Challenge
Rapid urbanization and population growth in developing countries exert immense pressure on urban transport systems. The demand for passenger transport in urban areas could increase by up to 79 percent between 2019 and 2050, as estimated by the International Transport Forum. However, expanding the current model of transport is not viable as it is environmentally and economically unsustainable. The transport sector already contributes to nearly a quarter of global energy-related carbon dioxide (CO2) emissions, according to the Intergovernmental Panel on Climate Change (IPCC). Moreover, air pollution generated by the sector has been responsible for approximately $1 trillion in health damages per year, according to the International Council on Clean Air Transportation. Without intervention, CO2 emissions from transport could rise by up to 50 percent by 2050, per IPCC estimates. For these reasons, decarbonization is a crucial aspect of any sustainable transport expansion plan.
One effective approach to decarbonize the transport sector is the widespread adoption of electric mobility, particularly in public transport. However, electric vehicles (EVs) are significantly costlier compared to traditional internal combustion engines (ICE). In some developing countries, electric buses can be nearly 60 percent more expensive than their ICE counterparts, per World Bank estimates. To meet the increasing demand for passenger transport while reducing the sector’s emissions, policymakers and planners need to find ways to bridge the capital cost differential associated with electric vehicles and ensure the long-term financial viability of electric mobility.
Approach
The World Bank supports countries in their efforts to improve the scalability and bankability of electric mobility solutions, with a special emphasis on public transport and e-buses. The World Bank employs a comprehensive approach, combining investments in infrastructure, technical assistance, and active engagement with the private sector so that these different activities bolster and reinforce one another to maximize impact.
Additionally, the World Bank is supporting countries through rigorous analytical work. Efforts on this front include producing studies and technical notes to help governments design and implement electric mobility programs. The World Bank developed an Electric Mobility Scoping Tool, which is designed to estimate the benefits and costs of e-mobility at a country level under different EV adoption scenarios. The tool has been applied to a broad sample of 20 low- and middle-income countries spread across all regions where the World Bank works.
"In line with its international commitments on climate change, the government of Senegal has opted for a paradigm shift, giving priority to clean mobility systems. We are working with the World Bank and the European Investment Bank to illustrate this shift with our Bus Rapid Transit (BRT) project. The pilot is fully electric and powered by solar energy, it is designed to carry up to 300,000 passengers a day on an 18-kilometer route, serving the most densely populated and congested areas in Dakar.”
— Thierno Birahim AW, Director General for Executive Council of Urban Transport of Dakar (CETUD)
Results
Since 2016, the World Bank has supported 32 countries worldwide with lending and knowledge work in their transition towards electric mobility.
In Dakar, Senegal, the World Bank is co-financing a state-of-the-art Bus Rapid Transit system (BRT) that operates entirely with electric buses. The system began operations at the end of 2023 (with full service contemplated in 2024 after a ramp-up period). The new vehicles offer fast and reliable public transport service on dedicated bus lanes, cutting travel times in half along the BRT corridor. The system will benefit some 300,000 daily commuters and put an additional 170,000 employment opportunities within the reach of low-income residents living in the densest neighborhoods in the city’s periphery. The initiative is projected to reduce greenhouse gas emissions by 1.2 million tons of carbon dioxide equivalent (MtCO2e) over its 30-year estimated lifetime, equal to taking 260,000 gas-powered cars off the road for an entire year.
Another example comes from India, where the World Bank has contributed to rethinking the approach to procurement of e-bus services, leading to changes in procurement resulting in a reduction by approximately 37 percent in the overall cost in five cities: Delhi, Surat, Kolkata, Bangalore, and Hyderabad. Between 2021 and early 2022, under the government’s Transformative Mobility and Battery Storage Program, the World Bank analyzed results from past tenders for e-bus services and helped harmonize a procurement approach and specifications through a consultative approach led by NITI Aayog and the state-owned energy transition company Convergence Energy Services Limited (CESL). By standardizing such requirements, the government has been able to aggregate demand and achieve cost savings through economies of scale. Additionally, the World Bank helped conceptualize, and is currently supporting the operationalization of a payment security mechanism aimed at mitigating financial risks for lenders and facilitating access to financing for e-buses. Building on those solutions, the government of India plans to scale up the aggregated procurement model across the country, with a goal of securing approximately 50,000 electric buses over the next two years.
The World Bank has also played a crucial role in developing analytical research to support the transition towards e-mobility. Efforts include:
- Studies offering a global perspective on vehicle electrification, including "The Economics of E-Mobility for Passenger Transportation," which explores feasible entry points to an electric mobility transition in developing countries.
- Country-level analyses addressing transport electrification in 18 economies, such as Chile and Bhutan. In the latter, for example, the study provided valuable insights that guided the government of Bhutan in shaping its strategy for the Electric Vehicle and Green Transport Initiative in Thimphu.
World Bank studies have also tackled key regional issues.
- For example, in the Sahel region, the World Bank analyzed the potential for electrification of two and three-wheelers, which play a vital role in public transport in Mali and Burkina Faso. This study, the first on electric mobility in the Sahel, has influenced the work of the World Bank and other development partners such as the United Nations Environment Program (UNEP). UNEP has used the findings of this study as a foundation to design pilot projects that are currently being implemented in West Africa under a regional program funded by the Green Climate Fund.
- In Latin America, the World Bank has worked with a diverse group of stakeholders, including governments, vehicle manufacturers, financial institutions, bus concessionaires, and civil society in Argentina, Brazil, Chile, Mexico, and Uruguay, to identify barriers and opportunities for achieving clean, efficient, and sustainable bus systems. In Brazil, for example, this collaboration led to the preparation of the Electrification and Improvement of the São Paulo Urban Transport Project, with financing anticipated from the government of Brazil, the Inter-American Development Bank, private capital and commercial financing, and the World Bank. The project focuses, among other things, on improving the quality of public transport and reducing GHG emissions, local pollutants, and noise from the municipal bus fleet through facilitating the transition to an electric bus fleet of approximately 1,400 e-buses.
One World Bank in Action
In Chile, the International Finance Corporation (IFC), the private sector arm of the World Bank Group, is supporting the procurement of 992 e-buses for use in Santiago’s public transit system. In Chile, transport contributes to nearly 25 percent of carbon dioxide equivalent (CO2e) emissions and is responsible for 40 percent of Santiago’s air pollution. The project contributes to climate mitigation by replacing existing diesel buses with e-buses powered by renewable electricity, leading to an annual reduction of 47,092 tons of CO2e in greenhouse gas emissions. Furthermore, this initiative supports one of the goals outlined in the National Electromobility Strategy, which aims to ensure that all public transport vehicles, including buses, taxis, and shared taxis, sold by 2035 are zero-emission.
Partners
To accelerate innovation and investment in e-mobility, the World Bank helped establish in 2021 the Global Facility to Decarbonize Transport (GFDT). This trust fund aims to assist developing countries in implementing pilot projects, research, and capacity building addressing climate-smart mobility. Currently, GFDT receives support from Germany's Federal Ministry for Economic Cooperation and Development (BMZ), Luxembourg's Ministry of Mobility and Public Works, The Netherlands' Ministry of Infrastructure and Water Management, and The United Kingdom's Department for Business, Energy & Industrial Strategy.
World Bank Contribution
Since 2016, the World Bank has committed nearly $2.3 billion to transport projects that include elements of electric mobility, including $1.2 billion from the International Development Association (IDA) and $1.1 billion from the International Bank for Reconstruction and Development (IBRD). So far, $772 million has been disbursed from these funds, with a portion allocated to support activities fostering the transition to electric mobility in developing countries, including some of the activities mentioned above.
Looking ahead
Driven by rising interest and demand from client countries, the World Bank expects its e-mobility engagement to continue growing significantly over the next few years, both on the lending and knowledge fronts.
The GFDT will have a key part to play in the road ahead as some of its very first projects will be dedicated specifically to electric vehicles, including e-buses. The World Bank will support countries in replicating and scaling BRT systems operated with electric vehicles, like the one in Dakar.
In terms of knowledge, the World Bank is leveraging the findings of its research activities on e-mobility to support its client countries in their efforts to harness the benefits of transport electrification. For example, the Electric Mobility Scoping Tool is supporting public and private sector dialogue on electric mobility in many countries including Bangladesh, Kenya, Malawi, and Türkiye.
Learn more
Story: Electric Vehicles: An Economic and Environmental Win for Developing Countries
Story: With Bus Rapid Transit, African Cities Are Riding Toward a Better Future
Blog: In Developing Countries, the e-mobility revolution is closer than you might think
Immersive story: Climate Action Game Changers: Urban Transport
Multimedia
Transforming Transportation 2024: Mobilizing Finance for Climate Action
Transforming Transportation 2023: Accelerating Toward Green & Inclusive Mobility
Financing the Transition to Climate-friendly & Inclusive Transport