In search of funds to end energy poverty

As the Green Climate Fund continues to cast about for ways of raising $100 billion per annum without anyone feeling the pain, along comes the call for universal energy access. This laudable goal depends on squeezing another $48 billion per annum out of the system.

What’s more, in order to bring electricity to poor rural communities that other funding sources won’t touch, the energy lobby is joining the lengthening queue for climate finance.

it was important to recognise explicitly that climate finance can play a role in those instances where energy access and climate goals coincide.

This was the conclusion of last week’s Oslo conference, Energy for All: financing access for the poor, which was billed as a key stepping stone towards international commitment to the proposed 2030 goal.

I’m not sure whether the circus piling into Durban next month for the year’s major climate negotiations is quite ready for this. Will they be able to relate the introduction of power to remote communities to familiar climate disciplines of adaptation or mitigation?

It’s true that developing country NAMAs (nationally appropriate mitigation actions) include extensive proposals for renewable energy programmes. But these have been conceived more in the context of efficiency of energy production than a target of universal access to electricity and clean cooking stoves.

And the Clean Development Mechanism is designed for introducing more efficient technologies than would otherwise have been deployed – not really appropriate in regions beyond the reach of conventional grid sources.

I wonder whether it might have been wiser for the conference to limit its aspiration for climate finance to the provision of clean cookstoves.

Cost projections are a mere 10% of those for electricity access and a much more explicit transition from bad to good stoves is involved. In a global warming context, the old stoves are bad, not just for deforestation but also for the emission of both CO2 and black carbon.

Which leaves the question of financing electricity access for the poor. International NGOs are pressing the World Bank to step into this field, bringing on other multilateral and bilateral donors by example.

There’s already a frenzy of private sector activity in the distribution of solar home systems and improved cookstoves.

Both the development banks and the private sector have to believe that a viable business model will emerge somewhere along the line. It was therefore unfortunate that the key input to the Oslo conference, a study by the International Energy Agency, expressed the view that such a prospect remains elusive in most rural environments.

Energy poverty could become the trendy development theme of 2012 and is surely a cause that leaders at next year’s Rio+20 summit might rally around.

But they will be petrified by scary financial numbers. We have to find models to bridge the gap between the solar lantern micro-market and the big business territory of urban grids.


this article was first published by OneWorld UK