TOWARDS AN ‘ENERGY PLUS’ APPROACH FOR THE POOR

Between 2009 and 2011, the UNDP Asia-Pacific Regional Centre led a collaborative review of 17 energy access programmes and projects implemented by governments, development agencies and the private sector in Asia-Pacific. By examining complex issues surrounding energy access, the review contributes to the on-going discussion on universal access to energy, and suggests pathways towards achieving it. The review collates knowledge of policies and practices in dissemination of low-emissions technologies, financing, market development, entrepreneurship, institutional strengthening and policy development that can be converged to make energy services affordable for the poor.

Publication Brief	Main Report	Agenda for Action	Case Studies

Key findings

The ‘Energy Plus’ approach

The 17 reviewed energy access programmes and projects have brought improvements to the quality of lives of communities in terms of energy cost savings, health, education, communication, access to information and women’s empowerment, thus contributing to the achievement of the Millennium Development Goals. In addition, initiatives that promote low-emission technologies contribute to the global climate change agenda.

The impact of energy access projects on livelihoods and incomes is less visible. This is because most energy access projects adopt a ‘minimalist’ approach, focusing on the basic energy needs of the poor (lighting homes, cooking, heating). While the importance of these cannot be overemphasized, such a strategy is not sufficient for effective poverty reduction. On the other hand, projects that complement energy service provision with measures that raise incomes and improve livelihoods – e.g. improving access to information, market linkages, business development services and access to capital – show tremendous promise in poverty reduction and economic and human development. Such ‘Energy Plus’ initiatives, however, are few in number and are yet to be scaled up in terms of the number of people reached.

Good practices in energy service delivery

• Ensure that the energy solution is ‘right’. The product/service should be extensively tested to ensure that it is sufficiently robust and that it effectively addresses consumer needs, preferences and affordability.

• Involve communities in project processes by:
  • aligning the project within the prevailing local governance framework;
  • ensuring that project goals and objectives emphasize women; and
  • ensuring that the reporting of project results and monitoring data are disaggregated by gender.

• Create commercially viable markets for energy products and services by:
  • clustering dispersed markets;
  • building on existing supply chains and distribution channels;
  • establishing strict quality control measures;
  • building awareness of consumers including women; and
  • strengthening the capacity of entrepreneurs and supporting their growth.

• Monitor projects and systematically track their impacts. The projects’ monitoring and evaluation systems need to incorporate indicators and measurable targets to capture the benefits achieved.

Good practices in project and end-user financing

• Government policies and projects on expanding energy access and promoting renewable energy must be supported by allocations in the national budget.

• A combination of appropriate financing options (for example, subsidies, end-user financing and micro-credit) should be made available to consumers.

• Microfinancing options should be made accessible since they are instrumental in scaling up energy access for the poor.

• Income-generating activities (such as development of local entrepreneurship, access to business finance and establishment of market linkages) should be built into programme/project design in order to maximize poverty reduction.

Good practices in mainstreaming energy access within national development strategies

• Develop a long-term, well-articulated national policy on energy access and renewable energy, inclusive of sectoral and sub-national strategies. Such a policy must be situated within the overall government policy framework of development and poverty reduction.

• Develop capacities of all key stakeholders, including project implementing agencies, technology suppliers, service providers, financial institutions, civil society organizations and final consumers (including women).

• Engage with stakeholders at all levels to ensure a broad base for information dissemination, to ensure support for projects and to achieve national consensus on the importance of energy access (thus encouraging its integration into government development programmes).

• Establish and strengthen lead energy institutions. A strong national energy institution can ensure that good practices and lessons learned in individual projects get translated into sector-wide strategies and policies.

The way forward: an institutional partnership framework for expansion

An appropriate institutional partnership framework for expansion ensures that the respective stakeholders pursue the good practices identified above:

• Governments should provide an enabling policy environment and regulatory framework, including a commitment to effective public-private partnerships, and facilitate private sector participation in the manufacture, sale and service of quality energy products at scale.

• Development partners should co-finance ‘common goods’ such as product development; market development; capacity development; policy dialogue and advocacy; and provision of risk underwriting to innovative pilot initiatives.

• The private sector is responsible for the provision of appropriate, high-quality products and services.

• Community-based organizations and non-governmental organizations (NGOs) should lead community mobilization, consumer awareness and information dissemination.

• Financial institutions should provide low-interest loans and micro-credit to the private sector and end-users.