Scaling up Energy Transition in East Asia and Pacific

Strong economic growth has moved in parallel with rising fossil fuel use and greenhouse gas emissions in East Asia and Pacific region. The region now accounts for over a third of global emissions. To continue growing and reducing poverty in a sustainable way and to reach the nationally determined contributions, the decarbonization of the power sector is necessary.

The World Bank is leaning in to support East Asia and Pacific countries in decarbonizing the power sector with a specific focus on scaling-up renewable energy. The program is using the Multiphase Programmatic Approach (MPA), an evolved model of doing business that can scale renewables more effectively than individual country operations by creating momentum, seeking higher levels of ambition, building partnerships and promoting economies of scale through national-level programs. Through this design, countries select country-specific activities to help them achieve their development goals while being part of a broader regional effort. The program is testing innovative approaches, leveraging the World Bank Group to mobilize private capital, and promoting learning and adaptation across phases.

Launched on September 24, 2024, the Program provides US$2.5 billion in IDA and IBRD financing to support the development of policies and strengthen institutions; finance regional and national transmission infrastructure to integrate renewable energy generation, and de-risk clean energy investments to support private sector participation. The MPA structure, with will remain active for 10 years until 2034, allows flexibility to add projects overtime as they become ready.

Impact on People and the Planet (By 2034)

• 20 million people will have new or improved access to clean energy
• 2.5 gigawatts of renewable energy generation capacity will be enabled, resulting in a net reduction of 60 million CO₂
• US$1.5 billion of private investment in clean energy mobilized

These results directly contribute to the World Bank Group Corporate Scorecard Indicators of Green and Blue Planet and Resilient Populations; Affordable, Reliable and Sustainable Energy for All and; More Private Investment.

A Regional Partnership for Momentum and Scale

The MPA approach was selected instead of stand-alone operations to leverage lessons learned across countries, streamline operational approaches, strengthen regional partnerships, and help create economies of scale to reduce the cost of clean energy for the benefit of people and firms. With a strong focus on increased regional cooperation and private capital mobilization, the MPA is deploying IBRD and IDA in a way that supports IFC and MIGA country engagements and instruments to draw on the private sector's resources.

Achieving Results for Country Needs

The first phase of the Program is financing US$260 million in investment projects in the Independent State of Papua New Guinea and the Republic of Marshall Islands.

Phase 1 Projects

In Papua New Guinea, the project aims to increase access to renewable energy and enhance the reliability of the electric supply. About 425,000 people are expected to be provided with new or improved access to electricity, leading to a net CO₂ emission reduction of approximately 437,000 metric tons over its economic lifetime. Approximately 8 megawatts of renewable energy capacity will be enabled through this project.

In the Republic of Marshall Islands, the project aims to increase renewable energy generation and improve the reliability and quality of electricity service in targeted main and outer islands. About 8 megawatts of renewable energy are expected to be enabled and about 25,000 people expected to be provided with new or improved electricity access, while contributing an estimated reduction of about 250,000 metric tons of CO₂ over the lifetime of the project.

In addition, the first phase also features a US$12.7 million grant implemented by the ASEAN Centre for Energy that will foster cross-border electricity trade among ASEAN countries.

Subsequent Phases

An additional US$1.25 billion has already been approved as subsequent phases.

In Mongolia, the project will strengthen the capacity and the reliability of the transmission grid to enable integration of renewable energy into the grid. These investments are expected to enable approximately 455MW of renewable energy while contributing to an estimated reduction of about 12 million metric tons of CO₂ over the lifetime of the project.

In the Federated States of Micronesia, the project will improve the reliability of electricity services, expand access, and increase renewable energy generation in targeted areas. It is expected to enable 3 MW of renewable energy capacity, provide approximately 32,000 people with new or improved access to electricity, and reduce about 107,000 metric tons of CO₂ over the lifetime of the project.

In Indonesia, the project will increase access to sustainable electricity in the Kalimantan and Sumatra regions, replacing reliance on diesel and other high-emission fuels. About 540 MW of renewable energy is expected to be enabled and about 3.5 million people will be provided with access to electricity while reducing 18.2 million metric tons of CO₂ equivalent net GHG during the lifetime of the Project.

In Mongolia, the project will enhance transmission grid capacity and reliability in the Project areas. This is expected to enable the integration of 150 MW of renewable energy, displace generation from fossil fuel power plants, provide approximately 200,000 people with improved access to electricity, and reduce an estimated 7.2 million metric tons of CO₂ emissions over the operation's lifetime.

In Indonesia, the project will prepare the electricity distribution grid for energy transition in the Java-Madura-Bali region. About 300 MW of renewable energy is expected to be enabled and about 20 million people will be provided with access to electricity while reducing 6.6 million metric tons of CO₂ equivalent net GHG during the lifetime of the Project.

How can countries join the Program?

Any World Bank client country in the East Asia and Pacific region is eligible to join the program.

What is the World Bank's Multi-Phase Programmatic Approach (MPA) and what advantages does it offer?

The World Bank's Multi-Phase Programmatic Approach (MPA)-allows countries to structure a long, large, or complex engagement as a set of smaller linked operations (or phases), under one program.

The MPA implies a cohesive continuous strategy that promotes replicable and scalable engagements. This is particularly beneficial for client countries facing the challenge of attracting private investment for their energy transition.

The MPA also allows the use of diverse instruments, including Program-for-Results (P4Rs), Investment Project Financing (IPFs), and guarantees, thereby enabling our client countries to better navigate a common challenge such as scale-up of renewable energy. Critical policy and institutional reforms will also be necessary to remove investment barriers and enable scale up. Multi-year initiatives spanning several countries, the MPAs will also emphasize knowledge sharing, adaptive learning and capacity building.

Why the emphasis on a regional approach?

A regional approach can help governments to scale up renewables more effectively than individual country operations by creating a longer-term strategic vision and commitment, fostering greater ambition and momentum, building partnerships, and promoting economies of scale. The program will generate knowledge and best practices that can be replicated and scaled up across the region. It will also attract private investment by developing regional connectivity and common procurement approaches along with greater harmonization of technical standards to develop local and regional supply chains.

Related

World Bank in East Asia and Pacific

Green Horizon: East Asia's Sustainable Energy Future

World Bank Infrastructure

World Bank Energy