 years, the World Bank’s Financial Instruments for Brazil Energy Efficient Cities (FinBRAZEEC) Project will focus on two urban sectors that have the potential to attract private sector investment at scale: efficient street lighting and industrial energy efficiency.
With FinBRAZEEC, Brazilian cities can create subprojects to completely replace the current sodium-vapor lamps for LED. Also, industries will be able to update pumping systems, engines, furnaces and other types of equipment. Given Brazil’s 86% urbanization rate, these initiatives have tremendous potential to reduce energy use, pollution and greenhouse gas emissions.
To enable them, FinBRAZEEC is piloting one of the most innovative financing structures the World Bank has developed to date. The World Bank will partner with Caixa Econômica Federal (CEF), the second largest state-owned financial institution in Latin America and the fourth largest bank in Brazil, as the project’s financial intermediary.
Under the project, CEF will lead the co-lending arrangement comprising the Green Climate Fund (GCF), CEF, and commercial lenders to eligible efficient public street lighting and industrial energy efficiency projects.
In order to mitigate the credit risk of energy efficiency projects, commercial lenders will benefit from a partial credit guarantee offered by CEF. The guarantee product will be backstopped by a $200 million contingent loan from the World Bank and grants from the GCF and the Clean Technology Fund (CTF) – $195 million and $20 million, respectively –, providing additional credit enhancement by supporting the facility, when needed, to meet its debt obligations to commercial lenders.
Altogether, this financing facility is expected to make more than $1 billion available for urban energy efficiency projects, leveraging the concessional financing being provided by the World Bank and other international organizations.
FinBRAZEEC is expected to serve as a demonstration model for leveraging private sector capital for clean energy investments in Brazil. Once the model is proven, it can be replicated in other countries, and in other sectors in Brazil. Moreover, it will provide an example of how Brazil’s now scarce public-sector resources, particularly those of the public banks, can be used to leverage private sector capital for infrastructure investments.
Currently, while there is private investment in infrastructure, the majority – around 70 percent – comes from public sources, including state banks, where resources are increasingly limited.
Mobilizing private sector investments not only are essential to help Brazil fill its infrastructure gap: without them, meeting the United Nations Sustainable Development Goals (SDGs) targets by 2030 will be much harder. The United Nations Conference on Trade and Development (UNCTAD) estimates that developing countries alone would require annual investments of between 3.3 trillion and 4.5 trillion dollars. About 2.5 billion dollars a year are missing to fill that need.
Climate change contributions
FinBRAZEEC is expected to help Brazil avoid the equivalent of 12.5 million tons of CO2 equivalent over the life of the project, as well as to help the country meet its goal of improving energy efficiency in the power sector by 10 percent by 2030, set as part of its Nationally Determined Contribution under the Paris Agreement on climate change.
The facility will be complemented by support for technical assistance and project preparation being provided by the GCF, the Global Infrastructure Facility, and the World Bank’s Energy Sector Management Assistance Program (ESMAP).
FinBRAZEEC draws on a series of lessons learned from previous World Bank experience in Brazil. ESMAP technical assistance helped identify viable business models for investment in urban street lighting, industries, transport and public buildings, providing useful tools and lessons for designing the FinBRAZEEC project.
The project also builds on the experience of another recent World Bank contingent loan for Uruguay’s national power company, which provided the government with a new financial mechanism to mitigate the impact of drought – and resulting decrease in hydroelectric energy generation – on the cost of electricity and on public sector accounts.
New Report Shows Shape of Urban Growth Underpins Livability and Sustainable Growth
A first-of-its-kind World Bank analysis, of the shape and growth of nearly 10,000 cities between 1990 and 2015, finds that the most successful urban areas are those that connect their growth to economic demand and then support this with comprehensive plans, policies and investments that help avoid uncontrolled sprawl.
The new report, Pancakes to Pyramids – City Form for Sustainable Growth, analyzes the dynamic, two-way relationship between a city’s economic growth and the floor space available to residents and businesses. It finds that a city is most likely to be its best version when its shape is driven by economic fundamentals and a conducive policy environment – namely, a robust job market, flexible building regulations, dependable public transit and access to essential services, public spaces, and cultural amenities.
Ultimately, getting livable space right, hinges on how a city manages its growth as populations and incomes increase, factoring in three dimensions of expansion – horizontal, vertical or within existing spaces (known as infill), the report finds. This will be key as cities, on the frontlines of the COVID-19 crisis, begin planning for a long-term, resilient, and inclusive recovery.
“Cities are at the frontier of development; they are where people go to chase their dreams of a better life for themselves and their families,” said Juergen Voegele, Vice President for Sustainable Development, World Bank. “This report helps us understand why a city grows outward, inward or up. As we support countries with their COVID-19 recovery efforts, this will also help us reflect on what makes a city livable and remind us that well-planned urban growth is good for both people and planet.”
In the average Sub-Saharan African city, 60 percent of the population lives in slums—a much larger share than the 34 percent average in cities in developing countries. The lack of floor space takes a severe toll on livability—with major consequences in times of pandemics like COVID-19. Many South Asian cities face similar issues.
Horizontal growth is inevitable for most cities. People will continue to migrate to urban areas for opportunities and a better quality of life, so it is crucial for cities to plan for this trend. As urban populations grow, one way to create more space per inhabitant is by building up instead of out. This could also help reduce crowding, discourage long commutes, draw more people to public transit and drive down greenhouse gas emissions. But building tall, or accommodating more people in a city, is dependent on economic demand and the business environment as it requires better technology, large investments, and higher returns on capital.
“Understanding the multiple drivers of city growth—a precondition for livable density in cities—can help city leaders focus on the right policy actions,” said Somik Lall, co-author of the report. “If managed well, cities that take a more pyramid-like shape can provide an impetus to accelerate sustainable development by getting people out of cars, cutting commute times, and limiting greenhouse gas emissions.”
Today, around 55 percent of the world lives in urban areas. By 2050, this number is projected to surpass two-thirds of the global population, with much of the new urbanization happening in Sub-Saharan Africa and South Asia. While such growth signals opportunities and better livelihoods for millions of people, it also puts immense strain on cities, especially in countries that contend with low incomes and weak institutional and fiscal capabilities.
By describing how economic productivity shapes decisions by households and firms to locate in cities, and how the quantity and spatial distribution of urban floor space respond to these changes in demand, the report aims to help decision makers sort through competing legal and regulatory approaches, evaluate their investments in infrastructure, and mobilize finance for durable urban investments, particularly for essential services such as transport, water provision, solid waste management, and sewage removal and treatment.
First international online forum Smart Cities Moscow
The first international online forum Smart Cities Moscow ended in Moscow. 86 speakers from Russia, China, Switzerland, Canada, Spain, the United States, Sweden, and other countries spoke at the forum’s business program. More than 193,000 people watched the broadcasts of the panel discussions and sessions.
“A modern approach to digitalization is unthinkable without exchange of experience and conversation between cities. Moscow, being one of the world leaders of digital transformation, acted as a platform for such a conversation, and it is important for us that the international community responded with interest to this initiative. Recent years have especially shown how important it is to develop the IT infrastructure of cities and create online services focused on the daily needs of city dwellers. Synchronization and joint efforts will make megacities even more sustainable, smart and comfortable for living,” said Eduard Lysenko, Minister of the Moscow Government, Head of the Department of Information Technologies of Moscow.
The need for global communities to cooperate in creating and developing smart cities was also stressed by Juwang Zhu, director of the UN Department of Economic and Social Affairs’ Division of Public Institutions and Digital Government.
“We at the UN support universal interaction in terms of the implementation of new technologies. I am glad that the Smart Cities Moscow forum will now be an annual event. This is very important: to encourage cities to exchange practices, to develop digitalization with the whole world, so that there would be more and more smart cities,” Juwang Zhu said, adding that the greatest benefit of using new technologies was seen by countries during the fight against the pandemic.
The business program of the forum consisted of 15 sessions divided into three main directions: “Smart City Infrastructure and Technologies”, “Smart City for Life”, and “Sustainable Development of Smart City”. The experts shared their experiences of using digital solutions in transport, urban planning, tourism, ecology, energy and other sectors important for the cities. Separate sessions were devoted to piloting 5G networks, application of artificial intelligence in urban processes and big data analysis for urban development planning.
Best practices and ecosystem approach to the digitalization of cities were discussed during the plenary session of the forum. Mayor of Moscow Sergey Sobyanin spoke about the experience of introducing technologies in the capital and creating digital platforms for residents. He noted that Moscow digital projects cover absolutely all spheres of life, focusing primarily on human needs. Representatives of the relevant departments of the Moscow City Government spoke in more detail about the capital’s IT projects during the panel discussions.
Mr. Chen Jining, Mayor of Beijing, Mr. Bakytzhan Sagintayev, Mayor of Almaty, Mr. Saeed Belhoul, Director of Electronic Government Operations of Dubai Telecommunications Regulatory Authority, Mr. Mohamed Salah Eldin, Project Manager for the construction and formation of the smart city Nour (new administrative capital of Egypt) and Mayor of Fort Lauderdale Dean Trantalis also shared their experience at the plenary session.
One of the key events of the forum was the awarding of two certificates of compliance with international ISO standards for sustainable and smart cities to Moscow. “Until now, there has never been a precedent in history when both of these certificates were awarded simultaneously,” said Patricia McCarney, president of the International City Data Council (WCCD).
How Cities Can Take Action to Drive the Energy Transition
The dominance of fossil fuels in the urban energy supply puts cities on the frontline of climate change. Cities account for about 75% of global primary energy use and are responsible for 70 per cent of energy related greenhouse gas (GHG) emissions, making them key actors in both national and global efforts to transition to a net-zero future.
Cities can catalyse the shift to a low-carbon future
A new report published today by IRENA, outlines ways in which cities can catalyse the shift to a low-carbon future – in turn supporting regional and national governments with the achievement of sustainable energy targets and the realisation of global climate objectives. Cities can be target setters, planners and regulators. They are often owners and thus operators of municipal infrastructure. Cities are always direct consumers of energy and therefore aggregators of demand, and can be facilitators and financiers of renewable energy projects.
Renewable Energy Policies for Cities also presents case studies from small- and medium-sized cities in various regions, demonstrating that cities are already stepping up to the responsibility. Examples from China, Costa Rica, and Uganda show that despite limited access to financing and policy support, the clear benefits of sustainable energy in an urban context have inspired action.
Solar Power in Kasese, Uganda
In Kasese, Uganda, for example, the municipality recognised its significant potential for solar energy, in turn leading to the establishment of Kasese’s Municipal Sustainable Energy Strategy in 2017. IRENA contributed to Kasese’s journey in deploying solar energy with its SolarCityEngine, a web-based application to assist homes, businesses and municipal authorities in evaluating the prospects of electricity generation using rooftop solar photovoltaics (PV). The online simulator allowed the municipality to assess the costs of incentive, affordability, and the total volume of investments.
A set of policy measures then followed, which included efforts to attract investments, programmes to train households and small businesses to deploy home-based solar system, and awareness-raising activities to ensure acceptance by residents. As a result, the residents of Kasese embraced the deployment of solar PV in their city, including their homes. The shift from polluting kerosene lamps to clean solar power brought improved health to many and presented new economic opportunities as people saved money on electricity.
E-mobility in Cartago, Grecia and Guanacaste in Costa Rica
In Cartago, Grecia, and Guanacaste in Costa Rica, electric mobility (e-mobility) is the new frontier in achieving net zero emissions. E-mobility is presented as a natural choice for the country thanks to its high renewables share in power supply, the availability of space for infrastructure, the short average of driving distance, and the optimal average temperature for electric vehicles (EVs).
With effective policies in place, the report highlights that Cartago, Grecia, and Guanacaste have all witnessed a positive increase in e-mobility infrastructure. The easy access to facilities, combined with the cost efficiency of EVs, motivates residents to make the shift from fossil-fuelled vehicles to EVs, and adopt a more sustainable way to commute. Electric buses also increased in number, not only creating jobs for trainers and drivers, but also reducing demand for private driving, and consequently GHG emissions.
Wind-powered heating in Zhangjiakou, China
In Zhangjiakou, China, residents attested to the positive change brought about by a wind-powered heating system. After abandoning coal for heating, residents found the air to be cleaner, which motivated people to enjoy nature and socialise more in outdoor settings. The wind power also fuelled growth in the city as businesses increasingly sought to base their operations in Zhangjiakou, to benefit from the low-cost electricity produced by the wind power.
Geothermal energy for district heating and cooking in Xiong’an, China
Xiong’an became the first smog-free city in Northern China thanks to the development of geothermal energy. With its low operation and maintenance costs, as well as resilience to weather conditions, geothermal has successfully replaced coal-generated district heating in Xiong’an. Residents enjoy the benefits from reduced heating costs, and the geothermal power plant together with district thermal grid creates jobs for the city.
Geothermal energy for district heating in Bogatić, Serbia
In Serbia, the success of Bogatić municipality in deploying geothermal energy for district heating system has motivated other municipalities to exploit their geothermal potential. After discovering the cost efficiency and the reduced pollution resulting from it, residents and financial institutions are now the advocates for the technology. See the guidelines for policy makers on Integrating low-temperature renewables in district energy systems.
Global energy transformation starts at a local level
Examples presented in the report showcase best practices for other cities working towards a decarbonised energy supply. What they emphasise is the importance of strong alignment between local and national governments, and of proactive local resident, community group and business engagement. For the global race to zero to move at an accelerated pace, the world’s urban environments must be empowered to take meaningful actions.
Read more in the Renewable Energy Policies forCities and related case studies, also available in Spanish and Chinese. The reports and case studies were produced with the support of the International Climate Initiative.
Majority of New Renewables Undercut Cheapest Fossil Fuel on Cost
The share of renewable energy that achieved lower costs than the most competitive fossil fuel option doubled in 2020, a...
Rise of Billionaires In India, Lobbyism And Threat To Democracy
Let me start by asking you – Have you watched Oliver Stones’ 1987 masterpiece, ‘Wall Street’? Great! For those who...
Middle Eastern powers vie in shaping a next generation of Muslims
Education is emerging as a major flashpoint in competing visions of a future Muslim world. Rival concepts being instilled in...
Disintegrating Big Tech: What Future Holds for the American Technology Giants’?
The United States lawmakers in June 2021 introduced five bills pertaining to Antitrust regulations for the purpose of curbing and...
Slavery and the real life bending sinister
What is slavery? It is nothing more than poverty of the mind. It is not a school of thought or...
The light side (SMEs) and the dark side (virtual currency) in post-covid Italy
With a view to assessing the impact of the pandemic that has been afflicting Italy since the beginning of 2020,...
Who won the interaction with the “free press” at the Geneva Summit?
Before the much anticipated Geneva Summit, it became clear that President Biden would not be holding a joint press conference...
Middle East2 days ago
Egypt-China relations after the “U.S. and Israel Policies” in the Middle East
Americas2 days ago
Is Covid-19 Zoonotic, Natural or Lab-engineered?
Human Rights3 days ago
Famine risk spikes amid conflict, COVID-19 and funding gaps
Africa2 days ago
Will U.S. Sanctions Against Ethiopia Provide Russia with Regional Opening?
Americas3 days ago
Juneteenth and Getting Over Our Systemic Induced Ignorance and Denial
Africa2 days ago
Dr. Dolittles and Ben Alis: How Is the Collective North Responding to African Challenge?
Finance2 days ago
Turkish Airlines and Turkish Cargo Rise to the Top Amid Pandemic
Defense2 days ago
Afghanistan Will Test SCO’s Capacity