SYNOPSIS The rate of growth in the demand for power in many developing countries is alarming. Some are facing unprecedented power shortages, which are increasingly hindering the opportunity to fulfil potential economic development. In rural areas, particularly where the agricultural sector is leading the way towards higher per capita incomes, as is the case in many areas of India, the shortages are being felt the most. This trend is likely to continue as demand from rural areas increases through population pressure and development requirements, and may worsen due to the fact that the conventional means of supplying power to these areas i.e. through extension of the centralised grid, is fraught with inefficiencies. Rural areas of developing countries have long been recognised as the places where it may be cost-effective to harness renewable energy sources, such as wind and solar energy, for power and subsistence energy requirements. However, their utilisation still remains at a relatively low level. The aim of this paper is to identify the reasons why this is so, bearing in mind that the cost of renewable energy technologies has decreased significantly over the last twenty years. The role of the World Bank is critically assessed, since it sets the intellectual agenda on development matters. It is concluded that their use of tools to compare the costs between conventional non-renewable energy and renewable energy technologies does not fit into the modern, increasingly holistic, way of measuring costs, which takes into account the benefits of flexibility, modularity, and of not having to rely on imported fuel. Also, attempts to “green” their policies have largely failed. The other aims of this paper are to examine how governments and the private sector are involved in the scheme of things, and to reason how the dissemination of renewables may best be carried out. India is used as an example of a country which has typical, and extreme, power problems, characteristic of developing countries experiencing rapid economic growth. But its government has also led the way in opening up the power sector to private participation, in such a way as to encourage the development and dissemination of renewable energy technologies. The progress to date is reviewed. The contribution which biomass could make is recognised, but with one or two brief exceptions, this has been regarded as beyond the scope of the paper. Private participation is becoming increasingly important in the power sector, particularly with all the renewable energies, and in the final section a possible role for multinational oil companies in the potentially huge “renewables” market, which has been identified over the next two decades, is discussed. It is argued that the problems facing the oil industry now, and in the future, will make life difficult for them, and that these problems can be, at least partly, offset by involvement in the renewables market. Being seen to be investing in environmentally benign activities may also help in turning around adverse public opinion.