The World Bank is questioning the value of large-scale power-generation projects of the type it has funded in Africa and other parts of the developing world.

Paul Wolfowitz

World Bank President Paul Wolfowitz is pressing donors at the annual bank conference on development economics to rethink how they go about building infrastructure projects in developing nations.

The World Bank has been criticized for traditionally favoring mega size hydropower projects at the expense of renewable energy solutions.

Bank officials say they are considering funding more power projects all across Africa, from regional grids to small-scale power generation at the household level.

Wolfowitz, in a speech Monday, said that changed circumstances, such as the huge population shift from the African countryside to the cities, calls for new thinking about infrastructure of all kinds.

Paul Wolfowitz with FCCJ President Sloan, preparing to begin speech

"Africa's infrastructure may have been adequate in the 1960's and 1970's, but high population growth combined with rapid urbanization has led to a severe mismatch between the need for infrastructure and what's available," he said.

The two-day development meeting, the first to be hosted by Japan, is focusing on how to meet future energy needs for fast-growing populations, especially those in Africa.

Japan's Finance Minister, Sadakazu Tanigaki, announced a $2 million contribution to a World Bank fund promoting development research.

Tanigaki said it is important to assess whether past efforts to improve infrastructure have actually led to improvements in developing nations, or merely left behind "white elephants" that might have damaged the environment.

The conference is also focusing on how higher oil prices are affecting the poor nations. Officials have suggested that those prices might mean that smaller energy sources, such as wind power, might have now become a feasible alternative to large-scale projects.

The bank estimates that current oil prices are causing Sub-Saharan African nations to lose three percent of their gross domestic product, while increasing poverty by about five percent.

Wolfowitz says Japan's success in the areas of infrastructure and environment is one place that aid donors can turn to for inspiration.

Japan's development after World War II was helped by close collaboration between industry and government, which saw early moves toward pollution controls and such alternative energy sources as solar heating.

The World Bank has traditionally favored a free market approach with minimal government involvement.