Increasing access to electricity can have a major impact on poverty reduction and sustainable development because it impacts the operations of many other sectors. Improved access to electricity can reduce poverty by: fostering productivity and production of value-added goods; increasing productive hours beyond daylight, allowing for increased study or business hours; improving access to communications in rural areas; improving healthcare by enabling refrigeration of mediation and access to specialized equipment; and improving gender equality by relieving women of fuel and water collecting tasks. Increasing access to electricity is particularly important in Sub-Saharan Africa, which has an average overall electrification rate of 28.5% and an electrification rate of only 12% in rural areas.
Since 2000, PPIAF has been providing technical assistance to governments to explore options to involve the private sector in rural electrification in several regions. In particular, PPIAF seeks to support institutional, regulatory, economic, and financial frameworks that provide incentives and are conducive to private sector participation in rural electrification and investments in renewable energy. Complementary technical assistance to governments will support appropriate policy strategies, action plans, legislation, and competent institutions.
A few specific examples of PPIAF's work in the power sector include: supporting strategic options for rural electrification in Uganda; assisting the government of Senegal to increase private sector investment in the electricity sector; improving service provision in rural India; and promoting private sector participation to supply electricity in rural areas in El Salvador and Nicaragua. The Sub-National Technical Assistance (SNTA) program provides technical assistance to sub-national entities such as energy utilities to improve their creditworthiness so they can access market-based financing on their own account, without sovereign guarantees.
PPIAF also supports activities that use innovative clean energy technologies, complementing its strategic theme of climate change. The use of renewable energy has environmental benefits, as it will substitute for the use of biomass (wood and charcoal) which, as the major source of energy consumed in rural households and industries, is leading to deforestation, loss of biodiversity, erosion of top soils, and increased vulnerability to flash floods. Renewable energy also has the potential to displace diesel generators, which are heavy pollutants through CO2 emissions.