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

MODULE 10: INCREASING ACCESS TO ENERGY SERVICES IN RURAL AREAS
page 10.83
1. BACKGROUND
Access to electricity in the rural areas of Zambia is as low as 2 per cent. In order
to address this situation and increase access to electricity and reduce poverty, the
Government of the Republic of Zambia (GRZ) incorporated the installation of photovoltaic
(PV) solar systems in the rural electrification programme. Zambia has an
average of 2000-3000 hours of sunshine per year. In order to accelerate the rural
electrification programme, the Government established the Rural Electrification
Authority in 2003 following the promulgation of the Rural Electrification Act (2003).
In 1998, GRZ initiated a pilot project called “Providing Electricity Services using
Photovoltaic Systems through Energy Service Companies in Rural Areas of
Zambia” also known as “The Zambia PV-ESCO project”. The project was undertaken
by the Ministry of Energy and Water Development (MEWD), the Swedish
International Development Agency (Sida) and the Stockholm Environment Institute
(SEI).
The main objective of this project was to identify the framework and conditions
necessary to successfully provide electricity services to rural areas through ruralbased
energy service companies (ESCOs). The project would provide policy-makers
and planners in Zambia with the information required to enable private sector
to participate in rural electrification using a fee-for-service approach.
This case study describes the Zambia PV-ESCOs pilot project, examines its first
six years of operation and highlights lessons learnt.
2. PROJECT DESCRIPTION
The project design was influenced by experiences in other parts of the world where
PV systems have proved too expensive and unsustainable for the rural poor.
The Zambia PV-ESCOs pilot project was initiated in June 1998 by the MEWD with
financial assistance from Sida and the technical assistance from SEI. The strategy
was to provide energy services through already existing and viable rural-based
companies. These companies would install solar-based systems in domestic
houses and other commercial buildings and provide the necessary maintenance
and technical support. The clients would not purchase the PV systems but rather
pay a monthly rental for the use of the PV system and the service provided by
the service company.