Local entreprises could also be supported with new credit schemes which can help overcome the high start-up costs for customers. Rural energy presents the Bank with an important challenge. It should be a key part of the Bank's work, whether discussing country assistance strategies, energy sector reform, or new investments. Renewable technologies such as solar, wind, and small-scale hydropower are often ideal in rural areas and require far more systematic attention by policymakers. Renewable forms of energy have significant environmental advantages relative to fossil fuels and, most important, the costs of many renewable technologies have come down significantly over the last decade.
Sunlight is also in ample supply in many developing countries.
However, appropriate delivery mechanisms for renewable energy are still lacking. The Bank's Action Plan, explained in the report, calls for a strong effort to accelerate the opening of rural energy markets, help consumers to have a choice, and put in place better systems to deliver and finance rural energy. Informed consumers will choose the most cost-effective solution, according to their preferences. Ensure that Prices Reflect Costs. Distortions in prices that are created by subsidies and taxes should be eliminated.