Strategy for Productive Energy Use Promotion (Mozambique)

A strategy for productive energy use promotion under the EnDev AMES-M programme

The AMES-M programme, implemented in the context of the Dutch-German partnership called “Energising Development”, aims to increase sustainable access to modern forms of energy in Mozambique. The second phase of AMES-M started in November 2009 and will finish in the end of 2012.

In order to enhance the economic development and poverty reduction outcomes of the programme, the programme team decided to add a component of productive energy use in 2011. The planning phase for this new set of activities coincided with the test-run phase for the GIZ and EUEI PDF PRODUSE Manual, and the AMES-M programme was selected as one of two projects under which parts of the Manual should be field-tested. In this context, a 3-day expert workshop on “Strategies for Promoting Productive Use of Electricity in Mozambique” was organized by AMES-M in May 2011 in Chimoio, capital of Manica province, which had been prioritized for implementing PU activities. The workshop was attended by 33 participants from government agencies at national and provincial level, FUNAE (Mozambique’s the national rural electrification fund), Ministry of Agriculture, Department of Agriculture at provincial level, local and international NGOs such as KULIMA, AMOJUDEC, ORAM, AKSM and the Canadian Hunger Foundation. There were also participants from the Pedagogic University of Chimoio and the University of Beira, as well as private consultants.

The main intended outcome of the workshop was to develop jointly with the concerned local and national level stakeholders a strategy for productive energy use promotion in the agriculture sector in Manica Province, with a focus on renewable energy, on the basis of the structured approach proposed in the manual. The workshop was designed in an interactive manner, by which participants were guided through a process of thorough reflection on the local economic system, and an analysis of agricultural value chains. In sequential group work exercises, they identified potential options for productive energy use in agriculture and agricultural processing, building on the natural and physical assets of the region, and discussed the economic viability and sustainability of these options. Given that only few participants had profound agricultural expertise and knowledge of the local system, the main objective of these exercises was to convey the manual’s comprehensive analytical approach and planning tools, which can help identify the most promising PU opportunities and provide a basis for channeling PU programme funds accordingly.

As a follow-up to the workshop, participants were encouraged to work out proposals for specific productive use opportunities to be promoted in Manica province, which would then be considered to receive capacity development support by AMES-M. Six local institutions submitted their ideas few weeks after the workshop to the AMES-M team, including an irrigation project for potato cultivation, hydro-powered maize milling and wheat de-husking, and multi-functional platforms. To further strengthen the proposals and guide the initiating institutions in rigorous screening for economic viability of the PU ideas, the AMES-M team worked out a questionnaire to be applied to the proposals. This questionnaire solicited information on the following elements:

• general project description
• electric equipment required
• energy sources required
• main actors
• expected allocation of benefits
• definition of the agricultural value chain in which the PU idea is anchored, and analysis of value addition steps
• technical skills required
• availability of maintenance and repair services
• conditions to be met in terms plot and physical environment
• investment costs (material and capacity building)
• analysis of entrepreneur’s cash flows
• management skills on the side of the institution that provides technical and capacity building support
• market opportunities for the final product, market channels, and need for marketing efforts
• general strengths and potential challenges of the business idea
• replicability of the business idea
• target area (urban or rural).

The next phase in the PU programme will be a technical and economic analysis of the PU business ideas. The overall productive use promotion strategy developed under AMES-M is to support start-ups of a number of feasible and replicable productive activities that depend on energy in collaboration with commercial banks for funding initial investments. By showcasing working business models, the programme hopes to stimulate productive use activities at a larger scale in the province.

Preliminary conclusions to be drawn from the inception phase of the PU promotion activities in Mozambique are:

(i) The expert workshop to kick-off PU promotion activities in Manica province has helped to mobilize and involve a group of local stakeholders in strategic planning of PU development right from the start; the workshop has resulted in an effective transfer of ownership to local implementing partners, and to ensure that all activities are based on local knowledge.

(ii) The workshop has also been effective in advocating for PU promotion within the National Fund for Rural Electrification, which has sharpen its focus on productive energy use and upgraded the topic on its agenda of activities.

(iii) The approach has helped to convey to all stakeholders a sound understanding of the structured approach to PU promotion, i.e. planning PU promotion activities on the basis of a thorough analysis of the local economic system and proven business opportunities.