Energy Access for Poor in Urban and Peri-urban Areas An Emerging Challenge

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1 Africa Electrification Initiative Energy Access for Poor in Urban and Peri-urban Areas An Emerging Challenge Dr. Venkata Ramana Putti Energy Sector Management Assistance Programme (ESMAP) The World Bank Dakar, Senegal 15 November, 2011

2 Energy Access at ESMAP Program 1: Program 2: Program 3: Program 4: Energy Assessments and Strategy Energy Efficiency Clean Energy Energy Access Provide technical and analytical support to operational efforts that enhance energy access to the poor in the developing countries in a sustainable manner 2

3 Overview

4 Urbanization Challenge in Africa 40% of Africa s one billion people currently live in cities SSA is the fastest urbanizing region in the world - 4.5% p.a. Most African cities will have increased their populations by at least 50% by By 2030, urban populations will exceed rural populations Ouagadougou Kampala Dar es Salaam Conakry Maputo Bamako Kinshasa Lome Addis Ababa Khartoum Abidjan Dakar Harare Lagos Accra Luanda Nairobi Cairo Johannesburg Projected Change in Urban Populations ( ) 0% 20% 40% 60% 80% 100% 120% Source: UN Habitat The State of African Cities,

5 The Challenge of Growing Slums Rural, urban and slum populations About 70% of Sub-Saharan Africa s urban population lives in slum conditions Better work opportunities in cities draws migrants from the less endowed rural areas 90% of additional jobs in urban areas in sub-saharan Africa are created by micro and small scale enterprises in the informal sector. Ghana Cote d'ivoire Burkina Faso Benin South Africa Dem Rep Congo Cameroon Angola Uganda Mozambique Kenya Ethiopia Burundi West Africa Central Africa East Africa - 20,000 40,000 60,000 80,000 Population (thousands) Rural Urban Slums 5

6 Urban Poverty and Electricity SSA has one of highest rates of urban poverty in the world Access to modern energy services and urbanization is a key to poverty reduction (EAP): Productive uses of energy generates income, provides employment Formalizing informal, small scale enterprises, provides access to finance and markets, business skills, and provides tax income to government % Sub-Saharan Africa (S-SA) kwh per capita % of population living on less than $2 per day % urban population Electric power consumption % East Asia and Pacific (EAP) kwh per capita % of population living on less than $2 per day % urban population Electric power consumption 6

7 Thousands Millions Hundreds Fast Growing Demand for Energy Biomass is the most prevalent fuel in Africa Primary solid biofuels (TJ-net) Charcoal (kt) Electricity consumption per capita kwh/per capita Energy Consumption in Africa by Type (2004) Biomass, 59% Electricity, 8% Coal, 4% Petroleum, 25% Gas, 4% 7

8 Electricity for Urban Poor 40% of people living in Sub- Saharan African cities lack access to electricity About 50% of slum dwellers are illegally connected to electricity Unsafe connections are dangerous to life and property Utilities lose potential paying customers and significant revenue opportunities 8

9 Household Energy in Urban Slums Biomass is primary cooking fuel for slum dwellers. Kerosene and candles are secondary source of lighting. WHO estimates the number of premature deaths from smoke inhalation to be greater than from malaria and tuberculosis. 9

10 Peri-urban Situation in Africa Peri-urban environments play a mediating role between rural and urban, due to unplanned growth of cities. Places of dynamic social change, agricultural activities create significant opportunities for food production and security. Village Peri-urban Not proximate to city High agricultural and farming activities Strong rural migrant cultural influences, and traditional structures In-place Peri-urban Located on city fringes Combined farming and market retail activities Tradition oriented structures incorporating some urban influences Absorbed Peri-urban Geographically absorbed within the city Mainly retailing of agricultural products Strong interface with urban formal structures Rural Peri-urban Urban 10

11 Energy Access in Peri-urban Areas Electricity companies provide coverage for urban areas. Rural Electrification Agencies focus on access in rural areas. Peri-urban areas fall in between and remain un-served. Potential development of small-scale peri-urban energy suppliers Village Peri-urban Non proximate to grid Lack of access to electricity with significant number of illegal connections High un-affordability issues High use of traditional fuelwood In-place Peri-urban Low proximity to grid Lack of electricity access with significant number of illegal connections High un-affordability issues Combination of different types of traditional biomass: fuel-wood and charcoal Absorbed Peri-urban High proximity to grid High access to electricity, with significant number of illegal connections High ability to pay for electricity Combination of traditional biomass and modern energy services 11

12 Barriers to Energy Access for Urban Poor Affordability: High connection costs such as meters, wiring, improved cookstoves High recurring costs such as electricity bills and LPG Legal tenure: High degree of informality and lack of recognition by authorities Squatting on illegal land, insecurity of housing and land tenure Adequate infrastructure: Narrow, non existent roads, shack dwellings makes it difficult for energy service providers to erect necessary infrastructure Education and awareness: Lack of knowledge of harmful health related issues Lack of trust: Between service providers and slum communities 12

13 Overcoming Barriers for Energy Access 13

14 Some Common Enabling Factors Development of energy access programs that link into city development strategies. Multi stakeholder collaboration: successful partnerships between civil society groups, utilities, community based groups and local government Strong political will needed of government for the program A regulatory framework that support access for the urban poor Change in mindset of slum dwellers: from illegal consumption to legal energy for productive activities 14

15 Slum Electrification Ahmedabad, India Ahmedabad Municipal Corporation (AMC) initiated slum upgrade (Parivartan), providing water, sanitation, and roads. Electricity connections were cofinanced by Ahmedabad Electricity Corporation (AEC) and USAID. Multiple stakeholder approach involving AMC, AEC, community women s self-help group, and two local NGOs. AMC provided a 10 year non-eviction certificate for each household Results: 5 slums of 700 households electrified Significant reduction in AEC losses 15

16 Electricity for Pavement Dwellers in Mumbai, India Over 25,000 households were squatters on Mumbai pavements without legal recognition. 80% did not have access to electricity, the rest obtained access illegally. 3 community based organizations approached Bombay Electricity Supply and Transport (BEST) with proposal. Government guaranteed tenure for 18 months and provided BEST with confidence to enable erection of electricity infrastructure. A registered NGO provided guarantee on collection of bills. Results: Majority of households electrified, success replicated in other slums Reduced electricity theft by households Increased productive uses of electricity 16

17 ESMAP Intervention 17

18 Access Program for Urban, Peri-urban Poor Primary Objective To develop work programs for ESMAP and World Bank that help increase access to reliable, affordable, sustainable modern energy services for the urban poor A workshop in Africa will provide a platform for practitioners for further dialogue. Activities Scoping study to understand barriers and options (Ghana case study) Best practice case studies (done in India, Bangladesh, Colombia, Brazil) Multi-stakeholder consultations with practitioners, energy service providers, civil society organizations, NGOs, and other relevant parties 18