Scaling up to phase down: financing energy transitions in the power sector

The power sector transition will advance energy efficiency and decarbonize the energy supply by expanding renewable energy and strengthening electricity networks in order to integrate renewable energy, demand-side management, and end-use electrification. In LICs and MICs, this transition aims to meet the rapidly growing demand for energy in a way that supports inclusive development consistent with net-zero global emissions by mid-century, and builds resilience to the changing climate. A just transition in the power sector should address the needs of workers and communities who are affected by the shift away from fossil fuels; provide modern energy access to millions of people; and protect vulnerable customers from unaffordable energy prices.For the first time, the World Bank has outlined a vision for how the international community can support LICs and MICs to overcome critical barriers that are paralyzing the power sector transition. Drawing on findings of the first set of Country Climate and Development Reports produced by the World Bank, and decades of engagement with energy sector development, this approach distils understanding of the unique challenges that LICs and MICs face in undertaking this transition at the scale and pace required to meet their development and climate needs. The approach may help both World Bank clients and development partners in preparing a roadmap to catalyse and sustain in virtuous cycle that unleashes urgently needed investment in power sector transition.