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

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SUSTAINABLE ENERGY REGULATION AND POLICYMAKING TRAINING MANUAL page 10.48 Answers to review questions Question: What are the eight Millennium Development Goals Answer: 1. Eradicating extreme poverty and hunger 2. Achieving universal primary education 3. Promoting gender equality and empowering women 4. Reducing child mortality 5. Improving maternal health 6. Combating HIV/AIDS, malaria and other diseases 7. Ensuring environmental sustainability 8. Developing a global partnership for development Question: What typical basic energy needs in rural areas Answer: See table 2. Question: What is financial intermediation Answer: Financial intermediation involves putting in place all the elements of a financial package to build and operate decentralized rural energy supply companies (eg. RESCOs). The process is sometimes referred to as “financial engineering” and covers: the transaction costs of assembling the equity and securing loans; obtaining subsidies; the assessment and assurance of the financial viability of schemes; assessment and assurance of the financial credibility of borrower; the management of guarantees; the establishment of collateral (“financial conditioning”); and the management of loan repayment and dividends to equity holders. Financial intermediation can also be used to cover whole schemes rather than just investment in an individual plant. In this way projects can be “bundled” together in away which: makes them attractive to finance agencies; establishes the supply of finance on a “wholesale” basis from aid agencies, governments, and development banks; and creates the mechanisms to convert these flows into a supply of retail finance (equity and loan finance at the project level). Question: What is meant by an “enabling environment” Answer: A regulatory and institutional framework that is not a barrier to development of rural/decentralized energy services, i.e. it should encourage private companies, be clear and consistent when dealing with all actors in the power/energy sector and be constant and open to minimal political interference. Taxes and subsidies should be used with care to encourage investments, not undermine markets. A supporting infrastructure of training institutions and/ or finance should be put in place and made accessible to all.
MODULE 10: INCREASING ACCESS TO ENERGY SERVICES IN RURAL AREAS page 10.49 Exercises 1. Given that the MDGs do not mention energy specifically as a target, can you put together a table showing for each MDG target how energy can contribute to the achievement of that target. 2. Research an example of a project/programme situation where basic human services were improved (sanitation, health, water supply, education, etc.) and show the role of energy in achieving the improvement. Would the project have been possible without energy Write a 2–3 page essay. 3. Research the question of the use of subsidies to improve rural energy access. What are the advantages and disadvantages of using subsidies What are “smart” subsidies Write a 2–3 page essay. Presentation/suggested discussion topics Presentation: RENEWABLE ENERGY – Module 10: Increasing access to energy in rural areas Suggested discussion topic: How can international aid funds best be used to improve access to energy services for the poorest rural populations in order to achieve the MDGs Relevant case studies 1. Ghana Solar (PV) Electrification Case Study 2. Ghana Wind Energy Case Study 3. Zambia PV-ESCOs Case Study 4. Rural Electrification in Brazil
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