Poverty Reduction Strategy Process(PRSP) and Energy
How can PRSP Support Pro-Poor Energy Interventions?
Stephen Karekezi, Lugard Majoro and Waeni Kithyoma
AFREPREN/FWDAfrican Energy Policy Research Network/Foundation for Woodstove Dissemination
Email: [email protected]: www.afrepren.org
The Challenge
What are pro-poor energy interventions?
• Millennium Development Goal (MDG) compatible Increased electricity access for all rural & peri-
urban institutions and enterprises
° Tunisia’s rural electrification level is now estimated to
be over 90%
° Estimated cost from MDG Review – of the order of
$2 $10/capita/year
Improved and cleaner cooking stoves & fuels
° Over 90% of urban households in Senegal use LPG
° MDG Review – of the order of $5 to $10/capita
What are pro-poor energy interventions?
• Millennium Development Goal (MDG) compatible
Access to motive power
° Treadle pumps, gensets, windpumps &
micro/pico hydro
° 40,000 households using treadle irrigation
pumps in Kenya
° Treadle pump – $25 to $50
How can Poverty Reduction Strategy Process (PRSP) support pro-poor energy interventions ?
What is Poverty Reduction Process (PRSP)
• Main tool used for policy & national budget priorities and economic planning
• Basis for donor coordination – aid resources aligned to PRSP priorities Linked to EC-led Country
Strategy Papers (CSPs) Other donor-led development
strategies
Macro-Economic Policy & Budget Priorities
Sector Budget Priorities
What is Poverty Reduction Process (PRSP)
• Designed to be consultative process involving all country’s major sectors and stakeholders
• Guides Central Government budgetary allocations to sectors such as energy, health, education and agriculture
Macro-Economic Policy & Budget Priorities
Sector Budget Priorities
Impact of PRSP
Macro-EconomicPolicy & Budget Priorities
Health, Education & Water: Big Winners but not Energy
Sector Budget Priorities
• PRSP process increased financing for health, education and water but not energy sector – macro-economic rationale
• Health, education and water analysts able to demonstrate: Investment in health,
education and water = poverty reduction
Impact of PRSP
Macro-EconomicPolicy & Budget Priorities
Health, Education & Water: Big Winners but not Energy
Sector Budget Priorities
• Consensus on priority activities and institutional approach Education – Primary
education Health – Primary health
care, HIV
• Need similar approach for energy
• $10 oil price increase = 1.5% drop in GDP)
Energy & Per Capita Income
• Plus project-level evidence but still not as persuasive as evidence from health, education and water sectors - UNEP/Riso COOPENER initiative addressing this issue
100
1,000
10,000
100 1,000 10,000 100,000
Per Capita GDP in PPP terms US$ (log scale)
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PRSP & Energy - Country Status
• In some countries, energy sector does not feature prominently in PRSP
• Compounded by limited attention to energy in MDGs (Millennium Development Goals)
Strong Modest
Mozambique
Ethiopia
Zambia
Kenya
Tanzania
Eritrea
Uganda
Malawi
Ensuring PRSP Addresses Energy Sector
• Initial formulation stage
• Review (approximately every 3 years)
Macro-Economic Policy & Budget Priorities
Sector Budget Priorities
1st Priority: Ensure Energy is Mentioned in PRSP
Macro-Economic Policy & Budget Priorities
EUEI 1: Enabling Environment for Energy Sector Development
Sector Budget Priorities
EUEI 2: Facilitate Large Scale Energy Investments
& EUEI 3: Energy Service Delivery
2nd Priority: Ensure PRSP Supports Pro-Poor Energy Services
Macro-Economic Policy & Budget Priorities
EUEI 1: Create Enabling Environment for Pro-Poor Energy Initiatives
Sector Budget Priorities
EUEI 2: Facilitate Large Scale Energy Investments
& EUEI 3: Influence Delivery of Pro-Poor Energy Services
Examples
EUEI: Create Enabling Environment for Pro-Poor Energy Initiatives
EUEI 2: Facilitate Large Scale Energy Investment
EUEI 3: Influence Delivery of Pro-Poor Energy Services
Policy study on electrification targets and how best to use energy subsidies
-Connection fund -Low-cost electrification options- Kerosene, LPG stoves- Improved biofuel stoves- Diesel sets - Micro, pico hydro & windpumps- Solar and biofuel dryers
Country Preparatory Meetings - Priorities
Create Enabling Environment for Pro-Poor Energy Initiatives
Facitate Large Scale Energy
Influence Delivery of Pro-Poor Energy Services
- National electrification targets - Energy subsidies studies - Impact of oil price increases $10 increase = 1.5% of GDP)
- Rural energy or electrification fund-LPG & Kerosene- Gensets- Solar dryers & Solar PV-Treadle pumps-Small credit schemes-Community micro hydro - Improved cookstoves,
Key Actors to be Identified
Create Enabling Environment For Pro-poor energy interventions
Facilitate Large Scale Energy Investment
Influence Delivery of Pro-Poor Energy Services
Ministry of Finance and/or Planning, Independent policy institutes
-Ministries of Energy-Utilities and mini-grid operators-Ministries of agriculture & health- Small credit institutions- SMEs-Municipalities- Local governments- Rural institutions (NGOs, CBOs, religious institutions)-Universities