And Then They Lived Sustainably Ever After? -

And Then They Lived Sustainably Ever After? -
And Then They Lived Sustainably Ever After?
-Experiences from Rural Electrification in
Tanzania, Zambia and Kenya
Elisabeth Ilskog
Doctoral Thesis 2008
KTH Royal Institute of Technology
School of Technology and Health
Stockholm, Sweden
I
Contact information:
Address: KTH School of Technology and Health
Royal Institute of Technology
S-136 40 Haninge
Sweden
Web-link to:
• the KTH School of Technology and Health:
http://www.sth.kth.se
Copyright Elisabeth Ilskog, 2008.
All rights reserved.
Printed by E-PRINT
Stockholm, Sweden, 2008.
TRITA-STH Report 2008:5
ISSN 1653-3836
ISRN KTH /STH/--08:5--SE
ISBN 978-91-7415-006-3
II
Abstract
Accelerating the introduction of basic, clean energy services is seen as a key strategy for promoting
sustainable development in rural areas. Still, many people worldwide lack access to modern energy,
such as electricity, and Africa lags behind other developing regions of the world. Support to rural
electrification is therefore given high priority by the national governments and donor organisations.
There is a trend to encourage the involvement of other actors than national utilities for
implementation of rural electrification. At the same time, it is required that the activities shall
contribute to sustainable development.
The objective of the work presented in this thesis has been to reach increased knowledge on the
impact from organisational factors on project sustainability, and to examine whether rural
electrification implemented by private entrepreneurs or other non-governmental organisations
contribute more effectively to sustainable development than the conventional approach where rural
electrification is the responsibility of a government utility. A key activity of the research work has
therefore been to improve and develop the present methodologies used for evaluations, as to attain a
more functional in-field evaluation method.
The thesis presents findings from seven rural electrification cases in Eastern and Southern Africa and
shows how these can be used to illustrate different dimensions of sustainability by means of indicators.
The evaluation indicates that the national utilities perform better from a social/ethical perspective,
whereas the private organisations and the community-based organisations manage their client-relation
issues in a more sustainable way.
In addition, a literature survey shows that among stakeholders there are a number of “concepts-takenfor-granted” as regards to rural electrification. These are not supported by the findings from the seven
cases. The observed deviations between expectations and realities can obstruct the development since
leading decision-makers may have unrealistic expectations when planning for new electrification
activities. Instead, activities have to be implemented with the empirical reality in mind. By doing so
the ambiguities, complexities and all the paradoxes of rural electrification can hopefully be better
managed.
The study has been funded by The Swedish International Development Agency, Department for
Research Cooperation (SAREC), and Ångpanneföreningen’s Foundation for Research and
Development (ÅFORSK).
Language:
English with an additional abstract in Swedish.
Keywords:
Rural Electrification, Sustainable Development, Indicators, Evaluations,
Interdisciplinary, Africa.
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And Then They Lived Sustainably Ever After?
- Experiences from Rural Electrification in Tanzania, Zambia and Kenya
The PhD has now come to a close.
Screen, mind.
All is blank.
IV
Sammanfattning
En hållbar utveckling handlar om att fördela jordens ändliga resurser mellan dagens och
morgondagens generationer. En hållbar utveckling av ett samhälle förutsätter att invånarna har tillgång
till elektricitet. Trots det saknar stora delar av befolkningen runt om i världen el. Det gäller framförallt
de som bor på landsbygden. Stöd till landsbygdselektrifiering ges därför hög prioritet bland många
myndigheter i utvecklingsländer och av internationella utvecklingsorgan. Trenden i dag är att främja
privata aktörer inom elektrifieringssektorn. Utvecklingen måste också vara långsiktigt hållbar.
Syftet med denna doktorsavhandling har varit att bidra till en ökad förståelse för de kritiska
faktorerna kring landsbygdselektrifiering, och att få en större insikt i hur den organisationsform som
valts påverkar den långsiktiga hållbarheten i det område där organisationen verkar. Är det så att ett
privat företag eller någon annan form av enskild organisation bättre bidrar till en hållbar utveckling i
det område där det bedriver sin verksamhet, jämfört med den traditionella formen där
landsbygdselektrifiering drivs av statliga organisationer?
Det finns förhållandevis få publicerade utvärderingar av genomförda elektrifieringsprojekt på
landsbygden som i detalj visar hur utvärderingen har gått till och vilket underlag som har samlats in.
Många rapporter och utredningar är i stället redovisade på en mer strategisk nivå eller på ett sådant
sätt att resultaten från dem inte går att jämföra.
För att kunna utreda forskningsfrågan har därför en metod tagits fram med syfte att samla
information och sammanställa den på ett transparent sätt. Det underlag som samlas in via denna metod
presenteras med hjälp av 39 föreslagna indikatorer inom områdena teknik, ekonomi, sociala
indikatorer, miljö och organisation. Urvalet av dessa indikatorer har skett genom litteraturstudier och
via fältstudier av genomförda elektrifieringsprojekt. Syftet har varit att få en transparent och robust
utvärderingsmetod som fungerar i fält.
Metoden har kompletteras med en SWOT-analys för att inkludera ytterligare information till
utvärderingen. Analysen har genomförts via diskussioner med ledningarna för de olika
organisationerna.
Doktorsavhandlingen presenterar metodens tillämpning på sju organisationer för
landsbygdselektrifiering i Tanzania, Zambia och Kenya. De genomförda studierna indikerar att statliga
organisationer tenderar att lyckas bättre med den sociala långsiktiga hållbarheten. Bland annat är fler
av de boende i området anslutna till elnätet och viss gatubelysning finns, vilket är en fördel ur ett
genderperspektiv. De enskilda organisationernas styrka är framförallt deras goda kundrelationer.
Studien har dock inte kunnat fastställa att någon enskild organisationstyp är bättre för att genomföra
en långsiktigt hållbar landsbygdselektrifiering i utvecklingsländer. När ett beslut om
organisationsform ska fattas, måste hänsyn tas till de specifika lokala förutsättningarna på platsen.
Den genomförda studien har gett intressanta erfarenheter om såväl den långsiktiga hållbarheten i de
undersökta projekten, som utvärderingsmetoden i sig. Det är dock viktigt att påpeka att det krävs
upprepade utvärderingar av respektive projekt, för att kunna dra några långtgående slutsatser.
Bland många aktörer inom utvecklingssektorn runt om i världen finns ett antal ”allmänt accepterade
sanningar” om landsbygdselektrifiering och dess effekter på en hållbar utveckling. De observationer
från de sju projekt som studerats inom ramen för denna avhandling, överrensstämmer inte med dessa
”allmänt accepterade sanningar”. Det finns därför anledning att anta att sektorn präglas av en empirisk
och teoretisk dubbelhet, där ett försök att skapa en rationell utveckling i ett projekt kan få en rakt
motsatt verkan. I stället bör projekten hanteras utifrån den verklighet de befinner sig i för att på så sätt
bättre ta vara på den komplexitet, mångtydighet och alla de paradoxer elektrifieringen rymmer.
Arbetet med att utvärdera genomförda insatser inom landsbygdselektrifiering bör fortsätta.
Studien har finansierats av Sidas avdelning för forskningssamarbete (SAREC) samt av
Ångpanneföreningens forskningsstiftelse (ÅFORSK).
Språk:
Engelska med en sammanfattning på svenska.
Nyckelord:
Landsbygdselektrifiering, hållbar utveckling, indikatorer, utvärdering, tvärvetenskaplig,
organisationsanalys, Afrika.
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And Then They Lived Sustainably Ever After?
- Experiences from Rural Electrification in Tanzania, Zambia and Kenya
VI
Acknowledgements
My first and foremost gratitude goes to the project managers and electricity clients in Urambo, Liwale,
Lundazi, Chipata, Nyimba, Tungu-Kabiri and Zanzibar for their hospitality. I hope to be able to
continue to work with them.
In addition, I would like to thank the Tanzania Electric Supply Company Ltd (TANESCO), and
especially Mr. Maneno Katyega for considerable contributions to the study, and for always being
prepared to cooperate. My thanks also go to the Stockholm Environment Institute (SEI) and their
colleagues in the ESCO project in Zambia, Mathias Gustavsson at the University of Gothenburg, Sida
staff in both Dar es Salaam and Stockholm, Practical Action East Africa, and to the Ministry of
Energy and Minerals in Tanzania for its support in the evaluation of the project in Urambo.
Funding of the project has mainly been received from Sidas Department for Research Cooperation
(SAREC) and from Ångpanneföreningen’s Foundation for Research and Development (ÅFORSK), for
which I am very grateful. Continuing with the institutions – I thank the staff at KTH School of
Technology and Health for always being helpful with the confusing administrative issues.
I would also like to thank:
- my colleagues at ÅF Consult for their support and adaptability to my alternating working hours,
- my supervisors for their professional help and valuable input; Tore J Larsson for towing me all the
way to the end, Eva-Lotta Thunqvist for her patience and the laughing moments we have spent
together, Björn Kjellström for following me all the way through my research period, and for inviting
me to his family’s peaceful boma in Trosa,
- my PhD-colleagues and friends – Robert, Niels, Hans, Elisabeth and Kristina for encouraging me and
letting me know how comfortable it is to be “on the other side”…
- my colleagues at Restaurant Chakula for taking so good care of the daily operations during my
period of absence.
- my friends/kina Kuchache in the village of Kigogo Fresh for being more inspirational to this thesis
than they could ever imagine.
Lastly, my thanks go to my mother, father, sister Annika, and the rest of my large extended family and
friends for always supporting me and all my unpredictable ideas – Anna, maybe you can now release
me from the ban of starting new projects?
A special thanks goes to Freja for being the sunbeam of my life, and to whom I owe a lot of ice
creams.
Although I see this thesis as a milestone for myself, I realise that I have not become the wise person I
thought I would be. There is still a lot to learn, which I hope to be able to do under my new devise Schysst tempo!
Tack/Liza
VII
And Then They Lived Sustainably Ever After?
- Experiences from Rural Electrification in Tanzania, Zambia and Kenya
VIII
List of Appended Papers
This doctoral thesis is based on the following papers, referred to by Roman numerals I-VI,
where the publications I-IV have also been included in a licentiate thesis, published in 20051.
I
Electrification Co-operatives
- Bring New Light to Rural Tanzania
Ilskog, E., Kjellström, B., Gullberg, M., Katyega, M. and Chambala, W. Energy
Policy. Volume 33, Issue 10. July 2005, p 1299-1307.
doi:10.1016/j.enpol.2003.12.006
II
Simple Organisation Analysis as a Tool for Raised Awareness of
Interdisciplinary Perspectives on Rural Electrification
- Case Studies from Zambia and Tanzania
Ilskog, E and Katyega, M.
Workshop on Rural Energy Delivery Mechanisms, Bagamoyo, Tanzania,
October 2003.
Seminar on Rural Energy Delivery Mechanisms, Stockholm, Sweden, January
2004.
III
New Markets in Sub-Saharan Africa
- Myth or Reality?
Ilskog, E.
International Conference & Exhibition on Small Hydropower, Falkenberg,
Sweden, June 2004. http://www.managenergy.net/products/R654.htm
IV
Village Electrification Technologies
- An Evaluation of Photovoltaic Cells and Compact Fluorescent Lamps
and their Applicability in Rural Villages Based on a Tanzanian Experience
Gullberg, M., Ilskog, E., Katyega, M. and Kjellström, B.
Energy Policy. Volume 33, Issue 10. July 2005, p.1287-1298.
doi:10.1016/j.enpol.2003.12.005
V
Indicators for Assessment of Rural Electrification
- An Approach for the Comparison of Apples and Pears
Ilskog, E.
Manuscript accepted for publication in Energy Policy. March 2008.
doi:10.1016/j.enpol.2008.03.023
VI
And Then They Lived Sustainably Ever After?
- Assessment of Rural Electrification Cases by Means of Indicators
Ilskog, E., Kjellström, B.
Manuscript accepted for publication in Energy Policy. March 2008.
doi:10.1016/j.enpol.2008.03.022
The papers are appended as Appendix I – VI at the end of the thesis.
1
Ilskog 2005
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And Then They Lived Sustainably Ever After?
- Experiences from Rural Electrification in Tanzania, Zambia and Kenya
X
Table of Contents
1.
Introduction ........................................................................................................................ 1
1.1.
Background ................................................................................................................ 1
1.2.
Objectives of the Thesis ............................................................................................. 1
1.3.
Scope of the Work...................................................................................................... 2
1.4.
Methodology .............................................................................................................. 2
1.5.
Thesis Outline ............................................................................................................ 3
2. The Development of Rural Electrification in Africa.......................................................... 4
2.1.
Overview .................................................................................................................... 4
2.2.
Power Sector Participation by Different Organisation............................................... 6
2.3.
Development Issues Related to Rural Electrification ................................................ 7
2.4.
Sustainability Issues Related to Rural Electrification ................................................ 8
3. Impact Assessments and Evaluations by Means of Indicators......................................... 10
3.1.
Impact Analysis and Evaluations of Rural Electrification ....................................... 10
3.2.
Indicators as Means for Evaluation and Assessment ............................................... 11
3.3.
Indicators of Sustainable Development on a Micro-level ........................................ 14
4. Field Studies and Results ................................................................................................. 17
4.1.
Experiences from 10 years of Electricity Services in Urambo, Tanzania................ 17
4.2.
Experiences from Different Rural Electricity Organisations ................................... 21
4.3.
Opportunities and Constraints of Investing in Developing Countries ..................... 25
4.4.
Reduction of CO2-emissions from Small Scale Rural Electrification...................... 28
4.5.
Need for Systematic Evaluations ............................................................................. 31
4.6.
Assessment of Rural Electrification Cases............................................................... 35
5. Discussion ........................................................................................................................ 38
5.1.
Organisational and Institutional Aspects.................................................................. 38
5.2.
Prospects for Foreign Investments ........................................................................... 40
5.3.
Public Benefits ......................................................................................................... 41
5.4.
Aspects on Productive Uses of Electricity ............................................................... 41
5.5.
Gender Aspects ........................................................................................................ 42
5.6.
Technological Aspects on Rural Electrification....................................................... 43
5.7.
Rural Electrification in Practice ............................................................................... 44
6. Methodological Analysis and Discussion ........................................................................ 46
6.1.
Generalisation of the Findings ................................................................................. 46
6.2.
Methods and Assumptions ....................................................................................... 47
6.3.
Further Work ............................................................................................................ 53
7. Conclusions ...................................................................................................................... 55
8. References ........................................................................................................................ 58
9. Nomenclature ................................................................................................................... 63
Appendix I-VI:
Appendix VII:
2
Papers included in the Thesis
Rural Electrification Sustainability Indicators,
- Manual for Field Workers2
Ilskog 2008
XI
And Then They Lived Sustainably Ever After?
- Experiences from Rural Electrification in Tanzania, Zambia and Kenya
XII
1. Introduction
1.1.
Background
Access to basic, clean energy services is essential for sustainable development and poverty
eradication, and can provide major benefits in the areas of economy, health, literacy and
equity. Still, many people worldwide lack access to modern energy, such as electricity. At
present, it is estimated that approximately 1.6 billion people worldwide lack access to
electricity and about 2.5 billion rely on traditional fuels as their primary source of energy3.
Policy makers have realised the vital role that electricity plays and have taken interventions to
address the energy needs of the bulk of the population. Because of this, power sector reforms
are currently on going or have been initiated in over 20 African countries, mainly as a result
of the electricity sectors poor performance. Numerous of these studies appear to equate poor
performance in the electricity sector with high state intervention4. Most power sector reforms
of today therefore consist of deregulation and privatisation. This means that rural
electrification projects will not necessarily be implemented by national utilities and that new
institutional arrangements will be used. There are however few documented experiences from
such new arrangements.
The Swedish International Development Agency, Department for Research Cooperation
(SAREC), is financing a research cooperation programme between Makerere University in
Kampala, Uganda and a number of universities in Sweden, of which The Royal Institute of
Technology (KTH) is one. The programme aims at strengthening the co-operation between
the Universities, and contributes to the exchange of experiences between students of both
universities. The work presented in this thesis is part of that programme, and has mainly been
performed through funding from SAREC.
Additional financing has been received from Ångpanneföreningen’s Foundation for
Research and Development (ÅFORSK).
1.2.
Objectives of the Thesis
The aim of the study has been to investigate the reasons behind successful/less successful
implementation of rural electrification, with the overall objective to facilitate for decisionmakers to improve their basis for future decisions and measures on rural electrification
activities. This has been especially interesting in the light of the on-going trend towards
private sector led projects, which have introduced new elements influencing possibilities and
barriers for a sustainable rural electrification development.
The research objective of the work has been to reach increased knowledge of the impact
from organisational and institutional factors on project sustainability, through
interdisciplinary field studies, and studies of literature on rural electrification. The main issue
for the research work has been to examine whether rural electrification implemented by
private entrepreneurs or other non-governmental organisations contribute more effectively to
sustainable development than the conventional approach where rural electrification is the
responsibility of a government utility.
3
4
GNESD 2007
Karakezi and Kimani 2002, Sida 2005(a)
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And Then They Lived Sustainably Ever After?
- Experiences from Rural Electrification in Tanzania, Zambia and Kenya
1.3.
Scope of the Work
From the perspective of sustainable development, this doctoral thesis presents an analysis of
rural electrification, based on interdisciplinary empirical studies of seven rural electricity
cases in Tanzania, Zambia and Kenya. With the organisational aspects as a starting-point, the
thesis deals with the following central issues within the area of rural electrification;
To what extent has implemented rural electrification been evaluated, and are there any
means for additional research to contribute to the “accumulated knowledge” and to the
evaluation methods presently used?
Are there any differences in the performance of the various organisations involved in
rural electrification, when it comes to sustainable development, and to what degree are
the organisations capable to manage the essential activities on long-term-basis?
What is the probability of international private investments in the African power
sector, and especially in the rural areas?
What are the costs for elimination or reduction of greenhouse gas emissions caused by
small-scale electrification?
In what way is electricity in practice contributing to poverty eradication?
Prior to this thesis, findings on critical factors of importance for the sustainability of
electricity services in electrified rural areas, have been published in a licentiate thesis5.
1.4.
Methodology
The research objective has been approached by three main activities, namely:
1. To study literature on evaluation of rural electrification and sustainable development.
2. To conduct fieldwork as to study and learn from areas where rural electrification has
been implemented.
3. To improve and develop present methodologies used for evaluations, as to attain a
more functional in-field evaluation method. The method developed is presented in full
text in Appendix VII.
The main part of the work is based on field surveys, where selection of respondents has been
made through random sampling and stratified sampling (subdivision). In addition, data has
been received through inspection and measurements of technical components, review of client
ledgers, logbooks, economic reports and other documentation available on the sites. The
situation for each specific case surveyed, has been assessed by means of indicators developed
during the work. Lastly, SWOT-analyses have been made based on information received from
discussions with stakeholders.
The data collected has been compiled either in SPSS or on simple Excel Spread Sheets. The
analysis of the data and the calculation of the indicators have been made on Excel SpreadSheets.
The methodology and its limitations are further discussed in Chapter 6.
5
Ilskog 2005
2
1.5.
Thesis Outline
The result of the study has been presented in six papers, appended to this thesis. The thesis
starts with a general discussion on the present situation of electrification in Africa (Chapter
2), where concepts on rural electrification and power sector development conveyed in
literature are introduced. The chapter also includes a discussion on the context of sustainable
development and the approach applied in the thesis. Chapter 3 discusses the need of
evaluations, as well as the use of indicators and index. Chapter 4 presents a summary of the
results from the field studies, and a desk research on the investment climate in Africa. In
Chapter 5, a discussion of the result of the study is given, followed by a discussion on
methods and need for further work (Chapter 6). The conclusions from the study are presented
in Chapter 7, and the nomenclature used in the thesis is found in Chapter 9.
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And Then They Lived Sustainably Ever After?
- Experiences from Rural Electrification in Tanzania, Zambia and Kenya
2. The Development of Rural Electrification in Africa
2.1.
Overview
Most people in Africa today do not have access to modern energy services with a majority
of them living in rural areas. As seen in Figure 1 below, the rural access to electricity is less
than 5 % in most countries in southern and eastern Africa.
Figure 1.
Access to electric grid services in Africa (Source: Gustavsson, Ellegård, 2004).
Africa’s low overall access rates are partly explained by negligible service coverage in rural
areas where the bulk of the population still resides6. Accelerating the introduction of modern
energy is seen as a key strategy for promoting sustainable development in rural areas, and
increasing the current low level of access to electricity services is considered a high priority
and a major challenge among national governments in developing countries and the donor
society. In fact, it is well documented that one of the most important energy indicators to track
the progress of the MDGs (Millennium Development Goals) is access to electricity8.
Increased access to electricity services obviously requires not only installation of the
necessary infrastructure, i.e. equipment for electric power generation and distribution of
electric power, but also provision of the electricity services at a cost that is considered
affordable by the population. In all African countries included in this study, until now
parastatal national electricity utilities have been responsible for providing the electricity
services. Rural electrification has been achieved either by extension of the national electric
transmission grid or by construction of isolated distribution networks supplied mainly by
diesel generator sets. To make electricity affordable also for low-income groups, panterritorial tariffs that result in subsidies for clients in rural areas and clients with low
consumption have been applied, and are still in practice.9 Additional measures have been
implemented in many national energy policies, including deregulation and privatisation of
national utilities, underlining the role of private actors as important. One example being
Uganda, where the role of private participation has been emphasised as one of the key means
of achieving greater efficiency and improved performance in the electric power sector10. In
6
World Bank 2007(a)
GNESD 2007
9
Lyimo 2006
10
The Republic of Uganda 1999
8
4
other countries, private actors have been pointed out as crucial “development partners” and
efforts to motivate private companies to establish activities in the country has been
advocated11. Private sector was expected to step in when infrastructure gaps were
acknowledged as a constraint to meeting growth targets and achieving welfare
improvements12.
In general, the private sector involvement in the electric power sector began in the 1980s
with a comprehensive privatisation program in Chile and a few projects in other developing
countries. Since then, the private sector has played an important though minority role in
financing investments in this sector in developing countries. Between 1984 and 2003,
approximately 90 countries had achieved 952 electricity projects with private sector
participation. The majority of the project had been launched in countries in Latin America and
East Asia. On a total, 70 percent of the investments made by the private sector were made in
electricity generation13.
For those countries in Africa were private participation has been implemented, it has been
claimed that private ownership is the best institutional means to create profit, which in turn is
pointed out as a precondition for a well-functioning business sector14. Many countries in
Africa have during the last decade also been characterised by an economic growth that has
resulted in new investment incentives15. Between 1995 and 2005, the private sector had
invested almost $37 billion in infrastructure in African countries south of Sahara. These
market-oriented solutions have been promoted as a means to overcome apparent constraints
posed by state-provided services. Governments in developing countries are therefore in the
process of establishing institutional frameworks for regulation of the new market structures.
The main reason held forward to why the government public services have failed is stated to
be a “problem of a ‘principal agent’, where political and bureaucratic leaders control
information and resources that allow them to pursue their own individual aims and ambitions,
rather than operating in the public interest. Reformers present private sector participation as
an institutional solution to poor governance”, where poor governance can be characterised
with “bureaucratic inertia and disincentives to innovate, low technical and managerial
capacity at all levels of service delivery, lack of accountability to consumers, absence of
incentives for workers to perform, political constraints to laying-off under performing or
unneeded workers, and corruption”16. The need of private participation is also stressed by
donor organisations. Sida for instance, states that “the public sector will have to contribute to
play a major role in financing needed investments but a significant part of the capital, in both
local and foreign currency, must be mobilised from private investors and financial markets”.17
The main argument against privatisation of public services is that the expectations of having
private actors investing in such utilities have not been fulfilled. “Based on market incentives
alone, private investment does no go to the areas of greatest need” 18. Investments in energy
sectors in third world countries requires high investment costs, long payback periods, and
coping with a political situation that in practice often imply a difficulty to charge tariffs that
ensure a commercial return. Therefore, it is argued, governments in developing countries have
been burdened with high costs for motivating private sector investments, such as tax11
The Revolutionary Government of Zanzibar 2004
World Bank 2007(a)
13
Covindassamy et al. 2005
14
Sida 2000
15
DBSA et al. 2000
16
Bayliss and Fine 2007
17
Sida 2005(b)
18
Bayliss and Fine 2007
12
5
And Then They Lived Sustainably Ever After?
- Experiences from Rural Electrification in Tanzania, Zambia and Kenya
exemptions, and specific contract arrangements that minimize or even eliminate contract risks
for the private participant. Moreover, the focus of investors on cost recovery has not promoted
social objectives, such as reducing poverty and promoting equity19.
These changes of the energy policies of governments in Africa, encouraging private
participation, are supported by the donor community. The influence of the donors is strong
since most of the financing for investments in the electricity sector is provided as
development aid or soft loans. Another effect of donor policies is the promotion of renewable
energy technologies, in particular solar PV (photovoltaic) for electricity generation. For
scattered electricity users at remote locations with a small demand for electric power, solar
PV is often the cheapest supply alternative available today. The justification used by the
donors for the promotion of solar PV is however also that stand-alone diesel generation is
avoided, thereby avoiding use of fossil fuels and release of CO2 that would contribute to the
risk for a global climate change.
2.2.
Power Sector Participation by Different Organisation
The implementation of rural electrification can be realised by utilising different
organisational forms, including government, private actors, communities and non-profit
organisations. Historically, the most used form is implementation of electrification through
government or governmental parastatal organisations20.
A number of African countries have turned their electricity utilities to corporations
(parastatals). A few countries such as Kenya, Nigeria and Zimbabwe have gone a step further
to commercialise their power utilities.21 A further development in many African countries
such as South Africa, Tanzania and Uganda, is the introduction of private sector involvement
in the energy sector. This has mainly been done through introduction of Independent Private
Producers (IPPs), which are allowed to own electricity production plants and to sell the
electricity to the government owned utility.
Other form of private sector involvement in the electricity sector is the contract
management-form, which has become a common feature, particularly in West-African
countries. Most of these contracts involve an agreement through which the operational control
of a company or part of a company is delegated to an external operator, while the host
company remains the owner of installations and controls all investment decisions.22 This is an
institutional form commonly used in Western Europe as well.
The above presentation mainly concerns the urban areas of a country, and areas connected
to the national power grid. In many rural areas electricity, if any, is provided through
decentralised systems. These decentralised systems are mainly owned and run by local
branches of government utilities, and commonly equipped with a diesel generator set for
electricity generation. The tariff applied is the same as in the rest of the country concerned.
Another organisational form implemented in rural areas, in for instance Zambia and South
Africa, is an Energy Service Company (ESCO), which can be described as a form of contract
management. The ESCO is typically a private business, sub-contracted by the government to
provide the energy service and to maintain the equipment, which can remain as a property of
19
Bayliss and Fine 2007, Hall 2007
Karekezi and Kimani 2002
21
Karakezi and Kimani 2002
22
Karakezi and Kimani 2002
20
6
the government or handed over to the ESCO. The energy end-user (the client) buys an
“energy service”, such as light but not the equipment itself23.
Electricity can also be produced locally by others than the government utility or
organisations contracted by the government. Examples of this are rural based agricultural
industries, such as sugar, coffee, and tea industry, wattle-companies and sawmills. However,
the major part of the electricity produced is used within the industry itself. Systems where
electricity is sold to private clients are unusual and not allowed in most countries in subSaharan Africa24. One exemption however, being electricity produced and distributed by cooperatives or different forms of community based organisations (CBOs). The management in
these organisations is generally composed of a steering committee or an executive committee,
working under by-laws set up in collaboration with the government.
Community enterprises are a specialised form of community-based organisation that has
both commercial as well as social aims and objectives. In this respect, the commercial
objectives of a community enterprise are the business methods and practices that drive its
organisational functions and determine its operational style. This is claimed to distinguish the
organisational form from other forms of community-based organisations as discussed above.25
These organisations are however still rare in African countries.
In general, the existence of decentralised power companies in Africa has been substantially
lower than in developing countries on other continents. In China for instance, decentralised
power companies play an integral role in the delivery of power to rural areas. In large parts of
the country, the success of rural electrification and subsequent economic development has
relied heavily upon their initiatives. The organisations have however been dependent upon
governmental subsidies, and are now challenged by a market orientation and demand on
technical efficiency26.
2.3.
Development Issues Related to Rural Electrification
Lighting up rural areas is a longed-for change among the rural population, and electricity for
TV, radio and charging of mobile telephones is highly appreciated for facilitation of access to
news and communication. Better health services, water services and improved security
resulting from installation of streetlights are possible results from electrification that will
benefit the majority of the population in an electrified area. In addition, electricity has been
pointed out as important for reduction of fuel wood consumption, thereby preventing
deforestation27.
For economic development, also income-generating activities are needed to create
employment opportunities through activities performed in households, in micro enterprises28,
in industries of different types and sizes, and in agriculture. 29 Access to 24 hours of electricity
services is generally seen as important for the establishment and growth of businesses. Even a
limited level of electricity service has been pointed out to be able to have positive effects on
23
24
25
26
27
28
29
Ellegård and Nordström 2001
Oral information from AFREPREN, Kimani and Kithyoma 2002
Boyd 2003
ESMAP 1999
Sida/BITS electrification projects in Botswana, Ghana and Lesotho, Sida 2002 (Orgut)
A micro enterprise is a very small business that produces goods or services for cash income (NREL 2000)
Gullberg et al. 2004
7
And Then They Lived Sustainably Ever After?
- Experiences from Rural Electrification in Tanzania, Zambia and Kenya
operating hours, working conditions, mechanisation/automation, product preservation,
communication and education30.
There are different opinions about the gender aspects of rural electrification31. Some are of
the opinion that rural electrification is an energy sub sector that does not have any different
impact on women versus men. Other energy experts feel strongly that energy projects have
the potential to provide special positive benefits for women. More efficient stoves, drinking
water pumping and agro-processing can reduce women’s workloads, improve their health,
and provide income-earnings. Some of these benefits depend on electrification. Better lighting
can extend the day for both productive and reproductive work and strengthen education and
health services. Irrigated agriculture can provide better income-generation and employment
opportunities. Elimination of indoor air pollution and elimination of the need to spend time
and efforts on collection of cooking fuel by switching from cooking with wood fuel to electric
cooking32 is also sometimes claimed to be a benefit of electrification that is important for
women.
Electricity may however also bring negative effects on development. Such effects could be
prolonged working hours, increased consumption of alcohol at bars, prostitution, negative
influences on youth from video films etc.
What needs to be further clarified is if the type of organisation that provides the electricity
services has any influence on the public benefits and the distribution of them in the rural
community. In addition, it is of interest to find out whether the type of organisation used for
electricity supply makes any difference from a gender perspective and from a perspective of
bringing other effects on the community.
2.4.
Sustainability Issues Related to Rural Electrification
Ever since the release of the definition on sustainable development by the 1987 World
Commission on Environment and Development33, the sustainability issue has received
increased attention, and is now taken into consideration in all research involving development
issues and evaluations in particular (see for instance: Kennedy 2002, and Dewulf & Van
Langenhove 2005). The Commission’s frequently quoted definition of sustainability as
“development that meets the needs of the present without compromising the ability of future
generations to meet their own needs”, concerns the distribution of resources between and
among generations and is focussed primarily on preservation of the environment and
management of exhaustible natural resources such as fossil fuels.
Sustainable development however, requires more than conservation of the environment and
the natural resources. A Swedish official study34 used the following, more elaborated
definition: “Sustainable development concerns the distribution of resources between and
among generations. Economic growth and equitable distribution of the growing resources
derived from this growth are prerequisites for sustainable development. The growth most be
of good quality, such as material- and energy efficient, and be able to satisfy human needs
such as health and education. The growth must not jeopardise the balance of essential
ecological systems”. Another study on the sustainability of the energy sector in particular,
Johansson & Goldemberg, (2002) also acknowledged the economic and social aspects and
concluded that: “sustainable energy development will require electricity services that are
reliable, available and affordable for all, on a sustainable basis, world-wide”.
30
NREL 2000
Cecelski 2000
OECD 2007
33
Bruntland, G. (ed.) (1987)
34
Swedish Ministry of Finance 1999/2000
31
32
8
In this thesis, an even wider approach to sustainability than those implied by the definitions
quoted above will be taken but applied on the local grass-roots level of electricity services at
selected project sites.
With the grass-roots perspective, one fundamental requirement for sustainability is that the
services must be economically sustainable. This means that the payments received for the
services must cover all operating costs and allow sufficient accumulation of capital for reinvestment when the economic lifetime of the equipment has been reached. The services
should also promote economic development and this requires that tariffs are affordable for
entrepreneurs that would use the electricity services for improvement of their productivity.
Affordability is also an issue for non-productive uses like residential lighting, electricity for
health centres and streetlights. This means that there must be a sustainable market for the
services.
Another important requirement is that the services are technically sustainable. This implies
that supplies of fuel, spare parts, maintenance and service, personnel for management,
administration and operation must be possible to maintain for the period of interest. The area
of organisational/institutional sustainability covers issues on how the project is managed,
the degree of client-satisfaction with the energy services, and if both women and men are
represented in the decision-making in the project.
The perspective on social and ethical sustainability is the most complex of the
sustainability aspects, and does not only cover a broad area, but is also dependent and
influenced by the development as a whole, which cannot be directly connected only to the
impact of the actual project. The perspective includes issues such as the share of population in
the area with access to electricity, development of health institutions and the education level
in the area. These are important issues when financing from the government or a donor is
needed but it may be less important for the organisation providing the services. It is obvious
that the services must also be environmentally sustainable, but the implications of this
requirement might be different from a local, national or global perspective. Environmental
sustainability in a broad global perspective is important for donors’ decisions about project
financing, but is a less important issue for the development and survival of the schemes that
have already been implemented.
The performance of the seven selected projects with respect to these aspects of
sustainability was evaluated during the field work presented in Chapter 4 and is further
discussed in Chapter 5 and Chapter 6. Since the risk for undesirable climate change as a
consequence of continued use of fossil fuels is receiving increased attention and is highlighted
for instance by Sida in a recent policy document35 some possibilities to minimize the CO2emissions caused by small scale electricity generation was also studied. The result of this
study is presented in Section 4.4.
35
Sida 2004
9
And Then They Lived Sustainably Ever After?
- Experiences from Rural Electrification in Tanzania, Zambia and Kenya
3. Impact Assessments and Evaluations by Means of
Indicators
3.1.
Impact Analysis and Evaluations of Rural Electrification
As described above, access to basic, clean energy services is essential for sustainable
development and poverty eradication, and can provide major benefits in the areas of economy,
health, literacy and equity. As many people worldwide still lack access to modern energy,
electrification of rural areas has been emphasised by governments in developing countries and
the donor community among others during the last decades, both through extension of the
national grid and through local solutions.
Different forms of evaluations of such electrification efforts have been made by several
organisations36. In addition, the adoption of the Poverty Reduction Strategy Papers in many
countries, along with the Millennium Development Goal (MDG), has led to an increased need
for more systematic analysis of the poverty and social implications of reforms37. Despite this,
one of the studies made by the World Bank, states that “in the field of development
evaluation, there is a widespread concern that the utilisation rate of evaluations, even for
methodologically sound evaluations, is very low”. The World Bank points out that many
reasons have been given for this low rate of evaluation utilisation, such as that “findings are
not disseminated in a timely way to the potential users; or information not presented in a way
which makes it easy to use”.38
In addition, as can be illustrated by evaluations assigned by different organisations39, baseline data is often missing. In one of the studies40, the intention was to compare rural
electrification of seven cases in Botswana, Ghana, and Lesotho. The evaluation was planned
to be undertaken by comparison of two dimensions: before and after the implementation of
the project. The study however found out that no baseline data where available, nor was the
possibility to find such data at country level “fulfilled to any significant degree”41
The conclusion of the study of the evaluations listed above is that they contribute with
important observations but are difficult to compare since they are not performed in a similar
way. In addition, it seems as simple comparable measures of the effect of electrification are
missing, a conclusion that is supported by Gaunt (2005) and Ugwu & Haupt (2007). One
example is the way in where the share of population with access to electricity is presented. Of
what size are the audited areas of concern? Are the presented figures including also those with
individual arrangements, such as separate diesel generator sets, solar PVs, etc? The figures are
not transparently presented and therefore difficult to compare. In addition, the effects on
sustainable development of leaving the responsibility for rural electrification to new actors
have not been evaluated.
An extensive evaluation of rural electrification was performed by NRECA in 200242; where
close to 4 000 interviews were made. The broad objective of the study was to assess economic
36
Kjellström et al. 1992, NORAD 1994, the World Bank 1996 (b) (c), 2003 (a) (b), 2005, Sida 2002
World Bank 2003(b)
38
World Bank 2005
39
Sida 2002, and NRECA 2002
40
Assigned by Sida 2002
41
Sida 2002
42
NRECA 2002
37
10
and social impacts of a Rural Electrification Program in Bangladesh. The evaluation resulted
in a substantial amount of data collected. No detailed description have however been given on
the underlying definitions and methods to compile the collected material.
As indicated above, a number of evaluations have also been made under the umbrella of the
World Bank Group (WBG). In 1996, a study evaluated the reasons behind why the power
projects of the World Bank were less successful in Sub-Saharan Africa than in other regions.
The study evaluated the performance of 41 power projects completed from 1978 to 1993,
which showed that the institutional development and policy reforms, were inferior the
situation in other regions, as well as low operational efficiency and failure to recover costs.
The evaluation from 1996 was followed by an extensive review of the World Bank Group’s
Experience with Private Participation in the Electricity Sector, published in 200343. The
review evaluated the performance of the WBG activities in all regions, during the 1990s in
promoting private sector development in the electric power sector (PSDE). In general, the
study recommended that the WBG continue to systematically pursue PSDE, as more than 50
percent of projects evaluated was concluded to “have a good outcome”, compared to the
objectives of the projects. The study also emphasised the importance of monitoring and
evaluation of impacts. The study concluded that there “is no universal blueprint for PSDE;
rather, there is a continually evolving menu of options whose validity depends on countryspecific objectives and conditions. Good project level outcomes are a necessary condition for
good sector-level outcomes, but this is achievable only with strong government commitment
to country-sector reform objectives. To achieve these reforms was pointed out to be difficult
in most of the WBG’s client countries”.
In 2005, The World Banks Operations Evaluation Department (OED) presented a report
with the intention to illustrate the potential benefits from evaluations. The report includes
eight case studies where evaluations were found to be highly cost-effective and of
considerable practical use for the intended users. Although the report did not include any case
of rural electrification, it shows that well-designed evaluations, conducted at the right time
and developed in close consultation with intended users, can be a highly cost-effective way to
improve the performance of development interventions.
In 2007, a study supported by the World Bank and African Union among others, was
presented. The study was based on a pooled database that draws upon the entire body of
household surveys conducted in Africa in the last fifteen years. The difficulties to compare
various surveys as discussed above, is also pointed our by the authors of this study. In
particular, the infrastructure categories used and expenditure surveys varied widely44.
3.2.
Indicators as Means for Evaluation and Assessment
Analysis and communication of changes and trends by means of indicators have become
commonly used by different organisations. One main reason is that reports often tend to be
bulky and consist of extensive statistical information, which have in many cases been difficult
for decision-makers to interpret. To compile this extensive information by means of indicators
– which present data in a comprehensive form and at the same time display an appraisal
message, has therefore been an important task.
The recognition of the role that indicators can play was made earlier by the 1992 Earth
Summit. This recognition is articulated in Chapter 40 of Agenda 21, which calls on all
institutions and organisations to develop and identify indicators of sustainable development
43
44
World Bank 2003(b)
World Bank 2007(a)
11
And Then They Lived Sustainably Ever After?
- Experiences from Rural Electrification in Tanzania, Zambia and Kenya
that can provide a solid basis for decision-making at all levels.45 The need of indicators as
well as proper monitoring and evaluation has also been emphasised by OECD46, where it is
stated that “strategies should be based on structured indicator systems to assist in monitoring
progress and to serve as quantitative targets”.
The response from the international community has been large, and has resulted in the
development of a number of indicators on sustainable development. A selection of the most
significant work is given below.
3.2.1. Guidelines and Methodology, Developed by the UN
Commission on Sustainable Development
The UN Commission on Sustainable Development performed an extensive work on
development of guidelines and methodologies on sustainability indicators, during 1995-2001.
The work was a direct response on the call articulated in Chapter 40 of Agenda 21. Moreover,
Agenda 21 specifically called for the harmonisation of efforts to develop sustainable
development indicators at the national, regional and global levels, including the incorporation
of a suitable set of these indicators in common, regularly updated and widely accessible
reports and databases47.
The indicators presented by the UN (CSD-ISD) have been organised “under the four
primary dimensions of sustainable development: social, economic, environmental, and
institutional”48, and the thematic framework, guidelines, methodology sheets and indicators
set out are based on a conceptual approach widely used for environmental indicator
development.
The methodology developed during 1995-2001 has further been reviewed and assessed by
an expert group.49 The revision was made as to assess proposals to revise the previous
developed CSD-ISD made by international agencies and organisations, and to assess the
coherence between CSD-ISD and the Millennium Development Goal (MDG) indicators.
3.2.2. Energy Indicators Developed by the IAEA
In addition to the indicators developed by the UN, a specific emphasis has been put on
energy indicators. The work has been performed by the International Atomic Energy Agency
(IAEA) in cooperation with the United Nations Department of Economic and Social Affairs,
the International Energy Agency, Eurostat, and the European Environment Agency (Energy
Indicators for Sustainable Development: Guidelines and Methodology 2005)50. The aim of
the work was to select, define, and validate an appropriate set of energy-related indicators
consonant with the larger effort on Indicators of Sustainable Development developed by the
Member States of the UN, as presented above.
The central characteristic of the CSD-ISD indicators, and the energy specific indicators
developed by IAEA, is their national focus, whereas the MDG indicators are primarily used
for global monitoring of the internationally agreed Millennium Development Goals.
45
UN 2005
OECD 2006
47
UN 2001
48
UN 2001
49
UN 2005
50
IAEA 2005
46
12
3.2.3. Guidelines, Toolkits, and Performance Indicators Developed
under the Umbrella of the World Bank Group
Under the umbrella of The World Bank Group (WBG), different forms of guidelines have
been developed. In 1995, indicators of relevance for the micro-level (field-level), was
developed and categorised on sector-level, implementing entity-level, and project-level51. The
work to develop performance indicators was initiated by the Wapenhans Report "Effective
Implementation: Key to Development Impact"- July 199252, which found that project ratings
made by the World Bank were not providing adequate feedback on progress towards
development impact. The reasons identified were:
Too much emphasis was placed on the mechanics (physical and financial) of project
implementation.
The risks and factors that mostly influence project outcomes were poorly identified.
Objective criteria, transparency, and consistency across units were lacking.
Ratings tended to be overly optimistic.
As to improve the possibilities for proper monitoring and evaluation, the World Bank
initiated the development of standard performance indicators to measure the effectiveness of
project implementation, which place greater emphasis on performance to assess the quality of
projects at entry, and subsequently to monitor implementation performance. The work has
resulted in a large number of indicators (“notes”) covering 16 sectors, including Power,
Environment, Poverty Reduction, and Private Sector Development. The indicators are listed at
an internet based page.53
The indicators/notes listed by the Word Bank are merely suggestions and statements such as
“the performance indicators must be based on the unique objectives of individual projects”.
In 2001, ESMAP54, a joint programme by UNDP and The World Bank, presented a “Best
Practice Manual” with the aim to review methods of decentralised electrification intervention
and to provide a step-by-step approach for implementation of decentralised electrification
(DE) projects. The manual provides a brief overview and summary of rural electrification
options, and discusses the key factors necessary to create a conducive environment for the
promotion of DE. This includes the legal, regulatory, and fiscal incentives, sustainable
financing mechanisms, and necessary technical assistance to promote projects.
The document also provides a systematic guide for task managers implementing a DE project,
including questionnaires, business plan forms etc. It also gives short examples from
implemented projects in developing countries.
In 2003, the same programme (ESMAP), made a comprehensive attempt to develop a
demand-oriented approach/methodology to monitor and evaluate rural electrification projects.
The aim of the program was to develop a sound methodological approach for improving the
design and effectiveness of rural electrification projects, with a specific focus on poverty and
gender implications. In the evaluation approach, the use of both quantitative and qualitative
techniques was advocated, and the need to begin the evaluation process already in the initial
stage of the project preparation was stressed on as important. The report presented a large
number of variables and key indicators. In addition, detailed descriptions were given on
structure of questionnaires, and approaches for applying the participatory assessment tools.
Based on the findings from the case studies included in the program, the most obvious
conclusion was that a greater emphasis on monitoring and evaluation of socioeconomic
51
World Bank 1996(a)
World Bank 1992
53
http://www.worldbank.org/html/opr/pmi/contents.html
54
ESMAP 2003(b)
52
13
And Then They Lived Sustainably Ever After?
- Experiences from Rural Electrification in Tanzania, Zambia and Kenya
development impact is necessary. However, the program did not perform any evaluation of
real cases of rural electrification. Nor did the report include any detailed description of the
underlying context of each suggested indicator, such as its underlying definition and concept,
its measurement method and limitation.
In 2005, the “Community Development Toolkit” was presented by ESMAP55. The toolkit
was stated to be a “pioneering new approach in support of sustainable development in the
extractive sector”. The aim of the project was to develop new approaches and tools to support
government, industry, and community efforts to realise more sustainable community
development around mining and mineral processing operations. The Toolkit included 17 tools
intended for use throughout the project cycle and which cover the assessment, planning,
management, and evaluation phases of community development as well as stakeholder
relationships. Examples of the tools suggested are; social baseline studies, community
mapping, and development of indicators.
Lastly, guidelines have been developed recently (2007)56 where the goal has been to promote
the use of the modules in forthcoming living standards measurement studies (LSMS), and to
monitor which questions work best in different country contexts. It has been anticipated that
data sets from these enhanced LSMS survey modules can be used to formulate indicators that
can be used in the energy sector as key decision-making tools. The developed guideline gives
detailed suggestions on topics and specific questions to include in household questionnaires,
and provides some information on selected indicators for countries in Latin America and
Asia. The aim is to provide information on household energy uses that will give important
insights into the role that energy services play in household welfare, and the policies that
would be most effective in accelerating the household transition from traditional to modern
fuels.
3.3.
Indicators of Sustainable Development on a Micro-level
The literature review on evaluation and evaluation of rural electrification in particular,
indicates a lack of documented field-experiences from developing countries57. In addition, it
appears that simple comparable measures of the effect of electrification are missing.58 As can
be seen from the literature study presented above, several manuals, and toolkits etc. have been
developed. However, the implementation of these on real cases seems to be limited.
Neither has the literature review carried out as a part of this study identified any previous
study on the effects of the organisational form on sustainable development of rural
electrification projects on field-level. This conclusion is also supported by other studies. For
instance, a study performed by The World Bank/ESMAP concludes that “unfortunately, data
sets on which to base evaluation of energy services’ are in remarkably short supply”.59
It appears as if specific research on rural electrification often has been focused either on
technological issues or on environmental impacts.60 Other areas for study have been the
55
The project was jointly coordinated and managed by the World Bank Group’s Oil, Gas, and Mining Policy Division and the
International Council on Mining and Metals (ICMM). ESMAP 2005
56
O’Sullivan & Barnes 2007
57
Meadows 2003, Kozloff & Shobowale 1994, Ilskog 2005
58
Gaunt 2005, Ugwe & Haupt 2007
59
O’Sullivan & Barnes 2007
60
See for instance Fraenkel. et al. 1991, Amelin & Hersoug 1997
14
household energy use61, how households’ access and use of energy are related to poverty62,
and the specific relation between household energy and gender issues.63
The review of literature on sustainability research indicates that most of the initiatives have
been focused on macro-level definitions. “The process of translating national strategic
sustainability objectives into concrete action at micro (i.e. case-specific) levels remains a
difficult task”.64
There are however sectors where a larger focus has been set on the development of
indicators on micro-level, with one of these being the water sector. The literature on the use of
indicators in this sector is substantial.65 Water is increasingly seen as one of the most critically
stressed resources in many countries worldwide. Much effort has therefore gone into the
development of indicators of water problems. “These have been critically reviewed and
shown to be lacking as they fail to reflect the current agenda in water resources management
nor do they direct data collection efforts. Effective water indicators need to focus on the
structural impediments to the sustainable supply of water, so as to facilitate policy
responses.”66 The considerable research on water poverty indicators can contribute to the
development of indicators in other sectors, although the indicators presented are sectorspecific.
3.3.1. Indicators as Foundation of Index
The development of different types of index has been advocated by several researchers.67
The argument is that an index links together the physical, economic, and social drivers, with
the aim to target crosscutting issues in an integrated way.68 It is also argued that an index
would facilitate comparison of different alternatives along various dimensions of the
sustainability envelope; economy, environment, resource utilisation, health, safety, and
project administration.69
Examples of survey instruments and methodology used70 is based on the
assessments/ranking made by different stakeholders on the importance of a number of
specified indicators, covering economy, environment, society, resource utilisation, health and
safety, and project management/administration. The ranking data has further served as input
in a mathematical model, which is an essential requirement to be able to perform a multicriteria analysis that will result in a final index.
Others71 suggest that well-known index, such as the Human Development Index (HDI) can
be used in combination with different indicators, as to generate an integrated index.
However, critical assessments on the use of index can also bee seen. For instance, Feitelson
& Chenoweth (2002) raise the issue that the aggregation of any such multi-dimensional index
“is always fraught with conceptual and practical problems. Using a collective expert
judgement to determine the weightings of a multi-dimensional index results in an index that is
subject to the value judgements and cultural biases of those who created it, while arbitrarily
61
62
63
64
65
66
67
68
69
70
71
ESMAP 2003 (a)
Pachauri & Spreng 2003
ESMAP 2004
Ugwu & Haupt 2007
Sullivan 2002
Feitelson & Chenoweth 2002
Sullivan 2002, Ugwu & Haupt 2007, Feitelson & Chenoweth 2002
Sullivan 2002
Ugwu & Haupt 2007
Ugwu & Haupt 2007
Olsson 1999
15
And Then They Lived Sustainably Ever After?
- Experiences from Rural Electrification in Tanzania, Zambia and Kenya
adopting an equal weighting for all components of an index is a de facto weighting itself that
is no less problematic”.
Aggregating indicators for generation of sustainability measures and combining these
results in a sustainability index, clearly involves serious methodological difficulties. This is
further discussed in Chapter 6 of this thesis.
Hence, the work of the different organisations described above, have served as valuable input
into the study presented in this thesis, in particular considering the selection of sustainability
dimensions (themes), and structure of the methodology sheets.
16
4. Field Studies and Results
The following chapter consists of a summary of results from field studies and literature
research, each section based on issues addressed in the six papers appended to the thesis. In
Section 4.1 experiences from an implemented electrification project in Tanzania is presented
based on results from a number of socio-economic studies and technical follow-ups. The
evaluation of the project in Tanzania is followed by a study on six organisations engaged in
rural electrification in Zambia, Tanzania and Kenya (Section 4.2), based on SWOT-analysis
as the evaluation tool. Section 4.3 presents findings from a study mainly based on literature
research and interviews concerning opportunities and constraints of small-scale power
investments in developing countries and experiences from Swedish actors on business
opportunities in Africa related to small-scale power generation. In Section 4.4, some
technological aspects on rural electrification are presented, again with the project in Tanzania
serving as the case for the study. Section 4.5, presents a method for sustainability evaluation
based on the use of 39 indicators. In the final section of this chapter, Section 4.6, the findings
from field visits to seven rural electrification areas in Eastern and Southern Africa, and
implementation of the evaluation method on these, are presented.
4.1.
Experiences from 10 years of Electricity Services in Urambo,
Tanzania
In Urambo District in northwest Tanzania, a pilot project on rural electrification based on a
co-operative approach has been on going since 1993. Urambo Rural Electric Consumers Cooperative (UECCO) was formed and registered as the first power co-operative in Tanzania.
The main purpose of the pilot project was to find out how much administrative, technical and
financial support a new electrification co-operative will need in order to survive and develop
in a sustainable way. During 1994 to 1997, researchers have made several visits to Urambo
for monitoring the progress of the project. In 2002, a follow-up was made for evaluation of
the performance of the co-operative.
4.1.1. Methods for Fact Collection
The method used for monitoring and evaluation during the years 1993-1997 has mainly
been discussions with the co-operative Committee, the District Office in Urambo and
Tanzania Electric Supply Company Ltd. (TANESCO). In addition, researchers from Tanzania
and Sweden have conducted several socio-economic studies. More details of the progress
during 1994-1997 can be found in a special report.72
In 2002, the follow-up of the pilot project was performed through open-ended interviews
and information collected at meetings with the management of the co-operative, the District
Office and TANESCO. Also interviews with electricity clients, based on a pre-prepared
questionnaire where carried out. The interviews covered approximately 20 % of the total
number of electricity connections in Urambo. 27 of the respondents were men and 8 were
women. In addition, inspection of the distribution network, measurements of the load at three
of the substations and performance tests of the power plant were made as well as reviews of
the logbooks kept in the powerhouse and the consumer ledgers.
72
Gullberg et al. 1999
17
And Then They Lived Sustainably Ever After?
- Experiences from Rural Electrification in Tanzania, Zambia and Kenya
The methods used for fact collection are further discussed in Chapter 6.
4.1.2. Findings from the pilot project in Urambo, Tanzania
Approximately 80 000 persons is living in Urambo District of which roughly 20 000 in
Urambo town73. Agriculture is the dominating activity, and tobacco is an important cash
crop74. The electricity is distributed to the members/clients through a local grid during 4-5
evening hours per day. The generation of the distributed electricity is made by two diesel
generator sets with a working capacity of 193 kW. Fees for consumption are collected by
UECCO-staff monthly. The consumption is either metered or paid on a flat rate basis.
The electricity clients are assumed to be among the most affluent citizens of Urambo. Of the
clients interviewed, 1/3 was categorised as high-income, and almost 2/3 as middle-income.
Only one client was classified as low-income in accordance with the definition of Tanzania
Bureau of Statistics in 2000/200175.
Table 1 shows a selected number of indicators on the operating record of the power plant;
the development of the load, the consumption of fuel, the development of the tariff, the
development of the number of members/clients, the average amount of energy generated per
client and the operation results of UECCO during different periods 1994-2002.
Table 1.
The development of operation records of the power plant, electricity tariff,
member/client numbers and economic results for the organisation in Urambo, 19942002. (Observe that the presented periods vary for the different indicators.) (Source:
various sources complemented with evaluations made by the follow-up team.)
b
Period
Availaa
bility %
Average
b
load
kW
Fuel use
litres/kWh
Diesel
c
Price
TAS/litre
1994
1995
1996
1997
2001
2002
80.7
87.5
96.2
94.5
97.5
97.0
64.4
36.8
36.2
66.3
0.38
0.38
0.45
0.34*
300
328
425
650
a
Energy
Charge in
c
Urambo
TAS/kWh
200
260
350
450
Number of
active
d
clients
67
66
99
101
193
241
Client
monthly
e
use
kWh
110
53
41
45
32
35
UECCO
Period
f
balance
1000 TAS
-1 831
- 2 514
+ 601
+ 166
+ 3 379
1994 July-Nov, 1995 Jan-Dec, 1996 Jan-Dec, 1997 Jan-June, 2001 Nov-Dec, 2002 Jan-Oct.
Records for the period 1998-2000 are not available.
b
1995 Jan-June, 1996 Jan-June, 1997 Jan-June, 2002 Jan-June.
* Incomplete data for January 2002.
c
1995 Oct., 1996 Sept., 1997 July, 2002 Oct.
d
e
f
1994 Dec., 1995 Dec., 1996 Dec., 1997 June, 2001 Oct., 2002 Oct.
Monthly average value per client. 1994 Dec., 1995 Dec., 1996 Dec., 1997 June, 2001 Oct., 2002 Oct.
1994 July-Dec, 1995 Jan-Dec, 1996 Jan-Dec, 1997 Jan-June, 2002 Jan-Dec.
As can be seen from the table, the availability of the plant has increased considerably since
the start in 1994, from 80.7 % to 97.0 % in 2002. The average system load has dropped
despite an increasing number of clients. This is a result of a more than three-fold decrease in
average monthly electricity consumption, which has dropped from 110 kWh to 35 kWh per
month during 1994 to 2002. This has occurred in three steps, the first when a system of flat
rates were abandoned and the consumption was charged on basis of actual consumption, the
second as a consequence of a tariff increase in 1996 and the third as a result of an increase of
73
Assessments made by the Urambo District Council (Urambo District 2001)
Gullberg et al. 1999
75
National Bureau of Statistics, Tanzania 2002(a)
74
18
the tariff in 2001. In 2002, the system load was back to approximately the same level as in
1994, however with more than 3.5 times as many electricity clients.
The specific fuel consumption of the generator sets has decreased to 0.34 litres/kWh in
2002, which is well below the range 0.43-0.72 litres/kWh observed for TANESCO highspeed diesel power plants76.
The operating costs for electricity generation are composed of fuels costs, costs for
lubricants, maintenance costs and staff salaries. In Urambo, the fuel costs dominate and were
in 2002 responsible for 80 % of the operating costs. In 2002, the un-paid electricity was 37 %,
which likely can be explained by an over-consumption by remaining flat-rate clients and a
relatively high amount of technical losses.
Payments for sold electricity are the main cash flow into the co-operative. As can be seen
from the table, the capital balance of the organisation has improved since 1994. Experiences
from the project however show that the cash flow is not sufficient to bring financial
sustainability to the project, i.e. to make adequate savings for coming re-investments.
Financial support from The Swedish International Development Cooperation Agency (Sida)
and TANESCO has been necessary for investments in and renovation of the generator sets. In
addition, TANESCO has been given technical support and training to the co-operative.
In addition, the observations made in 2002 during the inspection of the distribution network,
show that the funds set aside for maintenance are not sufficient. When the distribution system
was inspected, it showed signs of maintenance shortcomings. Some transformers had
oversized fuses, and the conductors used in the system were undersized in a few areas. As the
distribution system was gradually becoming overloaded, this also was most likely
contributing to the increase in technical losses, described above.
As shown in Table 1, the energy charges in Urambo has increased with more than 200 %
since the start in 1994. In 2002, the price per unit amounted to 450 TAS, which was more
than 15 times higher than the tariff charged by TANESCO on households77. Converted into
USD, the energy charge in Urambo in 2002 was 0.47 USD/kWh and the tariff charged by
TANESCO was 0.030 USD/kWh.
The electricity clients in Urambo can be divided into four categories: institutions (police,
bank etc.), public (churches and mosques), businesses (bars, guest houses, hotels) and
households. In 2002 there where also 15 bulbs in use for street lighting. Electricity is
predominately used for lighting and household appliances. In 2002, 70 % of the electricity
consumed by the clients was used in households. This can be compared with the figures from
1997, when 46 % of the electricity was consumed in households. Most households use one
lighting point in every room. It appears that the reduced average use of electricity, a result of
the changed and increased tariff system as discussed above, to a large extent has been
achieved by disconnection of lights with lower priority and un-utilisation of fans and electric
irons. A finding from the survey made in 2002 was that 20 % of the connected households
where lacking electric lights in the kitchen.
All of the men interviewed in Urambo stated that women and children benefit most from the
electricity in the household. The women on the other hand stated that the children benefit
most, whereas men and women equally benefit from electricity. The female respondents were
however few in number.
In 2002, slightly more than 80 % if the interviewed clients spent up to 30 % of their income
on energy (electricity for lighting and power, kerosene and batteries for lighting, cooking and
power, and charcoal and firewood for cooking). The remaining 15-20 % used a higher share
of their income on energy.
76
77
Kjellström et al. 1992
TANESCO pan-territorial rate for the first 100 kWh consumed per month
19
And Then They Lived Sustainably Ever After?
- Experiences from Rural Electrification in Tanzania, Zambia and Kenya
A further comparison of the figures of electricity consumption in different categories shows
that businesses have lost in relative importance, from 44 % in 1997 to 15 % in 2002.78 Shown
in direct numbers, businesses have decreased from 28 in 1997 to 16 in 2002. The average
electricity consumption among businesses was almost three times as high as in households
(approximately 100 kWh/month compared to 35 kWh in households). Of the electricity
clients interviewed, 22 % claims that the present electricity services have raised business and
economic opportunities in the village. Guesthouses, bars and shops have extended their hours
of business and other businesses such as hair salon; video-rooms and groceries (selling of cold
drinks) have started afresh. Close to 15 % of the interviewed clients also said that they have
started income-generating activities after they have been connected to electricity. The
proportion of additional income-generating activities performed in households is however
unknown.
More than half of the clients interviewed (54 %) claim that they are considering to start
income-generating activities if Urambo will be provided with 24 hours electricity, with a tariff
at the same level as the subsidised tariff of TANESCO. Activities planned for are presented in
Figure 2.
welding,
sawing,
milling
29%
increased
services
7%
other
12%
grocery
and/or bar
24%
multimedia
15%
computers
8%
Figure 2.
garage
5%
Plans for new or expanding businesses with 24 hours electricity services in accordance
with TANESCO tariff (Source: summary of 38 answers from surveys made by
TANESCO/Ministry of Energy and Minerals (MEM)/Luleå University of Technology
(Paper I) and University of Dar es Salaam in 2002).
The results from Urambo show that a village organisation in Tanzania can manage its own
electricity supply system if it is given adequate technical, management and financial support.
The example also shows that it is possible to find a fraction of the population that has the
ability and willingness to pay a relatively high price for electricity. As per 2002,
approximately 10 % of the households in Urambo Township are electrified by the cooperative. The co-operative management has however had difficulties fulfilling important
formal requirements of the by-laws for the co-operative, like preparation of audited annual
reports and arranging annual meetings. In addition, some of the practices in the co-operative
have not been entirely transparent. The main weakness in the performance of the co-operative
is its inability to increase tariffs at the same rate as fuel prices increase and to set a tariff that
allows an adequate budget for maintenance and re-investment. In addition, the use of unmetered flat rate as a tariff system should have been avoided.
The result from the study is further discussed in Chapter 5. In addition, the main findings of
the visits and follow-ups to Urambo are presented in Paper I appended to this thesis.
78
Many Micro Enterprises and Small and Medium Enterprises (SMEs) are however operating in households, making it difficult
to make a clear distinction between businesses and households.
20
4.2.
Experiences from Different Rural Electricity Organisations
An analysis or an evaluation of an implemented project can be performed in many ways
mainly depending on the purpose of the analysis. The previous section (Section 4.1) contained
results from a detailed follow-up of a project. In this section, the result of the application of
another analysis tool on rural electrification projects is presented. The analysis has been
applied on five organisations engaged in electricity services in rural areas in Africa, with the
purpose of getting a better insight in the prevailing situation of these organisations. The
analysis is presented in Paper II, appended to this thesis.
In addition to the analysis presented in the paper, this section has been supplemented with
initial findings from a rural electrification project in Kenya. These findings are presented at
the end of this section (4.2.3).
4.2.1. SWOT-analysis
The method used for the analysis is a simple form of SWOT-analysis. The SWOT-analysis
can be described as the examination of an organisation’s:
Strengths and Weaknesses, which are internal factors directly related to the business and
under the control of the organisation.
Opportunities and Threats, created by external conditions related to the organisations
environment and which the organisation itself cannot control. These conditions however,
are important for the organisation to be aware of.
SWOT-analysis is a general tool designed to be used in preliminary stages of decisionmaking and as a precursor to strategic planning in various kinds of applications79. When
correctly applied, it is possible for an electricity service organisation to get an overall picture
of its present situation in relation to the community where it serves, its potential clients etc.
To be able to quantitatively compare the strengths, weaknesses, opportunities and threats
among the organisations, a weighting process has also been conducted. In the process, the
parameters have been valued on a scale from 1-5, where 5 being either a considerable strength
or a considerable weakness, etc. The results have been plotted in diagrams. It has to be
observed however, that the process of utilising weighing of the parameters is a subjective
process where qualitative observations are transferred to quantitative data.
A further discussion of the strengths and weaknesses of SWOT-analysis is given in Chapter
6.
4.2.2. Findings from Case Studies in Zambia and Tanzania
The method of the SWOT-analysis has been utilised in discussions with five organisations
engaged in electricity services in rural areas of Zambia and Tanzania. The fieldwork has been
conducted in Tanzania (Urambo) in November-December 2002, in Zambia (Nyimba, Chipata
and Lundazi) in May 2003 and in Tanzania (Liwale) in August 2003. The analysis presented
in Paper II is based partly on information collected during these discussions, and partly on the
author’s own conclusions.
79
Johnson et al. 1989, Bartol et al. 1991
21
And Then They Lived Sustainably Ever After?
- Experiences from Rural Electrification in Tanzania, Zambia and Kenya
The five organisations included in the study represent the private sector through three PV
Energy Service Companies80, the government through one local grid branch81 and finally a
community organisation through an electric co-operative82 (Table 2).
Table 2.
Organisations included in the study. (Source: information from the included
organisations).
Type of organisation
Technology used
Number of clients
(May 2003)
Local branch of government Local grid supplied by
430
owned utility
diesel generator set
Private Company (Ltd.)
Solar PV
150
Private Company (Ltd.)
Solar PV
150
Private Company (Ltd.)
Solar PV
100
Co-operative
Local grid supplied by
240
diesel generator set
The result for each organisation has been compared with the results for the other
organisations with the aim to identify similarities and disparities between them. Below
(Figure 3) is a presentation of the result from a perspective of finding similarities between the
organisations. As can be seen from the figure, a majority of the organisations included in the
study (3 out of 5) points out their staff and management as internal strengths of their
organisations, whereas macro-economical issues were identified as major threats. All five
organisations bring up rising exchange rate and a high inflation rate as threats to their
businesses.
The information collected from the five organisations have also been scrutinised from the
perspective of detecting strengths, weaknesses, opportunities and threats solely raised by each
type of organisation (government, private and co-operative).
The quantitative comparison of the organisations strengths and weaknesses is given in
Figure 4. In the figure, the strengths of the organisations have been plotted on the x-axis and
the weaknesses on the y-axis. This implies that a high number on the x-axis is a considerable
strength, whereas a high number on both the x-axis and the y-axis is a considerable strength
as well as a considerable weakness. One such example is that the potential clients see
electricity as a good product, which means that only limited marketing is needed, at the same
time as electricity is regarded as too expensive by most rural poor.
As can be seen in the figure, it is interesting to note that client-relation issues appear to be
the best-off issues. This group embraces strengths such as familiarity to the local area and a
good client base. The economic issues brought up, appear to be the greatest problems for all
organisations included in the study. The issues of economics cover weaknesses such as the
non-existence of funds for re-investments and audited income statements. The issue of
infrastructure and logistics gives the most dispersed result among the organisations included.
For two of the organisations the geographically dispersed client stock and inadequate staff
transport is assessed as strong weaknesses, whereas well functioning offices and Internet
facilities are considered as strengths for two of the other organisations.
The discussion and conclusions drawn from the analysis are presented in Chapter 5 and 7.
The main findings are further summarised in Paper II appended to this thesis.
80
The SWOT-analysis with representatives from the private organisations where performed through workshops with each
organisation.
81
The analysis was performed with the local branch management team, complemented with issues raised by a research team
at the utility head office.
82
The SWOT-analysis for the co-operative has been carried out by the authors, based on discussions with the management
committee of the co-operative as well as on results from a questionnaire performed on a random sample of the electricity
clients/members of the co-operative.
22
Strengths
Opportunities
• Flexible, knowledgeable staff
• Favourable National
Rural Energy Strategy
• Familiar with the local area
and clients
• Potential for micro-credits
• Good client base
• Limited competition in the
area
• Licensed electricity delivery
organisation
• The market is expanding/
has a good potential
• Well educated technical staff
• Difficult to keep price of
electricity sufficient as to
cover costs
• Clients have low purchase
power and vulnerable
economy
• Lack of spares in stock and
shortages of material
• Rising exchange rate
• High inflation
• No internet access
• Insufficient infrastructure
(e.g. transport)
• No computer education
• Limited capital available
• High interest rate and costs
on equipment and fuel
• Limited communication with
clients
• Limited capital in the
area/region/country
Weaknesses
Figure 3.
Threats
Strengths, Weaknesses, Opportunities and Threats considered by the majority of the
five electricity service organisations included in the study. (Number of organisations to
consider the issues are indicated by the bars.) (Source: information from ESCOs in
Zambia, TANESCO in Tanzania and UECCO in Tanzania.)
0
Weaknesses
0
10
20
30
-10
Staff and management
capacity
Client-relation issues
Logistics/Infrastructure
Product issues
Economics
-20
Legal framework
-30
Figure 4.
Strengths
Strengths and Weaknesses for the studied organisations in Tanzania and Zambia
(based on an analysis where issues brought up have been weighted dependent upon
their assessed importance). (Source: information from ESCOs in Zambia, TANESCO in
Tanzania and UECCO in Tanzania.)
23
And Then They Lived Sustainably Ever After?
- Experiences from Rural Electrification in Tanzania, Zambia and Kenya
4.2.3. Findings from a Case Study in Kenya
In addition to the findings from the case studies in Zambia and Tanzania presented above,
an analysis of a project in Kenya has been made. The analysis is based on a fieldwork
conducted in Tungu-Kabiri in Kenya in October 2003, where information was collected from
discussions with the leadership of the community corporation and the project leader from the
Intermediate Technology Development Group, East Africa (ITDG-EA).
In Tungu-Kabiri a micro-hydro project has been on-going since 1998, with the first
electricity being produced in June 2001. The project has been initiated by ITDG, and is based
on a concept with a business centre. In the centre, premises to let to business enterprises or
public services have been established. The power to the centre is supplied during the day from
8.00 am to 4.00 pm. In 2003, power was used in eight separate stalls for a hair saloon, a
barbershop, charging of mobile phones, selling of cold beverages, a video show room, and for
welding. The tariff was based on flat rate, meaning that all clients paid the same monthly
amount. No electricity was in 2003 supplied to the surrounding households. However, this
was a planned development. Another planned development of the scheme was water
pumping, which was specifically advocated by the women in the community. The reason why
these plans had not yet been implemented was mainly due to lack of capital.
Financing of the scheme has been made through UNDP/GEF and ITDG and implementation
jointly through the Ministry of Energy, ITDG and the community. The community
contributed labour to the project estimated at 30 % of total costs.
The intention is that the project will be handed over to a community group formed as a
corporation, which will own, operate and manage the scheme. In 2003, the community group
had a leadership composed of 15 persons, of which 6 were women and 9 were men. The total
number of members was initially approximately 200, but had in 2003 decreased to 150.
From the initial findings in Kenya, it appears as many of the strengths, weaknesses,
opportunities and threats found in the other organisations presented above, are also valid for
the project in Tungu-Kabiri. On the positive side is that the client base is good and an
expanding market can be expected. There is also a new National Energy Policy in progress
that will be favourable for the project. On the negative side are the difficulties to keep price of
electricity sufficient as to cover costs, a low purchase power at the present market, and limited
operational skills among staff. Also for this project, high and unpredictable inflation, low
value of local currency in relation to USD, poor infrastructure and difficulties in obtaining
proper spare parts, are external threats.
Additional findings show that although the community has been involved in the
construction of the micro-hydro power plant it appears as the management is not aware of the
need to keep revenues high enough to cover costs for operation of the plant. One indication of
this is the system with a low flat rate tariff.
No ranking of the findings from the project in Tungu-Kabiri has been done.
24
4.3.
Opportunities and Constraints of Investing in Developing
Countries
As discussed in Chapter 2 of this thesis, different forms of power sector reforms are currently
on-going or have been initiated in many developing countries, most power sector reforms
consisting of deregulation and privatisation. This means that future electrification projects
will not necessarily be implemented by national utilities, and that new institutional
arrangements will be used, opening up possibilities for new actors.
The establishment of Clean Development Mechanisms (CDM) under the Kyoto Protocol
can further increase the interest for energy markets in developing countries. The Protocol is a
result of the intensified worldwide activities on climate change and reduction of greenhouse
gas emissions. The aim of the Clean Development Mechanism is to contribute to the
reduction of greenhouse gas emissions, by enabling industrialised countries to meet some of
their obligations beyond their own borders through implementation of projects generating
greenhouse gas emissions reductions. Examples of projects can be development or
rehabilitation of a hydro power plant or a wind power plant. In 2003, projects in developing
countries constituted the majority of the carbon dioxide trade in the world83. In 2006 the
market had grown rapidly, and was now dominated by the sale and re-sale of EU Allowances.
Project-based activities through CDM and Joint Implementation (JI) had also grown, where
China continued to have a dominant market-share of the CDM84. The African share of the
overall carbon market volume increased to 1.4% in 2006, and 5.1% of the project-based
market. The primary market for CDM credits increased to 5.7%. The numbers account for
very small share of the global market and occur even though the overall investment climate
across many African countries has improved over the past years.85
In many of the developing countries, large energy programmes are also present or planned
for through support by the World Bank or other development organisations such as Sida.
The possibilities for Swedish and other European private sector actors to participate in the
development of the energy markets in developing countries have been investigated and are
presented below. The main findings of the analysis on energy markets are further summarised
in Paper III appended to this thesis.
4.3.1. Methods for Fact Collection
The study has been based on literature research and open-ended interviews with actors from
Sweden and from developing countries (Vietnam, Tanzania, Zambia and Kenya). Private
companies, trade organisations as well as governmental organisations such as the Swedish
Energy Agency and Sida represent the contacted actors.
4.3.2. Findings from the Study
The international energy market is constantly under transformation and development. The
European market is still of outmost importance for a European actor, but competition among
different companies is significant at the same time as the demand is only marginally
83
CF (the World Bank) 2003
World Bank 2007(b)
85
World Bank 2006
84
25
And Then They Lived Sustainably Ever After?
- Experiences from Rural Electrification in Tanzania, Zambia and Kenya
increasing. The development of the markets in developing countries as discussed above opens
up new possibilities for export activities or for the establishment of foreign business
organisations in these countries. Taking Sweden as an example, there are sectors of particular
export interest, such as technology for small- and large-scale power production which is built
on many years development of knowledge and experience bringing out effective equipment86.
Actors interested in export or establishment of their businesses in foreign countries, will
however be confronted with new unfamiliar obstacles when entering into new markets in
developing countries. A thorough knowledge of the potential market is therefore necessary.
Besides knowledge of technical and institutional conditions, knowledge of economic, and
socio-economic requirements and opportunities are essential factors for the organisations
adoption to the new markets. In addition, the business culture in many countries can make it
difficult for new and foreign companies to be established. In addition, a majority of the
companies’ active in the small-scale renewable energy sector in Sweden and Europe are
relatively small and with limited financing possibilities.
Continuing with Sweden as an example, the Swedish export market to Africa is today
relatively small, although it has been growing in recent years. In 2003, less than 5 % of the
Swedish export of goods and services reached the developing countries in Africa, the Middle
East and South America87, of which Africa represented only a minor part. However, in many
countries in Africa the last decade has been characterised by an economic growth bringing out
investments in infrastructure, such as telecommunication and electricity services. This has
resulted in new investment incentives88.
Still, major constraints for the development of the markets in many African countries
remain. These can be summarised as; lack of technical standards for production of electricity
and distribution on a regional level, the development of the industrial market in many African
countries is slow and cooperation among donors and local actors not enough developed,
resulting in investment in energy equipment but not in long-term services and maintenance
after the end of the project. Other factors mentioned are that foreign investors are reluctant to
invest in African markets, mainly as a result of uncertainty of the stability of the development
of markets, level of taxes and lack of information in general.89
As an example, the implemented small-scale hydropower project in Tungu-Kabiri in Kenya
can be used (see the presentation of the project in section 4.2.3). The common problems for
many projects in developing countries emphasised above are valid also for this project, e.g.
high inflation, poor infrastructure and difficulties in obtaining proper spare parts. This
example from Kenya indicates the present constraints of an electricity market in Africa. These
constraints have also been stressed in another study, were the difficulties to forecast changes
in inflation and rates are pointed out as the major obstacles for investing in developing
countries. Of the countries in Africa south of Sahara, South Africa is highlighted as the
country with greatest investment potential, from where other countries in the SADC-region90
can be reached in a second stage91.
In order to be able to expand and compete on new markets, a thorough planning has been
pointed out as necessary. An increased cooperation among actors in the Energy Sector –
including private companies, trade organisations and governmental organisations, is of
outmost importance. In addition, focus should be on areas where actors are able to compete
with actors from other countries. Continuing with Sweden as an example, these areas are
86
87
88
89
90
91
Miljöteknikdelegationen 2000
Swedish Trade Council 2004
DBSA et al. 2000
DBSA et al. 2000
Southern African Development Community (SADC)
CSAE, CREFSA 2002
26
foremost; new technology, building of systems, and sustaining the quality of products and
services. A potential development of the global energy market trade, highlighted by contacted
Swedish actors, is schematically illustrated in
Figure 5. In the figure, the need of combination between comparative advantages in different
countries is illustrated. Swedish and other European actors have advantages in know-how
through many years of experience of building systems and quality assurance, whereas many
Asian countries such as India, China and Vietnam has a reputation as good production sites,
with well trained and relatively low-costing labour. The potential market is mainly found in
developing countries, where also the possibility of Clean Development Mechanisms (CDM)
in the future can play a substantial role for income generating.
In the case of capital, this can mainly be found in the European countries but also in some
countries in Asia. China and India are such examples.
It is also important to consider different institutional forms when establishing a business in a
new country, and joint venture has been pointed out by interviewed actors as a suitable form.
It is also good to start on a small scale, to keep control and stay patience in order to keep
initial risks low.
Europe
Consulting
Services
Asia
CDM
Capital
Africa
Figure 5.
Know-how
Equipment
Schematic illustration of possible flow of services, investments and know-how between
actors on different continents. (Source: based on information from Swedish actors
involved in businesses in developing countries.)
In summary, the study presented in Paper III, has resulted in an identification of the
following constraints for establishment of foreign actors in developing countries;
Low prices of electricity,
Imperfect infrastructure and incomplete standards,
Immature markets and legal structures,
High import duty and tax.
In addition, the following internal constraints have been identified for European companies
to enter into new energy markets;
Weak home market (the domestic market)
Difficulties in finding financing for expansion of the business,
Limited experience of export and to perform business in a foreign country,
Insufficient and inadequate information of the foreign market,
Difficulties in finding suitable partners in the countries of the planned establishment.
The result from the study is further discussed in Chapter 5.
27
And Then They Lived Sustainably Ever After?
- Experiences from Rural Electrification in Tanzania, Zambia and Kenya
4.4.
Reduction of CO2-emissions from Small Scale Rural
Electrification
Electrification of remote sites in developing countries has often been realised through diesel
generator sets and a local electric distribution network. The growing awareness of climate
change caused by CO2-emissions however calls for decreased fossil fuel combustion
worldwide and different energy technologies are gradually being developed. For many
developing countries, promotion of indigenous renewable energy sources is also essential,
since import of fossil fuels represents a considerable fraction of the total import expenditures.
Where hydropower of sufficient capacity and reliability is available not far from the
community to be electrified, this is clearly an option to consider, but in most cases other
solutions are needed. Solar photovoltaic generation is a commercially available option often
advocated as the best alternative to diesel generation. Wind generators can be considered at
sites with good wind conditions. Biomass can be used for steam power plants or engines
operated on gasified biomass, where a sustainable supply of biomass fuel can be assured.
As mentioned in section 2.4, Sida´s policy is to promote energy systems based on renewable
energy sources. Still, it is clearly stated in a later policy document92 that Sida may support
electrification projects based on fossil fuels provided that the systems are “carefully designed
in order to minimise negative environmental impacts”. In Paper IV, the costs for different
technical options for electricity supply to a rural community have been compared. The result
of that study is assessed to be of interest in this context.
4.4.1. Methods for Fact Collection
The village of Urambo in Tanzania, described in section 4.1, was selected for a case study.
Since most of the load in that village is for electric lights, the costs for providing a given light
service using different technical solutions were compared. Three of the options were based on
diesel generators and a local transmission and distribution network. These options differed
with respect to the appliances used for the light service. Incandescent bulbs, tube lights and
compact fluorescent lamps (CFLs) were considered. These options were compared to
individual photovoltaic (PV) electricity generation in combination with tube lights. For the
comparison between these options, the costs for power generation and distribution, including
– for the diesel supplied cases - service line, house wiring and meters, have been based on
those for new equipment. The costs are depending on factors such as expected lifetimes of
various components, interest rates, import duties, taxes and local competition. In the
calculations the following data were used; 100 % system load factor, 2 % real interest rate,
annual maintenance and service costs of 20 % of fuel costs for the generator set and 2 % of
investment costs for the distribution network and diesel costs as in Urambo, October 2002
(0.68 USD/litre). The service costs for the PV system were assumed to be negligible.
For the reason of technical and financial comparability, it is the connected lighting demand
of the clients that is in focus. In order to prepare a base for comparison between the
technologies, lighting demand has been expressed in average continuous light output in lumen
during 4 – 5 hours each evening with a high load case (12,000 lumen) and a low load case
(5,000 lumen). The low-load case represents Urambo in 2002. Further the environmental
impacts associated with the different options were quantified with an emphasis on their
emission of carbon dioxide (CO2) to the atmosphere.
92
Sida 2005(b)
28
4.4.2. Findings from the Study
In 2002, the annual cost for the average electricity client of Urambo Rural Electric
Consumers Co-operative (UECCO), amounted to in the order of 225 USD. This includes cost
for connection to the local service network, lighting equipment and energy at the cost of 0.47
USD/kWh93. The calculations are based on lighting almost equally shared between
incandescent bulbs and straight fluorescent tubes. Only a small fraction of the lighting was
constituted by CFLs at that time
Compared to incandescent bulbs, CFLs and tubes are more energy efficient. As regards
CFLs in a system of Urambo’s size and performance, the actual lifetime has not been tested
on a significant scale. Therefore, 84 CFLs were installed in Urambo for testing purposes. The
result from the test indicates that the lifetimes of CFLs are shorter than claimed by
manufacturers. At 4000 hours the failure rate was 38 %. This however also includes failures
in the lamp holder, which as it is designed for incandescent bulbs sometimes cannot hold the
slightly heavier CFL. Based on the monitored failures94 an estimation of the mean lifetime
for CFLs in Urambo has been made, resulting in life times for both fluorescent tubes and
CFLs being about 6000 hours.
Seen in the power supply perspective, the installation of CFLs or fluorescent tubes leads to
a reduced power demand per required lumen, but also to increased distribution losses per
delivered useful power compared to incandescent bulbs, as the luminous efficacy and cos ϕ
differ.
In financially sound electricity supply systems the energy per unit cost will reflect the total
system cost. In recognition of this, and with the low-load case, the calculations applied for the
individual client, give that fluorescent tubes constitute the least cost lighting alternative in a
power distribution system similar to that in Urambo where generating costs are 2.6 USD/kWh
or lower. Above this cost, CFLs are less expensive. The results depend on the cost of
generating electricity, the system load’s reactive component and the equipment costs for lamp
holders and lamps. Incandescent bulbs can compete first when generating costs are below
0.01 USD/kWh. Such low costs can perhaps be achieved in micro- or mini-hydro supplied
distribution grids, if investments and labour costs are moderate at the establishment and load
management is successful.
An alternative approach to a diesel supplied traditional system, would be to use solar PVsystems, installed at each client, that supply 12 or 24 V direct current to tube lights.
Table 3, based on the results presented in paper IV, shows a comparison of the main results
of the study for the low load case, 5000 lm. With the assumptions given above, the clearly
less expensive option is the traditional diesel system in combination with fluorescent tubes,
with the CFL-option coming close behind. When applying a cost-sensitivity analysis on
interest rate and utilisation degree, the situation remains the same for both the low load (5,000
lumen) and the high-load (12,000 lumen) case.
The most expensive option for the individual client would be the PV option for the low
load case (5,000 lumen), whereas the traditional system with incandescent bulbs is the most
expensive option for the high load case (12,000 lumen). It has to be observed however that
facts on solar panel life lengths in Tanzania are scarce.
The diesel option impacts the environment significantly more than the PV option, even if
there are impacts associated with manufacturing, delivery and mounting of the PV system.
The main environmental burdens from the diesel option are emissions from combustion,
emission from transport, and possibly fuel and lubricant oil leakage to soil.
93
94
See Paper I (Section 4.1)
Johnson 1994
29
And Then They Lived Sustainably Ever After?
- Experiences from Rural Electrification in Tanzania, Zambia and Kenya
In the table, the electricity client cost for the PV-system has been expressed also as cost for
CO2 reduction, showing that the PV-system allows for CO2 reductions at the approximate
price of 300 USD per ton CO2 saved.
Table 3.
Summary of evaluated technical options, costs and CO2 emissions. (Source:
calculations made by the authors.)
Technical solution for village electrification
a)
Annual full
financial cost,
USD per
household
b <c
Annual
CO2
emission,
kg per
capita
Cost for
CO2
reduction
relative
the
present
solution
(USD/kg)
Diesel generators in a traditional distribution system with
a mix of devices for lighting as for the present situation in
Urambo
160<300
64
Diesel generators in a traditional distribution system,
incandescent bulbs for lighting
230 <430
101
Diesel generators in a traditional distribution system,
fluorescent tubes for lighting
80 <160
27
-0,25
Diesel generators in a traditional distribution system,
CFLs with electronic ballast for lighting
100 <190
25
-0,14
Individual PV-sets with fluorescent tubes
260 <470
(0)
0,30
-
a)
The comparison is based on lighting services equivalent to 5000 lm continuous light output during five hours per
night.
b)
Reference cost conditions: 15% tax on imported equipment, fuel tax (258%) for diesel, 2% interest rate and full
utilisation of installed capacity.
c)
High cost conditions: 15% tax on imported equipment, fuel tax (258%) for diesel, 15% interest rate, and in the diesel
cases only 20% utilisation of installed capacity.
The result from the study is further discussed in Chapter 5.
30
4.5.
Need for Systematic Evaluations
Despite the large number of rural electrification projects being implemented in developing
countries, there are few published in-depth evaluations of the effects of these projects on
sustainable development.
To obtain an impact from experiences of rural electrification, it is necessary to generate a
critical mass of interest and support among host nation’s policy makers, and the international
donor society. Awareness of differences between the dimensions of electrification; and
especially economic, socio-economic, and social objectives is important. Indeed, the focus on
rural electrification where the objectives often claims to have a strong social emphasis,
especially calls for this awareness.
Systematic use of an evaluation method, with clearly defined indicators could contribute to
an improved basis for decisions regarding design and organisation of future rural
electrification projects. Indicators have become commonly used by different organisations for
analysis and communication of changes and trends, as a means to presents data in a
comprehensive form. It is important that the indicators are transparent in the sense of
underlying data being realistically traceable: robust in the sense of being replicable:
comprehensive by covering the important dimensions of sustainable development and fair in
the sense of gender, child labour, and social differences. An evaluation method is proposed
based on this interdisciplinary approach, with the aim to throw light on the whole context of
electrification.
4.5.1. Context and Framework of the Evaluation Method
For an evaluation method to be comprehensive, the major aspects of sustainable
development have to be defined. However, the definition of sustainability and its application
is still under debate, and the task of making the concept operational has been stated as
difficult95. “Like many basic ethical, political and legal ideas, sustainable development is a
regulatory idea, which cannot be made more precise by a good definition, but can only be
implemented by continuous discussions in any new situation”.
The concept of sustainable development is often discussed in terms of economic, social, and
environmental sustainability, and in recent years also the organisational aspect has been
included.96 In the proposed method, sustainable development is discussed in five dimensions:
technical, economic, social/ethics, environment, and organisation/institution. The fifth
dimension has been included to put an additional focus on the technical dimension, as it has a
direct influence on the sustainability of the local project. To further facilitate the interpretation
of the context, key variables have been added, with the aim to bring the five sustainable
dimensions down to a more legible level of relevance for electrification projects. The
approach is illustrated in Figure 6.
For the five sustainability dimensions a number of indicators have been developed, with
each indicator accounted for through a specific pre-structured “sheet”. The method of utilising
sheets for indicators is based on a format originally developed by the UN Commission on
Sustainable Development – the CSD Work Programme, during 1995-200097, which has later
been reviewed98 , and developed99 in cooperation with other international organisation. The
95
96
97
98
Villavicencio 2002
UN 2001, IAEA 2005
UN 2001
UN 2005
31
And Then They Lived Sustainably Ever After?
- Experiences from Rural Electrification in Tanzania, Zambia and Kenya
advantage of the pre-structured sheets is that the general criteria for the indicators, as
described above, become readily obtained by all professionals. Every separate sheet accounts
for the relevance of sustainable development attributed to the specific indicator. In addition, a
detailed measurement method is described for each indicator.
The selection of indicators has been made through an iterative process, namely:
• From literature studies on indicators utilised by researchers and consultants;
• Through practical tests in the field where the indicators have been tested based on
their suitability in a local context, and the possibility to procure necessary data and
information.
The selection of indicators is further described in Chapter 6.
Sustainability Dimension
Technical
Development
Key Variables
Indicators
Operation and
Maintenance
Indicator 1-7
Technical
Client-relation
Financial
Economic
Development
Productive Uses
Indicator 8-16
Employment
Generation
Competition
Sustainable
Development
Improved Service
Availability
Social/Ethical
Development
Credit
Facilities
Indicator 17-25
Equal
Distribution
Environmental
Development
Global Impact
Indicator 26-30
Local Impact
Organisational/
Institutional
Development
Capacity
Strengthening
Client-Relation
Indicator 31-39
Stakeholder
Participation
Figure 6.
The sustainability criterion process of the evaluation method.
4.5.2. Indicators Included in the Assessment Method
The procedure has resulted in a number of 39 indicators. The number was originally higher,
but has through the iterative process been reduced to the present number. In addition, the
indicators have been re-valuated on basis of their suitability in accordance with the general
criteria for indicators. A summary of the indicators included in the method is given in Table 4.
A thorough definition of each indicator is given in Ilskog (2008)100, appended to this thesis
(Appendix VII).
99
IAEA 2005
100
Ilskog 2008
32
33
Environmental Development:
Social/Ethical Development:
Economic Development:
Business development (F/M)2
Number of electricity service organisations in the area
Share of health centres and schools with electricity
Number of street lights in the area
Share of public places and specialised businesses where TV/telecommunication/internet is provided
Micro-credit possibilities available for electricity services connection
Share of population with primary school education (F/M)2
Share of population with access to electricity (F/M)2
Distribution of electricity client households in income groups (F/M)2
Subsidies offered for electricity services
Share of economically active children (F/M)2
Share of renewable energy in production
Emissions of carbon dioxide from production3
Share of electrified households where electricity has replaced other energy sources for lighting4 (F/M)2
Share of electrified households where electricity has replaced other energy sources for cooking of main
meals5 (F/M)2
Any serious local environment impact identified
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Improved availability of social
electricity services:
Credit facilities:
Equal distribution:
Global impact:
Local impact:
of
productive
Employment generation:
Competition:
Development
uses:
•
Profitability
Costs for operation and maintenance
Costs for capital and installation
Share of profit set aside for re-investment in electricity service business
Tariff lag
Share of electricity consumed by businesses (F/M)2
Share of electrified households using electricity for income-generating activities (F/M)2
•
•
•
•
•
•
•
Financial perspective:
Technical client-relation issues:
Efficiency
Conformance with national standards
Technical losses1
Compatibility with future grid service
Availability of support infrastructure
Daily operation services
Availability of services
Operation and maintenance:
Technical Development:
Indicator
•
•
•
•
•
•
•
Key Variable
Indicators Selected for Assessment of Sustainable Development in Rural Electrification.
Sustainability Dimension
Table 4.
7
2,3,4
7
7
2,3
2,5,6
3
1
2
2
1
2
1
1
1
1
-
1
1,3
-
Linked
Millennium
Development
Goal (MDG)
34
-
3
-
Linked
Millennium
Development
Goal (MDG)
The result from the study is discussed in Chapter 5.
It is also important to realise that no method applied can fully cover the complex reality of a project context, and it cannot be more than a tool to
be used as a basis for analysis and decisions. The method therefore needs to be complemented by specific project indicators, as well as the use of
other tools for analysis. One such example is the SWOT-analysis presented in section 4.2.
The implementation of the proposed method is recommended to be based on utilisation of pre-structured questionnaires: inspections and
measurements of technical components: review of client databases, logbooks and financial reports. However, research on rural electrification is a
matter of putting together the perspective of not only electrification itself, but also the impact it has on the development of a community. The
fieldwork in the selected project areas is therefore of outmost importance, and shall be designed using both quantitative and qualitative methods.
Still, even if using an in advance planned and carefully structured questionnaire, it is important to take into consideration that the data collected is
effected by both the interviewees and the interviewers: in the way the questions are put forward, any individual biases, age, sex, level of
education, religion etc. The methodology is further discussed in Chapter 6.
Constituted by distribution losses, over-consumption by clients (flat-rate), and thefts. In other documents the expression “un-paid electricity generation” can be seen.
2 : To the indicator can be added an indicator distinguishing between female- (F) and male-headed (M) households/businesses. 3: Calculated on input energy. 4 : Mainly
kerosene and candles. 5 : Mainly charcoal and firewood. 6 : Constituted by losses through non-paying clients. In other documents the expression “un-paid electricity generation”
can be seen.
Stakeholder participation:
Share of non-technical losses/Default rate6 (F/M)2
Level of satisfaction with energy services
Auditing of financial reports on yearly basis
•
•
•
Client-relation:
1:
Share of staff and management with appropriate education (F/M)2
Degree of local ownership
Number of shareholders (F/M)2
Share of women in staff and management
Staff turnover in organisation (F/M)2
Number of years in business
•
•
•
•
•
•
Capacity strengthening:
Organisational/Institutional
Development:
Indicator
Key Variable
Sustainability Dimension
And Then They Lived Sustainably Ever After?
- Experiences from Rural Electrification in Tanzania, Zambia and Kenya
4.6.
Assessment of Rural Electrification Cases
The evaluation method proposed in section 4.5, has been implemented on seven electricity
service organisations operating in Tanzania, Kenya, and Zambia. The organisations represent
the private sector through three PV Energy Service Companies, and the government through a
small isolated local grid branch and a larger utility connected to a national grid. In addition,
the study includes a co-operative and a Community Based Organisation (CBO). Figures of the
organisations are presented in Table 5.
4.6.1. Methods for Fact Collection
The evaluation of the electricity service organisations are based on interviews with
management, staff, and case facilitators; surveys with electricity clients; inspections of
physical assets; and reviews of available written documentation for each case included in the
study. The written documentation covers mainly inspection of production units, distribution
networks and substations, operational data in logbooks, client databases, and financial reports.
Approximately 800 stakeholders were interviewed. The surveys covered women and men,
households, businesses and institutions. Teams of 2-7 fieldworkers that included both women
and men, trained to fill in the questionnaires, collected the data. All were knowledgeable in
the local languages and had at least secondary school education.
Table 5.
Organisations included in the study. (Source: information from the included
organisations and Statistical Bureaus in the countries included).
Type of organisation
Technology used
Number
clients
Larger Government
Organisation/Utility
(Government L)
Main national grid supplied
mainly by hydro power. The
organisation also has a smaller
local grid supplied by diesel
generator sets
Local grid supplied by diesel
generator sets
59 000
2004)
430 (year 2003)
75 000
3
0.03 - 0.11
(average:
0.07)
Co-operative
(Co-operative)
Community
Based
Organisation (CBO)
Local grid supplied by diesel
generator sets
Small hydro power
240 (year 2002)
82 000
4
0.47
NDA
Private Company (Ltd.)
(Private A)
Solar PV located at each clients
premises
Private Company (Ltd.)
(Private B)
Solar PV located at each clients
premises
Private Company (Ltd.)
(Private C)
Solar PV located at each clients
premises
8
(Business
Centre)
(year
2003)
100 (Solar Home
Systems, SHS)
(year 2003)
150 (Solar Home
Systems, SHS)
(year 2003)
150 (Solar Home
Systems, SHS)
(year 2003)
Smaller local branch of
government
owned
utility (Government S)
of
(year
Total
population
within
concession
area
1
985 000
70 000
Price
for
Electricity
Services
(USD/kWh)
2
0.03 - 0.11
(average:
0.07)
2
0.006
5
1.6
365 000
5
2.1
235 000
5
1.6
Source: 1: “Tanzania 2002 population and housing census”, National Bureau of Statistics Tanzania, 2002(b). 2: The lowest tariff
is applied for low-consuming households only. 3: “Household Budget Survey 2000/01”. National Bureau of Statistics Tanzania,
2002(a). 4: "Taarifa ya wilaya ya Urambo", Urambo District 2001. NDA: No Data Available. 5: “Zambia 2000 Census Report”,
National Bureau of Statistics Zambia, 2003.
35
And Then They Lived Sustainably Ever After?
- Experiences from Rural Electrification in Tanzania, Zambia and Kenya
A ranking system was used for comparisons between the seven cases. For each indicator,
scores from 1 to 7 were given to each case, where the case with the best performance was
given the highest score and that with the lowest performance the lowest score. If several cases
showed the same performance, the score was divided among them.
The total score for each sustainability dimension was then calculated by simple averaging of
the scores for the relevant indicators, which means that the indicators were given equal
weights.
4.6.2. Findings from the evaluation of the seven cases
The number of indicators proposed in Section 4.5 is 39, out of which eight were formulated
after the fieldwork had been completed. The case studies have therefore included
determination of 31 of the proposed indicators.
Figure 7 shows the total scores attained by the seven cases for the five sustainability
dimensions. It is not possible to draw general conclusions regarding the effect on the
sustainability of rural electrification from the result of this study. The cases included in the
study are few, and the performance is partly a result of conditions imposed by the external
financing organisations.
However, the implementation of the evaluation has generated valuable experiences and the
proposed indicators give a good picture of the situation in rural electrification. The main
strength of the three private electrification enterprises is their ability to manage client-relation
issues whereas their main weakness concerns the social sustainability perspective, and that
they are owned by only one person/family. For the national utilities their main advantage is in
the social/ethical sustainability dimension, with the highest share of population with access to
electricity. The main weakness of the utilities concerns the organisational dimension. For the
two Community Based Organisations the main strengths and weaknesses are found in the
organisational/institutional sustainability, with a specific weak issue being their inability to
raise the tariff, as this decision has to be supported by the majority of members, which are
also the electricity clients themselves. Rural electrification through small private and local
community based organisations can be applied when this appears as the most effective way to
achieve sustainable development. Special attention must then be given to the
organisational/institutional sustainability so that for instance loss of key persons does not lead
to collapse of the service.
Lastly, it is an important observation that all the organisations rely on external financial
support to some extent, and especially on financing of the initial investment; none of the
organisations is able to accumulate capital for reinvestment. This opens possibilities for
external influence that could be used to promote sustainable development.
36
Total for all five sustainability dimensions
200
180
160
140
120
100
80
60
40
20
0
Government Government Co-operative
L
S
Figure 7.
CBO
Private A
Private B
Private C
Total scores reached by the organisations for all dimensions. The indicators have been
summarised per case through comparative ranking and given equal weights. For the
calculation of total scores, all dimensions have been given the same weight.
It is believed that the information included in the indicators give a reasonably good picture
of the situation. However, sustainability is a matter of development over time. Data from a
single evaluation are therefore not sufficient for assessment of sustainability, even if the data
can certainly be used for identification of areas where improvements will be necessary.
The choice of units was found to be a difficult issue for some of the indicators. Percentages
are a reasonable choice for several of the indicators, but in particular for some of the
economic indicators it was found that absolute values give a better understanding of the
performance. When these indicators are expressed in percentages, the result depends on the
reference value used. Large absolute differences may be hidden by this and small absolute
differences exaggerated. Regardless of how indicators are measured and aggregated,
important information about differences between cases evaluated may be lost and it is
therefore important that also the data for the individual indicators are reported when projects
are compared on basis of aggregated indicators.
If systematic evaluations were made of all projects, this would contribute to improved
sustainability of rural electrification projects. The indicators proposed could be used as a basis
for discussions of the most relevant and suitable indicators. The evaluations should include a
baseline study and repeated evaluations on at least three occasions after commissioning, for
instance after one year, three years and ten years.
The result from the study is discussed in Chapter 5, and presented in detail in Paper VI
appended to the thesis.
37
And Then They Lived Sustainably Ever After?
- Experiences from Rural Electrification in Tanzania, Zambia and Kenya
5. Discussion
As discussed above, it is not possible to draw far-reaching general conclusions based on the
result of the study of the seven organisations in Tanzania, Zambia and Kenya. The cases
included in the study are few. The technology and the organisational form used may also be
either a consequence of historical decisions, when there were fewer options available, or a
result of conditions imposed by the financing agency.
However, the findings will hopefully assist in enlarging the knowledge on organisational
aspects of rural electrification, and serve as a basis for further analysis and discussion. This
chapter consists of a summarised discussion of the main findings derived from the six papers
presented in Chapter 4.
5.1.
Organisational and Institutional Aspects
The survival of an organisation is to a large extent dependent on its internal factors, which
are directly related to the business, and under the control of the organisation itself. Among
these factors, energy pricing is essential for the economic sustainability. When taking
decisions on tariffs, the organisations studied have been facing the dilemma of all enterprises
operating a growing business where the capital investment is high. Charging the full capital
cost to the few initial clients will make the product too expensive for the individual client. Not
recovering the capital investment within the economic lifetime of the equipment will on the
other hand not be sustainable. It is consequently important that the market is expanded rapidly
so that the capital costs can be shared by many clients. Also important is that the clients are
charged according to their consumption, and that flat-rate tariffs are avoided.
The results from the study show that all of the organisations included, are having difficulties
with recovering the investment costs. The running costs are covered by the revenues of the
projects managed by the private companies and the co-operative, but not in the projects
managed by the national utilities or the community group (CBO). The survival of the project
managed by the national utilities is through cross-subsides in the national tariff, and for the
community group through support from external institutions. There is however no reason to
believe that given sufficient economic and management/educational support, an electrification
project can manage to survive and develop, regardless of its organisational form.
It is interesting to note that local markets with a substantial purchase power exist, even
though constituted by only a small fraction of the rural population. One example being the cooperative project where the price of electricity is 15 times higher than the price charged by the
state owned utility in other areas of the country, and the extent of connection still being
approximately the same. This is also seen from the SWOT-analysis (Paper II), where clientrelation issues appear to be the most well-off issue. For all cases included, there are new
clients waiting to be connected. Especially for the private companies, the number of clients
waiting to receive energy services is significant. The extent of electricity consumed for
productive uses is also an important factor for a project, as it increases the market, and can
lead to an improved purchasing power at the local market. The issues related to productive
uses of electricity are further discussed below.
Findings from the study show that the private companies tend to investigate possibilities for
side businesses to a greater extent than the other studied organisations, which likely is an
advantage from a perspective of consolidating sources of income. In addition, the private
38
organisations have also been found to manage their client-relation more successfully than the
other organisations included in the study.
Organisational weaknesses are mainly found among the government utilities included in the
study, and can be illustrated by their low share of local ownership, and their inability to
reduce the high non-technical losses101, which can mainly be explained by non-payment of
electricity bills by different government institutions/clients. This is in line with experiences
from other developing countries where the rate of outstanding payment has been proved
higher if the services are operated by the government, than if private companies or CBOs are
responsible.102 Also in the case of the co-operative the level of non-technical losses is high.
This high level can probably be explained by an over-consumption by remaining flat-rate
clients.
Transparency in the studied organisations concerns the possibilities for clients, partners,
owners and government institutions to follow the development of a project through annual
reports etc. None of the studied organisations has a desirable degree of transparency, mainly
as they are not succeeding to perform audited annual reports103. The private organisations
have an additional disadvantage, as they are owned by only one person/family and this
reduces other stakeholders’ possibilities for insight into the activities of the business. In
addition, sole ownership can be a severe risk for the projects, as they are often located in areas
with a relatively high level of HIV/AIDS.
For the two Community Based Organisations the main strength is the advantage of
community participation, whereas the main weakness is their inability to raise the tariff, as
this decision has to be supported by the majority of members, which are also the electricity
clients themselves. Adjustment of the tariff is to some extent also a problem for the
government utilities, where decisions on tariffs are made by the government and increasing
tariffs can be politically sensitive.
It is obvious that a high degree of educated staff and a base from where recruitment can be
made is important as a means for adequate management and operation of an electricity
service. It is also obvious that an organisation of the size of the national utility included in the
project has superior resources in this sense, compared to the smaller organisations. This is
shown by the less successful measures taken in the technical installations made by the smaller
organisations, even though a service contract has been available with the national utility, as in
the case of the co-operative.
Additional conclusions concern the involvement and awareness of local stakeholders in
project implementation. With involvement of local management already in the initial project
planning, it appears as if their awareness and responsibilities are strengthened. Examples
being the co-operative and the private companies studied were the awareness on the effects of
energy pricing on project sustainability seems to be higher than those of the community
group. The national and local economic development is essential for the survival of the
organisation. Inflation is a major problem as it is difficult for the organisation to adjust energy
prices at the same pace as the inflation. In fact it has been pointed out in other studies that it is
the difficulties to predict the pace of the inflation that create most problems, not the level
itself104.
It is important to note that the renewal of the energy polices in many developing countries is
seen as positive from an organisational perspective, although the effects of it in many cases
not yet has been seen on a local level105. This is a clear example on how strategic policy and
101
Also referred to as “un-paid electricity services” and “default rate”
ESMAP 2000
103
For the community group this is still a preliminary conclusion, and further research has to be conducted
104
CSAE, CREFSA 2002
105
Okure 2004
102
39
And Then They Lived Sustainably Ever After?
- Experiences from Rural Electrification in Tanzania, Zambia and Kenya
institutional levels and local organisational level are inter-linked. The question is however
whether there are a sufficient number of organisations – entrepreneurs - that can carry on the
intentions of the national energy polices.
Again, the conclusion from the evaluation of the seven projects included in the study is that
there is no single most appropriate organisation for electricity services in rural areas. Every
organisation form has its strengths and weaknesses, and the most suitable way to organise a
project is to a high extent depending on the local context. Hence, when a choice between
different organisational set-ups is possible, case-specific conditions that may influence the
strengths, weaknesses, opportunities and threats, identified here, should be considered.
5.2.
Prospects for Foreign Investments
Many countries in Africa have during the last decade been characterised by an economic
growth. Still, low prices of electricity, imperfect infrastructure, incomplete standards,
immature markets and legal structures, as well as a high import duty and tax, are constraints
leaving foreign investors likely to remain scarce in the energy sector in many countries in
Africa, at least for the next coming years. In addition, corruption in the power sector has been
pointed out to be a major risk factor for investors106.
In rural areas where the purchase power is lower than in urban areas, the introduction of
foreign investors is especially unlikely. This has also been observed in a study recently done
by the World Bank, were private sector interest in rural electrification has been stated as
“moderate to low”107. However, with a combination of comparative advantages from different
countries at different continents; such as know-how and consulting services from Europe,
production of equipment in Asia and a growing market in Africa, there are possibilities for
increased business activities in Africa, at least in some countries. South Africa has been
pointed out as a country with potential to lead the way as a gateway for such development.
Also the potential for Clean Development Mechanisms (CDM) can play a significant role in
income-generation of future electrification of Africa.
106
107
Covindassamy et al. 2005
World Bank 2004
40
5.3.
Public Benefits
Beyond dispute, access to capital is a prerequisite for all form of electrification as the initial
investments are very high. As discussed above, the tariffs applied among the cases studied
were too low to allow accumulation of capital for re-investment. In addition, no capital costs
for the initial investment were paid, except to some extent by the larger government utility.
All the cases were therefore depending on external financial support.
As concluded above, it is unlikely that foreign private investors will be substantially
engaged in rural electrification in developing countries in Africa during the next coming
years. Neither can it be realistic to assume that local private actors will take the role as
investors to an extent that will have an impact on the development. It therefore remains for
national governments and donors to finance most of the initial investments. An important
implication of this is that the financing organisation should be able to ensure for instance
environmental and social/ethical sustainability by attaching suitable conditions to the
financing decision. The motive of donors to engage in rural electrification, should fully call
for the project to be of use also for those who cannot initially afford to connect to electricity –
the rural poor, which means that the public benefits of a rural electrification project are
important, even if these have no direct effect on the sustainability of the project itself.
Fundamental issues such as food preservation, pumping of water, education, health care and
streetlights are important for improved social welfare. Such conditions could include
requirements for a generation technology using renewable energy and supply of some fraction
of the generation for social benefits like health centres, schools, and streetlights.
It is not possible to state whether any specific organisational form will have a particular
impact on this, but it is reasonable to believe that the private market will only deliver these
energy services if the full costs for these services are covered.
Whether the type of organisation used for electricity supply makes any difference from a
perspective of bringing negative effects on the community, has not been possible to draw any
conclusions on.
5.4.
Aspects on Productive Uses of Electricity
The productive uses of electricity in the rural areas studied in this project are generally
limited to low-load uses, such as lighting for extension of working hours for bars, groceries
etc., and to enable income-generating activities in households. Such activities are common in
most developing countries. In Tanzania for instance, some 42 % of the households reported
having a business in year 2000108.
This limited range of application of electricity for productive uses is not what has been
expected. Instead, a growing demand of electricity for more value-added activities and smallscale industries could have been assumed to take place, at least over a longer period. The
restricted services of the co-operative might perhaps explain the unequal consumption growth
among different user categories. For the private organisations, the limitations in power from
the solar panels may be restricting the growth.
As seen from Paper I, more than half of the clients interviewed in the co-operative project
claim that they consider to start income-generating activities, such as welding, garage and
groceries if they would be provided with 24 hours electricity services to the lower tariff
108
National Bureau of Statistics Tanzania 2002
41
And Then They Lived Sustainably Ever After?
- Experiences from Rural Electrification in Tanzania, Zambia and Kenya
charged by the national utility. However, even in areas served by the grid, were 24 hours of
electricity services is prevalent, the situation appears to be similar. From the projects studied
it is therefore clear that even though electricity has been brought to the area, the effects on
productive uses of electricity among the electricity clients are low. This shows that electricity
by it self does not lead to a sustainable economic development, and that other causes than
merely availability and price of electricity are influencing the decisions of the local population
and their opportunities to engage in productive activities. Such factors are the availability of
tools and machines for productive applications, credit for fixed assets and working capital, the
human resources necessary for technical and business management, and a market for the
products. The intentions expressed by many of the interviewed clients in the area served by
the co-operative might therefore not be realistic.
This limited use of electricity for value-added activities has also been pinpointed in other
studies109. Among reasons given were factors outside the direct control of the electricity
organisations, namely shortage of capital, transport problems and lack of skilled labour.
As no substantial increase in productive uses has been seen in any of the projects, the effect
of supply technology has not been able to be studied. However, it is likely to believe that a
substantial increase in productive uses would require installation of additional generation
capacity in all projects. The systems based on distribution grids would be more adaptable to
such an increase.
5.5.
Gender Aspects
Of the organisations studied, the major part had women involved in management and
decision making of the organisations activities, although the female participants in the
management are clearly in minority.
Whether female of male electricity clients’ benefit most from electricity services cannot be
assessed from the study. Interesting is however that all of the men interviewed in the area
where the co-operative operates stated that women and children benefit most. The women on
the other hand stated that the children benefit most, whereas men and women equally benefit
from electricity. The female respondents were however few in number. As seen from the case
studies, electricity is mainly used in households for lighting and electric appliances110. From a
woman’s point of view, lights in the household should preferable by in the kitchen and
workroom, as to facilitate her work. Substantial parts of women’s income-generating
activities are home-based. Men on the other hand, usually perform their income-generating
activities outside of the household, and therefore have other electricity preferences at home,
for example TV and entertainment.111 This difference in preferences is important to take into
consideration in areas where households only can afford a few lighting points. If progress in
foremost economic development is to be achieved through lighting up households, the
lighting points should preferably be in the kitchen and in a workroom if such a room exists.
However, as seen from the case operated by the co-operative, 20 % of the connected
households where lacking electric lights in the kitchen (Paper I).
Streetlights have been found to be appreciated in particular by women, as these reduce the
feeling of insecurity when walking the streets after dark. Of the cases studied, streetlights are
only present in the area operated by the co-operative, and to a very small degree in the area
where the larger government utility operates.
109
See for instance Kjellström et al. 1992, and Kittleson 1998
With the exception of the project in Kenya, were electricity not yet has been distributed to the households
111
Cecelski 2000
110
42
Like in other electrified rural areas, electrification has not resulted in a significant shift from
fuel wood and charcoal to electricity for cooking in electrified households, regardless of the
tariff level and the service schedule. Only a small fraction of the households in the electrified
communities are connected many years after the start of the service (see Appendix VI, Table
5 and 6). It should be obvious that conservation of natural forests is not a valid justification
for rural electrification. Taking Tanzania as an example, this is also the situation for the
country as a whole, even in electrified urban areas. In the Household Budget Survey from
2000/2001112, 12 % of the households reported having electricity, while electricity for
cooking was found to be used by only 0.9 % of the households. In Dar es Salaam, the amount
of households utilising electricity for cooking were 4.4 %, whereas 60 % of the households
were connected to electricity.
Other studies113 reports that one of the most spectacular influences of electricity was found
on the infant mortality rate, where the rate in the electrified households was 25% less than the
national average and 35% less than the national rural average.
As discussed above on the aspects on public benefits, the emphasis on different aspects
exercised by national government and the donor society is likely to influence the extent to
which there is a supportive policy environment for gender issues. A national sector policy for
rural energy programs should emphasize on sustainability and equity as explicit goals. In
addition, it matters to what extent policies are aimed at enabling people of different genders
and social classes to participate.114
5.6.
Technological Aspects on Rural Electrification
For long, diesel generators have been the cheapest electricity supply alternative for rural
communities that are not located in areas with favourable conditions for mini-hydro power
generation such as in the case of the project of the CBO in Kenya. Today, the price of
renewable technologies have fallen, one example being solar PV systems were the price has
decreased to a level were these are clearly cheaper for low-load power needs, and many
donors now promote installation of solar PV-systems for rural electrification in Africa.115 The
main reason for the promotion is that these, in contrast to diesel generators, do not contribute
to the emissions of carbon dioxide (CO2) that are expected to lead to a global climate change.
However, as shown in this study (see Paper IV), electricity produced from diesel generators
may be cheaper for the client than solar PV, also when the load is limited to a few electric
lights per household, if effective light appliances such as fluorescent tubes or compact
fluorescent lamps (CFLs) are used. It is also shown in Paper IV that the contribution to global
emissions of CO2 by use of diesel generators in a small community is low in comparison to
the current situation in the OECD countries. On a per capita level, household use of electricity
from diesel generation in the area were the co-operative operates, emits less than 10 % of the
CO2 emitted in OECD countries.
Since the study presented in Paper IV was completed, the international diesel prices have
increased considerably. In March 2008, the Rotterdam price was approximately 0.8 USD/litre
and the price with taxes in Sweden about 2 USD/litre. With these high fuel costs, the
difference between the costs for lighting with the cheapest diesel option and the solar PV will
112
113
114
115
National Bureau of Statistics Tanzania 2002
NRECA 2002
ESMAP 2004
The three projects in Zambia included in this study are examples of this
43
And Then They Lived Sustainably Ever After?
- Experiences from Rural Electrification in Tanzania, Zambia and Kenya
be less. With other cost data un-changed, the diesel price must however reach above 4
USD/litre, for the solar PV to be cheaper than the diesel generator combined with tube lights.
Switching from the traditional use of incandescent bulbs to tube lights in a diesel supplied
system will reduce the CO2-emissions by a factor of almost 4 and will lead to lower costs for
the client – a clear win-win situation. Complete elimination of the CO2-emissions by use of
solar PV will lead to significantly higher costs for the client, even at diesel prices far above
the present price in Sweden with taxes. It is clearly questionable if the rural population in
developing countries shall pay this price for reduction of the global emissions of greenhouse
gases. It seems reasonable to assume that a diesel supplied system where the clients uses
efficient appliances should qualify as a system “carefully designed in order to minimise
negative environmental impacts”, as required by policies stated by Sida116.
Although the technical losses are high among the studied cases involving distribution of
electricity, the information collected in the field studies indicate that the service can be
maintained for the technical lifetime of the installations for all the cases (see Paper VI). The
historical operating records of the two government utilities and the co-operative indicate that
the weaknesses in some technical indicators are not a major threat to continued service. From
a client perspective however, the availability of electricity services is important. If the
availability is not satisfactory, clients may for instance invest in their own generating sets.
The limited service periods of some of the organisations (co-operative, the CBO, and the
private solar PV-companies) are therefore a threat to technical sustainability.
5.7.
Rural Electrification in Practice
As seen from the empirical case studies presented in this thesis, they represent partly
another reflection of the reality than that given in the literature on rural electrification
introduced in the background (Chapter 2). A sum up of the differences between “concepts
taken-for-granted” and the reality for the studied organisations can be described in the
following way:
Table 6.
Concepts and facts on rural electrification in practice. (Source: Conclusions from
studied organisations in Tanzania, Zambia and Kenya.)
Aspects
Concepts taken-for-granted
The reality in studied organisations
Rural Electricity Market
The market is too small
There are many clients on waiting-lists
Price (tariff)
Rural population are unable to pay a high
price for electricity
No differences in degree of connected clients in rural
high-cost areas and rural low-cost areas
Organisations
Private organisations are more suitable than
governmental
There is no single most appropriate organisational
form
Productive Uses of
Electricity
24 hour services will result in a substantial
increase in income-generating-activities
Productive uses are mainly composed of low-load
uses in households, and no major difference is seen
in cases with 24 hours service than in those with
limited service hours.
Uses of Electricity
Electricity will be used for cooking
Electricity for cooking is hardly used at all
Capital
Foreign private actors will provide funding
Foreign investors are likely to remain scarce in rural
areas for many years
116
Sida 2005(b)
44
As shown in the table, the picture of rural electrification emerging from the case studies is
partly in contrast with the “concepts taken-for-granted” as the “ideal” image of expected
development of rural electrification that appears to be common among actors engaged in
planning and implementation of rural electrification. The fact that a number of development
expectations have not been fulfilled has also been pointed out in earlier studies117. In the
studied literature, the concepts discussed above mainly have been found to be prevailing in
programs, strategies and project justifications, and not in literature presented by those who
have studied the situation in practice. One example being the concept stating that
electrification will have a positive impact on deforestation by reducing the uses of wood fuel
for cooking118, which is not supported by literature presented by researchers119.
An additional observation from the study is that the advantages of privatisation and private
sector involvement are far from obvious, implying that there is a risk of marginalising other
forms of organisations, such as community based organisations and co-operatives. Monitoring
of the progress for a longer period is desirable for comparison between different types of
organisations.
It is not known what consequences are caused from these differences between the
“concepts taken-for granted” and the situation in the studied projects, but it seems as they can
to a substantial degree obstruct the development by leading decision-makers to draw incorrect
conclusions when planning for new electrification activities. Instead the opportunities and
constraints have to be tackled with the empirical reality in mind, as to be able to better
manage the ambiguities, complexities and all the paradoxes of rural electrification. There is an
additional need of integrating electrification with other measures for rural development.
Maybe it is then possible to touch down closer to a “sustainable-ever-after-life” for rural
citizens in developing countries?
117
See for instance Kjellström et al. 1992, Sanghvi and Barnes 2001, and Marandu 2002
See for instance Malawi SDNP 1998 and Landstrategi Sverige Uganda 2001-2005, Sida 2001
119
See for instance Cecelski 1998, and ICIMOC 2001
118
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And Then They Lived Sustainably Ever After?
- Experiences from Rural Electrification in Tanzania, Zambia and Kenya
6. Methodological Analysis and Discussion
Extended energy supply is a matter of making wise decisions on what to implement and
how. To increase the understanding of the context of rural electrification and to contribute to a
sustainable development of new projects in developing countries, it is important to:
1. Study and learn from already implemented rural electrification
2. Improve and develop present methodologies and tools used for studies and
evaluations, as to attain a more functional evaluation method.
This has been the purpose of the PhD study. As the focus of the study has been on how the
organisation is functioning in its context, technical issues have not been discussed in detail.
Neither has the macro-perspective received high attention, even though it is recognised by the
author that the impact of macro-perspective issues on a local organisation is considerable (see
previous chapter).
The cases included in this study have been selected from a number of decentralised rural
electrification projects in Africa. The criteria for the selection have been that the electricity
supply should have been on going for a minimum of two years120, and that the generated
electricity should be sold to private clients. As the legal framework in many countries in
eastern and southern Africa is not yet allowing for electricity produced by others than
government utilities to be sold to private clients, and that organisations and private companies
only recently have been allowed to produce electricity in other countries, the actual number of
qualified projects is presently still low.
In Section 6.1 the generalisation of the findings from the study is discussed. The methods
utilised are addressed in Section 6.2, and in Section 6.3 the need for further work in this area
is recognised.
6.1.
Generalisation of the Findings
The majority of the cases included in the study qualify for the criteria stipulated above. The
two decentralised systems (the smaller government utility and the co-operative), as well as the
larger government utility, have all been supplying electricity to clients during more than 10
years. The three private projects commenced in 1998 and the supply of electricity services to
clients started in year 2000. Finally, the project run by the CBO has been on going since 1998
with its first electricity produced in 2001. The cases have been studied through the utilisation
of a number of different tools, briefly described in Chapter 4, and further discussed below
(Section 6.2).
The performance or context of any organisation is never completely similar to the situation
for another organisation. This implies that the results from one organisation are unique. In
addition, using other methods and tools for studying the project will likely give other results
than those received by applying the tools selected in this study. In addition, as discussed
above the studies have been performed in only a few and different rural areas in Africa, rising
the question on whether the findings from the studies are possible to consider as general for
rural areas in eastern and southern Africa. Examples of unique results concerns areas such as
transport distance to clients. This is pointed out as a problem for one of the private
organisations (Paper II). Other examples are staff education, specific conflicts within the
organisation, and political interference.
120
With exception of the project run by the CBO
46
The fact that many findings are similar for all seven studied electrification cases indicates
however that some degree of generalisation can be made.
Other researchers have also pointed out similar reasons for difficulties in rural electrification
projects. Kjellström et al. (1992), concluded in an comprehensive study that; ”most of the
area managers that the survey team met during the survey were found to be competent and
keen to provide a good service to the electricity consumers.” For economic reasons however,
the number of trained staff was limited and service maintenance and repairs was not carried
out or heavily delayed. “Organisational changes and strengthening of the organisation for
operation of the services in the rural areas are necessary to improve the situation”.
6.2.
Methods and Assumptions
There are many different methods of collecting information, depending on the type of
research and the area in which the work is conducted. Often the resources in time, staff and
financing are also affecting the choice of method. Research on rural electrification is a matter
of putting together the perspective of not only electrification itself, but also the impact it has
on the development of a community121. The need of fieldwork at the selected project areas are
therefore of outmost importance.
The methods utilised for the research presented in this thesis are;
a) Field Surveys and situation assessment by means of indicators,
b) SWOT-analysis,
c) Open-ended discussions with stakeholders.
The methods are further presented below.
6.2.1. Field Surveys and Situation Assessment by Means of Indicators
6.2.1.1. Data Collection and Preparation
The details of the method used for the fieldwork on which Paper I, IV, and VI are based, are
given in Table 7. The fieldwork has included both quantitative methods and qualitative
methods, which are further presented below. The fieldwork has mainly been performed with
Sida as the main client (Zambia and Tanzania). The fieldwork in Kenya has been performed
entirely within the research project.
Quantitative data on the case studies have been gathered through inspection and
measurements of technical components, review of client ledgers, logbooks and economic
reports etc.
In addition, a questionnaire (see Appendix VII) has been used in the fieldwork. When
utilising questionnaires, there is a need for standardisation and systematisation of data and the
process under which the data are collected. A questionnaire can be designed in different ways:
from the simplest form of a checklist, through a semi-structured questionnaire and finally as a
structured questionnaire. By using a structured questionnaire, the respondents are asked the
questions in the same way; both in terms of sequences and in the way a specific question is
formulated. The results presented in Paper I, IV, and VI are partly based on the use of a
121
Although the approach used in this thesis has been limited.
47
And Then They Lived Sustainably Ever After?
- Experiences from Rural Electrification in Tanzania, Zambia and Kenya
structured questionnaire that has been designed by University of Gothenburg122, which was
used in the fieldwork performed by University of Gothenburg, in Zambia (see Table 7 below).
For the collection of information needed for the selected indicators (see 6.2.1.3 below), the
questionnaire was further developed before applied on the studied cases in Tanzania.
The questionnaire has been prepared in English. The languages used when the respondents
were approached with the questionnaire are; English (Zambia) or Swahili (Tanzania) 123.
6.2.1.2. Sampling
To include a whole population in an area where research is conducted is difficult to
accomplish. Instead, sampling usually has to be done through a selection of informants.
Methods used in this research are random sampling and stratified sampling (subdivision).
Random sampling however – if performed strictly – requires that every individual have an
equal probability to be selected. This usually requires a total census of the local population of
a research community, which again is difficult. Instead, other simplified ways like sampling
by designing every nth unit or event can be used. This is the approach used in this research. As
to be able to reach all groups of stakeholders, such as women, stratified sampling has also
been used. Here the criteria used for selection are set up as to find a sample in a specific layer.
6.2.1.3. Data Compilation and Analysis
The data collected from the questionnaires applied on the fieldwork has been compiled either
in SPSS (Zambia), on simple Excel Spread Sheets (two of the cases in Tanzania), or both in
SPSS and on Excel Spread Sheets (one of the projects in Tanzania)124. The analysis of the
data, and the calculations for the preparation of the indicators (see 6.2.1.4 below), has been
made by the author of this thesis. The calculations have been prepared and made on Excel
Spread-Sheets.
122
Gustavsson, M. Human Ecology Section, University of Gothenburg
No questionnaire was used for data collection in Kenya.
124
As no questionnaire was used in Kenya, compilation of such data was consequently not made.
123
48
49
125
- Recipient of information
from the survey made by
Göteborg University
- Participant in survey of the
management
- Partly analysis
- Project leader and
participating in the survey
(note that no questionnaire
was used)
- Analysis
- Team member and
participating in the survey
- Data compilation and
analysis
- Project leader
- Analysis of data
- Project leader and
participating in the survey
- Partly data compilation
- Analysis of data
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Survey covering 268 electricity clients and non-clients in
their homes/businesses/institutions
Survey covering 120 electricity clients at the
organisations sales office
Inspection of production and distribution assets
Review of financial reports and databases
Interviews with staff and management of the
organisation
Language used was swahili
Survey covering 27 electricity clients in their
homes/businesses/institutions
Discussions with staff and management of the
organisation
Review of logbooks and relevant reports
Language used was swahili
Survey covering 35 electricity clients in their
homes/businesses/institutions
Inspection of production and distributions assets
Discussions with staff and management of the
organisation
Review of logbooks and relevant reports
Language used was swahili
Discussions with staff and management of the
organisation
Inspection of production and distributions assets
Review of logbooks and relevant reports
Review of a study carried out by UNEP (Wamukonya,
2004)
Survey covering 360 electricity clients, potential clients
125
and non-clients in their homes/businesses/institutions
Review of financial reports
Interviews with staff and management of the
organisation
Language used was English
7 field workers
2 field workers. The team
consisted of 1 woman and 1
man. None of them was
from the area
5 field workers. The team
consisted of 1 woman and 4
men. None of them were
from the area
2 field workers. The team
consisted of 2 men, one
from the area and one from
outside of the area
9 field workers. The team
consisted of 3 women and 6
men from the area
Private A: All clients were
interviewed
Private B and C: the interviewees
were randomly selected
No interviews were made with
clients
The interviewees were randomly
selected from the client ledgers of
the organisation
The interviewees were randomly
selected from the client ledgers of
the organisation
The interviewees were randomly
selected from an existing database
used for an on-going household
census
The survey was performed by Gustavsson, Human Ecology Section, Göteborg University, Sweden. Data from the survey has generously been granted for use in this study.
2001, 2003
Private
Organisation
A, B, C
2002
Co-operative
2003, 2004
2003
Smaller
Government
Organisation/
Utility
Community
Based
Organisation
(CBO)
2004
Presentation of background and methods for data collection for each case included in the study. (For further details see Paper VI).
Year of
Role of the Author
Method
Number of evaluators
Selection criteria
Evaluation
and/or enumerators
Larger
Government
Organisation/
Utility
Table 7.
Case
6.2.1.4. Methodological Framework and Indicators
The data collected in the fieldwork and discussed above, has further been analysed by means
of indicators.
As described in Section 4.5, the methodological framework for the indicators has been
based on five dimensions of sustainable development: technical, economic, social/ethics,
environment, and organisation/institution. For each of these dimensions a number of
indicators have been developed. For the indicators to be useful in field, they have to fulfil
some essential criteria. The criteria for the indicators are listed in Table 8 below.
Table 8
Criteria for Indicators.
Distinguishing Remarks
Features of
Indicators
Simple to
understand and
apply
Transparent and
inter-subjective
Robust
Comprehensive
Fair
No method will be used in practice unless the potential users feel comfortable and can
understand the structure of the method as also of each indicator included. “There is no
point in delivering yet another set of sustainability indicators that in practice is not
126
applicable”
The underlying data has to be easily availably and realistically traceable, as also the
definition of the indicators. Everybody within the profession shall be able to use the method
127
and receive the same results from the same data
The indicators shall be formulated clearly enough to be replicable in their application
The pre-designed set of indicators need to cover all major aspects of sustainable
development
The indicators used have to emphasise the issues of equality, covering gender
sensitiveness, and effects of the development on different social groups in the society
concerned. The indicators also have to be fair in respect of comparing projects in different
areas
The selection of the indicators has been made from literature studies on indicators utilised by
researchers and consultants, and from an analysis based on key issues within each
sustainability dimension. The procedure is illustrated in Figure 8. The indicators selected have
then been practically tested in the field based on their suitability in a local context, and the
possibility to procure necessary data and information (A). In addition, the indicators have
been re-valuated (B) on basis of their suitability in accordance with the general criteria for
indicators (Table 8Table 10). The procedure has resulted in a number of indicators which
have originally been higher, but through the iterative process been reduced to the present
number (C).
It is important to notice that a number of the selected indicators can find their place in more
than one of the five dimensions of sustainable development. One example being the share of
staff with appropriate education, which can be used both as an indicator of the status of the
organisation (the Organisational/Institutional Dimension), and for the technical sustainability
by indicating the level of adequately trained operators (the Technical Dimension).
126
127
Heuberger et al. 2003
Hansson 2003
50
Selected indicators
Sustainability Literature
Dimension:
studies:
technical
economic
social
environment
organisation
Re-valuation on
basis of suitability
in accordance with
the general criteria
C
on indicators
utilised by
researchers and
consultants
B
Baseline data
A
Possible indicator 2 Possible indicator
Possible indicator 3
Possible indicator
Figure 8.
1
nn
Procedure of selection of indicators. Possible indicators are tested based on their
suitability in the field (A), re-valuated based on their fulfilment of the general criteria (B),
before accepted as part of the proposed method (C).
Hence, the indicators finally selected to be included in the proposed method are designed to
fulfil the stipulated criteria as described above. Nevertheless, they can be discussed with
regards to their suitability for a specific project, especially when projects in varying cultural
contexts are subject for analysis. The alternative however, with an infinite number of
indicators, is likely to be cumbersome and time consuming to deal with. Therefore, the most
suitable way forward is suggested to be through evaluations where the suggested indicators
are supplemented with case specific indicators. The efforts for determination of the indicators
will always be case-specific and depend mainly on the remoteness of the site and the
availability and quality of the records kept by the local management.
An additional difficulty is the attempt to attribute a development/a change in the project
area to the specific project. Research on rural electrification is a matter of putting together the
perspective of not only electrification itself, but also the impact it has on the development of a
community and its context. It is therefore important to realize that all conclusions and
subsequent decisions must be based on a combination of analysis and assessments, both with
consideration taken to the result from the analysis and in proportion to other possible
conclusions. No method applied can fully cover the complex reality of a project context. A
method cannot be more than a tool to be used as basis for decisions, and for case-specific
comparisons.
The number of indicators included in the proposed method is 39 out of which eight were
formulated after the fieldwork had been completed. The case studies have therefore included
determination of 31 of the proposed indicators. The choice of units has been a difficult issue
for some of the indicators. Percentages are a reasonable choice for several of the indicators,
but in particular for some of the economic indicators it was found that absolute values give a
better understanding of the performance. When percentages are used to express these
indicators, the result depends on the reference value used. Large absolute differences may be
hidden by this and small absolute differences exaggerated.
The selected indicators have then been accounted for through a specific pre-structured
“sheet”. Every separate sheet accounts for the relevance of sustainable development attributed
to the specific indicator. In addition, a detailed measurement method is described for each
indicator.
51
And Then They Lived Sustainably Ever After?
- Experiences from Rural Electrification in Tanzania, Zambia and Kenya
The method of utilising sheets for indicators is based on a format originally developed by
the UN Commission on Sustainable Development – the CSD Work Programme, during 19952000128 . The advantage of the pre-structured sheets is that the general criteria for the
indicators (Table 8) become readily obtained by all professionals. The original structure of the
sheet has been developed to suit indicators on a national level. Therefore, the structure has
been modified and adapted for indicators on a local level. This includes the removal of
headlines such as “Policy Relevance”, “International Conventions and Agreements”, and
“International Targets/Recommended Standards”. Finally, the headline “Gender Relevance”
has been added to the sheet.
A full description of all the included indicators and their respective sheet is given in a
separate document129 specially developed during this PhD assignment. The document is also
appended to the thesis (Appendix VII).
6.2.2. SWOT-analysis and Open-Ended Discussions
Depending on the specific subject of study, questionnaires vary a lot in complexity. However,
even if using an, in advance, planned and carefully structured questionnaire the data collected
are heavily effected by both the interviewees and the interviewers: in the way the questions
are put forward, any individual biases, age, sex, level of education, religion etc. This shows
that no matter how much we need surveys we also have to bear in mind the context in which
the surveys are to be set. ”It is clear that many of these methodological precautions require
extensive supporting field work-participant observation, interviewing, and other qualitative
back-up research, to give reality and meaning to the numbers and percentages.”130. This
implies that there is a need of using qualitative methods in the research, especially in
interdisciplinary themes such as rural electrification, which is distinctly influenced by social
and cultural contexts.
The qualitative method used for the fieldwork is SWOT-analysis (Paper II, Section 4.2).
SWOT-analysis is based on workshops and discussions with the management and staff of the
organisations. When utilising SWOT as an analysis tool, it is important to consider the
drawbacks that goes with it. One of the most apparent disadvantages is that no single person
is objective – implying that the analysis is highly dependent on the subjective views and
choices of the person/persons carrying out the analysis. In addition, reasonable definitions of
what to include in the analysis are difficult to make. Narrow limits most likely exclude
important actors and sectors. Generous, all embracing, limits on the other hand results in nonapprehensible amounts of information. The list of questions used for discussion on the
SWOT-analysis is included in Appendix VII.
The findings in Paper III (Section 4.3) are mainly based on literature research and openended interviews with market actors.
128
UN 2001
Ilskog 2008
130
Pelto 1970
129
52
6.2.3. Overall Comparisons of Sustainability
Aggregating indicators for generation of measures for the different dimensions of
sustainability and combining these results for a simple overall assessment of the
sustainability, clearly involves serious methodological difficulties. Large differences between
the cases can be hidden when the aggregated measure for the dimension of interest shows
small differences. The outcome would of course change and could change dramatically if the
indicators were weighted, but this leads to the problem of selection of the weights to use for
the different indicators.
In addition, the use of ranking for generation of common scales for the indicators within
each dimension is also problematic, because it can either reduce large absolute differences or
exaggerate small absolute differences. There are several alternative approaches. One would be
to define target levels for the indicators and use the number of indicators that reach the target
level as a measure of the sustainability. For indicators that fall below the target level, the ratio
between the indicator value and the target could be used as a measure. Such an approach
would focus more on absolute sustainability than the present, where the performance of cases
is compared relative to each other. At least for some of the indicators, definition of the targets
would present problems.
Regardless of how indicators are measured and aggregated, important information about
differences between cases evaluated may be lost and it is therefore important that also the data
for the individual indicators be reported when projects are compared on basis of aggregated
indicators.
Finally, sustainability is a matter of development over time. Data from a single evaluation is
therefore not sufficient for assessment of sustainability, even if the data can certainly be used
for identification of areas where improvements will be necessary. Information about the
trends of the indicators would lead to considerably improved possibilities to assess
sustainability. In particular, for some of the social/ethical indicators the development over
time can be a very important measure of the impact of electrification.
6.3.
Further Work
“We speak of data as if it was out there waiting for us. Of course, it is not: “data” is only a
convenient summary term for the documented and memorised results of conducting research
either based on our first-hand experiences or based on those of others set down in texts”131.
Reality always differs from theory, calling for a constant development and adaptability of the
theory. To develop, but still to remain with results that can be compared also with future
evaluations is to walk a tightrope.
As stated above, the obvious conclusion from the study is that there is no single most
appropriate organisation for electricity services in rural areas. It seems plausible that a large
utility regardless of its organisational form would be able to implement a rural electrification
project that is sustainable from all aspects, provided that the financial resources are accessible
from the government or from a surcharge on the tariff paid by other electricity clients. The
availability of financial resources are however in the reality limiting the number of projects
that can be implemented and there will certainly still be a large number of communities that
131
Ellen 1984
53
And Then They Lived Sustainably Ever After?
- Experiences from Rural Electrification in Tanzania, Zambia and Kenya
must wait many years to be electrified through such a scheme. The alternative approaches,
where the electrification is implemented by a smaller organisation such as a co-operative, a
private entrepreneur or a community enterprise company, are interesting as they open up
possibilities for local and private initiatives.
The following actions would contribute to improved evaluation of sustainability of rural
electrification:
•
Systematic evaluations shall be made of all projects, using a standard set of sustainability
indicators. The indicators suggested in this thesis could be used as a basis for evaluation
and for further discussions of the most relevant and suitable indicators. For assessment of
the sustainability of the services, repeated evaluations are necessary.
•
Aggregation of indicators to give simple measures for the different sustainability
dimensions should be avoided. Instead, a minimum acceptable level and a target level for
each indicator may be defined and projects assessed on basis of the number of indicators
where the minimum level and the target level were exceeded.
•
It is important that the indicator sheets will remain open for enhancement, refinement,
amendment and change as a result of degree of availability of data and as input from other
researchers and stakeholders is received. International Conventions and Agreements, and
International Targets/Recommended Standards, are specifications that, when available,
can be added to the sheets.
•
To many of the indicators can be added an indicator distinguishing between femaleheaded and male-headed households. This can be further developed.
•
All evaluations of electricity clients can be supplemented with a reference group
constituted by non-clients (e.g. citizens that are not at present electricity clients).
•
An advantage is if the results from evaluations performed could be reported to an internetbased homepage, from where interested actors could access information.
54
7. Conclusions
Since the history of man began, we have moved forward by developing and learning from the
successes and mistakes made by ourselves or others; in other words from different scales and
forms of evaluation. Still, in many areas in our society we exclude evaluations as a proper tool
for handling more complex and interdisciplinary situations.
This thesis has dealt with the issue to investigate the reasons behind successful/less
successful implementation of rural electrification, with the overall objective to facilitate for
decision-makers to improve their basis for future decisions and measures on rural
electrification activities. This has been especially interesting in the light of the on-going trend
towards private sector led projects, which have introduced new elements influencing
possibilities and barriers for a sustainable rural electrification development. The main
important issue for the research work has been to examine whether rural electrification
implemented by private entrepreneurs or other non-governmental organisations contribute
more effectively to sustainable development than the conventional approach where rural
electrification is the responsible of a government utility.
The following main conclusions from the study have been highlighted:
The proposed method for evaluation has generated valuable experience
Despite the large number of rural electrification projects being financed by the international
donor community there are few published in-depth evaluations of the effects of these projects
on sustainable development, in particular on the organisational aspects.
The implementation of the evaluation method proposed in this thesis has generated valuable
experiences regarding collection of data for evaluation of rural electrification projects. The
proposed indicators give a good picture of the present situation for the cases evaluated.
However, for assessment of the sustainability of the services, repeated evaluations are
necessary.
SWOT-analysis is seen as a simple and useful complement to the evaluation method.
Through the SWOT-analysis, the management of an organisation is given the opportunity to
highlight their views on the development. This can bring additional information to the
evaluation, which will not be covered by the selected indicators.
Subsidised tariffs does not necessarily lead to a higher share of population with
access to electricity
Local markets with a substantial purchase power do exist, even though constituted by only a
small fraction of the rural population. One example being the co-operative studied, where the
price of electricity is 15 times higher than the price charged by the state owned utility in other
areas of the country, and the extent of connection still being approximately the same. This
implies that a subsidised tariff does not necessarily lead to a higher share of population with
access to electricity.
55
And Then They Lived Sustainably Ever After?
- Experiences from Rural Electrification in Tanzania, Zambia and Kenya
Diesel generation combined with energy efficient lights can be a cost effective means
to reduce CO2 emissions from small-scale electrification
The costs for Solar Home Systems (SHS) are still substantially higher that those for diesel
generation combined with efficient light appliances.
It is clearly questionable if the rural population in developing countries shall pay the price
for complete elimination of greenhouse gases. If such elimination is seen as essential, the
additional costs have to be covered by the donor community.
Electrification alone will not lead to the development of productive activities
Electricity by it self does not lead to a sustainable economic development. Other causes than
merely availability and price of electricity are influencing the decisions of the local population
and their opportunities to engage in productive activities. Such factors are the availability of
tools and machines for productive applications, credit for fixed assets and working capital, the
human resources necessary for technical and business management, and a market for the
products. The intentions expressed by many of the interviewed clients during the fieldwork,
on taking up productive uses when connected to electricity, might therefore not be realistic.
Governments and the donor community have unrealistic expectations on impacts of
rural electrification
As has been pointed out in Chapter 5.7, many actors involved in planning and implementation
of rural electrification in Africa, appear to have unrealistic expectations on the impacts of
rural electrification, such as effects of deforestation, reduced work-load for women, and the
financing willingness by private actors on the local and international scene. If this is true, it
could indicate that results reported in several evaluations of rural electrification experiences
have not had much effect, and that new emphasis on private solutions is based more on
ideology than on a realistic assessment of the empirical situation. The possible consequences
are ineffective use of available funds for rural electrification and implementation of privately
organised electrification schemes with uncertain long-term prospects.
What instead seems as necessary is that the actual experiences from existing rural
electrification schemes are taken into account when new projects are planned for and that
development goal are carefully prioritised. If additional measures are necessary for achieving
the high priority goals, these should be included in the electrification projects.
Private investors cannot be expected to take responsibility for all aspects of
sustainability. Therefore, additional financing from the donor community will
continue to be essential
It is not possible to state whether any specific organisational form will have a particular
impact on the issues of public benefit and gender, but it is reasonable to believe that the
private market will only deliver these energy services if the full costs are covered. Full cost
recovery will be difficult to obtain especially in rural areas where the load development and
purchasing power is lower than in urban areas. The probability of international private
investments in rural areas of the African power sector is therefore low, which implies that
donor support will continue to be of importance. Donor agencies that provide financing for
rural electrification projects should use their influence to ensure that all-important aspects of
sustainability are considered by the implementing organisation.
56
The is no single most appropriate organisation for electricity services in rural areas
The results from the research show that all of the organisations included are having
difficulties with recovering the investment costs. There is however no reason to doubt that an
electrification project can manage to survive and develop, regardless of its organisational
form, if given sufficient economic and management/educational support.
The organisational weaknesses have mainly been found among the government utilities
included in the study, and can be illustrated by their inability to reduce the high non-technical
losses, their low share of local ownership, and to raise tariffs.
The private organisations included had their main weakness in the limited possibility for
stakeholders’ insight into the activities of the business. In addition, sole ownership can be a
severe risk for the organisations, as they are often located in areas with a relatively high level
of HIV/AIDS.
57
And Then They Lived Sustainably Ever After?
- Experiences from Rural Electrification in Tanzania, Zambia and Kenya
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62
9. Nomenclature
Afrepren
CBO
CDM
CFL
Client
Costumer
CO2
CSD
CSD-ISD
DE
Diesel Genset
ESCO
ESMAP
ITDG-EA
KTH
kV
kVA
kW
kWh
LSMS
MDG
MW
NGO
OECD
PV
SADC
SAREC
SEI
Sida
SME
SPSS
SWOT-analysis
TANESCO
TAS
UECCO
UNDP
USD
VAT
W
ÅFORSK
African Energy Policy Research Network
Community Based Organisation
Clean Development Mechanisms
Compact Fluorescent Lamp
Energy end-user (also referred to as costumer)
Energy end-user (also referred to as client)
Carbon dioxide
UN Commission on Sustainable Development
CSD Indicators of Sustainable Development
Decentralised electrification
An electric generator powered by a diesel engine
Energy Service Company
The Energy Sector Management Assistance Program (Joint UNDP/
World Bank Programme)
Intermediate Technology Development Group, East Africa (name
changed to Practical Action)
The Royal Institute of Technology in Stockholm
Kilovolt
Kilovolt ampere
Kilowatt
Kilowatt hours
Living Standards Measurement Studies
Millennium Development Goals
Megawatt
Non-Governmental Organisations
Organisation for Economic Co-Operation and Development
Photovoltaic
Southern African Development Community
Swedish International Development Agency, Department for Research
Cooperation
Stockholm Environment Institute
Swedish International Development Agency
Small and Medium Enterprises
SPSS is a computer program used for statistical analysis (originally,
Statistical Package for the Social Sciences)
An analysis tool for Strengths, Weaknesses, Opportunities and Threats
Tanzania Electric Supply Company Ltd.
Tanzania Shillings
Urambo Electric Consumers Cooperative Society
United Nations Development Programme
US Dollars
Value Added Tax
Watt
Ångpanneföreningen’s Foundation for Research and Development
63
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