As the World Bank Group (WBG) asks an $86 billion general capital increase from its major shareholders, it appears this lending and knowledge institution is not committed to direct public resources to measures that support sustainable development, poverty reduction and clean energy. Instead, the Bank looks set to mobilize public money to subsidize fossil fuel industry and orient funds for large-scale thermal, hydropower projects and energy-related policy reforms, says joint NGO report.

This critique emerges from the recent study on the energy portfolio of the Bank in Indonesia undertaken by the Jakarta-based Institute for Essential Services Reform (IESR) and Bank Informartion Center (BIC), an IFI watchdog working in Indonesia, Mekong and South Asia. The study looked at the Bank’s influence on Indonesia’s energy sector over the last 40 years through its lending and non-lending services. The report is released in time for the May 6 Jakarta consultation that WBG organizes to solicit external comments on its energy strategy approach paper.

“Since 1969, the WBG has provided over USD 5.4 billion in energy lending in Indonesia which has focused on centralized, large scale, grid based thermal and hydropower projects and on the financial viability and privatization of the Perusahaan Listrik Negara (PLN)”, says Daniel King, one of the researchers for the study. Bank’s appetite for risky, dirty public debt for energy remains high as demonstrated by pending loans for a $500 million geothermal project in Sumatra and North Sulawesi, $530 million Upper Cisokan hydropower in West Java, and $225 million transmission project in Java and Sumatra.

“If these were an indication that Bank wants to keep its business-as-usual model for energy financing, this leaves us with little confidence that the institution can play a relevant role in promoting low-carbon development and wider energy access for the poor,” argues Fabby Tumiwa, Executive Director of IESR. “Apparently, the Bank only pays lip service as an institution concerned with climate change and delivering affordable and reliable energy to off grid, rural communities. It does not walk the walk”, Tumiwa adds.

Delivering energy access for the poor?

“The Bank’s mandate is to reduce poverty, but it is disappointing that the objective for energy access for the poor is not made clearer in the 2009-2012 Country Partnership Strategy, its country support masterplan. Although the Bank’s rural electrification projects of the 1990s brought electricity access to 10 million households, it still has no clear plan to address energy access for over 70 million Indonesians without electricity access”, King reveals.

The study found that the Bank has oriented its energy financing into investments that are considered high in greenhouse gas emissions, environmentally and socially risky and ones that favor privatization of energy utilities. King discovered that in the 1970s, nearly $600 million worth of loans and grants focused on oil and transmission while loans more than tripled ($1.5 billion) in the 1980s but this time, the Bank dedicated public debt to Indonesia’s coal, large hydropower and transmission projects. In the 1990s, the Bank repeated the same lending pattern. Although it can be credited for investing $670 million for rural electrification projects, it has also scaled up its loans geared to privatize State-owned and operated power utilities.

A climate bank?

While the energy sector is the second largest source of CO2 emissions in Indonesia, discharged from power generation, the Bank’s strategy to mitigate climate change is poor, says the report. As the Government of Indonesia (GOI) aims to reduce GHG emissions by 26 percent by 2020 and make a further cut up to 41 percent with international support, it turns out the Bank has no clear cut strategy to progressively shift its funding from fossil fuel.

“It is predictable – as well as disappointing – that the Bank is not ready to abandon its addiction to dinosaur energy sources and technologies,” claims Tumiwa. “Promoting the use of coal had been a specific policy aim of WBG projects in Indonesia until 1995; coal and gas still form a key part of the Bank’s energy strategy in the country and the lending institution has propensity to label its advanced coal technologies as clean energy. This is inaccurate and misleading”, Tumiwa asserts.

Is the Bank promoting alternatives?

“At the conceptual plane, it looks like this post-World War Bank seeks alternatives but how clean and sustainable these offered solutions are is highly suspect”, argues Yaya Nurhidayati dari Bank Dunia. “Large hydropower is back on the agenda. The Bank is set to approve a $530 million loan in October 2010 to develop the Cisokan River Pumped Storage Power Project, reveals Forqon. The Bank champions hydropower as a “clean energy” source due to its low carbon emissions but scientific studies show that in tropical climate, methane emissions from dam reservoir can be high”, he added.

The Bank has recently increased its funding for geothermal projects using clean thecnology fund and regular investment loan but the actual social, environmental and economic impacts are yet to be seen. Meanwhile its public and private sector arms have extended the lending envelope to “new renewables” such as wind, solar, small hydro and modern biomass but volume has been negligible.

What’s new in the country energy agenda?

In the study, King found that the Bank is infusing large chunk of public money for policy-based reforms, called development policy loans (DPL), the successor of structural adjustment programs (SAPs) that were controversial in the 1980s and 1990s. From 2007 to 2010, the Bank prepositioned $467 million for DPLs related to financing energy infrastructures, some of which include regulatory, institutional and administrative reforms.

The Bank acknowledges that the infrastructure sector “continues to be plagued with corruption issues in Bank-financed projects, which has delayed project preparation and implementation and has serious implications for the future project pipeline.” Yet, this has not stopped the Bank from providing infrastructure DPLs plagued with lack of transparency and accountability. In the design of the DPL, large amount of money has been provided over a short period of time with little public consultation. This raises another concern on fiduciary control: with little detail available, the public are left in the dark how the public debt is actually spent. The public hardly knows if energy-related DPLs contribute to low carbon development or simply disbursed without addressing the energy needs of the poor.

Time to clean up the act

“With its dirty, risky energy portfolio, it is long overdue for the Bank to progressively shift from unsustainable and climate damaging investments to one that supports developing economies’ transition to low carbon development”, states Norly Mercado of the Bank Information Center. “As the Bank revises its new energy strategy for the next 10 years, the Bank should set out a clear, limited role – only supporting activities that have maximum impact on its goals of sustainable development and poverty reduction.”

“The Bank’s energy strategy must prioritize support for increased energy access for millions of the poor living rural, off grid, and those dependent on non-electrical energy sources. After all, energy access is a human right”, states Mercado. It must also focus on decentralised sustainable energy solutions that meet the energy needs of the poor in a cost-effective and energy efficient manner.”

“As countries like Indonesia make the transition necessary to prevent dangerous climate change, the Bank must end investments in fossil fuel extraction and use by 2015 and implement full life-cycle risk adjusted cost accounting by 2015.”

“By failing to clean its energy investments, its role as a climate bank makes no relevance”, asserts Tumiwa.

Jakarta, 5 Mei 2010, Sebagai Kelompok Bank Dunia (WBG) dengan peningkatan general capital $ 86 miliar dari pemegang saham utama mereka, tampak jelas Bank dunia dan kelompoknya tetap tidak menunjukkan komitmennya dalam menjalankan mandat terhadap publik guna mendukung langkah-langkah pembangunan berkelanjutan, penanggulangan dan pengurangan kemiskinan serta menegakkan energi bersih. Sebaliknya, Bank Dunia tetap akan memobilisasi uang rakyat untuk mesubsidi industri bahan bakar fosil dalam termal skala besar, proyek-proyek hydropower dan reformasi energi yang terkait.

Kritik ini disampaikan terkait dengan hasil penelitian dari IESR dan BIC (Bank Information Centre) terkait Portfolio Bank Dunia di Sektor energi Indonesa. Penelitian ini mengkaji peran dan pengaruh Bank Dunia di sektor energi Indonesia selama lebih dari 40 tahun dalam memberikan pelayanan kredit dan non pinjaman. Laporan dari hasil penelitian ini akan dibawa oleh IESR dan BIC dalam Konsultasi Publik Bank Dunia di Sektor energi Indonesia pada Kamis ini (6/7), di Jakarta, dimana Bank Dunia akan melakukan sosialisasi kebijakan dan strategi energinya di Indonesia.

“Sejak Tahun 1969, WBG telah memberikan lebih dari USD 5,4 miliar pada pinjaman energi di Indonesia yang memiliki fokus pada sentralisasi, skala besar, grid berbasis termal dan proyek tenaga air juga terhadap viabilitas keuangan dan privatisasi Aktiva pajak tangguhan Listrik Negara (PLN)”, jelas Daniel King salah seorang konsultan dan peneliti IESR.

King juga menjelaskan bahwa Bank telah melakukan kebijakan yang justru mengedepankan hutang publik secara kotor untuk sektor energi secara tinggi dengan menunda pinjaman untuk proyek geothermal (panas bumi) di Sumatera dan Sulawesi Utara sebesar 500 juta US$, 530 juta US$ untuk proyek hydropower di Jawa Barat, dan 225 juta US$ untuk proyek transmisi di Jawa dan Sumatera.

“Jika ini merupakan indikasi bahwa Bank tetap ingin mempertahankan model ini sebagai business-as-usual untuk pembiayaan energi, jelas membuat keyakinan kami semakin berkurang bahwa lembaga ini dapat memainkan peran yang relevan dalam mendorong pembangunan rendah karbon dan akses energi yang lebih luas bagi masyarakat miskin,” tambah Direktur IESR, Fabby Tumiwa.

“Jelas sekali, sebagai lembaga keuangan internasional yang katanya peduli terhadap perubahan iklim dan akan memberikan akses energi terjangkau bagi masyarakat miskin dan pedesaan, ternyata hanyalah sebuah lips-service belaka. Nyatanya di (praktik) di lapangan mandat mereka untuk mengedepankan penanggulangan kemiskinan tidak berjalan sama sekali,” tandas Fabby lagi.

Memberikan energi akses bagi kaum miskin?

Senada juga diungkapkan oleh King, terkait mandat bank dunia yang harusnya mengedepankan pada kepentingan masyarakat miskin dan bukan sebaliknya.

“Mandat Bank adalah untuk mengurangi kemiskinan, tetapi sungguh mengecewakan bahwa tujuan agar masyarakat miskin mendapatkan akses energi justru tidak dibuat secara jelas dan tegas dalam Country Partnership Strategy (Strategi Kemitraan Negara) untuk tahun 2009-2012, dimana Negara mendukung masterplannya. Meskipun proyek kelistrikan di pedesaan Bank Dunia di tahun 1990 telah membuat 10 juta rumah tangga mengakses listrik, namun mereka masih belum memiliki rencana yang jelas untuk menangani akses energi bagi lebih dari 70 juta orang Indonesia yang tidak memiliki akses listrik “, jelas King yang asli Australia ini.

Penelitian ini juga menemukan bahwa Bank dunia telah berorientasi melakukan pendanaan energi ke dalam investasi yang justru mendukung meningkatkan emisi gas rumah kaca, kerusakan lingkungan dan resiko-resiko sosial bahkan mendukung privatisasi utilitas energi. Ditambahkan oleh King bahwa pada tahun 1970-an, sekitar 600 juta US$ senilai pinjaman dan hibah justru difokuskan pada minyak dan transmisi sementara jumlah kredit itu dilebihkan tiga kali lipat (1,5 miliar US$) pada tahun 1980-an. Bank Dunia jelas mendedikasikan hutang publik kepada pembiayaan (investasi untuk asing) batu bara Indonesia, proyek hydropower skala besar serta proyek transmisi. Tahun 1990, Bank Dunia kembali mengulangi pola pinjaman yang sama. Meskipun dapat dikreditkan untuk imvestasi $670 juta untuk proyek kelistrikan di desa, namun juga telah ditingkatkan pinjaman yang ditujukan untuk memprivatisasi BUMN dan dioperasikan utilitas kekuasaan.

Sebuah Bank Iklim?

Sementara pemerintah Indonesia menyatakan akan mengurangi emisi gas rumah kaca sebesar 26% pada tahun 2020 dan didukung secara internasional hingga 41%, justru bank dunia tidak memiliki strategi jelas dan lebih mengedepankan pendanaan terhadap bahan bakar fosil. Padahal sektor energi adalah terbesar kedua dalam emisi CO2 di Indonesia dari pembangkit listrik.

“Ini bisa diprediksi – dan juga mengecewakan – bahwa Bank tidak siap meninggalkan kecanduan untuk sumber energi dinosaurus dan teknologi,” tandas Tumiwa. “Mempromosikan penggunaan batubara telah menjadi tujuan kebijakan Bank Dunia dan kelompoknya hingga 1995; batubara dan gas masih diangap bagian penting dari strategi energi Bank Dunia di negara dan lembaga pinjaman yang memiliki kecenderungan untuk memberi label bahwa ada teknologi canggih energi bersih batubara. Hal ini jelas menyesatkan dan sangat tidak akurat,” tandas Fabby.

Apakah Bank Dunia mempromosikan Energi Alternative?

“Di konseptual, tampaknya seperti paska-Perang Dunia Bank mencari alternatif tetapi bagaimana bisa bersih dan berkelanjutan sebagai bagian ditawarkan, patut dicurigai”, jelas Koordinator BIC Asia Tenggara, Grace Marcia Mercado

“Banyak proyek hydropower dijadikan sebagai agenda kembali. Bank diatur untuk menyetujui pinjaman sebesar $ 530 juta pada Oktober 2010 untuk mengembangkan Cisokan River Storage Power Project. Bank Dunia selalu mengatakan bahwa ini proyek energi bersih dan rendah karbon, tapi penelitian menemukan bahwa hydropower di daerah tropis seperti Indonesia justru memicu emisi metana dari serapan air bisa tinggi,”jelas Norly.

Bank baru-baru ini meningkatkan pendanaan untuk proyek panas bumi (geothermal) dengan menggunakan dana teknologi bersih dan kredit investasi biasa, tetapi sebenarnya dampak sosial, lingkungan dan ekonomi jelas belum terlihat. Sementara itu pada sektor swasta dan publik telah memperpanjang pinjaman untuk “energi terbarukan” seperti angin, solar, hydro kecil dan biomassa modern tetapi volumenya telah diabaikan.

Apa agenda energi terbaru di Indonesia?

Penelitian King juga menemukan bahwa Bank menanamkan potongan besar uang publik untuk reformasi kebijakan-berbasis pengembangan kebijakan pinjaman (DPL), pengganti program penyesuaian struktural (Sap) yang kontroversial pada 1980-an dan 1990-an. Dari 2007 sampai 2010, Bank prepositioned $ 467.000.000 untuk DPLs terkait dengan energi pembiayaan infrastruktur, beberapa diantaranya termasuk regulasi, kelembagaan dan reformasi administrasi.

Bank mengakui bahwa sektor infrastruktur “terus menjadi terganggu dengan isu korupsi dalam proyek-proyek yang didanai Bank, yang telah menunda persiapan dan pelaksanaan proyek dan memiliki implikasi serius untuk masa depan proyek pipa” Namun, hal itu tidak menghentikan dan mengganggu Bank dari penyediaan infrastruktur DPLs kendati kurangnya transparansi dan akuntabilitas.

Dalam desain DPL, sejumlah besar uang telah diberikan dalam waktu singkat dengan konsultasi publik yang sedikit. Hal ini menimbulkan keprihatinan lain tentang pengendalian fidusia: dengan detail kecil yang tersedia, masyarakat yang tertinggal dalam gelap, bagaimana hutang publik sebenarnya dibelanjakan. Masyarakat tidak tahu jika DPLs yang berhubungan dengan energi berkontribusi pada pengembangan karbon rendah atau hanya disalurkan tanpa mengatasi kebutuhan energi masyarakat miskin

Waktunya Untuk Memperjelas Aksi

Sementara Norly menambahkan bahwa dengan portfolio energi berisiko dan kotorr yang didorong Bank Dunia justru semakin mendorong ketidakberlanjutan, bahkan merusak iklim investasi. Tapi pihak Bank Dunia selalu mengatakan bahwa mereka telah mengembangkan mengembangkan transisi ekonomi untuk pengembangan rendah karbon.

“Bank merevisi strategi energi baru untuk 10 tahun ke depan, Bank harus menetapkan peran yang jelas terbatas – kegiatan yang mendukung hanya yang memiliki dampak maksimum pada tujuan pembangunan berkelanjutan dan pengurangan kemiskinan,” tandas Norly.

Ditambahkan Norly bahwa Strategi Energi Bank Dunia harus memprioritaskan dukungan untuk akses peningkatan energi bagi jutaan orang miskin yang hidup di pedesaan, dan mereka bergantung pada sumber-sumber energi non-listrik. Lagi pula, akses energi merupakan hak asasi manusia.

“Negara seperti Indonesia memang rentan terhadap dampak perubahan iklim, dan Bank harus mengkhiri investasinya pada bahan bakar fosil dan menerapkan siklus akuntansi biaya disesuaikan pada tahun 2015. Bank Dunia telah gagal untuk investasi energi bersih, dan perannya sebagai Bank Iklim, sama sekali tidak membuat iklim bumi lebih baik,” tandas Fabby. (***/Fay).

Contact
Fabby Tumiwa, IESR, fabby@iesr-indonesia.org; +62811949759
Nadia Hadad, BIC, nhadad@bicusa.org; +62811132081

5 May 2010/JAKARTA,

As the World Bank Group (WBG) asks an $86 billion general capital increase from its major shareholders, it appears this lending and knowledge institution is not committed to direct public resources to measures that support sustainable development, poverty reduction and clean energy. Instead, the Bank looks set to mobilize public money to subsidize fossil fuel industry and orient funds for large-scale thermal, hydropower projects and energy-related policy reforms, says joint NGO report.

This critique emerges from the recent study on the energy portfolio of the Bank in Indonesia undertaken by the Jakarta-based Institute for Essential Services Reform (IESR) and Bank Informartion Center (BIC), an IFI watchdog working in Indonesia, Mekong and South Asia. The study looked at the Bank’s influence on Indonesia’s energy sector over the last 40 years through its lending and non-lending services. The report is released in time for the May 6 Jakarta consultation that WBG organizes to solicit external comments on its energy strategy approach paper.

“Since 1969, the WBG has provided over USD 5.4 billion in energy lending in Indonesia which has focused on centralized, large scale, grid based thermal and hydropower projects and on the financial viability and privatization of the Perusahaan Listrik Negara (PLN)”, says Daniel King, one of the researchers for the study. Bank’s appetite for risky, dirty public debt for energy remains high as demonstrated by pending loans for a $500 million geothermal project in Sumatra and North Sulawesi, $530 million Upper Cisokan hydropower in West Java, and $225 million transmission project in Java and Sumatra.

“If these were an indication that Bank wants to keep its business-as-usual model for energy financing, this leaves us with little confidence that the institution can play a relevant role in promoting low-carbon development and wider energy access for the poor,” argues Fabby Tumiwa, Executive Director of IESR. “Apparently, the Bank only pays lip service as an institution concerned with climate change and delivering affordable and reliable energy to off grid, rural communities. It does not walk the walk”, Tumiwa adds.

Delivering energy access for the poor?

“The Bank’s mandate is to reduce poverty, but it is disappointing that the objective for energy access for the poor is not made clearer in the 2009-2012 Country Partnership Strategy, its country support masterplan. Although the Bank’s rural electrification projects of the 1990s brought electricity access to 10 million households, it still has no clear plan to address energy access for over 70 million Indonesians without electricity access”, King reveals.

The study found that the Bank has oriented its energy financing into investments that are considered high in greenhouse gas emissions, environmentally and socially risky and ones that favor privatization of energy utilities. King discovered that in the 1970s, nearly $600 million worth of loans and grants focused on oil and transmission while loans more than tripled ($1.5 billion) in the 1980s but this time, the Bank dedicated public debt to Indonesia’s coal, large hydropower and transmission projects. In the 1990s, the Bank repeated the same lending pattern. Although it can be credited for investing $670 million for rural electrification projects, it has also scaled up its loans geared to privatize State-owned and operated power utilities.

A climate bank?

While the energy sector is the second largest source of CO2 emissions in Indonesia, discharged from power generation, the Bank’s strategy to mitigate climate change is poor, says the report. As the Government of Indonesia (GOI) aims to reduce GHG emissions by 26 percent by 2020 and make a further cut up to 41 percent with international support, it turns out the Bank has no clear cut strategy to progressively shift its funding from fossil fuel.

“It is predictable – as well as disappointing – that the Bank is not ready to abandon its addiction to dinosaur energy sources and technologies,” claims Tumiwa. “Promoting the use of coal had been a specific policy aim of WBG projects in Indonesia until 1995; coal and gas still form a key part of the Bank’s energy strategy in the country and the lending institution has propensity to label its advanced coal technologies as clean energy. This is inaccurate and misleading”, Tumiwa asserts.

Is the Bank promoting alternatives?

“At the conceptual plane, it looks like this post-World War Bank seeks alternatives but how clean and sustainable these offered solutions are is highly suspect”, argues Yaya Nurhidayati dari Bank Dunia. “Large hydropower is back on the agenda. The Bank is set to approve a $530 million loan in October 2010 to develop the Cisokan River Pumped Storage Power Project, reveals Forqon. The Bank champions hydropower as a “clean energy” source due to its low carbon emissions but scientific studies show that in tropical climate, methane emissions from dam reservoir can be high”, he added.

The Bank has recently increased its funding for geothermal projects using clean thecnology fund and regular investment loan but the actual social, environmental and economic impacts are yet to be seen. Meanwhile its public and private sector arms have extended the lending envelope to “new renewables” such as wind, solar, small hydro and modern biomass but volume has been negligible.

What’s new in the country energy agenda?

In the study, King found that the Bank is infusing large chunk of public money for policy-based reforms, called development policy loans (DPL), the successor of structural adjustment programs (SAPs) that were controversial in the 1980s and 1990s. From 2007 to 2010, the Bank prepositioned $467 million for DPLs related to financing energy infrastructures, some of which include regulatory, institutional and administrative reforms.

The Bank acknowledges that the infrastructure sector “continues to be plagued with corruption issues in Bank-financed projects, which has delayed project preparation and implementation and has serious implications for the future project pipeline.” Yet, this has not stopped the Bank from providing infrastructure DPLs plagued with lack of transparency and accountability. In the design of the DPL, large amount of money has been provided over a short period of time with little public consultation. This raises another concern on fiduciary control: with little detail available, the public are left in the dark how the public debt is actually spent. The public hardly knows if energy-related DPLs contribute to low carbon development or simply disbursed without addressing the energy needs of the poor.

Time to clean up the act

“With its dirty, risky energy portfolio, it is long overdue for the Bank to progressively shift from unsustainable and climate damaging investments to one that supports developing economies’ transition to low carbon development”, states Norly Mercado of the Bank Information Center. “As the Bank revises its new energy strategy for the next 10 years, the Bank should set out a clear, limited role – only supporting activities that have maximum impact on its goals of sustainable development and poverty reduction.”

“The Bank’s energy strategy must prioritize support for increased energy access for millions of the poor living rural, off grid, and those dependent on non-electrical energy sources. After all, energy access is a human right”, states Mercado. It must also focus on decentralised sustainable energy solutions that meet the energy needs of the poor in a cost-effective and energy efficient manner.”

“As countries like Indonesia make the transition necessary to prevent dangerous climate change, the Bank must end investments in fossil fuel extraction and use by 2015 and implement full life-cycle risk adjusted cost accounting by 2015.”

“By failing to clean its energy investments, its role as a climate bank makes no relevance”, asserts Tumiwa.