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Power

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.

Subsectors

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    Generation

    In a liberalized electricity market, private party electricity producers (Independent Power Producers or IPPs) can bring the required capital and technical know-how to increase generation capacity available to the national grid. Attracting private investors, however, requires a conducive investment environment, sound off-takers, and a solid regulatory system. A conducive investment environment also means an electricity price high enough to induce entry and compensate risk. Whilst obvious,...

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    Transmission

    Electricity is transported over a large network of wires and delivered to local distribution systems, which in turn deliver it onward to the customer. Electricity flows free on the network following the route of lowest resistance at the speed of light. The electricity flow thus has to be managed continuously and in real time by matching the flow on the grid to the output of the individual generation plants to prevent congestion—the job of the system operator. The transmission business...

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    Distribution

    The distribution side of the industry involves all elements of the sale of the product to the customers from wires to the house, billing, the collection of the fees, and customer service. Besides customer relations, the main task of the distributor is keeping the local wires in good shape and adding new lines as the customer base grows. Commercial best-practices are crucial in the distribution sector, as this is where the costs of the grid are recovered from the end-users. Technical or...

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    Renewables

    Developing country governments are increasingly recognizing the role that public-private partnerships (PPPs) can play in delivering these projects in an efficient and timely manner. PPPs can leverage private capital and innovation to deliver workable renewable projects and can allow governments to share some of the significant risks associated with these projects with the private sector. PPIAF has been providing technical assistance to governments to help PPPs in this increasingly important...

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Related resources

Impact stories

Resources

    • 2010
    • PPIAF, World Bank Group (WBG), KfW Development Bank, World Bank Group (WBG)

    The Future of the Natural Gas Market in Southeast Europe

    This study was to analyze the future role of natural gas in the energy mix of countries of South East Europe. The study further identifies regional, cross-border and country-specific gas infrastructure projects that are economically, financially...

    • 2011

    Lighting Africa: Note sur le rapport d’étude politique

    Cette note résume un rapport récent préparé par Lighting Africa visant à identifier les principales barrières politiques à l’adoption de produits et de services d’éclairage moderne, et à formuler des recommandations quant à leur atténuation. La...

    • 2011
    • Joseph Goldberg, Oeyvind Espeseth Lier
    • PPIAF, WPP, World Bank Group (WBG)

    Rehabilitation of Hydropower

    An introduction to economic and technical issues

    Section one provides a concise summary of the results of the study and includes an overview of the conclusions as well as lessons learned based on the assessment of the case studies. Section two gives the context for the study including the...

    • 2014
    • International Finance Corporation (IFC)

    Handshake Issue #13: Power & PPPs

    Handshake Issue #13, Power PPPs focuses on public-private partnerships in the power sector and brings diverse expert voices together to discuss how to increase access to energy in emerging markets. Features on hydropower and renewables, alongside...

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