Karl Jechouek is Division Chief within the World Bank's Industry and Energy Department. The Department is the central 'anchor' group that supports the emerging agenda and new products in the Bank's energy sector assistance. This includes renewable energy, other clean technologies, rural energy development, energy efficiency, and energy sector restructuring.

Dr. Jechoutek, to the outsider there seems to be something of a revolution taking place within the bank in respect of a more prominent role for photovoltaics and other new energy technologies. Is this a fair assessment?
Yes, I think in some respects this is true. We are certainly more open now to considering 'non-conventional' energy technologies than has been the case in the past. Our long-term objectives in the energy sector - to make existing energy suppliers and consumers more efficient, and encouraging competition to give consumers the energy choices they deserve - are still valid, but we acknowledge markets in renewables, efficiency, and renewable decentralised solutions need time and effort to develop for the benefit of the environment, and of the poor.

Namely rural customers in developing countries?
Exactly. This department was one of the first within the Bank to acknowledge that streamlining existing supply networks was not actually helping many people in the rural areas of developing countries. Extending the grid network to such areas usually requires substantial subsidy, which is cripplingly expensive for the governments and often the suppliers who venture down this path. So it is obvious that we need some new heroes.

Does PV have the necessary 'hero' qualities then?
Perhaps it has the potential to become one of the 'superheroes' for rural populations that are now dependent on expensive kerosene or batteries, and who have no hope that the grid will reach them. The Bank sees the provision of modern energy systems as a prerequisite to development in terms of meeting the end-users expirations for a better standard of living. We know that the overriding priority for rural people is improved light, and then more light. Then come other services, such as TV, radio and other appliances. Now for such basic requirements modular technologies like PV offer users the flexibility to decide what they need for more cost-effectivity than major grid extension programmes in low-density areas.

So why isn't the market for PV systems already booming?
Well I mentioned an important word before - potential. With liberalisation of the energy market and the introduction of competition, we tend to fail into the trap of thinking that energy supply companies can simply waltz into these rural areas, set up shops and start selling systems. But we really have to nurture these markets. Rural people would welcome better services, but there are generally few delivery, after-sales or financing mechanisms to enable them to obtain these.

So you have identified some of the problems, but how are you addressing them?
One of our first priorities is to ensure that our own staff are aware of the options for relieving this rural energy poverty. Co-operative agreements partners, such as IEA, ETSU, EPRI and major foundations and NGOs, for example, are helping the Bank to get its own house in order. Then we can set about connecting others with this knowledge - government departments, potential investors and so on - so that we can bring about the proverbial levelling of the playing field that would enable energy policy decisions to be made in an informed manner without prejudice in favour of, or against any technology.

But surely this alone will not bring about the changes to resolve the issue of delivery and en-user financing?
No, that requires rather more creativity and hands-on involvement, which is where concepts like the PV Market Transformation Initiative and Solar Development Corporation (see article Building markets for PV in developing countries) fit in. We know that many of the potential customers are prepared and able to pay above the odds for high quality energy service - often up to five times more per unit than they might expect to pay if they were able to obtain grid power. But if the service is not available or not affordable, then the whole idea of the rural energy market based on consumer choice falls apart. PVMTI, REEF and SDC (incidentally, all good examples of co-operation between the IFC, the GEF and the Bank) are a positive step towards addressing both of these problems. I think it has now got to the stage where we stop talking and start doing. The Bank is now 'getting out' into the potential market place, finding out what it and others can do to help systems and energy suppliers and financial intermediaries establish the necessary alliances to build the vital social infrastructure.

So, are you optimistic for the future of PV in the rural development context?
Well, we are seeing a move amongst project financiers away from grants and soft loans, so cost recovery in all development projects is increasingly important. We've all seen the charts and done the sums that show PV can be a cost effective low-power density supply option, and there is no doubt that the potential market is huge so on these terms there is good cause to be optimistic. But it is going to take a lot of work from all quarters to build sustainable workable markets for PV and other new energy technologies. I would like to think that the Bank is now demonstrating its commitment to this cause and is inviting partners to join the effort.

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