Asian Development Bank's: Energy for All Initiative: As Part of Its 'Strategy 2020' Objective for Inclusive Growth, the Asian Development Bank's Energy for All Initiative Promotes New Approaches to Scaling Up Access to Energy for the Poor

By Tyrpenou, Michael | International Trade Forum, January-March 2011 | Go to article overview

Asian Development Bank's: Energy for All Initiative: As Part of Its 'Strategy 2020' Objective for Inclusive Growth, the Asian Development Bank's Energy for All Initiative Promotes New Approaches to Scaling Up Access to Energy for the Poor


Tyrpenou, Michael, International Trade Forum


In Asia and the Pacific, more than 800 mil lion people still have no access to electricity. About 1.8 billion people still rely on biomass fuels (such as wood, dung and crop waste) to meet cooking and heating needs. Added to the fact that the poor are disadvantaged by the time and effort required to collect biomass materials, jeopardizing their capacity to participate in income generating activities, this reliance brings with it ongoing adverse health consequences.

The Asian Development Bank (ADB) has acted to tackle this problem by introducing its Energy for All Initiative. In recent years, the ADB has financed programmes in conjunction with government and non-governmental organizations in Sri Lanka, Viet Nam, the Philippines and Bhutan that provide more than just power to the poor.

By providing access to clean energy and greater livelihood opportunities through education, health and safety, these programmes highlight the benefit of community empowerment through development.

CASE STUDY

CREDIT TO CONNECT

Sri Lanka

In Sri Lanka, through a US$1.5 million grant from the Japan Fund for Poverty Reduction (JFPR), the ADB worked to provide greater access to electricity for the nation's poor. Providing capital, issued through micro-financing vendors, the JFPR 'Power Fund for the Poor' grant was designed to negate the initial high cost of connecting households to the power grid. As a result, the revolving fund provided electricity to 15,000 homes from 2004 to 2009.

Loans are seen as the key for poor households to overcome the high initial cost of connection. Under this project the national utility, Ceylon Electricity Board, provided installment credit to poor households to pay for the upfront cost of connection at an average connection cost of 15,000 to 20,000 Sri Lankan Rupees (SLR)--roughly US$ 130 to US$ 170. With repayments for connection fees paid in monthly installments over two to three years, the loans are affordable for poor households as demonstrated by the 95% loan recovery rate.

Following the success of the initial project, the Government of Sri Lanka requested an additional US$ 3.5 million Asian Development Fund loan to scale up the Power Fund for the Poor as part of a US$165 million Clean Energy Access and Improvement Project, approved in 2009. The scaling up of the micro-finance fund will be done through a loan-funded credit support programme with the goal of equipping an additional 60,000 households, representing 8% of the total number of poor households, with electricity by 2016.

CASE STUDY

MICRO-HYDRO LIGHTS UP A VILLAGE

Philippines

For many rural communities in the Philippines, electricity is still inaccessible. On the island province of Negros Occidental, in the country's Western Visaya region, eight communities are benefitting from a US$1.5 million grant from the JFPR. Designed to supply renewable energy resources to these locations, the grant focussed on the promotion of living standards and the livelihoods of the communities' inhabitants. With a key focus on community ownership and participation, the ADB worked alongside Winrock International to educate local communities on the maintenance and operation of hydro systems.

In Balea, a small community within the province, a 19KW river micro-hydro system was constructed to bring electricity directly to households. Through extensive community consultation, villagers, who paid a one-off fee to join the co-operative, were supplied with electricity. The programme was so successful that neighbouring villagers in Calapnsuan, some three kilometres away, rushed to join.

However, despite the successes of each programme, major issues were still encountered by the ADB. In Balea, delays, poor governance and miscommunication between stakeholders, villagers and local government authorities threatened to derail the project.

With continued investment into community engagement and education in the villages, the ADB is certain that local communities will accept full ownership of the programme. …

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