Bringing Small-Scale Finance to the Poor for Modern Energy Services: What is the role of government? Experiences from Burkina Faso, Kenya, Nepal and Tanzania"

Governments at the local and national level can be one of the key levers for unlocking access to small-scale finance for modern energy services. A recent UNDP report entitled Bringing Small-Scale Finance to the Poor for Modern Energy Services: What is the role of government? Experiences from Burkina Faso, Kenya, Nepal & Tanzania offers lessons on the role of governments in removing barriers and bridging the knowledge and resource gaps that constrain poor people from accessing small-scale finance essential for purchasing modern energy services.

“Access to small-scale finance tailored to low-income individuals, households, and businesses is extremely important for expanding access to modern energy services.
However, the reality is that the poor typically have limited options for financing the purchase of modern energy services (lighting, refrigeration, mechanical power for grinding and milling, heat, cooking fuels, etc.). This is despite the fact that unlocking access to credit for modern energy has the potential to unleash economic productivity for small enterprises, to create improved health and educational prospects, and to help build assets and incomes of the poor.

This UNDP report looks at the current gap that exists between access to modern energy and small-scale finance and focuses on the role of governments in bridging that gap, and recommends priority actions to be taken by governments.”

Download the full report here

Download a two page brief here

Joint UNDP/Practical Action report "Expanding Energy Access in Developing Countries: The Role of Mechanical Power"

There has been increasing recognition in recent years of the importance of energy access in developing countries for meeting the Millennium Development Goals (MDGs). Crucial linkages between the two have been documented (DFID, 2002; Modi et al, 2006) and highlighted at global forums such as the Commission on Sustainable Development (CSD). Internationally, multilateral agencies have committed to partner with developing country governments to address energy access issues in the context of sustainable development, as defined in the Johannesburg Plan of Implementation (JPOI), adopted at the World Summit on Sustainable Development in 2002.
At the same time energy has climbed the international policy agenda, driven by concerns about oil and gas prices, energy security, and links to climate change. However, even progressive agendas that promote low-carbon, alternative energy and energy efficiency in developed countries have so far not clearly meshed with the requirements of energy access for development in developing countries. These requirements are for a drastic increase in the quality and quantity of energy access by the poor. On current trends however, the existing grim energy access statistics of 1.6 billion people in developing countries without access to electricity and 2.5 billion still using traditional biomass fuel for cooking look unlikely to change by 2030 (PAC, 2008).

While these figures are justifiably often quoted and act as drivers for energy access advocacy and policy, they fail to reflect the full extent of the energy access gap. In particular they do not fully reflect the need for energy in productive uses and basic processing in many different rural livelihood activities, undertaken everywhere in enterprises, farms, mines, workshops, forests, wells and river crossings to name a few. These energy services are fundamental to rural livelihoods, and to the efficient transformation of natural resources into vital products and services including food. This access to energy results in wealth creation for producers and more affordable prices for consumers. For poor people, such energy needs are often met with simple hand tools or with physical strength – often leading to exhaustion, extra costs in time and money, and reduced human and natural resource productivity. In rich countries, these services are provided by the diesel and electrically-driven machinery which economic wealth can obtain. The crucial point however is that the energy end-use vector in all these cases is mechanical power, derived from whatever energy source is available. With this recognition, the contribution of mechanical power becomes apparent, and examples of its role in many applications can start to be mapped, along with their impacts, development outcomes and associated interventions.

This publication sets out to do just that, and mechanical power is seen through this study to be critical to enhancing the productive use of labour in many ways, directly supporting the core of rural people’s daily activities. Mechanical power is defined here as ‘the effective outcome of transforming different forms of energy sources (e.g. wind, hydro, fossil fuels etc) to kinetic energy (to cause motion)’. Mechanical power can further be broken down from an energy source perspective into that created by electrical and non-electrical power; the latter sources include human power (e.g. treadle pumps, rope pumps etc), animal power (e.g. oxen, donkey), renewable/natural power (e.g. wind pumps, hydro turbines, biogas engines) or fossil energy (e.g. gas/diesel engines/pumps etc) without intermediate conversion to electricity.

"This report, which is a product of joint work between UNDP and Practical Action, highlights the contribution of mechanical power to energy access in developing countries. Given the significant development contributions mechanical power can make, it recommends that mechanical power as an energy service should be given the same consideration as other modern energy services by policy makers and practitioners responsible for improving energy access for poor communities worldwide."
  • Download the full report here
  • Download a one page brief here