Investing in a Sustainable Future

The report evaluates the alignment of Multilateral Development Bank (MDB) investments in the electricity sector with sustainable, low-carbon development. It proposes a framework consisting of policies (such as integrated energy planning and subsidy reform) and institutional capacities (including regulatory transparency and stakeholder engagement). A review of loans from the World Bank, Asian Development Bank (ADB), and Inter-American Development Bank (IDB) between 2006 and 2008 reveals that while some projects are comprehensive, many MDB interventions lack consistency in addressing integrated planning, transparency, and stakeholder engagement. The report highlights that comprehensive support is often concentrated in countries with already favorable domestic policies, such as Mexico, and recommends that MDBs more consistently integrate climate-friendly policy and regulatory support into their core electricity financing.

• A small number of MDB projects comprehensively address the proposed elements of sustainable energy, serving as models for aligning electricity investment with low-carbon development, though overall attention to these issues remains limited.
• MDBs have provided inconsistent support for integrated energy planning, which is necessary to identify the most environmentally and socially cost-effective options for meeting energy needs.
• While MDBs frequently address electricity access for the poor, they often prioritize the extension of centralized systems and cost recovery over more creative or decentralized renewable energy solutions.
• There is limited emphasis on transparency in the design and implementation of energy programs and a lack of engagement with local stakeholders, including civil society and consumer organizations.
• MDB investments that comprehensively address sustainability elements are typically concentrated in countries where government policies were already favorable to climate change and sustainable energy, such as Mexico.
• Investments in technical assistance and capacity building for enabling sustainable energy are often small compared to the costs of actual infrastructure investment.
• The Clean Technology Fund (CTF) shows promise in supporting investment plans that comprehensively address sustainable energy elements, though attention to governance and regulatory issues varies by country.
• MDBs have significantly increased investments in transmission and distribution infrastructure, but these projects may indirectly support conventional fossil-fuel infrastructure rather than sustainable energy.

APA

Nakhooda, S., & Ballesteros, A. R. (2009). Investing in a Sustainable Future. International Institute for Sustainable Development. https://www.iisd.org/system/files/publications/bali_2_copenhagen_invest_mdbs.pdf

Chicago

Nakhooda, Smita, and Athena R. Ballesteros. Investing in a Sustainable Future. International Institute for Sustainable Development, 2009. https://www.iisd.org/system/files/publications/bali_2_copenhagen_invest_mdbs.pdf.

Wikipedia

{{cite report |last1=Nakhooda |first1=Smita |last2=Ballesteros |first2=Athena R. |title=Investing in a Sustainable Future |publisher=International Institute for Sustainable Development |date=November 2009 |url=https://www.iisd.org/system/files/publications/bali_2_copenhagen_invest_mdbs.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{nakhooda2009investing, author = {Nakhooda, Smita and Ballesteros, Athena R.}, title = {{Investing in a Sustainable Future}}, institution = {International Institute for Sustainable Development}, year = {2009}, month = nov, url = {https://www.iisd.org/system/files/publications/bali_2_copenhagen_invest_mdbs.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }