S. Korea - World Bank Should Get Out Of Clean Energy Financing - Reuters

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SINGAPORE - The World Bank should stop exploring options for financing the development of clean energy because it does not have enough strength in the field, South Korea said on Monday. "The Bank's ideas would seem to be poor value to developing countries," Finance Minister Kwon O-kyu told the Development Committee of the World Bank and the International Monetary Fund.

British finance minister Gordon Brown first raised the idea of fresh cash for cleaner energy in April, calling for a seed fund of US$20 billion for alternative energy. The World Bank has since prepared a draft of two proposed funds: the Clean Energy Financing Vehicle consists of low-interest loans; the Clean Energy Support Fund would be based on grants. Both ideas endorse low-carbon technologies and carbon emission reductions.

The Clean Energy Financing Vehicle proposal calls for an initial capitalisation of US$10 billion, but Kwon said spending so much money on carbon credits would pose large but unquantifiable financial risks.

Work done to date on the two initiatives had revealed sufficient problems that the Bank should just stop, he said. "The Bank has no comparative advantage in this area...," he said, adding that the bank should focus instead on improving access to clean energy.

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