No one left behind: Smart Villages / EASAC at European Development Days 2016

Tuesday August 2nd, 2016 - Smart Villages

The Smart Villages Initiative and the European Academies Science Advisory Council (EASAC) held a debate session, “Can energy access alone end poverty?” as part of European Development Days (EDD). EDD is organised by the European Commission and “brings the development community together each year to share ideas and experiences in ways that inspire new partnerships and innovative solutions to the world’s most pressing challenges.” This year, EDD celebrated its tenth anniversary. Over the past ten years, 4,500 organisations have been represented, along with 500 panels, and 42,000 participants from 154 countries.

Our debate session brought together four speakers—from Tanzania, Indonesia, India, and Belgium—to discuss the ways in which energy access can help to catalyse development. As part of the EDD theme, “No one left behind,” the session looked closely at how energy and development can fight poverty, especially in the most remote areas of the global south. The aim of the session was to share success stories about energy initiatives from the public sector, private sector, and civil society while addressing the challenges that remain for universal energy access.

Listen to the debate:

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Panelists:  

Soma Dutta: Programme Coordinator, Women’s Economic Empowerment, Energia International Network on Gender and Sustainable Energy

David Lecoque: Policy and Business Development Officer, Alliance for Rural Electrification

Martin Saning’o Kariongi: Director General, Institute for Orkonerei Pastoralists Advancement

Tri Mumpuni: Executive Director, People Centered Economic and Business Institute (IBEKA)

The question posed first to panellists by moderator Eliza Anyangwe: “What is the one thing we can do to ensure that off-grid energy access leads to development?”

Martin Saning’o Kariongi believes that the one thing that must be done to ensure that energy access leads to development outcomes is to establish and build energy infrastructure. To counter the land crisis amongst the Maasai, he established a radio station to reach and inform remote communities and villages about land rights. However, he needed electricity to do this and so began with a small generator to enable his activities. Scaling up generation  with bio-fuelled engines enabled other uses of the energy included empowering Maasai women to run businesses by using the electricity to run a milk processing plant (Maasai women own the milk). As a result of electricity generation, 60% of the Maasai youth are now coming back to Terrat because a “smart village” has been established. Energy has enabled awareness raising and education regarding land rights as well as the formation of productive enterprises.

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The view of Tri Mumpuni is that the one thing that must be done to ensure that energy access leads to development outcomes is to energise villages, making sure electricity is not just for consumption but also for productive use. A key concern in both off-grid and on-grid renewable energy installations is not only the technology itself but building the capacity of the local community to sustain the plant. On off-grid projects, Mumpuni noted the initiative shown by local women to carry out productive enterprises with the energy (e.g., coffee grinding). In the case of on-grid projects, productivity can be kick-started by income gained from selling excess energy from the plant back to the grid. Consensus on what to do with the money, and establishing a village development fund was key for this to be done successfully. The income can be used for community development; education was often identified as a central means of improving standards of living. The fund can also help women entrepreneurs who may not have access to bank loans. By creating assets, energy can be a powerful tool to encourage people to stay in the village, making people producers and well as consumers.

From David Lecoque’s perspective, sustainable business models are the essential element for energy to lead to development outcomes.  Business models need to enable the productive use of energy at the agricultural, commercial and industrial level, and contribute to an environment of local economic development. However, there needs to be a return on investment for the model to be sustainable. For example, with a solar home system, the income from mobile phone charging can both pay off the system and also make a profit for the owner. This makes it financially sustainable not only for the villagers but for the businesses bringing these technologies to remote communities.

Soma Dutta proposed that by focusing on women as energy decision makers and by focusing on the last mile, energy access could lead to substantial development outcomes. The story of energy access from Soma’s perspective is one of disparities and inequalities. For example, in rural areas there are disparities between the central village and the hamlets, between men and women and boys and girls. The areas that are still left to be connected are also the most difficult ones—the last mile. She called for “making the last mile the first”, even though this is a place the traditional private sector would not normally go. To solve this challenge, she emphasised that organisations, the private sector, and governments must invest in women. They must invest in women who are working in the last mile, who will not migrate, who have good connections, who are good communicators, who are often involved in informal micro-enterprises, and who are often the people who make energy decisions within their households. Research shows that when you invest in women and put money in women’s hands, 90% goes back into social investments—especially in education and children’s education. Dutta argues that we really need to focus on this last mile, with special treatment and additional investment. To do this we need partnerships at all levels.

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Discussion Points:

Affordability: Soma Dutta recalled a project in Senegal where Energia worked with GVEP to set up a distribution network for solar lanterns, using local women as distributors to reach remote communities. The private sector partner was Total and to expand the distribution network Total provided women entrepreneurs with 60-day credit and they could then pass on these credit terms on to the customer. This enables women to sell these solutions to those that wouldn’t normally be able to make the investment. David Lecoque also emphasised the need for clever consumer financing. For example, the “pay as you go” (PAYG) method, allows community members to pay on a monthly basis (which may well be affordable when household spending on inefficient fuels such as Kerosene are taken into account). At the end of PAYG, which normally lasts three years, you have a system that still works and is producing free energy.

Martin Saning’o Kariongi stressed the need to create enterprises and enable funding so that communities can pay installation costs for energy production. For example, by connecting Maasai women to the milk market, they can sell their product. They can work to fund the installation of energy systems for their homes and businesses and potentially upscale their activities (milk processing, etc.). Soma Dutta noted here the importance of the “energy plus” approach. Whenever we are talking about productive enterprises, energy is one of many inputs. Marketing, leadership, agency, and information present a huge gap. The “energy plus” approach requires a partnership that integrates interconnected concerns, for an effective multi-sectoral approach.

Community participation: Tri Mumpuni stressed the need for ownership and responsibility for energy access programmes to go to the whole community, and for an appropriate institution to be established. Therefore, if there is turbulence and an individual wishes to override the programme, there is already a formal institution for resolution in place.  Indeed, from a business perspective (as argued by David Lecoque), these are your customers—you need to have a good relationship with the community, particularly as you are selling a long-term product or solution. You may also need community engagement for product maintenance at the local level.

Incentivising investment:  David Lecoque told the audience that in recent years, there has been a huge increase in political commitments to energy access. A significant amount of current budgets are being re-directed into energy, but when you look at targets for Sustainable Energy for All (SE4ALL), there is still a huge gap between what is needed and what is coming in. There is a need to use public resources in such a way that you can leverage private sector investment. You can do this by utilising financial models that take away some of the risk and provide guarantees, thereby taking away trepidation surrounding investment in expanding energy access.

Private sector partnerships with integrity: Soma Dutta noted that the only way partnerships will work is if there is a positive gain on both sides. Indeed, from our earlier example, if Total wanted to reach rural markets in Senegal for solar solutions, then they needed something to extend their distribution. Brokerage was key in making this partnership work. Total did not have the capacity to deal with individual entrepreneurs on a one-to-one basis, therefore, they were organised into groups and leading entities. Total then only interacts with the leading entities. However, brokering and facilitation come at a cost, and has to be part of the long-term solution. David Lecoque added to this that big companies can act as a supporter to small/medium-sized companies working in the area rather than engaging directly. Tri Mumpuni also stated the known profitability of hybrid models of funding for local cooperatives (50% coming from the private sector in one case in Indonesia).

Sustainable energy access: For the last two years, renewable energy has been put on the front page, and we have to make sure that whatever the available local resources, there is focus on clean energy solutions. Big outputs can come out of a small amount of energy generation, with the prices of renewables going down and the use of biofuel from sustainable sources. There are many available resources; we just need greater awareness for people to think that clean energy is important.

Direct current (DC) appliances: Tri Mumpuni noted that in 1999, when they needed a solar pumping system in remote area of Indonesia, they used DC as it was better to connect directly when the sun hits. Indeed, panellists highlighted that as the market for decentralised renewable technologies grows, the more the market will determine the appliances. Usually inverters would be used for AC-DC, but, in the longer term, there will be a move to the creation of DC appliances. For example, the selling of DC packages with not only the electricity source but also the appliances that go with it. There is a growing availability of DC technologies on the market.

Cooking: The production of biogas was cited as a key development in the field of cooking. In terms of the lack of attention paid to cooking in contrast to energy access, Soma Dutta cited four reasons:

  • The permeation of household decision making dynamics through to the state level
  • Energy access is more readily associated with income than cooking is (attracts more investment)
  • Clean cooking is a complex technology to handle and to get right
  • There are 140 plus countries with targets on renewables but none of them are related to clean cooking.

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Closing statement (Bernie Jones, Smart Village Co-Leader):  Cities are held up as the hives of growth, but with energy you can carry out economically productive activities in the villages and bring all those services, which sets cities apart, into villages. Energy can act as a great equaliser, enabling people to have a choice between staying in a village and moving to a town or city. As we have seen throughout this discussion, sustainable business models, community engagement, and putting everything together in a smart way are key. The enablers of this are clever financing, reducing risk, skills, information, considering impacts, and showing communities what is possible, but giving them the ownership and a decision-making role.