Informing the Financing of Universal Energy Access: An Assessment ...

ELECTR-5744; No of Pages 26Figure 5: Lorenz Curves for Residential Electricity in Five Countriesincreased investment in energywill benefit the poor moststrongly in cases where electricityconsumption is relativelyequitable. Unfortunately, thosecountries with the worst energyaccess problems are usuallyamong those with the mostinequitable access to energy (cfKenya in Figure 5).The Gini coefficients forresidential electricityconsumption presented in thelegend of the graph (inparenthesis) provide a singlequantitative measure of thedistribution of consumptionacross the population for therespective countries (Jacobsonet al., 2005).A n important aspect of anyenergy access program isthus to examine, address, andplan for the differences in not onlytotal funding needed, but also inapproaches for populations thathave and do not readily haveaccess to on-grid energy. In thecase of Kenya, for example, gridextension, mini-grids, and offgridlighting options are allimportant technologies toexamine, which in turn changesthe funding needs to providemodern energy services. Furtherwork in this area is nowunderway.B. Energy poverty vs.investment in energyThere does not appear to be adistinguishable relationshipbetween investment in energyinfrastructure and degree ofenergy poverty (Figure 6). WhileGFCF appears to be positivelycorrelated with the total numberof people without access toelectricity, that correlationdisappears once one controls fortotal population. (For Figures 6and 7, we selected the LDCcountries for which we had themost confidence in the nationaldata sets.)S till, it is clear that existingcountry-specific investmentflows in the energy sector aregenerally not sufficient to meetthe needs of providing electricityservices to those 1.4 billionpeople who currently lackany access – even if all investmentwas directed toward expandingaccess. In practice, of course,much of any investmentwill be directed towardincreasing supplies (and quality)to those who already have someaccess.Bazilian et al. (2010a,b) estimatethat the total cost of universalaccess to electricity for householduses and modern energy servicesfor cooking could exceed USD 70billion per year on average to2030. 33 Focusing on countrieswith very low electrificationrate, we compare (Figure 7)energy-related GFCF in2008 with the estimatedannual average cost of universalhousehold electrification in leastdeveloped countries LDCs by2030. 34Figure 7 indicates that evenif all investment in energycapital was redirected toexpanding access, it would beinsufficient to bring about fullhousehold electrification by 2030for most LDCs analyzed. Forseveral countries (e.g.,Democratic Republic of theCongo, Eritrea, Ethiopia, Malawi,Togo), the gap is huge (greaterthan fivefold). In aggregate, thetotal energy-related financialflow to LDCs compares poorlywith estimated needs to reachuniversal access. Overall, andusing the methodology forhousehold energy from Bazilianet al. (2010a,b) 35 we find anestimated need of a yearly10 1040-6190/$–see front matter # 2011 Elsevier Inc. All rights reserved., doi:/10.1016/j.tej.2011.07.006 The Electricity JournalPlease cite this article in press as: Bazilian M, have surnames. Informing the Financing of Universal Energy Access: An Assessment of Current Financial FlowsElectr. J. (2011), doi:10.1016/j.tej.2011.07.006