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Urban Development

Brazil to power up investments in street lighting and energy efficiency

MD Staff

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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.

Risk mitigation

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.

World Bank

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Urban Development

Mali: Bamako Needs Urgent Actions to Become an Engine of Growth and Service Delivery

MD Staff

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Bamako, Mali’s capital city, has an opportunity to promote growth and improve service delivery, however this window of opportunity is narrow, a new World Bank Group report finds.

Launched today, Bamako – An Engine of Growth and Service Delivery analyzes how Bamako can become a city that works, increasing productivity and livability for its residents. According to the report, Bamako dominates Mali’s urban landscape, so reforms and investments in the capital would impact the entire country’s development.

The report highlights that to unleash Bamako’s potential, a balanced approach to reforming institutions, putting the right policies in place and investing in infrastructures and attention to implementation will be needed. This would require coordinated use of land and connective infrastructure, fiscal and technical capabilities to finance and manage better public service delivery, and strengthening of urban institutions.

“Many of Mali’s development challenges have a spatial dimension – with Bamako at its core. The economic and social importance of the capital city cannot be understated. Decisions made in Bamako will have long-lasting effects on Mali’s development as it is the nerve center of the national economy. Reforms and investments aimed at tackling urban development challenges in the capital will have knock-on effects on national economic development,” said Soukeyna Kane, World Bank Country Director for Mali.

The report looks at factors underlying Bamako’s current challenges. It finds that inefficiencies in the land market deter productive investments. This, combined with low quality of transport, hampers urban accessibility within the city – keeping people away from jobs and services. And these challenges are further exacerbated by institutional fragmentation and lack of adequate investments.

“Bamako has an opportunity to make early investments in urban infrastructure in close coordination with long-term planning. Moreover, digital and disruptive technologies offer an opportunity for Bamako to tackle major challenges like never before. ” said Anna Wellenstein, Director, Social, Urban, Rural, and Resilience Global Practice, World Bank.

Despite Bamako’s prominence, its progress on increasing its competitiveness over time and on urban service delivery for its citizens has been falling behind. The report finds that urban development in Bamako has been fragmented – providing an important explanation of the failure to realize the advantages associated with the city’s growth.

“The high level of urban fragmentation is fettering both – productivity, by preventing opportunities for matching people and jobs – and livability, by driving up the costs of urban infrastructure and service delivery,” said Megha Mukim, Senior Economist and Lead Author of the report.

To become an engine of growth and service delivery, Bamako needs to scale up investments in a bottom-up, innovative ecosystem by developing the right platforms and engaging citizens in finding solutions to transform the city space.

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Urban Development

RASAI: The car-sharing tool seeking to breathe life into Pakistan’s congested cities

MD Staff

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When Hassam Ud-din started studying in Islamabad in Pakistan, he had a three-hour round-trip commute from his home in Rawalpindi. He hated sitting in traffic jams, breathing dirty air and burning up fuel and money. Eventually he moved closer to Islamabad but, not content with solving the problem for himself, he’s now come up with a fix to help others.

Ud-din has created an Internet tool that matches drivers with passengers looking for an affordable way to get to work or elsewhere. Called RASAI, the Urdu word for accessibility, the website and app aim to fill spare seats and empty trunks and create a more efficient travel system that offers low-income travellers more opportunities while also tackling pollution.

“I realized that people are limited in the opportunities they have by the radius of where they can go easily and cost-effectively,” said Ud-din, who has a passion for maps and route planning and studied transportation engineering.

In Pakistan, it is quite common to see people seeking lifts on the side of the main roads. After conducting a survey that found that more than 60 per cent of vehicles were using only half their capacity, Ud-din realized it would be possible to harness this tradition.

“It was already happening in an informal way so what we did was we gave people an option to digitize their daily route. People can go to our website or app and register their route with us and the timings and we can find them passengers to take on their way,” the 26-year-old said, noting that most people tend to use the website to set up monthly rides.

Only 17 per cent of Pakistan’s population of around 200 million own cars but the country’s cities are still blighted by congestion and foul-smelling fumes. The Health Effects Institute’s State of Global Air report last year found that Pakistan, Bangladesh and India had experienced the steepest increases in air pollution levels since 2010.

Authorities are starting to act: for example, in 2020 Karachi will launch a zero-emission Green Bus Rapid Transit network, with 200 buses fuelled by bio-methane, or cow poo. However, the need for affordable transport is still great.

For Ud-din, the answer lies in the vehicles that are already on the roads.

“Our main aim was to create a virtual transit network … where you don’t have an infrastructure but the capacity on the roads is optimized for you and you are able to use it quite efficiently,” he says.

Around 1,400 vehicles are registered on RASAI’s website, with most customers setting up lifts on a month-by-month basis. Passengers who find a lift using RASAI usually pay a nominal amount to help cover fuel costs, but the trips are still more affordable than other methods.

Ud-din had to overcome people’s resistance to sharing their cars. Some were concerned about possible security issues or cultural differences. But Ud-din found a way to circumvent that hesitation by linking his service to the existing concept of pick-drop taxis.

“We need to be disruptive in the tech and the value proposition but it’s good to be conservative when you pitch it to the customer and try to relate it to something that is already there,” he said.

While one of Ud-din’s main priorities was to provide affordable transport for people on lower incomes, he also wanted to address traffic pollution.

“(RASAI) helps solve the pollution problem directly and indirectly: if four people go in one car instead of taking their own cars, that reduces emissions. Indirectly, if those cars are not on the road, that reduces both congestion and pollution.”

Ud-din’s innovation won a grant from UN Environment as part of the Asia-Pacific Low-Carbon Lifestyles Challenge, which supports young people with cutting-edge ideas to foster energy-efficient, low-waste and low-carbon lifestyles.

Ud-din says the grant boosted his team’s morale, while the mentoring he received as part of the award allowed him to think more clearly about turning his idea into a viable business model.

“The financial support was crucial to hone the product and cover the expenses required. These kinds of startups require a lot of capital to start because they require a critical mass,” he said.

Commenting on the winners of the challenge, UN Environment’s Acting Executive
Director Joyce Msuya said the innovations were just the latest examples of a long history of ingenuity in the region.

“The four billion inhabitants of Asia and the Pacific have seen both sides of the development ledger more vividly than most. Standards of living have skyrocketed as traditional consumption and production models have gone into overdrive,” she wrote in a recent opinion piece.

“Yet, environmental debt accrued by these global habits is increasingly obvious: climate change, pollution, habitat loss and ecosystem destruction. If we continue to make the same choices, our future looks bleak.”

The innovative spirit shown by inventors like Ud-din will take centre-stage at the fourth UN Environment Assembly in March, where the motto will be to think beyond prevailing patterns and live within sustainable limits.

For Ud-din, who spent a year in Silicon Valley as part of the Global Cleantech Innovation programme, technology will play a critical role in finding new solutions to environmental challenges, just as it has enabled on-demand services to facilitate our increasingly digital lives.

“Tech allows us to leverage resources that we might not even have known we have. Take Airbnb: people had spare rooms and the tech allowed them to make them available on a platform, and now it’s a valuable company,” Ud-din said. “In the same way, we are saying that if you are driving somewhere and you have spare capacity, that’s an asset you can leverage.”

UN Environment

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Urban Development

Interview with Renzo Piano

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Renzo Piano © Stefano Goldberg / PUBLIFOTO Genova

Renzo Piano, winner of the 1998 Pritzker Prize and the 2002 UIA Gold Medal (among others), is one of the most prolific architects of our time, with an architectural repertoire that numbers over 50 landmark buildings spread right across the world. Today, he is perhaps best known for his iconic designs of the Georges Pompidou Centre (Paris, France) and The Shard (London, United Kingdom).

Born in 1937 to a family of builders in Genoa, Italy, Piano went on to found the Renzo Piano Building Workshop in 1980, which now has offices in Paris, Genoa and Berlin. He also established the Renzo Piano Foundation, a non-profit organisation dedicated to the promotion of the architectural profession through educational programs and activities.

But Piano, it seems, is far from slowing down: he recently volunteered his services to his hometown of Genoa, where he is designing a replacement for the Morandi Bridge, which tragically collapsed in August 2018.

The UIA Secretariat caught up with Mr. Piano just before the New Year to talk about the 1970 UIA-endorsed competition that marked a milestone in his early career: The Georges Pompidou Centre.

What attracted you to the competition for the Georges Pompidou Centre?

There was an idea in the competition brief that Richard [Rogers] and I found particularly interesting: the creation of a “house of culture”. André Malraux, culture minister from 1959-1969, came up with the idea of establishing a “house of culture” in every French city; a place where the different disciplines could intertwine, from music to literature to art. We liked that idea.

The other thing about this competition was the chairman of the jury, Jean Prouvé: my idol! Prouvé served as a great example to me, not just because of his talent for designing buildings, but also because of the ethics of his architecture, manifest mostly in his work with Abbé Pierre. He was an icon!

How did you feel when you won the competition?

Imagine: you’re 34-years-old, you’ve done a bit of work, but mostly small contracts, and somebody gives you the opportunity to build the Georges Pompidou Centre: How do you feel? Very surprised! We never expected to win – I mean, there were 681 entries!

What impact did this competition have on your career?

It had a huge impact: it gave us self-confidence and the courage to fight for our ideas. When we won that competition, we were projected into a new dimension. Up until then, we were small fry! Then suddenly we found ourselves working with big construction companies, and those kinds of companies are always telling you “impossible, Mr. Piano, impossible”! But our experience with the Georges Pompidou Centre taught us how to defend our ideas and not to let them fade away under the pressure of opposition. Though, of course, you have to be careful; you have to be sure the idea you’re defending is a good one! Once you’re sure of that, you have to be prepared to put all your energy into upholding your idea, day after day.

What advice would you give an architect entering a design competition?

Firstly, I would encourage any young architect to enter competitions. I myself got about 80% of my work through competitions. Even the new Palais de Justice, in Paris, was a competition. Nobody asks you to design buildings like that without a competition process first.

Secondly, forget tactics. One of the reasons why Richard and I won the competition for the Georges Pompidou Centre was because we never thought we could actually win, so we had zero strategy with regards to the jury. We were just focused on finding the right idea for that revolutionary period after May 68. Don’t waste your time trying to conform to what you think the jury is looking for, or you’ll never find true inspiration. Just concentrate on digging deep inside yourself, brainstorming with your colleagues, and looking for the right idea. Then, only then, you might win!

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