A while back, I wrote about the need for social bankability based on the casual observation that our financial and energy systems are broken.

Social bankability is the decision, by fiat, to use public funds to fill in gaps where private banking has failed, but where the evidence shows the investments are entirely creditworthy and socially desirable. That’s what Franklin Roosevelt did in 1933 when he decided that American farmers setting up electricity co-ops were creditworthy, even though banks didn’t trust them. Muhammad Yunus did the same thing for enterprise loans to the poor with micro-credit.

Now a new class of entrepreneurs are demanding that the World Bank step up and do the same for off-grid clean energy access.

While innovations like crowdfunding are needed to disrupt the system, we need to do much more. That’s why it’s exciting to see twenty-two of the world’s leading off-grid clean energy entrepreneurs, as well as the Global Off-Grid Lighting Association (GOGLA), demanding social bankability from the World Bank Group in the form of $500 million in risk-adjusted investment.

In order to make good on the pledge to deliver universal energy access, the International Energy Agency (IEA) has found that half of all energy services flowing to un-electrified communities must be provided by off-grid clean energy. The IEA has also shown that an over-reliance on large-scale centralized power -- often dirty coal plants -- will still leave 1 billion of the world’s poor without energy access by 2030. That means decentralized, off-grid clean energy is the right tool for the job, regardless of climate concerns.

The problem is that today’s investments in energy access are heavily skewed toward the problem, not the solution. The global financial system is not designed to finance nimble, decentralized investments that serve the poor. Worse, the system views all things new (including clean energy) with skepticism. That means large-scale investments for centralized generation receive the majority of finance even though they do little to solve the problem while causing a lot of climate change. This practice continues even when, as with the proposed Kosovo coal project, the underlying economics are wildly unfavorable to the investment. This is just bad banking.

In the absence of dedicated credit mechanisms, the poor have had to finance off-grid clean energy themselves, often through cash purchases. They are able to do that thanks to a combination of highly innovative business and financial models, plus the plummeting cost of renewable energy that has made it more affordable for early adopters.

This has laid the foundation for a revolution in which small can be big. This is taking root in places like Bangladesh, where 1 million solar home systems have been installed (including 30,000 to 40,000 solar home systems every month). Now "pay-as-you go" systems, mobile banking payments, and community power that extends clean energy from off-grid cell phone towers to surrounding communities promises to build an entirely new bottom-up decentralized clean energy powered "grid."

This isn't leapfrogging. It’s catapulting past the heavily polluting centralized grid that dominates the Western world.

But getting there means crossing the "valley of death" where dedicated credit sources are scarce. Deeming such investments to be socially bankable is a way to encourage more activity.

This is exactly why the off-grid sector wants the World Bank to step in. The problem is that the Bank, even under Dr. Jim Yong Kim’s leadership, is doing just the opposite. Instead of funding the off-grid sector, it continues to support new coal plants like the one in Kosovo. In fact, nearly 60 NGOs from around the world sent a letter the same day demanding the institution stop funding fossil fuels altogether.

Which takes us back to where we began. Public money is increasingly hard to come by. But the World Bank is using its resources to follow the lending practices of the past, rather than fulfilling its mission to forge a credit pathway to the future. There are literally 1 billion reasons to change course. So, Dr. Kim, what will it be? 

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Justin Guay leads the Sierra Club's international program.