This paper presents the motivation behind the acceleration of World Bank activities in renewable energy (RE) project development and financing. Analytical evidence is mounting that anthropogenic green-house gas emissions may have a serious effect on climate and hence drastic economic dislocations. In addition, dramatic progress in technical improvements and cost reduction in renewable energy technologies during the past few years have brought about a surge of interest in developing RE projects in developed as well as developing countries. The combined effect of these developments is leading the World Bank's clients and donors to the increasing consideration of renewable energy projects as the main means for a long-term solution to the atmospheric warming risk. Also, additional local and regional environmental benefits are expected to accrue from the gradual transition from fossil fuels to renewable energy resources. The Solar Initiative was established at the World Bank in the Spring of 1994 to fulfil two main objectives: (a) to provide active support to the Bank's regional units for (RE) project identification and preparation; and (b) to play a coordinating, strategic, and catalytic role in removing barriers that impede the introduction of renewable and other environmentally sustainable technologies in developing countries. The paper outlines these programmatic objectives, the accomplishments achieved to date, and the current plans of the Solar Initiative.
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