MDG Energy

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1Reaching the Millennium Development Goals and beyond: access to modern forms of energy as a prerequisite

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2 Reaching the Millennium Development Goals and beyond: access to modern forms of energy as a prerequisite

Reaching the Millennium Development Goals and beyondAccess to modern forms of energy as a prerequisite

GLOBAL NETWORK ON ENERGY FOR SUSTAINABLE DEVELOPMENT

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This publication may be reproduced in whole or inpart and in any form for educational and non-profitpurposes, without special permission from thecopyright holder, provided acknowledgment of thesources is made. GNESD (Global Network onEnergy for Sustainable Development) would appreci-ate receiving a copy of any publication that uses this

publication as a source. No use of this publicationmay be made for resale or for any other commercialpurpose whatsoever without prior permission inwriting from GNESD. The opinions and recommen-dations set forth in this publication are the responsi-bility of the authors and should not be considered asreflecting the views or carrying the endorsement ofUNEP (United Nations Environment Programme).

ISBN 978-87-550-3600-0

GNESD

GNESD is UNEP-facilitated knowledge network ofcentres of excellence and network partners, re-nowned for their work on energy, development, andenvironment issues. The main objective of GNESD isto work towards reaching the MDGs (Millennium

Development Goals) through thefollowing.

P Strengthening the member centres ability to acquire,assimilate, and apply existing knowledge and expe-riences.

P Working for a better understanding of the links be-tween sustainable energy and other development andenvironment priorities, and technology and policyoptions, leading to better articulation of practical poli-cies that can be adopted so as to promote and high-light the crucial role of energy for sustainable

development.P Working to provide research findings to the govern-

ments to be considered in formulating their policiesand programmes, and the private sector to attractinvestments in the energy sector, so that these fa-vour energy sector growth for sustainable develop-ment, especially for the poor in the developingcountries.

P Promoting a communication infrastructure that pro-vides a means for members to share experiencesand draw on each others strengths, expertise, andskills.

P Strengthening SouthSouth and NorthSouth ex-change of knowledge and collaboration on energyissues of common interest.

GNESD is one of several Type II partnerships in thefield of Energy that were launched at the WSSD (WorldSummit on Sustainable Development) in Johannes-burg, September 2002.

Acknowledgements are due to the co-chairs of GNESDfor their valuable input, to the member centres, andthe secretariat of GNESD for their contributions towardspublication of this paper. We thank TERI for doing thefinal editing and printing.

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Contents

Summary .... 4

Introduction .... 7

Energy and its linkages to the MDGs .... 14

Case studies .... 18

The energy vision for the MDGs .... 31

Strategies and options .... 35

Conclusions and recommendations .... 37

References .... 39

Bibliography .... 41

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Summary

Energy services have a significant role in facilitatingboth social and economic development. Energy under-pins economic activity, enhances productivity, and pro-vides access to markets for trading purposes. It enablesfulfilment of the basic human needs of nutrition, warmth,and lighting, in addition to education and health. There-fore, ensuring energy access to all remains importantin order to achieve the MDGs (Millennium Develop-ment Goals).

At present, about 1.6 billion people worldwide lack ac-cess to electricity and about 2.5 billion rely on tradi-

tional fuels as their primary source of energy. This lacktrickles over to negatively impact their access to basicneeds such as those enshrined in the MDGs. There-fore, unless concerted actions are taken to ensure pro-vision of energy services, achieving the MDGs wouldremain a distant aspiration. The objective of this paperis to be seen against this background, linking energywith the MDGs. This publication builds on the earlieranalytical work of GNESD (Global Network on Energyfor Sustainable Development) network on the issue ofenergy access, and documents the importance of en-ergy service provision for both achieving and sustain-

ing the MDGs. Table 1 provides an account of relevantMDGs for each case study. It also summarizes key les-sons learnt from case studies that prove energy ac-cess leads to a gamut of social and economic benefitsfor the beneficiaries.

The levels of energy consumption are not evenly dis-tributed among regions and countries of the world dueto many external and internal factors. Generally, it isseen that the countries with higher level of industriali-zation and improved health coupled with other socialfactors tend to use far more energy than those with

relatively low industrial activity and having poor socialdevelopment indicators. Further, existing disparities canalso be linked to the different shares in the worldswealth as wealthier regions tend to have better accessto energy sources than poorer nations because of theirability to pay. Two issues are of particular relevancewhen considering energy services for the poorhighdependency on inefficient traditional fuels, and limitedaccess to electricity. Overcoming these challenges will

involve reduction of extreme poverty through injectionof funds through either aid and loans/grants, or tradethrough market access for creation of new wealth.Besides provision of modern energy input, better fi-nancing options are required to build the kind of en-ergy infrastructure that will enable countries to reducethe number of people surviving on less than a dollar aday by 2015.

To pursue these goals, several developing countrieshave undertaken rural electrification programmes forenhancing access to electricity. While many have not

been very successful, catering to only a fraction of thepopulation, the Rural Electrification Programmes,for example in Bangladesh and Brazil, have clearlymade an impact, improving the lives of the people. InBangladesh, the Rural Electrification Programme waslaunched in 1977. Since then, about 70 rural electrifi-cation cooperatives have been established, providingenergy services to more than 40 million people. Over38 000 villages have been provided with electricityunder the programme. The initiative has promoted non-farming activities, such as cottage, small, medium, andagro-based industries, in the rural areas, generating

employment and improving overall economic growth.The Bangladesh Rural Electrification Programme casestudy, presented in this paper, is a clear pointer to thefact that provision of clean and modern energy is one

Table 1 Millennium Development Goals relevant for casestudies

Case study Millennium Development Goals

1 2 3 4 5 6 7 8

Bangladesh rural

electrification x x x x xBrazil rural electrification x x x x x x x xKenya pump

for irrigation x xSenegal National

Liquefied PetroleumGas Programme x x x x x

South Africa NationalElectrificationProgramme x x x x x x

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of the most effective ways to achieve poverty allevia-tion. It can be considered a model to be followed byhighly centralized national electricity utilities.

Another success story where electricity promotion haschanged the lives of the people is the PROVEGAMproject in Brazil. The project aims to use natural veg-etable oils in adapted engines for electricity productionand use. In an isolated community of Vila Soledade,new diesel generators, adapted with a conversion kitto operate with in natura palm oil, were introduced in2003. The advantages of replacing the old generator

with the innovative set were many. It brought benefitssuch as the reduction of technical failures of the sys-tem and the increased energy supply, since there werefew supply interruptions. Besides, locally producedbiofuel could be used in the generator. Other similarinterventions have also borne positive results; for in-stance, the pilot project involving investments byAgropalma, an oil palm producer, in production of bio-diesel through partnerships with small farmers. In onesuch programme in the city of Moju, the Par StateLand Institute provided land to farming families for thecultivation of oil palms. Agropalma supplied the sap-

lings, the initial infrastructure, and taught techniquesfor cultivation of the palm, besides agreeing to purchasethe entire crop at international market prices. Theinitiative has raised the incomes of the familiesand demonstrates the importance of partnershipsbetween government, industry, and non-governmentalorganizations.

The South African NEP (National Electrification Pro-gramme) gives yet another example of how access toclean energy can translate to socio-economic benefits.Launched in two phases by the utility ESKOM, begin-

ning 1994, the programme left a remarkable impact onrural areas, where access to electricity increased fromabout 20% to 50%. The remarkable aspect of NEP wasthe absence of external funding. ESKOM funded theprogramme from its own resources. At several stagesof the project, the provision of electricity was found tobe economically unviable. However, social concernsoutweighed economic concerns, pushing the case forprovision of electricity to dispersed communities.

Pre-payment meters were widely installed under theelectrification programme, which gave households bet-ter control over electricity expenditure and avoided theaccumulation of electricity debts. This also made theutility avoid problems associated with billing and non-payment.

Though NEP provided electricity to many poor house-holds, it did not ensure that the poor households couldafford to buy it. Thus, the Government of South Africaintroduced a policy in 2003 on electricity subsidy toreduce the worst effects of poverty on communities.

The policy provides a poverty tariff targeted at the poor.Studies show that this was a very successful policy asit not only improved quality of life of households butalso increased income-generating activities. The projectillustrated that financial gains should not be the onlyparameter in deciding on public sector projects; otherconcerns such as social gains and long-term benefitsalso remain equally important.

The MDGs of improving maternal health and reducingchild mortality can be attained by providing cleaner andmore affordable cooking fuels, as women and children

suffer the most due to inferior fuel usage. According toWHO (World Health Organization), a large proportionof children die due to exposure to polluted air from theuse of traditional fuels. To reduce the consumption ofdomestic biomass energy by 50% in order to addressproblems of rural poverty in the country, the Govern-ment of Senegal initiated a LPG (liquefied petroleumgas) Programme, commonly known as thebutanization programme in 1974. Since then, the con-sumption of LPG has been increasing, replacing fire-wood consumption. Through various supplementarymeasures such as ensuring adequate and continuous

supply of LPG; technology development and adapta-tion; adequate regulation of prices; and targeted in-centives and awareness programmes, the governmenthas successfully enhanced LPG consumption levelsin the country.

Although the butanization programme has been suc-cessful, it imposes a heavy subsidy burden on the gov-ernment. Another approach, therefore, could be to

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develop and adopt the use of biomass and biomass-derived fuels, improved stoves, and practices that re-duce exposure to harmful emissions and increase theefficiency of conversion of biomass to biomass-derivedfuel. This is basically keeping in mind the sensitivity ofthe subsidies in Senegal, where a slight price increasedue to withdrawal of subsidy on LPG can drive people

down the energy ladder.

While electrification and LPG programmes involve con-siderable expense, cost-effective techniques to boostthe use of modern energy have also borne fruit in manyparts of the developing world. The case study includedin this paper the ApproTEC (Appropriate Technolo-gies for Enterprise Creation) treadle pump in Kenya is an example in this regard. Treadle pumps for irriga-tion were introduced by the organization ApproTEC inKenya in 1991. Today, over 24 000 treadle pumps arein use, benefiting over 120 000 people. The experi-

ence in Kenya shows that low-cost energy solutionsfor farming have several positive impacts, notably onfarming practices and socio-economic and cultural as-pects. The success of these pumps has led to the rep-lication of the programme in other parts of Africa, suchas Tanzania and Uganda.

While the case studies above are examples to supportthe hypothesis that access to modern forms of energyis a prerequisite for reaching the MDGs, there remainseveral constraints for achieving the desired goals. Themost important being the lack of adequate financial

resources. Energy investments, mainly from multilat-eral sources, have recently witnessed a decline. Mostprivate investments are channellized in infrastructuresectors, where energy is not a favoured choice. In sucha context, various innovative financing options need tobe explored. These include measures such as debtrelief; better usage of private investments, aid andgrants; micro financing schemes, and FDI (foreign di-rect investment). Besides these, new sources of capi-tal through carbon funds can provide opportunities forthe energy sector of developing countries.

Some other strategies that also need to be followed toensure access to energy to all include macro-economicstability for growth, provision of targeted energy serv-ices for the poor in urban and peri-urban areas, andenergizing rural areas. Further, for provision of mod-ern energy services for rural areas, the focus should

be on scaling up existing interventions, provision of low-cost but high-impact interventions, and exploring vari-ous available cost-effective technological options.

In conclusion, the paper demonstrates that thoughenergy access is not an MDG in itself, adequateprovision of energy is crucial for achieving the MDGs;

and the case studies clearly bring out this linkage. Fur-ther, as the macro-economic environment improves,so does the demand for modern energy services, andconsequently the improvement of the overall quality oflife. Thus, assisting countries to not only achieve theMDGs, but also to increase their capacity to sustainthe MDGs remains important. In this context, the roleof government in enabling both public and private en-ergy development (political commitment, mobilizing fi-nancial resources, and selection of projects) remainscrucial. The paper recommends the need to put in placean appropriate energy policy to achieve and sustain

the MDGs. Specific energy options should be exploredand accordingly promoted for rural and urban poor.Special attention must be given to the productive useof energy to increase and improve livelihoods throughincome-generating activities. Innovative financial andtechnological interventions should be explored, alongwith measures to enhance awareness amongst thepeople for promoting energy efficiency and conservation.

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Introduction

Background

Since access to modern energy lies at the heart ofhuman development, it is evident that in order to meetthe MDGs (Millennium Development Goals), substan-tial improvements are needed in the type of energyservices that the poor have access to. Unless concertedactions, with more emphasis on providing the poor withbasic modern energy services, are taken, 1.6 billionpeople will still remain without access to electricity and2.5 billion people will still be relying on traditionalbiomass for cooking (IEA 2005a).

The importance of the access issue was first broughtforth by many individual publications in the UNDP(United Nations Development Programme) book toRio+5Energy after Rio prospects and challenges.To further frame the energy agenda, Rio+5 created CSD(Commission on Sustainable Development)-9. Subse-quently, WEA (World Energy Assessment) report wasprepared by the UNDP, UNDESA (United Nations De-partment of Economic and Social Affairs), and the WorldEnergy Council to inform CSD-9, and had an exten-sive chapter on these issues. CSD-9 said, inter alia

To implement the goal accepted by the international com-

munity to halve the proportion of people living on less than

$1 per day by 2015, access to affordable energy services

is a prerequisite (CSD-9 outcome, para. 22).

The CSD met in April and May of 2001. The officialterm agreed upon to juxtapose energy and human de-velopment was energy for sustainable development.Next, in preparation for the WSSD (World Summit onSustainable Development) in Johannesburg, Septem-ber 2002, the Secretary-General issued the WEHAB

(water, energy, health, agriculture, biodiversity) docu-ments in June/July 2002, with the E referring to en-ergy, and the discussion drawing heavily on the WEA.The Johannesburg PoI (plan of implementation) con-tains the same message as CSD-9. The linkages be-

1 Commission for Sustainable Development annual meeting. 20012 WSSD (World Summit on Sustainable Development). 2002.

Johannesburg, South Africa

tween energy and the MDGs are thus well establishedand agreed upon by the international community.

Momentum on the energyMDG agenda was built bythe Millennium Project of the UN (United Nations),which in 2004 evolved a vision comprising a set of en-ergy services that could provide a way forward towardsmeeting the MDGs by 2015. The overriding conclusionwas that energy services must be explicitly addressedwithin the planning for poverty reduction and for meet-ing the broader MDGs. Among the projects recommen-dations were the ones that called for modern liquid and

gaseous fuels for cooking for 100% of the worlds ur-ban population and 50% of the worlds rural popula-tion, improved biomass stoves for 50% of the worldsrural population, and electricity and clean cooking fu-els for 100% of the worlds health facilities and schools.

The UN Millennium Project also noted that a prerequi-site for meeting the MDGs is to reduce the share of theglobal population that does not have access to basiclevels of electricity, as well as the population reliant ontraditional solid fuels for cooking, to no more than about1 billion people by 2015. This MDG Energy Vision fore-

sees improved access to modern energy for about 1.5billion people.

The underlying conviction that runs through the inter-national communitys deliberations on the MDGs andenergy is that although improving access to modernforms of energy is not an explicit part of the MDG goals,access to energy is a prerequisite to reach all or any ofthem (Kjorven 2006; WEA 2004; CSD-9 2001;1 WSSD20022).

The objective in this paper is to be seen against

this background, and it recognizes the main issue asbeing the road map to achieve a successful linkagebetween energy and the MDGs. The contribution ofGNESD (Global Network on Energy for SustainableDevelopment) in the Energy Access Theme has

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Table 1 Percentage share of population that

depends on traditional biomass

Country/region Percentage share ofpopulation

China 56Indonesia 74Rest of East Asia 37India 58Rest of South Asia 41Latin America and the Caribbean 23North Africa and Middle East 0.05Sub-Saharan Africa 89

Source IEA (2005a)

reduction requires significant input of modern energy,which falls within the interest of this paper.

While assessing energys relevance to the povertychallenge, two priority challenges emerge. These are highdependence on, and inefficient use of, traditional fuels,and limited access to electricity.

The stranglehold of traditional fuels

Within the developing regions of the world, the shareof the population that depends on traditional biomass-based fuels varies from 23% in Latin America and theCaribbean to 89% in sub-Saharan Africa (see Table1). Apart from the low quality of life generally associ-ated with the use of these fuels, there are serious en-vironmental problem of indoor air pollution, especiallywhen used in enclosed surroundings with limited ven-tilation (Smith 1998).

Most investments in the energy sectors of developingcountries have targeted the modern energy sector, al-beit relatively modest investments in the dominant tra-ditional energy sources have been made that couldpotentially make a significant difference. Likewise, mostinterventions on better use of traditional fuels are oftenthe scaled-down versions of conventional industrialplantation forestry, with fuelwood production the soleobjective. Participatory forest management offers afresh approach, whereby rural people are given regu-lated responsibility for managing existing forests and

woodlands. It is better attuned to traditional practicesand appears more successful in achieving sustainablemanagement. It should be noted that this solution toconcerns over deforestation and fuelwood crises hasbeen brought about not by massive government invest-ments, but by an attitudinal revolution, followed by the

3 A commonly used definition of sustainable development is the oneproposed by Brundtland Commission Meeting the needs of thepresent generation without compromising the needs of the futuregenerations.

provided important insight on how to move ahead. Inthis paper, the idea is to build on this and add a broaderpicture with the help of five case studies from GNESDmembers and five other case studies that have had adocumented impact on the movement towards theMDGs in terms of what made these cases happen andwhat were the roles of governments, NGOs (non-gov-

ernmental organizations), financiers, research organi-zations, local communities, the ODA (official developmentassistance), and so on.

Energy, sustainable development, andthe poverty challenge

Although several definitions have been put forward forsustainable development, none have been universallyaccepted but the one suggested in this paper is stillconsidered most credible. This definition fully integratessocial and environmental concerns with economic

growth. An important feature of this concept, which isof direct relevance to this paper, is the improvement inthe welfare of people who live in extreme poverty andare most vulnerable to shocks and stresses.3

Energy is intrinsically linked with sustainable develop-ment at the local, national, and regional levels. At thelocal level, modern energy is required to improve theoverall quality of life (especially, that of the poor) byenhancing productive activities and enterprise, whichwill result in increased incomes. At national and regionallevels, adequate modern energy leads to stable eco-nomic development, promotion of trade, and enhance-ment of participation in global markets, besides theadded benefits of better social and economic linkages.

Looking at the centrality of energy to sustainable de-velopment from another perspective, it is known thatthe reduction of extreme poverty must include injec-tion of funds either through aids, loans/grants, or tradethrough market access for creation of new wealth. Withthe current trend of dwindling aid and the debt situa-tion of poor countries, trade and wealth creation throughmarket access appears to be the most plausible solu-tion. This will need significant modern energy inputbecause trading higher value products for higher gainsrequires high-quality energy input. Therefore, poverty

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creation of new markets, patterns of ownership, andinstitutional environments.

On the demand side of the traditional fuel equation,interventions have focused on improved cookingstoves. With nearly half the worlds population cookingwith traditional biomass, greater fuel efficiency is the

need of the hour. However, acceptance by ruralpopulations has not been as high as hoped; and evenwhere improved stoves were adopted, fuel savings areless than anticipated. Too often, designs do not meetusers needs closely enough, and are not robust enoughfor real-life conditions. They do, however, assist in otherimportant ways, especially in reducing indoor pollution,thereby contributing to the MDG 5improved mater-nal health.

A glaring absence of pro-poor electricityprogrammes

Past results of electricity interventions have often beendisappointing. Repeated investments in poorly oper-ated systems, perennial shortage of cash because ofbelow-cost tariffs, and chronic inefficiencies and sys-tem losses often failed to increase access to electricityor productivity in many developing countries. The poortypically bore the brunt of these failures, suffering fromunreliable access when connected to energy sources,while many are still waiting for access to gas or elec-tricity networks, or to improved distribution systems forkerosene, LPG (liquefied petroleum gas), and other

modern fuels. It did not help that improving the welfareof the poor was rarely an explicit policy objective, withenergy policies focusing on higher productivity andgrowth through increased access to modern energysources by cities, towns, and businesses. The benefitwas expected to have a trickle-down effect on the poorand those in rural areas.

In the context of rural access to electricity, most devel-oping countries have developed and implementedsome type of rural electrification programme. Althoughsometimes these promote decentralized electrification

for example through renewable energy sources more often they focus on grid extension. Yet, despitethe doubling of the number of rural households withaccess to electricity in the 197090 period, rural elec-trification barely kept pace with the increase in popula-tion. Moreover, experience from rural electrificationprogrammes shows that electrification may act as acatalyst but does not guarantee economic development

of the poorest. Most of their benefits tend to accrue tothe wealthier groups in the electrified areas, which isnot compatible with the MDG of poverty alleviation.

On the demand side, switching to more efficient, mod-ern energy systems typically entails an initial capitalcost that is beyond the means of rural households, al-

though their running costs may be less than the en-ergy sources already in use. To overcome this, ruralmicro-credit schemes have attempted to remove theinitial capital hurdle, typically by utilizing the savingsresulting from the lower operating cost of the new sys-tems. They have the added advantage that the poorbecome clients, rather than recipients of governmentor donor funding. Under this relatively new approach,poor rural households represent a potentially signifi-cant commercial market.

The continuing use of traditional fuel and lack of elec-

tricity access among the poor point to the fact that de-veloping countries, faced with other challenges and theneed to serve burgeoning urban populations, have notdeveloped strategies for supplying energy to the poor-est people, most of them in rural areas, and with in-creasing urbanization in slums and peri-urban areas.In addition, billions of dollars worth of energy subsi-dies are in most cases not targeted at the poor, neitherdo they benefit them.

Seeking a better approach

As the scale of energy poverty is made clear, very lim-ited progress has resulted from all the well-intendedefforts made to date. A better way forward to extendaffordable modern energy to the poor must be found.In the re-evaluation taking place, five imperatives havebeen emphasized.

1 There is a need to address energy considerations inbroader development strategies, such as in agricul-ture, education, infrastructure, and social cohesion.In order to do so effectively, there is a need to quan-tify the linkages between energy and development,

and move beyond the intuitive understanding of howenergy and development are related. This will en-able policy-makers to better understand the costs andbenefits of scaling up energy services, and the im-portance of energy services versus growth in otherinput as a means of stimulating development.

2 Rural and increasingly growing peri-urban energydevelopment must be accorded higher priority by

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Table 2 Common energy myths and clarifications on them

Reality

The poor may not use theterm energy but they oftenspend far more time andeffort obtaining energy

services compared to thericher section of thepopulation. They spend asubstantial proportion oftheir household income onenergy for basic survivalactivities, that is cooking,keeping warm, and so on.People need to access arange of energy sourcesto satisfy their energyneeds, that is cooking,heating, transport, andcommunication.

Many poor people paymore per unit of energythan the better off, partlydue to inefficient conver-sion and lack of integratedplanning.Poor people in urban andperi-urban areas also sufferfrom lack of access toenergy services, and theirnumbers are likely toincrease. It is predicted thatalmost 61% of the worldspopulation will be living in

urban and peri-urban areasand services are notexpected to grow commen-surately.Reaching the poor withbasic modern energyservices as envisioned inthe MDG Energy Visionwould increase globalcommercial energyconsumption by about900 TWh (terrawatt-hour)per year, which is less than1% of the global energy

demand.

Myth

The poor do not consideraccess to energy a priority.

Access to electricity, grid ordecentralized, will solve all theenergy service needs of thepoor.

Poor people cannot pay fortheir energy services.

Only rural areas suffer fromlack of access to energy.

Commercial energy required tosatisfy the needs of the poor issignificant with respect to totalglobal energy consumption.

South Asia remains unchanged, the population with-out electricity will increase in sub-Saharan countriesand will fall only marginally in South Asia by 2030(Figure 1) (IEA 2005b).

MDG Millennium Development Goal

policy-makers. Hoping that improvement will trickledown from more advanced sectors of the economyor that rural and peri-urban energy poverty can besolved by a technical fix is untenable.

3 Rural energy development should have clear-cut pro-poor policies and must be decentralized to place ruralpeople at the heart of all long-term energy planning

and implementation. Bottom-up, people-led develop-ment shows the best promise of achieving sustainabledevelopment.

4 Top-down aggressive policies for the poorest, like ringfencing of investment funds, targeted tariffs, and evenfree basic services must be put in place and imple-mented efficiently and transparently.

5 Greater appreciation and awareness of the role en-ergy can play in other development activities, espe-cially among non-energy specialists, are also vital tointegrate energy into development strategies. Clari-fying misconceptions about energy (Table 2) in or-

der to encourage the development community to takea more pragmatic approach towards issues relatedto energy supply, energy access, and energy use isthe first step towards greater appreciation of the link-ages between energy and development.

These imperatives aside, there is a need to improveaccess to appropriate energy services through bettermanagement and regulation of the energy sector, in-creasing the efficiency of energy provision and use,increasing the choice of energy services, providingaccess to finance, encouraging partnerships, attract-

ing private investments under strict regulatory control,and designing subsidies that work.

Equally important is the need for more financial inputto build the kind of energy infrastructure that will en-able countries to reduce the number of people livingon less than $1 a day by 2015, one of the importantMDGs. The International Energy Agency (WEA 2004)estimates that the projected demand will entail invest-ment in the energy sector of some $16 trillion from 2003to 2030, or $568 billion per year. The electricity sectorwill absorb the majority of this investment. Developingcountries, where production and demand are set toincrease the most will require about $8 trillion invest-ment over the next 25 years to meet the energy needs.

If issues on financing, policy reforms, capacity devel-opment, and good governance are not addressed, andthe current pathway of development in sub-Sahara and

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Figure 1 Population with no electricity (million)

Source IEA (2005b)

Energy interventions to meet the MDGs

While modern energy services are an essential ele-ment enabling a country to meet the MDGs, it is notpossible to establish direct quantitative relationshipsbetween energy access and progress towards theMDGs. In order to estimate the resources required forimproving access to energy, a definition of minimumadequate levels of MDG compatible services needsto be established, with an aim to specifically close thegaps in achieving the MDGs. Identification of thoseservices whose widespread use will facilitate the reali-zation of the MDGs needs to be carried out, and a port-folio of possible energy interventions to improve access

needs to be built.

At the country level, governments should considergrounding their intervention plans on a foundation ofaggressive policy intervention to support increases inaccess to both electricity and clean fuels to the poorersections of society, as well as for the agriculture andSME (small and medium enterprise) sectors. Govern-ments also need to undertake a participatory planningprocess involving the local communities, investigatepossible low-cost solutions, implement training andcapacity-building programmes, and promote demand-

side efficiency interventions (to reduce wastage) athousehold, commercial, and industrial levels.

As regards the cost of a robust MDGEnergy Pro-gramme, a study Millennium Development GoalsNeeds Assessment, 2004 was conducted by theUNDP in Bangladesh, Cambodia, Uganda, Ghana, andTanzania. The study has estimated that the overall per

Table 3 Percentage share in investment in the MDGEnergy

Programme cost

Type of cost Percentage share Componentsof the total cost

Fuel 40%53% All fuels used for light-ing and cooking(except electricity):wood, coal, charcoal,kerosene, liquefiedpetroleum gas

Electricalconnections 20%33% Central grid connec

tions, mini grid, solarhome lightingsystems

End-usedevices 12%19% Light bulbs, kerosene

stoves, kerosenelamps, and gasstoves

Power plants 3%22% Additional generationcapacity for theenergy programme

Source UNDP (2004a)

capita MDGEnergy Programme cost, in terms of bothelectricity and fuel, ranges from $13 to $18 per capitaper year between 2005 and 2015 (calculated by divid-ing the total MDGEnergy Programme cost by the to-tal population of the countries covered in the study,and not on the portion of the population actually reachedby the programme). This reflects that the investment

in the energy sector to achieve the MDGs is astronomi-cally high and comparable with other sectors like theeducation and the road sector investment estimates.This was estimated from four sets of costs: end-usedevices, fuel consumption, electrical connections, andpower plants. Table 3 shows the percentage share ofinvestment required for the four components to coverthe MDGEnergy Programme cost for each countrystudied.

The estimates carried out in each of the countries stud-ied reveal that these per capita needs per year be-

tween 2005 and 2015 are in the same range as theeducation sector ($1317 per capita per year), and evenlesser than required for the road sector ($1019 percapita per year). The study also indicates that house-holds will be able to pay 30%50% of the programmecosts, as many modern interventions lower the recur-rent fuel costs a household needs to pay. This is espe-cially true in urban areas where biomass fuel sources

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major infrastructure building. The latter requires largequantities of fuel and electricity, while achieving MDGsin the rural and peri-urban areas is much more a mat-ter of access than quantity of energy. Hence, meetingthe needs of the poor may not necessarily involve de-velopment of major transmission lines, central stationgeneration, and major gas developments. However, an

improvement in the overall economic growth is alsovital for sustaining the MDGs.

To conclude, access to modern forms of energy, andits relation to environmental sustainability and povertyreduction, is the focus of the paper. Environmentaldamages relating to energy activities are discussed asmost of these impacts are yet to be adequately ad-dressed by the countries that are struggling to achievethe MDGs. Further, achieving environmentalsustainability is a specific MDG. This paper will not di-rectly address energy for economic growth as well as

security and trade, as these issues are outside itsscope. Case studies partly from the GNESD centres,supplemented by case studies from other publishedsources, have been used to analyse and articulate strat-egies and suggestions for countries trying to achieveas well as sustain the MDGs.

Study approach

The study presented here is based on six hypotheses,summarized as follows.

1 Access to modern forms of energy is a prerequisitefor achieving the MDGs and providing the platformfor future growth.

2 Design and implementation of appropriate policiesand measures to increase access to modern formsof energy are crucial.

3 Continuing along the current path of energy system,development is not compatible with sustainable de-velopment objectives.

4 It is crucial to find ways to accelerate progress fornew and appropriate technologies along the energyinnovation chain, from research and development todemonstration, deployment, and diffusion.

5 Developing robust pro-poor energy policies in manydeveloping countries is essential.

6 The lack of community or stakeholder participationin energy sector planning must be addressed forfaster results.

Looking beyond the MDGs

Many energy projects have a long implementation time,and sound energy policies also have long gestation peri-ods before their benefits are apparent. It is, therefore, cru-cial that interventions in the energy sector, particularly thosedirected towards providing clean energy services for thepoor, should look beyond the MDGs (Millennium Develop-ment Goals). Energy development planning should be thecrucial element in sustaining the achievements of the MDGsbeyond 2015, and must also evolve into a major multiplierin the continued development efforts beyond the MDGs byadopting longer-term pro-poor strategies.

are often more expensive than gas and kerosene al-ternatives.

Need for this publication

Since the adoption of the MDGs, several attempts havebeen made by the UN bodies and other stakeholdersto develop modalities for countries to achieve them,such as the UN Millennium Project (UN 2003). A fewstudies have specifically looked at the role of energy inachieving these goals, even though energy is not aspecific MDG (DFID 2002; Modi 2004). Most of thesestudies have been geared towards looking at the en-ergy needs of the poor and the role energy plays inachieving the MDGs. Others have focused on treatingenergy needs as an emergency situation in its own right.However, while achieving the MDGs is extremely im-

portant, it is perhaps even more crucial that the ac-tions and policies used to achieve the MDGs alsoprovide a sound basis for sustaining them in the fu-ture. This paper, therefore, looks at energy service pro-vision to ensure both meeting and sustaining the MDGs.

On the issue of sustaining the MDGs, experience hasadequately demonstrated that if necessary policies andinfrastructure are not correctly designed in poor coun-tries, these very often revert to their poor state of affairsin the MDG interventions, if subjected to economic, po-litical, or ecological stresses. This is also true for the en-

ergy sector. Countries reverting to increased use offirewood as a result of economic stress, after having im-plemented successful fuel substitution programmes, isa clear example of this phenomenon (Davidson 1992).

The ensuing discussion will make a distinction betweenenergy requirements for achieving the MDGs and forindustrialization, which includes energy provision for

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The overall objectives of the paper are toP demonstrate that access to modern forms of energy

will contribute to achieving and sustaining the MDGs;P identify energy systems for sustainable development

that will prevent countries from undergoing energyreversal trends, that is going down the energy lad-der; and

P

identify and put in place policies that will generateclean energy access and energy for sustainable de-velopment through productive use of lessons learntfrom the case studies.

These objectives are addressed within a framework ofsome basic premises, as outlined below.

P Only proven, robust technologies and measures canbe used in reaching out to the poorest of the poor.

P A diversity of technologies and service deliverymechanisms will be promoted.

P Energy end-use efficiency will always be promotedfirst.

P The need to energize rural areas for both householdand productive uses will be treated as vital.

P The need to energize the growing poor population inthe urban and the peri-urban centres will becomeincreasingly important.

P All energy sources will be considered, with an em-phasis on local and renewable energy.

P A comprehensive approach on gender issues, espe-cially in relation to policies on use of traditionalbiomass for cooking, will be encouraged.

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high-quality energy. Further, the method of farming inpoor countries is largely dependent on biomassburning for bush clearing, rain-fed systems for irriga-tion, and very little fertilizer input. This has resulted inpoor yields compared to the systems based on mecha-nized agriculture. Changing this pattern will requiremajor energy input for bush clearing, irrigation, and soilenrichment. Similarly, harvesting in poor countries islargely a manual process that is not only inefficient forlarge farms but also uncompetitive. Introduction ofmechanized harvesting methods to improve efficiencyand to be competitive will require energy input. Access

to modern energy will also bolster food storage andtransportation, other sources of food losses in poorcountries.

Energy and MDG 2: Achieve universalprimary education

Modern education, which enables students to be com-petitive, needs major teaching aids to compliment theirnormal pedagogical skills. Operating these aids requirehigh-quality electricity. Students who do not get exposedto these aids and skills are disadvantaged in the mod-

ern world. Further, these students will not have accessto modern knowledge and techniques such as thoserelating to computing, which are strongly tied to theprovision of electricity.

In poor homes that have no access to electricity, chil-dren spend a significant portion of their time doinghousehold chores. Further, they do not have light tostudy at night. This situation affects their capacity toundertake assignments or review their lessons. A fewhours of electricity to students can result in major im-provements in their performance (UN 2005).

Energy and MDG 3: Promote genderequality and empower women

The collection of wood for cooking and heating is a time-consuming affair that continues to worsen as resourcesget scarcer. With women assigned this task, much of their

Energy and its linkages to the MDGs

A framework of 8 goals, 18 targets, and 48 indicatorswas adopted by an international consensus to be usedas benchmarks to monitor the progress made by coun-tries towards achieving the MDGs (Millennium Devel-opment Goals). Even though energy has not beenincluded as one of the MDGs, it is universally acceptedthat energy development will be a key to achieving thetargets of most or all of the MDGs.

Energy and MDG 1: Eradicate extremepoverty and hunger

Central to overcoming poverty is the need to createopportunity for the poor to generate income. The mostplausible way of ensuring this is to involve them in pro-ductive activities at the household, national, and re-gional levels. Invariably, employment generationinvolves the supply of modern energy, as productiveactivities linked with low quality or traditional energyhardly result in better standards of living. Those sellingfirewood, especially in rural areas, generates incomeonly to fulfil basic survival needs, as most of the gainsgo to the transporters or others in the middle of thedistribution chain. While on the one hand, those in-

volved in employment generated through LPG (lique-fied petroleum gas) or electricity seem to raise theirlifestyles by increased access to education and health(Davidson 2004; Prassad 2002). On the other hand,the recent experience of the Multi-functional PlatformProject in Mali (detailed in this paper) shows clearlythat the introduction of mechanical energy creates thepotential of substantially changing rural livelihoods, es-pecially for women (UNDP 2004b).

The role of energy is also crucial to the goal of eradi-cating hunger. It remains a paradox that most coun-

tries suffering from hunger are to a great extent alsosuffering from major food losses. For instance, a largenumber of countries in sub-Saharan Africa, which spendup to 30% of their foreign exchange earnings in im-porting food, suffer from serious on- and off-farm losses(FAO 2000). Reducing these losses, occurring alongthe entire food chain, will require substantial input of

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productive time is wasted travelling long distances to col-lect fuel. Within the house too, women spend far too longto cook due to the lack of suitable household appliances.Providing energy near households and modern cookingstoves can save time for women and reduce their drudg-ery. Time thus saved by using improved fuels and appli-ances can provide opportunities for women to be involvedin other productive activities. Another aspect in which im-proved energy can help women is by cutting down thetime taken to take children to and from schools, if moderntransport is made accessible.

Energy and MDGs 4, 5, and 6: Reducechild mortality, improve maternal health,combat HIV/AIDS, malaria, and otherdiseases

Poor sanitation facilities and other factors are directlylinked with high child mortality. Hence, improving thesefacilities, which require heavy energy input, will reducechild mortality significantly. Another aspect that ac-counts for poor health indicators is the presence of weakhealth delivery services. Improving health delivery sys-tems will require good transport networks, and this re-quires energy for transport systems and for developinggood roads.

Poor homes use large quantities of traditional fuels suchas firewood, charcoal, or animal dung, and the burningof these fuels can result in significant adverse emis-sions (particulates, carbon monoxide, nitrogen dioxide,benzene, and so on). These emissions can lead to sig-nificant respiratory problems among children andwomen (Smith 1998). This problem is more acute inareas where cooking is done inside poorly ventilatedkitchens. Changing the sources of energy used forcooking to those with far less adverse emissions suchas LPG and kerosene can greatly assist in overcom-ing these problems.

Reducing or eradicating preventable diseases will re-quire very good clinics that have refrigeration facilitiesfor preservation of vaccines and other useful drugs. To

operate such systems, reliable and adequate electric-ity is a must.

Energy and MDG 7: Ensureenvironmental sustainability

The production and use of energy is strongly linked toenvironmental degradation because the level and typeof emissions from energy are highly dependent on thetype of energy source. Therefore, ensuring environ-mental sustainability at the national, regional, and glo-bal levels will be directly linked with the type of energy

produced and used. At the national level, using fuelswith reduced emissions will provide an improved na-tional environment, which will also result in other ben-efits such as good health. Some of the harmfulemissions from conventional energy use can be trans-boundary and this can lead to regional problems. Sinceit is a very general statement there is no need to referto UNEP (United Nations Environment Programmes).Globally, the emission of greenhouse gases, which isleading to climate instability, is largely caused by theenergy sector. Using cleaner fuels will help in reducingthe threat of climate instability (IPCC 2001).

Energy and MDG 8: Develop a globalpartnership for development

Many poor countries are small and fragmented. Thesemay have some energy resources but lack adequatemanpower, technical expertise, or financial resourcesto develop them. By using cooperative mechanisms,such resources can be developed so as to provideoptimal benefits to the citizens of such countries. Inaddition, suitable trade mechanisms can be used tolower energy costs and improve access to it.

Table 1 provides a concise understanding of the role ofenergy in meeting the MDGs along with the policy in-terventions required to integrate energy into the MDGs.

Although access to modern energy is a prerequisite tomove people out of poverty, it is not an end in itself.

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1 Eradicate extremepoverty and hunger

2 Achieve universalprimary education

3 Promote genderequality and em-power women

P Proportion of population

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4 Reduce child mortality

5 Improve maternal health

6 Combat HIV/AIDS,malaria, and otherdiseases

7 Ensureenvironmentalstability

8 Develop a global partner-ship for development

P Under-five mortality rateP Infant mortality rateP Share of 1-year-olds immu-

nized against measles

P Maternal mortality ratioP Share of births through

health personnel

P HIV prevalence in womenabove 15

P Contraceptive prevalent rateP Number of orphansP Prevalence of malaria death

ratesP Prevention against measlesP Prevalence and death rates

of TBP Share of TB cases detected

P Change in land areaP Protected land areaP GDP/energy useP CO

2/capita

P Share of people to cleanwater

P Share of people withsanitation

P Share of people withrespiratory diseases

P ODAP Market accessP

Debt sustainability

P Energy is the key componentof a functional health system,contributing, for example, inlighting operating theatres,refrigerating vaccines andother life-saving drugs,sterilizing equipment, andproviding transport to healthclinics

P Besides its centrality to thehealth system, modernenergy can have a greatimpact on maternal mortalityby reducing indoor airpollution

P Modern energy services forcommunication and power forrural clinics and hospitalsenable a quantum leap forhealth services

P Improved energy efficiencyand use of cleaneralternatives achievesustainable use of naturalresources, as well as reducedemissions, which protects thelocal and global environment

P Trade and internationalcooperation are vital to

energy development andsupply

P Increase facilities andtransportation for immunizationamong 1-year-olds

P Provision of adequate clinicswith access to modern energy

P Improved medical facilities formaternal care using modernsystems

P Provision of fully equippedclinics and hospitals

P Adequate training andhousing

P Reduction of excessivehousehold work load

P Effective drug manufactureand distribution

P Increased facilities forsterilization, refrigeration, andstorage facilities for vaccines

P Improved reuse facilitiesP Improved blood donation

systemsP Improved distribution systemsP Improved communication

system using ICTs

P Integrate energy in PRSP anddevelopment plans

P Use low-carbon-emitting fuelsand renewable energyresources

P Use more energy-efficientsystems

P Improved transport planning

P Promotion of fair energy trade,including renewable fuels

P

Use of gains from debt reliefin the energy sector

MDG Indicator The role of energy Energy needs and policy interventions for meeting

and sustaining the MDGs

GDP gross domestic product; CO2 carbon dioxide; ODA official development assistance; ICT information and communicationtechnology; PRSP poverty reduction strategy paper; MDG Millennium Development Goals; TB tuberculosis

Developed by GNESD (Global Network on Energy for Sustainable Development)

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nesses with electricity can generate 11 times more jobsthan those without electricity. The economic impact ofgreater rural access to electricity can be gauged byrising productivity in non-farming economic activity. Inan electrified village, productivity in industries has beencalculated at Taka 131 per hour in contrast to Taka 46per hour for non-electrified villages (Barakat 2003).

Figure 2 shows a comparison of productivitybetween electrified and non-electrified industries.Productivity has been calculated by dividing the total

Figure 1 Types of industries (%) set up under Rural Electrification

Programme

Source Barakat (2003)

Case studies

Bangladesh: switching on progressSocio-economic impacts of effective rural electrification

The programme

Seventy-six per cent of the population of Bangladeshresides in rural areas, which also houses more thanthree-quarters of the 65 million people living in abso-lute poverty.1 Rapid electrification in rural areas is, there-fore, accorded a priority by the government thatacknowledges that access to electricity producesgreater traction to a host of development goals.

The Government of Bangladesh launched REP (RuralElectrification Programme) in 1977, which has sincedelivered on many of Bangladeshs development pri-orities. Over $1.4 billion has been invested in the pro-gramme, under which 155 000 kilometres of electricalline have been installed, 6.7 million metered connec-tions have been provided, and access to electricity tomore than 40 million people in over 38 000 villageshas been made possible. Seventy rural electrificationcooperatives, known as Palli Biddyut Samities, havealso been established, employing 16 000 people. The

effectiveness of Bangladeshs REP can be gauged bythe fact that system losses in the REP are about 16%compared to 30%35% for the national utility. Addition-ally, the programmes billing and collection ratio of 96%is far higher than that of other utilities, and over$276 million is billed and collected annually fromconsumers.

One of the mandates of REP was to provide electricityfor non-farming activities such as cottage and agro-based industries. Figure 1 shows the types of indus-tries that have been set up under REP, leading to the

creation of rural jobs and making a significant contri-bution to the economy of the country. More than twomillion rural people are employed in the running of elec-tricity-based irrigation pumps, equipment handling, andbusinesses. It has been demonstrated that rural busi-

MDGs impacted

MDG 1: Eradicate extreme poverty and hunger

MDG 2: Achieve universal primary education

MDG 3: Promote gender equality and empowerment ofwomen

MDG 4: Reduce child mortality

MDG 5: Improve maternal health

1 People in absolute poverty are those living on less than2122 kcal/day (Government of Bangladesh 2001).

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Bangladesh. The size of the investment is not beyondthe capacity of the country. But it requires political will,vision, and inspiration, all of which have been demon-strated in REP itself since its inception.

Impact of the case study on the MDGs


A nationally representative survey conducted in 2002covering 23 Palli Biddyut Samities has found that elec-tricity access in rural areas has had a profound impact

on poverty alleviation by increasing the incomes of thepoor. The annual income attributable to electricity inpoor electrified households was 65% higher than thatin non-electrified households, and the income of thepoor and landless in electrified households was 50%higher than the income of those in non-electrified house-holds. On average, 16.4% of the income of electrifiedhouseholds can be attributed to electricity. The corre-sponding figure for the non-electrified households inelectrified villages was 12%, and for those in non-elec-trified villages, only 3.6%.

The higher incomes in rural electrified households area result of the positive impact of electricity on employ-ment. Electrified industries, on average, generate 3.3times more employment than non-electrified industries.Besides, there has been an enormous spill-over effectof rural electrification on employment in various sup-port services such as retail shops, restaurants, banks,faxemailphotocopy facilities, schools and colleges,and clinics.

A large part of the impact of electricity was realizedthrough its cost-reducing effects on the use of irriga-

tion machines. Average cost of electricity-operatedirrigation pumps is substantially lower than that in thecase of diesel-operated machines. The cost per hec-tare for electricity- and diesel-operated low lift pumpswas found to be Taka 887 and Taka 2946, respectively.Hence, access to electricity for irrigation has had a fa-vourable impact on the poorer farming households.

Figure 2 Comparison of productivity per hour between electrified

and non-electrified industries


value of production by total person hours devoted tothe production of that value. The difference clearly in-dicates that one of the prerequisites for poverty alle-viation is to make clean and modern forms of energyavailable to the poorer sections of the population(Barakat 2003).

REP has also had a profound impact on womens mo-bility, their decision-making freedom in using incomeand savings, utilization of credit, knowledge about gen-der issues, attitudes towards health care, and school-ing for both boys and girls.

The HDI (human development index) value obtainedfor electrified household in Bangladesh is 0.642. HDIfor non-electrified households in electrified villages is0.440, while that for households in the non-electrifiedvillages is 0.436. The significant differences in HDI val-ues between the electrified and non-electrified house-

holds imply that access to electricity for non-electrifiedhousehold will have immense impact on human devel-opment in rural Bangladesh.

Based on past experience of costs incurred in provid-ing electricity under REP, it is estimated that $350 mil-lion per year over the next eight years would be requiredto complete 100% basic electricity coverage in

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The impact of electricity on education is much morepronounced among the poor and (particularly) amonggirls in rural electrified households than those in non-electrified households. The literacy rate among the poorin the electrified villages was about 41% higher thanthat of the poor in the non-electrified villages. Similarly,literacy among females was 31% higher in electrifiedhouseholds compared to the non-electrified house-holds. Additionally, electrified households were betteroff in terms of adult literacy rates, enrolment ratios, ex-penditure on education, attendance rates, and aver-

age time spent on studies after sunset. Thus, householdaccess to electricity should be seen as one of the ma-jor strategies to reduce knowledge poverty.

MDG 3: Promote gender equality andempowerment of women

In electrified households, reduced household choresfor female members and a reduced gender gap in termsof daily average time for studying are indicative of im-proved gender status. Furthermore, women in electri-fied households are involved in more income-generation

activities. Electrified industries have been providingbetter opportunities for female labour than the non-elec-trified industries. During the period between 1997 and2002, it was found that the skilled female labour forcein electrified industries in rural Bangladesh has in-creased from 202 to 1045, whereas the overall femalelabour in non-electrified industries saw a marginal risefrom 80 to 125 in the same period (Barakat 2003).


REP has had a measurable impact on IMR (infant mor-tality rates) in rural Bangladesh. Electrified villages hadan IMR of 42.7/1000 live births as against 57.8/1000live births in non-electrified villages. Estimates showthat if access to electricity is 100% in rural households,

and those households maintain the same IMR as thecurrent electrified households, the annual number of in-fant deaths that could be prevented would be about 37 000.


The national survey of 2002 found that maternal healthin electrified villages is better than that in non-electri-fied villages. A total of 79.2% of households in electri-fied villages routinely seek medically trained personsin child delivery, access antenatal and post-natal carecheck-ups, accept TT (tetanus toxoid) immunization,

and seek treatment by medically competent personsin maternal morbidity, as against 57.4% of householdsin un-electrified villages. Likewise, households in elec-trified villages score over those in non-electrified vil-lages by a margin of 52.5% to 27.3% for healthindicators such as full immunization of children, reduc-tion in infant deaths, use of family planning methods,use of hygienic latrines, and so on. In all these indica-tors, not only is the richpoor divide less pronouncedin electrified villages compared to non-electrified vil-lages, but poor households in electrified villages alsoshow much better health outcomes than their counter-

parts in non-electrified villages.

Lessons learnt from the case study

P Strong commitment and collaboration between thegovernment, the people, and the implementers of aproject are crucial to its success.

P Adding productive activities to such a projectprovides the opportunity to realize both social andeconomic benefits.

P Key technologies and policies that accelerate ruralelectrification include renewable energy, fuel switch-ing, demand-side management, and standards.

P A much lower system loss is possible in rural sys-tems by adopting best practices through participa-tory management and good governance.

P REP can be considered as a model to be followedby highly centralized national electricity utilities inBangladesh and elsewhere, which are typicallyunder-performing and inefficient.

Electricity and education for children from poorer

households

School enrolment among children in the age group 615years is much higher among electrified households in Bang-ladesh. The difference in enrolment is more evident amonglower income households. For households having an an-

nual income of less than Taka 10 000, the school enrol-ment per electrified and non-electrified households are 75%and 11%, respectively. But for the higher income group(Taka 10 00020 000), the enrolment ratios for electrifiedand non-electrified households are 38% and 29%, respec-tively. The enrolment ratio is almost equal between electri-fied and non-electrified households for higher incomegroups.


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P Increases in productivity in rural industrial activitiesis essential for supplementing agricultural income andrealizing poverty reduction.

Brazil: remote but rechargedAn isolated community is electrified with locally available energy

sources

The programme

The Amazon region of Brazil has the lowest electrifica-tion rate in the country due to its geographic condi-tions, which are not compatible with the electricitysupply model used in the country. The difficulty of sup-plying remote area communities with electricity limitsthe organization of economic activities in the commu-nities. However, several of these remote areas havefavourable conditions for the implementation of alter-native energy projects, especially biomass-based en-

ergy systems. Brazil possesses vast tracts of arableland in the North-East and Middle-West, where culti-vation of oleaginous species such as babau, buriti,and Brazil nuts could be promoted. The oils originatingfrom these species, if used for electricity generation,have the potential to create significant local employ-ment and meet remote area energy needs. ThePROVEGAM project, aiming to develop specific solu-tions for electricity generation in remote areas, decidedto test the workability of vegetable oils from oleaginousplant species as a strategy for electricity productionand use.

The PROVEGAM project was financed by FINEP,Projects and Financial Studies, and developed jointlyby the Brazilian Reference Centre on Biomass(CENBIO); Biomass Users Network of Brazil (BUN);

Brazilian Agricultural Research Corporation(EMBRAPA); the Agropalma Group; Moju Municipal-ity; and the Federal University of Rio de Janeiro(COPPE/UFRJ). Its main objective was to install andfield-test a conventional diesel engine adapted usingnatura palm oil to produce power for the community ofVila Soledade, municipality of Moju, Par state, Brazil.

Vila Soledade is an isolated community that has approxi-mately 700 inhabitants. Before the execution ofPROVEGAM project, the community was served by anold and inefficient diesel generator that was unable tosupply sufficient electricity. In 2003, the project installeda 200-kW (kilowatt) new diesel generator, equipped witha conversion kit to operate with in natura palm oil, work-ing six hours a day, and generating 3.3 MWh (mega-watt-hour) every month. The new diesel generatorbrought benefits such as reduction of technical failuresin the system and the increase in energy supply, since

there were hardly any supply interruptions. However,the most important benefit was the use of a biofuel thatis locally produced.

Vila Soledade also has an agricultural project that in-volves the cultivation of palm trees and production ofpalm oil with 100 families. The first output from the plan-tation was in December 2004, giving the necessaryfruits to extract oil needed to supply the engines in thePROVEGAM project. In the agricultural project, eachfamily is responsible for 10 hectares; hence, for 100families, 1000 hectares are under cultivation. By the

end of the project, the community was producing mostof the palm oil needed for electricity generation, andwas also creating more local jobs.

In February 2004, CENBIO undertook a socio-eco-nomic survey of the community with the main objec-tive of identifying the changes in peoples life due tothe project. Results showed that majority of inhabit-ants were pleased with the results of the project, andregistered significant life improvements

The positive results of this project led to the replication

of this model to other communities in the Amazonregion by several institutions. One such programmehas been implemented by Agropalma, the biggest palmoil producer in Latin America. The company haslaunched a pilot project in the city of Moju whereabout 150 families work on the cultivation of oil palms.The project has the support of the government of thestate of Par, the Brazilian Agricultural Research Cor-

MDGs impacted






MDG 6: Combat HIV/AIDS, malaria, and other diseases

MDG 7: Ensure environmental sustainability

MDG 8: Develop a global partnership for development

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poration (Embrapa), and the Bank of the Amazon(BASA). Each family in Moju receives 12 hectares ofland from Par State Land Institute (Iterpa). Agropalmasupplies the palm saplings, initial infrastructure, andteaches cultivation techniques. The company has alsoagreed to purchase the entire crop of small farmers atprices based on foreign market prices. As the palm tree

takes 36 months to produce fruit, BASA is extendingloans to farmers so that they may live on the farm andpurchase the necessary input for the crop. The totalvalue of the loan is to be paid back with a 4% interestper annum, with a grace period of seven years. Withrespect to income generation from the partnership be-tween Agropalma and Paras government, it has beenreported that each participating family has an annualgross income of $15 300. In case family is involvedonly in the handling of the crop, the annual net incomecan reach about $5800.00.

Another programme engaging local agricultural capaci-ties for alternative energy production is being imple-mented in the state of Piau. An area of about18 000 hectares of government-owned land has beengiven to the company Brasil Ecodiesel under the guar-antee that the land would be shared with small farm-ers who would produce castor seeds for the productionof bio-diesel. The families sign a contract in which theyguarantee to cultivate castor plants for a period of 10years on the nine-hectare plot of land that each familyreceives. Up to now, about 5000 hectares are beingcultivated on the farm. Annual revenues for each farmer

vary between $1100 and $1330. The farmers also re-ceive a brick house to live in, with electricity and plumb-ing. In 10 years, if they comply with the contract they

have with the company, the residents will receive thetitle deeds for the piece of land.


MDG 1: Eradicate extreme poverty andhunger

Electricity produced from the PROVEGAM project hasgiven a boost to the quality of life in Vila Soledade.Energy availability allows the processing of local prod-ucts like palm oil, manioc, aa, and cupuau (Amazo-nian fruits), adding value to these raw materials andleading to rising incomes, reduced migration, and bet-ter standards of living. The socio-economic survey byCENBIO showed a marked improvement amonghouseholds, with more than 80% of them now usingelectric appliances and electromechanical equipment.


One of the main social benefits achieved by the projectwas the initiation of night study classes, which are at-tended by the whole community, including adults, re-ducing illiteracy levels of the community.

MDG 3: Promote gender equality andempowerment of women

According to CENBIOs socio-economic survey, women

are active workers in the palm oil production units andare also using electricity to operate appliances suchas sewing machines, registering a marked increase intheir income potential.


The availability of potable drinking water from electric-ity-powered pumps has significantly reduced thechances of children being affected by water-borne dis-eases such as cholera, leptospirosis, typhoid fever,giardiasis, hepatitis, amoebiasis, and salmonellosis.Availability of electricity also allows for the refrigera-tion and storage of vaccines and food items.


Besides the reduction in child mortality, potable drink-ing water and adequate food/medicine conservationimprove maternal health.

Effective partnerships

To execute partnerships with small farmers, companiesBrasil Ecodiesel and Agropalma sought the support of thefederal government programme that created fiscal incen-tive policies for industries that process castor and palm oilin the poorest regions of the country the North and North-

East and support family farming. Another point of federalsupport is the contribution of institutions like the BrazilianAgricultural Research Corporation (Embrapa), which re-searches varieties and methods to increase productivity.Individual state governments have also contributed, offer-ing areas for the setting up of the industries and land forthe growing of the crops.

Source Brazilian Reference Centre on Biomass (CENBIO)

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MDG 6: Combat HIV/AIDS, malaria, andother diseases

Local population can now receive information on HIV/AIDS, malaria, and dengue prevention through televi-sion and radio, among others, because of increasedaccess to electricity.


The partial shift from a fossil fuel to biofuel is a signifi-cant step forward for environmental sustainability.

MDG 8: Develop a global partnership fordevelopment

An effective partnership among governments, privatesectors, NGOs (non-governmental organizations), aca-demics, and, above all, the local community lay at the

heart of the success of the project.


P Strong partnerships among governments, institutions,and NGOs are vital to the success of developmentprogrammes.

P Access to electricity has the effect of developing orenhancing productive activities, which can, in turn,assist in recovering some of the costs of the project.

P The project demonstrates the viability of mini-grid sys-tems in remote areas.

Kenya: brighter harvestA low-cost, non-electric pump for irrigation, which has increased

agricultural output and incomes

The programme

Energy for irrigation is vital to increase food productionand broaden access to nutrition. Increased nutrition andimprovement in health, in turn, open up opportunitiesfor employment and income generation. However, thelack of adequate, affordable, and efficient energy inthe farming sector stymies agricultural output in most

developing countries. This can be eradicated to a largeextent through the use of low-cost and easy to operatenon-electrical energy technologies, as seen by the trea-dle pump (illustrated in Figure 3) experience in Kenya.

Treadle pumps for irrigation have been widely used inKenya since 1991, when the first version was intro-

duced in both urban and rural areas by the ApproTEC(Appropriate Technologies for Enterprise Creation). Thepopularity of the treadle pump in Kenya spread throughtechnology demonstration shows and word of mouth, andover 24 000 treadle pumps are now in use in Kenya, ben-efiting over 120 000 people. Currently, there are 150 dealeroutlets in Kenya for the pumps, and most of the dealersare agricultural and veterinary product stores, which areknown and easily accessible to farmers. ApproTEC actsas a link between manufacturers and dealers, since manydealers do not have the capital or access to credit to workdirectly with the manufacturers.

A 1999 survey by the ApproTEC showed that most ofthe pumps had been in use for over eight months (thepumps were first introduced in 1998), drawing watermainly from streams and wells of an average depth ofabout 4 metres. A majority of the pumps are used onan average of three hours per day, although farms inthe western and central parts of Kenya use the pumpsfor up to four hours. The introductory price in 1998 wasabout $70 for the ApproTEC metal pump body andabout $50 for the concrete pump body, popularly knownas Swiss Concrete.

Surveys also confirmed that treadle pumps are typi-cally purchased through savings made by the users.

Figure 3 Treadle pump

Source Operational Manual on Treadle Pumps, Appro TEC,

Kenya

MDGs impacted


MDG 3: Promote gender equality and womensempowerment

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Other important sources of capital include sale of cropsand livestock and retirement benefits. Women man-age nearly three-quarters of these pumps, which areprimarily used for irrigation, although they also supplyenergy in some instances for household and livestockneeds.

Treadle pumps have yielded several benefits for us-ers, both in their farming practices and their socio-eco-nomic and cultural lives. Irrigation through treadlepumps has also led to an increase in the number ofgrowing cycles, and farmers are reporting higher in-comes as a consequence. The practice of bucket irri-gation, which was the preferred mode of irrigation priorto the popularization of treadle pumps, was a strenu-ous and time-consuming affair. With the introductionof treadle pumps, farming families, especially women,have had their workloads reduced and now have timefor cultural and educational activities. The success of

these pumps has led to their being replicated in othercountries in the region, and they are sold throughdealerships in Tanzania and Uganda.



Treadle pumps have increased incomes for poorfamilies and created over 16 000 new jobs. Eachpump sold allows for crop cycle sales income ofKES 46 031 ($606). Subtracting KES 5943 ($79) spent

on production costs, the treadle pump delivers profitsof KES 40 088 ($528) per crop cycle.

MDG 3: Promote gender equality andwomens empowerment

While men own 84% of treadle pumps in Kenya, women

are the managers of nearly three-quarters of thesepumps.


Increased agricultural productivity due to the treadlepump has reduced the need to bring more land undercultivation, reducing the pressure on ecosystems.


P The success of this project is largely based on its

demand-driven nature.P There is a need for the necessary technical back-up

on such projects to maintain their sustainability.P While the project was linked to economic objectives,

it provided major social benefits as well.

Senegal: cleaner kitchensA long-term LPG (liquefied petroleum gas) Programme for

environmental sustainability and health

The programme

After a period of severe drought in the 1970s, theGovernment of Senegal recognized the importance ofreplacing traditional sources of cooking energy forachieving the development goals. In 1974, it launchedthe LPG Programme, commonly referred to as thebutanization programme. The objective of the pro-gramme was to reduce the consumption of domesticbiomass energy by 50%, and increase the consump-tion of LPG, in order to address the problems ofdesertification and rural poverty.

Since the start of the programme, LPG consumption in

Senegal grew from 3000 tonnes in 1974 to above13 000 tonnes in 1985, and then soared to 56 000tonnes in 1995. In 2005, it had risen to 120 000 tonnes,an average annual increase of 10%12% (see Figure4). The boom in LPG use resulted in the diversificationof household cooking equipment. Presently, nearly 85%of households in the capital Dakar and 66% of house-holds in other urban areas own LPG stoves. Thisremarkable increase in LPG use was due initially to

Reinvigorating the small-scale farmer

Mrs Janet Ondiek, a small-scale farmer in rural Kenya, isa widow who manages her farm following the death of herhusband in 1997. Mrs Ondieks farm is next to a perennialstream, and using bucket irrigation, she used to make aprofit of KES 7000 ($93) per season. In early 1999, MrsOndiek saw the treadle pump being demonstrated at alocal market and liked it so much that she bought one in-stantly. She has since used it to transform her horticulturalbusiness, as well as her familys life. She now irrigates 2.5

acres, growing high-value crops like bulb onions, toma-toes, and sweet peppers as well as kale (borecole) andspinach. Her profits top KES 240000 ($3158), and she nowemploys five workers. After the death of her husband,Janets six children had almost dropped out of school dueto the lack of money for school fees, but thanks to thetreadle pump, she can now send them to college.

Source ApproTEC (1999)

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tax breaks (exemption from customs duties on LPG-related equipment) and later on account of subsidiesfor LPG starting 1987. The LPG price structure wasfurther affected by gradual elimination of subsidies be-tween 1998 and 2002. Free imports were also grantedto various operators involved in LPG distribution andother petroleum products.

In 1997, the development of the LPG market stimulatedthe creation of SITRA (filial of DIPROM, a national oilcompany), which produces LPG cylinders in Senegal.So far, SITRA has produced 350 000 cylinders, and hasincluded gas packing to its activities since 1999. Sev-eral oil companies too handle the storage, packaging,and distribution of LPG, including Vitogaz/Shell, TotalGas, and Bousso. Around 100 wholesalers private en-terprises located countrywide procure LPG from thepackaging and distribution companies and distributecylinders to retailers, typically small food stores.

Higher income groups in Dakar were the biggest usersof LPG in the initial stages of the programme. LPG usehas since gradually extended to other income groupsand regions. On an average, more than 50% of urbanhouseholds now use LPG in the major towns Dakar,This, and Mbour where the price of LPG is rela-tively low due to low transport costs.

Yet, despite the relatively successful diffusion of LPGin urban areas, fuelwood consumption is still very highin rural areas. Because it can be purchased in smallquantities, and has no up-front installation costs, char-coal still trumps LPG in rural areas. The additional trans-portation cost in remote regions also makes traditionalcooking fuels more competitive in these regions. Themajority of rural households in Senegal, therefore, con-tinue to use biomass for cooking, thus undermining theMDGs of halving poverty and achieving primary edu-cation for children (especially young girls, who spend

precious time every day gathering fuel). Additionally,adverse effects on maternal health due to indoor airpollution remains unabated.

Although the increasing use of LPG has not succeededin fully replacing other cooking fuels, it has promotedthe diversification of cooking energy in Senegal, andhas reduced pressure on forestry resources. For ex-ample in 2002, the consumption of 100 000 tonnesof LPG led to a reduction of firewood equivalentto 40 500 hectares of land, or the avoidance ofthe production of 337 500 tonnes of charcoal.

Figure 4 Liquefied petroleum gas use in Senegal (19742005)

Source Compiled by ENDA based on data from CRETAS

(197499) and CNH (200005).

MDGs impacted






The Brazilian LPG experience

The result of the LPG (liquefied petroleum gas) Programmein Brazil was dramatic, allowing penetration to rise from18% in 1960 to 98% in 2004. The penetration in the ruralareas at 93% is particularly impressive, given the difficul-ties of reaching remote and thinly populated regions. Keyto the success of the programme, apart from the subsidiesprovided, were a strong dissemination programme by thegovernment and participation by the private sector.

In 2001, LPG prices were liberalized and collective or uni-versal subsidy was withdrawn. This was accompanied by avoucher programme subsidizing those families with amonthly per capita income that was not more than half ofthe minimum wages in Brazil. This targeted subsidy hasbeen an effective replacement for universal subsidies.

Source Janunuzi and Sanga (2004)

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Additionally, thousands of jobs (Pape-Alassane DEME/PROGEDE 2002) have been created since the imple-mentation of the LPG programme. The job creationcovers several branches of LPG activities ranging fromthe reception of the imported LPG to packaging andwholesale and retail distribution. While there was someconcern that the LPG Programme would lead to re-

dundancies in the charcoal industry, such fears havebeen largely unfounded. Urban retailers simply relo-cated to rural regions where charcoal consumption re-mains quite important.

It must also be noted that Dakar and the main cities,and not the remote regions of the country, are the chiefbeneficiaries of the LPG Programme as shown inTable 1. In fact, the additional transportation cost tothe remote regions makes the traditional cooking fuelsmore competitive in these regions. To allow a betterpenetration of LPG to the poorer section of the popula-

tion, it is necessary to redirect the subsidy throughvoucher schemes or any other suitable mechanism thatcan ensure an avoidance of leakage.

Impacts of the

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