Grid Extension: The Community-Based Approach
Introduction - Rural Electrification in the Developing World: Limits and Challenges
Key Messages
1. Around 1.5 billion people in the developing world today still live without access to electricity. Rural populations are disproportionately affected by this phenomenon, especially in Sub-Saharan Africa where rural electrification rates are merely above 10%.
2. Utilities lack incentives to engage in rural electrification due to its low perceived profitability. Therefore, a variety of alternative institutions have been designed, partly promoted by governments, to accelerate the process of rural electrification. These options include on a macro-level the creation of a separate division within the utility, the creation of a rural electrification agency/ fund or the creation of private companies and SMEs. On a micro-level rural electrification cooperatives have been employed in combination with one of the macro-level approaches.
A staggering amount of 1.5 billion people in developing countries today do not have access to electricity with the grand majority of them to be found in South Asia and Sub-Saharan Africa (World Bank, 2010a). In the latter 587 million people did not have access to electricity in 2009. This constitutes more than half of the population of Sub-Saharan Africa in which rural areas are still disproportionately affected regarding the lack of electricity. While in urban areas, for instance, electrification rates are close to 60% in rural areas merely above 10% of the population enjoy the same privilege (IEA, 2010; IEA, 2008).
| 2000 | 2005 | 2009 | |
|---|---|---|---|
| Total | 508.9 | 547 | 587 |
| Urban | 120 | ||
| Rural | 465 |
No. of people in Sub-Saharan Africa without access to electricity in million
Source:IEA World Energy Outlook, 2002/2006/2010
Alternative rural electrification projects, e.g. off-grid installations, which might provide an opportunity to lower the costs of electrification also often do not constitute a viable option since it is complicated and costly for utilities which are characterized by their highly centralized nature to operate several more decentralized projects on a village level (Foley, 1992b).
Utilities in developing countries which are often already struggling to provide electricity to consumers that have already been connected to the grid often show little interest in engaging in rural electrification (REEEP/UNIDO, 2006). However, in many of these countries rural electrification has become an undertaking increasingly important to the government which often tries to promote the latter through the provision of subsidies (USAID SARI, 2004). This financial assistance by the government which provides a first step to overcome the financial constraints associated with rural electrification is further complemented by a variety of alternative institutional options which have been designed to facilitate the process of rural electrification and ensure full dedication to this process.
These options include, at a macro-level:
• the creation of a separate department within the utility responsible for rural electrification only,
• the creation of an entirely new institution like rural electrification agencies
• the creation of private companies as well as small- and medium-sized businesses.
On the micro level a possible option is the formation of local electricity cooperatives which aim at facilitating the implementation and operation of rural electrification projects by including the local communities in the process (Foley, 1992b). Most rural electrification projects that employ this micro-level approach usually do so in combination with one of the macro-level options. These combined approaches are employed for rural electrification via grid-extension as well as for decentralized off-grid solutions.
These approaches all benefit from the shared commonality of constituting a separate body solely responsible for rural electrification. Yet, each approach displays some advantages as well as disadvantages and should be carefully fitted to the circumstances in which it operates.
