What is the point of the World Bank? You probably think of it, if at all, as a benign institution, a kind of giant, multilateral aid agency, whose job it is to bring liquidity to developing nations and help them grow out of poverty.
Until not so long ago, that was indeed its function. Created alongside the International Monetary Fund at the 1944 Bretton Woods Conference, the bank did sterling work in its early years helping countries like France recover from the war; and later, giving mostly third world countries the vital seed money needed to help attract investors to risky capital projects. Its multiplier effect on investment can be extraordinary. In 2013, the World Bank gave Kosovo $40 million towards building a lignite power station. This sent out the positive signal needed to encourage the private sector to complete the funding with another $1,960 million.
Amazing. Except that’s not what the World Bank does now. It won’t fund any more coal-fired power stations because they are not clean and green. Instead, it wants developing nations to embrace intermittent, unreliable and wildly expensive renewables like wind and solar as part of a mission — outlined by former UN Secretary General Ban Ki-moon — to ‘defeat poverty and save the planet’. In fact, it will achieve neither of those goals. Take Nigeria, whose capital Lagos has overtaken Cairo as Africa’s largest city, but whose electrical grid produces so little power that the economy runs mostly on private (and filthy, polluting) diesel generators. Nigeria’s National Electric Power Authority (NEPA plc) is known as ‘Never Expect Power Always, Please Light a Candle’. Blackouts and brownouts are common, as they are throughout sub-Saharan Africa, and the costs to the economy are enormous. The local mobile phone company MTM, with 62 million subscribers, spends 70 per cent of its operating expenditure on diesel to keep its network powered up.
Here is Nigeria’s Minister of Finance, Kemi Adeosun: ‘We want to build a coal power plant because we are a country blessed with coal, yet we have a power problem.