Rural
communities in poor countries are key to increased economic
production and to social progress. In the SADC region
the rural population can make up to 95% of the total,
an overwhelming number whose contribution to the economy
is severely muted principally due to the inadequacy
of policies, strategies and institutional frameworks
for development. Furthermore, rural communities bear
a disproportionate burden of underdevelopment, in comparison
to their counterparts in urban centres. Hunger and illiteracy
rates are higher; access to education is lower; and
avenues for breaking out of the poverty trap, if not
entirely nonexistent, are elusive. The provision of
energy services is at the core of any serious endeavour
to confront the problems that rural communities face.
Any
policy is devised in order to provide a framework for
systematic action. Such a framework arises from a conviction
that the status quo is inadequate, unsatisfactory or
simply archaic in the light of experience, and viewed
against the perceived opportunities and desired outcomes.
Access to energy in rural areas and the patterns of
use are clearly unsatisfactory. Even where national
economic growth is possible, in spite of unsatisfactory
energy services to the rural areas, such growth is meaningless
if it does not touch the lives of the majority of the
people. Predominantly, these people are in the rural
areas. Energy in the rural areas is used mainly to meet
household needs for cooking and heating. Some studies
estimate that this accounts for about 85% or more of
the total energy used. This means that very little energy,
other than human and animal, is used for productive
agricultural activities, the main source of livelihood.
This kind of ratio alone is a matter of concern because
it implies that the preoccupation with the rudimentary
requirements of food preparation and keeping warm leaves
little space for productive activities. Furthermore,
the energy used is predominantly of the traditional
type consisting of woodfuel and animal dung, averaging
between 70 and 75% in the SADC region, but much higher
in individual countries like Malawi and Mozambique.
The issues that this raises are much discussed in conferences
and workshops and are well documented. They range from
environmental concerns- especially desertification-
to issues of health for mothers and children. In addition,
the laborious work of ensuring availability of household
energy falls mainly on women, thus making gender a primary
focus of attention for any policy measures.
Biomass
use in Africa
•
Final energy Consumption: 70% is biomass compared
with 3% in OECD countries
•
End-use efficiency for traditional biomass is
low, that is, a large amount of fuel is required
to produce small energy levels
•
Smoke is a carcinogen produced during the burning
of charcoal and wood. As a consequence there is
a high incidence of respiratory problems among
African women and children |
The
corollary to the dominance of traditional energy forms
in rural areas is that very little commercial energy
is in use. Kerosene and electricity, where available,
are used for lighting and, in the case of electricity,
for powering radios and other small appliances. The
low access to electricity is a major concern because
of the potential it has to transform rural life. It
is inappropriate to compare kerosene and electricity
in general, suffice to say that of the two, electricity
is the cheaper for producing the same amount of light.
In
the region, and probably in the whole of sub-Sahara
Africa, there is universal agreement that massive improvements
are needed in rural energy services and there is also
considerable appreciation of the enormous task that
this represents. Energy is a key sector recognised in
all countries of the region and governments have created
full departments and ministries responsible for energy
affairs. From about ten years ago, many governments
have formulated national policies and master plans,
highlighting the problems of energy access. These documents
propose ameliorative strategies that often balance measures
for increasing energy access with the protection of
the environment. Here are some statements:
“The following are the objectives of the
energy policy:
a) to ensure accelerated economic development;
b) to ensure accelerated economic development;
c) to promote small-medium scale enterprises
d) to ensure environmentally friendly energy development,
and
e) to ensure efficient utilisation of energy resources.”
“The
Energy Policy is aimed at promoting optimum supply and
utilisation of energy, especially indigenous forms,
to facilitate socio-economic development of the country
and maintenance of a safe and healthy environment.”
National
Energy Policy, (1994) Zambia |
“Social
Equity: All households and community services should
have access to adequate and affordable energy services.”
Energy
Policy (1996), Botswana |
“Government
will promote access to affordable energy services for
disadvantaged household, small businesses, small farms
and community services.”
White
Paper on the Energy Policy (1998), South Africa |
The
excerpts were chosen to make the point that current
policies do not sufficiently focus on the plight of
rural communities with respect to energy. The problem
is far too urgent to be embedded in overall national
goals for increasing energy access, or promoting rural
development. Policies need to identify measures that
are specific to the rural areas or else the special
needs of the rural areas will be lost in statistical
averaging. For instance, over a ten-year period, household
access to electricity in Zambia grew from 8% to 20%;
but, in rural areas, over the same period, the access
rate remained almost stagnant at about 2%, while in
urban areas it averaged 35%. In the capital city, the
figure was closer to 50%.
Given
the scale of the problem, it will be a long time before
the traditional energy forms of woodfuel and animal
dung are substituted with cleaner, more efficient –
perhaps even less costly - commercial types. Therefore,
policies need to address the management of traditional
fuel sources for protection of the environment; the
policies also need to promote efficiency measures aimed
at reducing energy demand and therefore easing the toil
of women. Again, policies should isolate rural areas
for special attention, recognising that, not only do
most people live in rural areas, but also that all the
ills associated with extreme poverty are accentuated
in these communities. Traditional energy forms do not
easily lend themselves to institutionalisation and streamlining.
For instance, policies related to the use of woodfuel
are usually distributed among government departments
dealing with the environment, forestry, agriculture,
energy, tourism and, perhaps, community development.
Governments should seek to harmonise policies and implementation
strategies in all these departments, especially as there
may be significant differences of emphasis. Some, like
the departments of energy and community development,
may stress security of energy supplies; others, like
the departments of the environment and tourism, may
be more concerned about conservation of forests and
woodlands.
However
progressive the policies on traditional energy supplies
may be, it is ultimately the availability and access
to electricity that will bring real change to the rural
areas - change that goes beyond mere amelioration. Recognition
of this fact is the starting point for an aggressive
rural electrification program. Policies should consider
all available policy and institutional options for bringing
electricity to the rural areas, based on natural resource
endowments and the cost of supply. The challenge of
rural electrification in most countries of the region
is framed by the following characteristics:
•
Wide population dispersion
• High levels of poverty
• Underdeveloped electricity supply networks
• Low access to energy technology
Bringing
electricity to these communities will inevitably require
two broad technical approaches: isolated systems based
on:
• Mini and micro hydropower;
• Photovoltaic systems;
• Wind; or
• Biomass
and
extension of the existing grid. Isolated systems are
also commonly based on diesel generators, but the cost
of running these is extremely high, continuity of fuel
supply can be problematic and carbon monoxide emissions
pollute the environment. Because of the high costs,
governments and utilities tend to get locked into unrealistically
low tariffs that bear no relation to the actual cost
of supply. Therefore, diesel generators should be a
last resort, and the policy should be to substitute
existing diesel engines with other sources. It is clearly
essential that policy makers have adequate information
on the potential contribution and suitability of each
of the options in the various locations. Consideration
should also be given to the feasibility of integrating
these systems at some future date to the national grid.
| 5.1
MANAGEMENT AND FINANCE |
Internationally,
the era of private participation in energy markets is
relatively recent, with the notable exception of the
USA. Therefore the responsibility for implementing rural
electrification generally falls on state-owned utilities
operating in a vertically integrated format. But a realisation
has grown that governments alone cannot provide all
the money that the sector needs in order to guarantee
security of supply and to expand the system for increased
access. Sector reforms are also motivated by a desire
to stimulate increased operational efficiencies that
translate to enhanced quality of service to the consumer.
Thus, in the last few years a number of utilities have
been unbundled and different kinds of partnerships have
been forged between states and external investors, some
of whom are themselves traditional, stateowned utilities
like ESKOM of South Africa and EDF of France. Restructuring
of this kind involves laying the ground rules, through
legislation, for all the players in the market and for
the operation of the national network. It also involves
the creation of independent regulatory agencies whose
mandate is to ensure that the rules are obeyed, a fair
trading environment is maintained and that monopolistic
tendencies are checked.
Such restructuring separates the rural electrification
program from the ordinary commercial operations of utilities.
Thus, the restructuring brings into sharp relief the
need for specific policies, institutional framework
and a clear, sustainable financing mechanism. The reforms
also widen opportunities for private sector participation,
with the prospect of injecting additional resources
into the program. For electricity to be accessible to
rural communities, the tariff needs to be relatively
low, which makes rural electrification unattractive
to private business. Added to which is the low volume
of energy consumption. Therefore a purely commercial
business environment does not exist in a typical rural
setting, and the success of an electrification program
will require imaginative intervention of the government,
which can afford to take a much longer view of viability
than private investors. Rural electrification will require
the kind of investment that only governments can make
because many of the dividends are purely social, but
have an impact on the wider, macroeconomic performance
of the country. Better
education, better communications, higher availability
of health services are benefits that an investor cannot
quantify and demonstrate on a balance sheet, but they
are (should be) the core preoccupations of governments.
| 5.2
RURAL ELECTRIFICATION AGENCY, FUND |
It
is conceivable that a government department manages
a rural electrification program. In fact departments
have done so for many years in conjunction with national
utilities. However, on the whole this approach has yielded
dismal results. Governments alone simply cannot find
the money to maintain a reasonable rate of progress,
and politicians are more than inclined to sway the choice
of projects on grounds that have more to do with the
advancement of their careers than a rational view of
national priorities. For this reason, those among the
collaborating partners who would contribute to the rural
electrification program, especially as it addresses
extreme poverty, tend to shy away. As much as possible,
therefore, the policies need to distance the rural electrification
program from the political arena.
The
establishment of a Rural Electrification agency with
an associated Fund is the route that appears to succeed
best. A variation on this is a Rural Energy agency that
brings together all aspects of rural energy supply.
Whether it is one or the other, the important thing
is to back the agency with a robust law that shields
it from political schemes, formalises the transparency
of its procedures and entrenches an inclusive approach.
Inclusiveness refers to the direct participation of
the target communities in the planning, execution and
management of the projects. This is especially important
for disbursements from the Fund. Autonomy should also
be enshrined in the law through appointment procedures
and a clear demarcation of roles between the
responsible minister and the agency. The funding mechanism
should further enhance the autonomy of the agency by
minimising the direct role of ministers and government
officials.
| 5.3
ROLE OF PRIVATE SECTOR |
While
the responsibility for rural electrification is that
of government, the policy formulation process should
vigorously explore ways in which the private sector
can support the efforts. The structure of the industry
and the regulatory arrangements should be friendly to
private investment, and should be balanced with the
interests of the consumer. An important purpose of the
Fund is to formulate a package of measures that mitigates
the consumer tariff, while allowing a reasonable rate
of return to project promoters. The regulator should
also consider ways of stimulating rural investment through
a “light handed” approach to licensing and
standards, without compromising safety.
Energy
is indispensable to any development endeavour, and rural
areas are no exception. Currently, policies for increasing
access to energy in rural areas are embedded in overall
national policy frameworks. Furthermore, governments
have tried to directly manage rural electrification
programs, but have largely been unsuccessful due to
political interference and the failure to attract the
support of collaborating partners. This approach has
also failed to marshal the resources that could be contributed
by the participation of the private sector. Policies
and legal frameworks dedicated to rural energy supplies
are essential for accelerated programs. The policies
should not ignore traditional energy types, especially
woodfuel, which are likely to continue being used for
the foreseeable future. Nevertheless, rural electrification
deserves special attention because it alone holds the
key to the necessary dramatic transformation of life
in rural communities. The recent moves in many countries
towards electricity industry restructuring will benefit
rural electrification by sharpening the focus on a program
that has previously been managed by national utilities
without clear direction. The creation of specialised
agencies needs the force of the law to entrench autonomy,
demarcate responsibilities, and thereby build confidence
among collaborating partners. The regulatory environment
should aim to stimulate and support developments by
being mindful of the special position of rural areas.
