United NationsDepartment of Economic and Social Affairs Sustainable Development


Mr. Chairman, yesterday you brought up the issue of what can be done to improve access at
the household level. Let me briefly offer some suggestions on this issue.
Studies indicate that the willingness of the poor to pay for electricity service is high,
especially compared to the cost of providing services. This requires, however, access to
financing options and that they are able to meet the first costs of access and/or appliances.
· Formalization of economic assets into secure legal rights can play an important role in
economic and social development and can contribute to enhanced human security. By
promoting secure and equitable access to land and tenure arrangements households
would be more willing to invest in modern energy services. With the risk of being
evicted few households are willing to invest. Furthermore, secure tenure can be used
as collateral for loans. Norway is supporting Tanzania through the Institute for Liberty
and Democracy (ILD) to address the issue of land tenure.
· We need more micro finance and community banks that allow poor people to pay for
small-scale infrastructure, including modern energy. Grameen Bank is one successful
example of micro finance.
· Connection costs are likely to be too high for the majority of poor households to afford
if it has to be paid cash in the form of an initial charge. We need financing
mechanisms to bring the up-front costs within the reach of the poor, as well as welltargeted,
well-planned subsidies to make energy consumption affordable. In addition,
energy companies should be discouraged from charging high disconnection and
reconnection fees.
· Linked to this is the issue of promotion of private entrepreneurship which should be an
important element in the development of rural energy markets and services. As an
example of how the private sector can participate we can mention the Norwegian REC
Group which has established a subsidiar y, Solar Vision (PTY) Ltd, in South Africa,
which has a governmental franchise to install 50 000 solar home systems in South
Second Statement 2. May 2006
Regional cooperation
· Regional cooperation on development of energy infrastructure is an im portant
mechanism for regional integration, economic growth and peace and reconciliation
between countries. There is a need to support the development of regional energy
infrastructure, for instance regional interconnection and transmission grids and joint
development of energy sources. This would lower costs and enhance energy security.
· To develop such potential, energy market mechanisms must be encouraged, based on
strong political commitments to regional cooperation and to regulatory reforms in the
countries concerned. As an example of regional cooperation we can mention the
agreement between the governments of Tanzania, Burundi and Rwanda to develop the
Rusumo Falls hydropower project, supported by Norway, Sweden and the World Bank
· Initiatives are unde r way within the Nile Basin and in Southern Africa to develop
regional cooperation on energy. The South-African Power Pool (SAPP) is an example
of such an arrangement. SAPP is being supported through a twinning arrangement
with the Nordic power pool Norpool.
In addition, Mr. Chair, the OECD-DAC has developed GUIDING PRINCIPLES ON USING
· Support investments in grid extensions and in areas where providing energy services is
unattractive to private investors but necessary from a social perspective?as long as
tariffs cover operation and maintenance costs.
· Support reforms and regulations that encourage efficient power use and result in tariff
collection policies that attract private investment.
· Promote cross-border energy initiatives.
· Adapt energy supply technologies (including biomass) to productive uses, particularly
among the poor.
· Support efforts to improve poor households? access to safe energy, such as biomass,
when modern energy cannot be provided cost-effectively.
· Provide accompanying measures, such as micro-finance schemes, to increase poor
people?s access to appropriate energy services.
· Strengthen the management capacity, including for transparency and accountability, of
all energy sector entities.
1 OECD-DAC Network on Poverty Reduction: Guiding Principles of Using Infrastructure to Reduce Poverty.
Prepared by the Task Team in Infrastructure for Poverty Reduction (Infrapoor).
· Address concerns about environmental sustainability, energy security and access to
modern energy in remote areas by promoting renewable energy sources and energy
Thank you.