Rural Electrification: Powering the African dream of being poverty free

By: Paul Breeze

In Africa, rural electrification, or rather the lack of it has been identified as one of the key issues that must be tackled if poverty and deprivation across the continent are to be reduced. PEi takes a look at how this is being addressed and focuses on some of the initiatives being introduced to bring power to the people.

Poverty is a worldwide issue and one that is attracting increasing attention from politicians and international organizations. Yet tackling poverty has proved to be extremely difficult. While deprivation lies at the root of all poverty, that deprivation may be a result of factors as diverse as weak or corrupt governments, changing climate conditions, disease or simply isolation.

“As far as electricity is concerned, as few as seven per cent of most rural populations have access, and in some of the countries of sub-Saharan Africa the figure is much lower”
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One of the most important methods of combating poverty is to provide access to modern forms of energy, particularly electricity. The availability of something as basic as electric lighting is a necessity which nobody in the developed world could imagine living without. Yet in the developing world hundreds of millions of people are forced to survive without it.

Bringing light to poor villages extends the domestic day, often leading to improved levels of education. It allows businesses such as bars and restaurants to function in the evening, improving the social and economic conditions, and it can provide the foundation upon which new businesses can be established. Even greater benefits can be gained by bringing higher levels of power, particularly if this is used to encourage improvements in existing local industries. Nowhere is the need more urgent than in Africa.

Lack of installed capacity

In Africa, rural electrification, or rather the lack of it has been identified as one of the key issues that must be tackled if poverty and deprivation across the continent are to be reduced. World Bank statistics suggest that there were 313 million people living in poverty in Africa in 2001. With little improvement in most countries, that figure is likely to be higher today. As far as electricity is concerned, as few as seven per cent of most rural populations have access, and in some of the countries of sub-Saharan Africa the figure is much lower. Meanwhile only around 12 countries have an installed generating capacity of greater than 1 GW, according to Peter Richards of the Renewable Energy and Energy Efficiency Partnership.

Lack of installed capacity is a severe handicap faced by many African countries that wish to extend the reach of their existing electricity supply networks into rural areas. Yet central-station based power generation remains the norm. There are a number of initiatives, which seek to utilize distributed renewable generation as the basis for rural electrification, but their impact so far has been small.

Today, much of the electricity that is generated in Africa still comes from fossil fuel, including coal, which is plentiful in South Africa, natural gas and imported fuel. There are vast hydropower resources spread across the continent that could be harnessed to provide much needed power in areas that have none, but the development of large hydropower projects has proved controversial in recent years, with many environmentalists strongly opposed to them. Although some agencies now recognize that the development of at least some of these resources may be essential to lift Africa out of poverty, little practical progress has yet been made.

Gaining access via interconnection

While African generating capacity remains so unevenly distributed, the extension and interconnection of African electricity transmission systems so that countries with insufficient generating capacity can benefit by importing power from those nations with surplus power is one vision for improving access to electricity. This idea has been embraced by the New Partnership for African Development (NEPAD), which has as one of its goals the alleviation of poverty by extending rural access to electricity across the continent.

One such project is a Zambia-Tanzania-Kenya interconnector, which is being supported by the Development Bank of Southern Africa (DBSA) and the French development agency, AFD. This project will involve construction of 600 km of transmissions lines in order to bring power north from the southern African power pool. It will be constructed in two stages. The first, with a capacity of 200 MW, is due for completion in 2009 while the second 400 MW stage is expected in 2014. DBSA is also supporting a project that will involve construction of a new interconnector between Zambia and the Democratic Republic of Congo. However much of the power made available through such interconnections may end up powering industrial and mining operations or large urban populations rather than rural communities.

Private versus State

In fact the issue of whether the benefit of large-scale power sector projects will actually reach many of the rural population has become a contentious issue. Many of the large projects are owned by private sector companies, as are the grids and electricity suppliers in an increasing number of African countries. Critics have suggested that the private sector is not well suited to bringing power to rural populations, as they are unlikely to provide much in the way of economic rewards to their investors.

These critics argue that government-owned utilities are in a much better position to support and implement rural electrification schemes. Privatization removes control of these companies from governments. Yet rural electrification often requires government subsidy if it is to succeed. Private companies are unlikely to provide the necessary subsidies themselves though governments still can. This need not be a problem in a country with strong government and the will to ensure that rural electrification remains a priority. But all too often African governments have proved to be weak.

Failure of market liberalization

The African Energy Policy Research Network (AFREPREN) and the Foundation for Woodstove Dissemination (FWD) have studied the effects of electricity sector restructuring in Kenya and Uganda. Both countries have high levels of poverty and only around one per cent of the rural populations in these countries have access to electricity. Electricity acts in both countries allowed liberalization of the electricity sector while ostensibly encouraging rural electrification. However in practice this did not happen, and if anything the poor were worse off following liberalization. For example in Uganda, subsidies were intended to alleviate the problem of increased tariffs but only seven per cent of the subsidies actually reached the poor.

The AFREPREN/FWD study concluded that rural electrification initiatives were much stronger if the initiatives and the bodies overseeing them were created before liberalization of the sector rather than afterwards. This has been the experience from countries such as Thailand and the Philippines. It also suggested that rural electrification objectives should be built into any contracts for power sector concessions and that progress should be rigorously monitored. It found the latter was a failing in both Uganda and Kenya.

For future liberalizations the report suggested tying electrification targets to attractive distribution concessions when these are made available to the private sector.

South Africa: a victim of its own success

In contrast to these East African countries, South Africa has achieved some success in bringing power to previously deprived communities, with unexpected consequences. Eskom, the state-owned power company, had a large surplus of generating capacity in 1994 when apartheid was finally abandoned. Ironically the company did not anticipate the surge in domestic demand that came from the connection of communities that had been previously neglected and capacity cannot now meet demand fully. The company has launched a five-year programme of construction and expects to build $13.3 billion of new generating capacity.

South Africa’s surge in demand is probably a result of the connection of new urban rather than rural populations. Meanwhile the governments of Uganda and Kenya remain dedicated to extending their distribution networks to embrace larger rural communities. Uganda, for example, has recently sought bids for the Sida II project, funded with a grant from the Swedish International Development Co-operation Agency (SIDA). The project involves a series of 33 kV distribution lines that will extend the network into rural areas that are currently not supplied with power.

Do decentralized renewables hold the key?

One of the problems with rural electrification through grid extension is the cost of installation. A World Bank/UNDP study from 2000 concluded that the cost of rural electrification was around $9000/km, rising to $22 000/km where the terrain was most difficult. When this is coupled with the fact that the rural households that are provided with power by such extensions frequently cannot afford to buy the power that the new distribution system supplies, the case for traditional rural electrification schemes may appear questionable.

It is for this reason that many agencies are now examining a different approach, and one that it is hoped will bring more lasting improvements in living standards. This has two thrusts. The first is to tie new rural electrification schemes to community projects rather than aiming simply for domestic electrification. Power for schools, hospitals and community centres are often more affordable and bring greater benefits that simply providing a small domestic supply (although the latter is important too). Even more effective may be the targeting of new rural supplies to local economic activities, which can be made more efficient and thereby improve the prosperity of the whole community.

The second thrust of the new approach is to use stand-alone renewable energy more widely for rural electrification projects. Although these often appear expensive when compared with conventional sources, when the cost of extending a distribution network is taken into account the isolated renewable scheme may well be more cost effective. Such schemes also bring power to rural communities without adding to the atmospheric carbon dioxide burden.

Solar power is one source of energy, which is widely available across Africa and solar photovoltaic power supply units have been introduced successfully in several schemes. One approach being piloted in Zambia is the government’s Energy Service Companies (ESCOs) initiative, where a private company provides and maintains the generating capacity and sells the resulting power to its customers. In this case a company was set up with support from the Zambian government to provide and operate solar photovoltaic power units for rural customers. Though some customers purchase their own systems, many are owned by the ESCO, which charges a one-off installation fee plus a monthly tariff for operating and maintaining the unit. Typically, customers pay around $10 per month for a 50 W supply for four lights and a 12 V socket.

Meanwhile the German company Energiebau Solarstromsysteme GmbH together with the development organization Internationale Weiterbildung und Entwicklung GmbH has developed a hybrid solar-biodiesel system for supplying power to rural communities. A pilot scheme in Mbinga, Tanzania, supplies electricity to 140 people using solar photovoltaic panels and a combustion engine fuelled with vegetable oil that is produced locally.

Kenya, which has traditionally used grid extension to bring electricity to rural communities, has recently begun to test the use of small hydro as an alternative and more cost effective means of delivering power. The record of 40 years of its rural electrification programme was not impressive. Until 2002, the programme spent close to $150 million to supply 75 000 customers, less than three per cent of the rural population. Of the outlay, 60 per cent of the money was spent on installation and the rest on operation and maintenance, and the service was often poor.

The new approach is based on the establishment of small hydro generators in local communities where they supply power primarily for economic activities. One such scheme has involved installation of a 14 kW generator at a site 185 km north of the capital, Nairobi, where it provides power to 300 members of a community business centre. The community determines which of its members can use the power and the community also owns shares in the scheme from which it draws dividends. Kenya probably has 3000 MW of small hydro potential at hundreds of sites scattered across the country.

A new approach needed

Community schemes such as these are often difficult to establish but once set up they often operate successfully and are self-sustaining. Whether they will form the pattern for rural electrification in Africa in the future remains to be seen. There is no doubt, however, that a new approach is needed if poverty in African rural communities is to be eradicated.

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