Increasing access to energy services in rural areas - REEEP ...

SUSTAINABLE ENERGY REGULATION AND POLICYMAKING TRAINING MANUAL
page 10.32
are included in the policy options. In 2001, the Chinese government launched a
village power programme, to install 700 village power systems with central and
local government financial inputs. The financial flow in this government-led model
is shown in figure V.
Figure V.
Government-led model in China – financial flow
Government
budget
Selecting
the installation
companies
by bidding
Install system
for rural users
Local rural
energy service
companies
(RESCOs)
In this model, the government is the financial agency and the installation company
and the local service company play a crucial role for supply energy service
in the rural areas. However, the sustainability of this model depends very much
on continuing government support.
7.3. Private company participation
Increasingly in developing countries the task of ensuring adequate energy supplies
is being left to the private sector. This is primarily the result of structural
adjustment programmes, central to which is the privatization of publicly owned
utilities and the elimination of costly subsidies. In the absence of carefully defined
contractual relationships between the new private utilities and the state, reliance
on the private sector to provide energy services to the rural poor may result in
their continued neglect, since potential returns on investment in rural areas may
be lower than in other areas, or non-existent in some extreme cases. Despite this
there are examples of private commercial RE successes in the provision of energy
services in rural areas: SELCO (Solar Energy Light Company), active in India, Sri
Lanka and Viet Nam, 43 and SOLUZ are good models, using fee-for-service and customer
financing and leasing approaches.
43
www.selco-intl.com/where-we-operate.html