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PureSIG: Lessons Learnt on the Productive Use of energy
[top] [end]Renewable Energy"The premium of renewable energy is directly proportional to the distance from the grid. South Africa has a fairly significant rural grid infrastructure (about 50% of rural households are electrified) so any rural village is never much more than 10km or so from the grid. The closer you are, the more alternatives the market has to your PURE initiatives." User: Robert Aitken[top] [end]Local economies and market SupportFor non-farm enterprise development in low-income areas access to distant markets is essential. Energy projects can support income generation or marketing activities within the duration of the project. Evidence from the study shows that only rarely do local rural people have the human assets and social skills to continue after the end of the project upgrade links to distant markets (including those entrepreneurs with bachelor or higher level education). User: Annemarije Kooijman"Households spend considerably more of their monthly expenditure in external/commercial centre economies that they do within with narrow confines of their own local economy (10% local – 90% external). This is severely limiting in terms of what businesses the local economy can support." User: Robert Aitken "Many of the more successful local businesses offer goods/services that are required on an ad hoc basis and are utilised more out of convenience as opposed to offering better value, etc. To an extent they fill the gaps between formal sector goods/services as opposed to presenting competing offers." User: Robert Aitken Research in India indicates that it is very difficult for people to turn the new resource energy into extra income, and that ideas for new products or links to new markets are usually made by people from outside the community. User: Annemarije Kooijman I think here's one of the important things in PURE development - to what degree is it about enterprise development, and to what degree about technology introduction? I obviously think that it is both, but if I had to choose where the emphasis should lie I would go for enterprise development (and all that goes with it). User: WikusKruger "The key success factor is the handholding ability of the service provider. Not enough resources are available to for this purpose." User: Veena Joshi In the fieldwork in India a negative attitude towards loans for investing in productive assets among the smallest enterprises was encountered. From the study in HP and Darjeeling the largest enterprises in the sample generally did make use of loans for enterprise establishment. The smallest took loans out of need for enterprise operation, and loans for buildings, but generally preferred to borrow from friends or family or save until investment can be paid upfront. The main barrier to taking loans was the perception that investments would not pay themselves back. User: Annemarije Kooijman [top] [end]Types of Business Activity"Manufacturing is a big challenge. Unless based on traditional crafts, there is not much the local economy can produce that can rival imports from China and India. We had to rely to some extent on procurement policies to ensure local government bought mosquito nets from one of the PUC businesses as opposed to importing from China. The price for the material alone was about $3-$4/net while the landed costs of nets from China (dipped and everything) was about $3." User: Robert Aitken"There is a justifiable claim from groups who sell solar home systems, such as SELCO in India (www.ashdenawards.org/winners/selco), that people can improve their income by doing craft work at night. People who do tailoring, hand weaving, embroidery, etc. can work much longer each and increase their productivity. Small shops and street sellers can sell much more produce as they can work into the evening, when other people have come in from their work in the fields or elsewhere." User: Dr David Fulford "It seems to me that, apart from places where there are abundant micro-hydro potential (i.e. NOT South Africa), PURE may mostly be relegated to cellphone/battery/lantern charging or lighting for craft/clothing making, which is quite limited in itself. If one were to, for example, introduce energy into a community almost on the back of an anchor business, such as a [Bulungula www.bulungula.com], or a big sawmill etc, the potential to expand the uses of the energy is just much more. And it also enables the tackling of issues such as market linkages, training/knowledge transfer in a much "easier" way in the sense that a lot of these issues had to already have been addressed for this anchor business to be a success in the area." User: Wikus Kruger [top] [end]Opportunities and Market Niches"Although challenging there are some basic manufacturing opportunities - but in most cases market linkages are crucial. For example we were able to produce more professionally designed/stylish nets for local game lodges. The nets were about 20% cheaper than could be acquired in the formal sector. What made a big difference to the market was not so much the cost savings - which could have been discounted away by formal retailers if the number of units was right - but the fact that they were produced by local people. Tourism is big business and it’s increasingly branding itself as ecologically/socially responsible – a habit reinforced by an increasingly discerning, middle class global market." User: Robert Aitken"In my view, in India all non-farm enterprises based on an energy service at the core suffer from an uncertainty regarding the fuel supply. This is particularly true for modern sources -both in terms of availability and cost." User: Veena Joshi [top] [end]Competition"High turnover of entrepreneurs; the bigger the formal sector the more pressure on the informal/micro sector. People in SA aspire to be part of the formal sector. Many of the entrepreneurs kept one eye on their business and the other on employment opportunities in the formal sector. Obviously some folk are more likely to gain formal employment that others – and it is probably these folk, more driven and educated, that we want in these informal sector initiatives as well." User: Robert Aitken[top] [end]Increasing load factorIncome generation through energy use can be necessary to make an energy supply project feasible (for example increasing loadfactor). For this, one big energy user is sufficient, as in the very nice examples of income generation in Phil Maher's booklet User: Annemarije Kooijman ( the booklet is available on the Nottingham University's website , Look under manuals and 'Waterpower for a village business' User: Phil Maher[top] [end]Other barriers"Welfare state; SA has 12.5 million welfare beneficiaries (25% of the population - the highest proportion in the world I believe). It’s hard to promote entrepreneurship when those potentially interested realise that they have to build a business over time, not taking a salary for a while, reinvesting profits, watching cash-flow, etc. If a household has two people over the age of 60 years and two children under the age of 14 years, they will be paid about $300/month in grants. While this is not an enormous amount, it does make people a little less enthusiastic about the lower end realities of micro-enterprise." User: Robert Aitken"The policy environment should also support these market linkages - tariffs, taxes etc. can seriously hamper the sustainability of any PURE initiative." User: Wikus Kruger Categories: PureSIG | ||||
Page created:
14 April 2008; Last edited:
14 April 2008; Version: 0 | ||||
Pagename: PureSIG:LessonsLearnt @HEDON: AJJA | ||||
