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How can Tanzania make the most of new mini-grid and other energy access investments to catalyse local enterprises, jobs and incomes in poor rural communities?

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How can Tanzania make the most of new mini-grid and other energy access investments to catalyse local enterprises, jobs and incomes in poor rural communities?

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This is a presentation by Sarah Best and Ben Garside of the International Institute for Environment and Development (IIED) in collaboration with HIVOS and the Energy Change Lab.

It was prepared for a roundtable on the Productive Uses of Energy held in Dar es Salaam, Tanzania, on 20 May 2016.

It asks how Tanzania can make the most of new mini-grid and other energy access investments to catalyse local enterprises, jobs and incomes in poor rural communities.

More information: http://www.energychangelab.org/

This is a presentation by Sarah Best and Ben Garside of the International Institute for Environment and Development (IIED) in collaboration with HIVOS and the Energy Change Lab.

It was prepared for a roundtable on the Productive Uses of Energy held in Dar es Salaam, Tanzania, on 20 May 2016.

It asks how Tanzania can make the most of new mini-grid and other energy access investments to catalyse local enterprises, jobs and incomes in poor rural communities.

More information: http://www.energychangelab.org/

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How can Tanzania make the most of new mini-grid and other energy access investments to catalyse local enterprises, jobs and incomes in poor rural communities?

  1. 1. Sarah Best Author name Date Sarah Best Productive Uses of Energy Roundtable, Dar Es Salaam, 20th May 2016 Sarah Best and Ben Garside, International Institute for Environment and Development (IIED) in collaboration with HIVOS and the Energy Change Lab Remote but productive: How can Tanzania make the most of new mini-grid and other energy access investments to catalyse local enterprises, jobs and incomes in poor rural communities?
  2. 2. Sarah Best Author name Date Sarah Best Why productive uses of energy (PUE)?
  3. 3. Sarah Best
  4. 4. Sarah BestWhat does global practice guidance recommend? 1. Assessment and planning 2. Promotional activities with customers and communities 3. Strengthen the enabling environment
  5. 5. Sarah Best Author name Date Sarah Best Examples of PUE in Tanzania mini- hydro – CEFA and ACRA Matembwe Village Company (MVC) Ltd LUMAMA
  6. 6. Sarah Best Author name Date Sarah Best Assessments & Support Measures What types of PUE interventions do CEFA, ACRA and their partners use?
  7. 7. Sarah Best PUE assessment? • Partial • CEFA: food security driver • ACRA: business opportunity assessment • New phases: socio-economic baseline assessments • Opportunity for more in-depth analysis to pinpoint best options for catalysing PUE
  8. 8. Sarah Best1. Community awareness-raising and engagement • Preparing the community • Environmental and safety issues • Involving users in utility governance • Providing information on PUE opportunities
  9. 9. Sarah Best 2. Establishing new, utility-owned agro-processing enterprises – MVC
  10. 10. Sarah Best3. Funding new enterprises to buy end- use equipment – ACRA & LUMAMA
  11. 11. Sarah Best4. Electricity purchase rights to incentivise low-price electric milling services • Goal = improve affordability of milling services & regulate power use • Business person applies to user committee • Receives equipment advice & installation cost support • Electric milling price lower than diesel equivalent
  12. 12. Sarah Best5. Capacity building and skills development • Learning by doing (staff/community members in NGO projects, utilities) • Inspiration by demonstration
  13. 13. Sarah Best6. Supporting agricultural livelihoods for conservation and buy-in
  14. 14. Sarah Best Author name Date Sarah Best What are the impacts and challenges?
  15. 15. Sarah Best Impacts Challenges • Household (building upgrades, gender, food security, affordability) • Significant PUE impacts (MSMEs in retail services, milling, agro-forestry) • Increasing economic viability of service e.g. LUMAMA breakeven 2015 • User access to finance (e.g. SACCOs) • Business skills & business development services • Women-run enterprises • Balancing affordability with long-term economic sustainability of service
  16. 16. Sarah Best Author name Date Sarah Best What are the key issues and learnings
  17. 17. Sarah Best Issue 1: Integrated approaches Combining energy with an integrated rural livelihoods approach can increase local impacts, but also create challenges  Investing in awareness-raising and capacity building done by the right organisations is critical  Support for local enterprises need to be targeted, informed by a robust PUE assessment and good practice guidance
  18. 18. Sarah Best Issue 2: Time and money It takes time and money to promote PUE to low-income and marginalised groups, beyond many project and investor timeframes  Successful PUE interventions need to be properly budgeted and funded e.g. through grants and ‘patient’ capital  Partnerships and collaborations could help to scale-up impacts
  19. 19. Sarah Best Issue 3: Enabling environment Tanzania has a supportive enabling environment for energy access, but there needs to be more clarity on specific ‘enabling’ measures to accelerate PUE  Increased cross-sector co-ordination could promote more integrated approaches to energy access and rural development  New mini-grid support services, such as SREP, create an opportunity to foster learning and experimentation around PUE
  20. 20. Sarah Best What is your experience? 1. What are the barriers to improving productive uses of energy in rural areas? 2. On the ground, what innovations in the ‘delivery model’ (or ‘business models’) could help stimulate productive uses of energy? 3. What are the needs and opportunities to improve the wider enabling environment to support energy providers and stakeholders?
  21. 21. Sarah Best Next Steps for Energy Change Lab 1. Finalise and publish research findings, incorporating feedback on the draft paper from this roundtable 2. Design programme to support developers and other stakeholders learn and test out different approaches to PUE stimulation, potentially leading to sector-specific guidelines. 3. Further consultation on programme design with stakeholders to understand needs, incentives, barriers and priority outputs.
  22. 22. Sarah Best Author name Date Sarah Best Sarah Best sarah.best@iied.org Ben Garside ben.garside@iied.org Sisty Basil stiba7@gmail.com Maimuna Kabatesi mkabatesi@hivos.org Eco Matser ematser@hivos.org Thank you
  23. 23. Sarah Best Question 1: Barriers What are the barriers to improving productive uses of energy in rural areas? E.g. • Policy and Institutions • Finance • Capacity and Knowledge • Social • Technical Groups: A) Energy provider B) Community C) Government Agencies
  24. 24. Sarah Best Question 2: On-the-ground Innovation On the ground, what innovations in the ‘delivery model’ (or business model) could help stimulate productive uses of energy? E.g. • Multi-stakeholder collaboration • Targeted enterprise support • Payment and financing schemes • Rural livelihoods approach • Etc • Etc
  25. 25. Sarah Best Question 3: Enabling Environment What are the needs and opportunities to improve the wider enabling environment to support energy providers and stakeholders? E.g. • Advisory services • PUE toolkit • Funding • Cross-ministry collaboration • Etc • etc

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