UNDP Presentation - Third Inter-Agency Conference on Regional Coordination and Compound Risks in Central Asia, 14 April 2011, Ben Slay, Senior economist, UNDP Bureau for Europe and CIS

1. Household energy, water vulnerability in Tajikistan and Kyrgyzstan: What have we learned? Ben Slay Senior economist UNDP Bureau for Europe and CIS Third Inter-Agency Conference on Regional Coordination and Compound Risks in Central Asia 14 April 2011

2. Presentation overview Focus on Tajikistan, Kyrgyzstan Two key questions: “After the winter”: Is the glass half full, or half empty? “Perfect storm”? “Gradual improvement”? Role of donors/international community? “Policy advising feast versus implementation capacity famine”? Focusing on what works, scaling up Provide some answers from: Yesterday’s preliminary event New research results Possible future directions

3. From “slow onset crisis” to . . . “Perfect storm”? Weak economies Poor infrastructure Poor energy, communal, public service delivery Resistance to higher tariffs Ineffective social protection Corruption  governance issues Socio-political crisis (Kyrgyzstan 2010) Or signs of hope? We survived the winter: because it was mild?

4. Energy consumption: Some improvement in 2010 Kyrgyzstan (2007 = 100) Sources: State statistical agencies, UNDP calculations.

5. Household energy, communal services inflation rates: High, but falling Tajikistan: Annual average inflation rates. Kyrgyzstan: Annual average inflation rates.

6. Other signs of hope Kyrgyzstan: Big improvements in water levels in Toktogul HPP Collection rates in electricity sector have improved Fuel and Energy Sector Transparency Initiative Better energy sector regulation, corporate governance Civic engagement Tajikistan: New generation capacity (Sangtuda 1) New transmission capacity (South-North high tension line)

7. Poverty and household access to energy: New data and data issues New official household survey data are available for Tajikistan, Kyrgyzstan UNDP poverty and social impact assessments On energy, communal service sectors in Kyrgyzstan, Tajikistan Available on conference website But: Survey data do not always correspond to production and sales data provided by energy companies Survey data on household expenditures do not always agree with national income accounting data on consumption expenditure Survey data not always internally consistent Major survey data gaps on household access to communal services remain

8. 8 Link between grid connections, electricity supplies is broken in Tajikistan . . . Average monthly household electricity consumption (kWh) Share of households using electricity Source: State Statistical Agency

9. . . . And in Kyrgyzstan Shares of households reporting electricity cut-offs

10. 10 Affordability: How much household spending on energy is too much?

11. Kyrgyzstan: Share of energy in household spending seems low . . . What revolution??

12. 12 . . . While in Tajikistan, it seems very (too) high? Share of household expenditures devoted to energy, 2009 data. Source: State Statistical Agency.

13. What do people heat with? In Kyrgyzstan—electricity and coal (especially the poor) Shares of household energy spending on energy sources (2009) Source: National Statistical Committee

14. 14 In Tajikistan: Much greater reliance on firewood (and dung) Source: State Statistical Agency

15. Energy, water, and social policy Two key questions: Can social policy mitigate household energy and water insecurities? Is social policy become better targeted? Answers: No, and no Household energy insecurity can be reduced by: Off-grid small hydro, other decentralized renewables Energy efficiency Household water insecurity can be reduced by: Reforms of communal services, local governance Rural water, infrastructure projects financed by central, local government budgets, donors

16. What is to be done? Two key questions for the international community What does this research tell us? “Policy advising feast with an implementation capacity famine?” or “Let’s identify what works and scale it up”?

17. What does this research tell us? Evidentiary basis for understanding household energy vulnerability much better . . . . . . But there are still many open questions: Are the shares of household expenditures devoted to energy correct? Support for national statistical offices? Independent surveys, based on comparable methodologies? Willingness to pay? What are the implications of different composition of energy use? Tajikistan: sustainable forestry? Kyrgyzstan: social, environmental implications of coal?

18. Emerging lessons from Tajikistan’s experience with small hydro Key obstacles: Low electricity tariffs Weak national capacity for construction, maintenance of small hydro facilities Regulatory/legal lacunae Why should Barqi Tojik buy expensive, risky electricity from small hydropower plants? But—progress has been made: Legal framework for feed-in-tariffs now in place Trust fund for renewable energy can play “market maker role”

19. Thank you very much! Бoльшoe Cпacибo!