Providing Services to Rural Populations: Electricité de France

Energy is considered to be a vital need, enhancing both human and economic development. Energy contributes not only to the improvement of education, health and living conditions (especially for women), it also contributes to the development of economic activities and to the generation of wealth.

However, two billion people still do not have access to electricity.

Basic consumption needs – evaluated at 1 kilowatt-hour (kWh) per family per day – require the provision of an additional power generation capacity of 60 gigawatts (GW).

The cost of providing this additional capacity (including transportation and distribution infrastructure) with various technical options (connection to the grid, decentralized grids, solar home equipment, etc.) amounts to about US$ 200 billion, or US$ 8 billion per year over 25 years.

EDF, a competitive multi-energy, multi-service provider, has a keen interest in global electrification, both as a major player in the global power industry, as well as a public company with a history of dedication to public service and rural electrification.

Considering this issue, EDF committed itself “to help provide energy to developing countries' populations”. Improving rural and peri-urban (areas outside formal urban boundaries but which are in the process of urbanization) zone development, reducing the negative impact on the environment, and using and promoting renewable energy technologies, are some of the objectives of the Group's sustainable development commitment.

As part of its commitment, EDF's Energy Access program creates and operates local companies that provide rural services over the long-term to rural populations in developing countries, including electricity, water, gas and eventually telephony.

The aim is to stimulate local economic activity, reduce poverty and increase access to these services through adapted solutions.

The program

In rural areas, EDF's Energy Access program involves the creation of small, locally run companies to provide rural services including electricity, water, gas and telephone services in order to stimulate local economic activity and contribute to wealth creation.

In peri-urban areas, the program aims to increase access to these services and reduce poverty through adapted solutions, including pre-payment systems (in South Africa and Argentina), demand-side management pilot projects (also in South Africa and Argentina) and constant monitoring and evaluation of activities and their outcomes.

The Energy Access program has two major aims:

• To satisfy the basic requirements of families,
• To stimulate local economic development in order to reduce poverty and participate in the attainment of the Millennium Development Goals (MDGs).

The Energy Access program has four projects in operation:

• One in South Africa targeting 100,000 people;
• One in Morocco targeting 100,000 people;
• Two in Mali (Korayé Kurumba and Yeelen Kura) targeting 40,000 people.

Each project relies on the creation of a local Rural Electrification Services Company ( RESCO) which trains, employs and is managed by local people and which forms part of the local community. By 2007, after full rollout, EDF aims to touch 670,000 beneficiaries through the program.

The capital consists of investments by EDF and its partners. To date these partners have come from developed countries, but partnerships are now being actively developed with local communities and small businesses leading to closer involvement at customer level.

The Energy Access program also works closely with the World Bank, United Nations agencies (UNDP, UNEP), other multi- and bilateral donors, as well as NGOs and civil society.

The Energy Access program follows certain basic principles:

• Payment by the customer to encourage individual responsibility and to make the project sustainable;
• A grant for initial investment costs, as for rural electrification everywhere in the world;
• Local management;
• Priority is given to local and renewable energies.

The program takes a people-centered approach and uses energy as a tool for poverty reduction and rural development. This development will be measured on a permanent basis in each project by integrated monitoring and evaluation.

Lessons learned

Rural

• RESCOs are very sensitive to cash flow problems (payment rates, etc.);
• There is a lack of visibility on the institutional frameworks of the countries concerned;
• Start-up costs need to be controlled;
• There is a general lack of local skills and training;
• There is a lack of risk-covering mechanisms (institutional risks for example);
• Fee-for-service business model is viable and sustainable.

Peri-urban

• There is a need for security for employees and partners (townships, favelas, barrios, etc.);
• It is essential to establish and maintain an extremely close link with the community;
• Coordination with various actors, including shareholders, affiliates, government whether national or local, NGOs, community representatives, etc. needs to be permanent;
• There is a high probability of outages in these areas.

The projects

South Africa - KwaZulu Natal Energy Services

KwaZulu Natal Energy Services ( KES) began operations on 25 July 2002 following an agreement signed with the South African government in an effort to provide greater access to electricity for KwaZulu Natal's nine million people.

KES, a joint venture between EDF and Total supplies electrification to off grid areas and chose solar energy as its best solution because houses are too spaced out for a mini grid. The concession will operate for 20 years.

The fee for customers connected to the solar grid is 58 rands/month (US$ 8) for service and replacement costs. 8,192 houses were electrified as of the end of 2005, (around 400 customers were electrified each month).

The objective of the first phase of the project is 15,000 customers (or some 90,000 individuals).

KES works closely with RAPS, an operator of a neighboring concession, and TENESA, a South African affiliate of Total Energie that produces photovoltaic (PV) panels.

The installations supply electricity for a television, lights and a radio, as well as a plug to recharge a cell phone. Before receiving solar energy, the population was spending 2-3 times more on other forms of lighting such as Paraffin and kerosene.

Three energy stores have so far been opened and twenty-five local people trained and employed for each energy store in order to run the store and carry out installations. In an area of high insecurity due to economic and financial difficulty, KES is helping to create employment and provide stable jobs.

Challenges for KES include building operational and customer awareness, non-payment of fees and theft. The company has relied on the tribal system to communicate with the population. This ensures service and protection for the installations.

Since March 2004, the company is also providing bottled gas (LPG) in order to satisfy a demand for energy for cooling and cooking. LPG contributes both to the reduction of deforestation and the improvement of the lives of women and children.

Additionally, KES has installed a solar pump for water in a communal garden in a rural area outside of Johannesburg. Seeds for the first year's planting were supplied by an NGO. This pump will bring work for 78 families in the first year, food security in the second year, and a fully sustainable income in the third year.

The company is working to develop distribution of the products being grown and the money from the first year was banked so that the community could buy its own seeds in the following year.

In 2006 the Department of Mining and Energy selected KES for an extension of its activities in the Eastern Cape under financing from the German bank KfW.

Morocco – Temasol

EDF's involvement in the Moroccan program stems from a unique joint-venture between EDF, Total and Total Energie called Temasol.

Temasol is working with ONE (Morocco's national electricity office) in 24 Moroccan provinces to provide solar power to more than 53,000 customers.

• Phase 1: 4 provinces where installations began in 2002 and finished in 2005 with 16,000 customers.
• Phase 2: 20 provinces where installations started in 2005 for 37,000 clients.

In order to generate its own electricity, each house is fitted with a solar home system. The electronic controller automatically manages the charging and discharging of the battery that can store enough power to last up to five days.

Each customer pays an initial connection fee and then a monthly fixed service fee, ranging from US$ 7.50 per month (US$ 80 connection fee) for 4 lamps and one 12-V socket to US$15 per month (US$ 260 connection fee) for 8 lamps and one 12-V socket.

The fees are adapted to the budgets of local households: approximately the same amount was being paid for candles, gas, batteries, or battery recharging. They are also equivalent to the amount paid for similar consumption by customers connected to the grid.

The prices are in fact lower than the actual cost of the equipment and service received because the national electricity office gives a grant for each installation in order to provide equal energy access opportunities to the Moroccan population.

The office's solar contracts have positive socio-economic impacts on the population:

The business creates jobs in areas where they are rare (currently 83 direct employees, and 31 subcontractors). All the employees follow high-level in-house

• Training (technical, quality, customer relations, etc.).
• Bringing electricity to rural populations improves living conditions, which encourages local farmers and livestock breeders to remain on their land, rather than moving to the small towns that are connected to the grid.

In February 2005, more than 12,000 customers had received solar home systems at an installation rate of 400 to 700 per month. The 16,000 customers of Phase I were connected before the end of 2005, one year in advance of the contract schedule. Phase II (37,000 customers in 24 other provinces) started in the second quarter of 2005.

The installation of equipment will last 3 years and then the service will be ensured for 10 years. The estimated budget for this second phase is US$ 27 million. The national electricity office will provide US$ 22 million.

Further information on Temasol

• Read case study
• Hear the testimonies of isolated communities in rural Morocco"

Mali – Korayé Kurumba

Korayé Kurumba (“New Light” in the Soninké language) is the name of the RESCO created by EDF and Total in association with Malian immigrants in France to sell energy services to the rural populations in the northern region of Kayes in the west of Mali, on the border with Senegal and Mauritania.

For the first phase, from 1999-2004, the services offered by Korayé Kurumba were basically domestic (400 households) but also collective through public lighting (around 75 lamps) in four villages.

These services are based for 90% on the use of low-voltage village micro-networks powered by small diesel generators and photovoltaic (PV) kits of 50 to 100 watts for 10% of households.

Twenty-one different services are offered in order to satisfy as far as possible the local population's needs, ranging from just two lamps to 18 lamps and two sockets.

The connection prices and guarantee deposits range from 40 to 240 Euros (US$ 50-300). The monthly fee is between 7.50 and 60 Euros (US$ 9-80). The services are sold free of value-added tax since 1 August 2004.

Fees are paid according to the service chosen with payment periods adapted to the needs of each customer.

In December 2003, a small business zone was created in the village of Tambacara. This approach should be replicated in other villages.

Korayé Kurumba also supplies energy in two villages to pump water for domestic use. The company also provides energy to health centres and schools.

The possibility of supplying bottled gas (LPG) is also being studied in order to satisfy the demand for cooling and cooking, to reduce the amount of women's time and labor spent collecting firewood and to reduce desertification.

A new development phase is being prepared within the new rural electrification reference framework being put in place in Mali. With the related financing (from the World Bank and other donors) this should permit Korayé Kurumba to increase the number of customers to 5,000 in the near future. Within this framework, a new tariff should be adopted.

Mali – Yeelen Kura

Founded in 2001, the Yeelen Kura (new light in the Bambara language) RESCO aims to bring electricity to 130,000 people.

A partnership between EDF and the Dutch electricity company Nuon, the company aims to sell energy services to the rural populations of the Koutiala region to the south east of Mali on the border with Burkina Faso.

In the first phase, from 2001 to 2003, Yeelen Kura proposed basic domestic services based on the use of photovoltaic kits of 43 to 120 watts installed in each household.

Today, Yeelen Kura provides energy services both to households and to schools, medical centres and local communities, has 1,500 customers and 33 employees, 25 who live in the villages, and 16 agencies.

Yeelen Kura offers a range of kits, from a simple 2 lamps or 1 lamp plus one socket solution for 6.75 Euros (US$ 8) per month (34 Euro – US$ 45 installation fee) to 3 lamps which can operate 5 hours per day and a socket for a radio or color TV of max 70 W / 12 Volts (4 h per day) for 17 Euros (US$ 22) per month (70 Euro – US$ 90 installation fee).

Energy is supplied by low-voltage micro-networks in villages where population density is high. This solution will enable the provision of energy for productive activities generating revenues (craftwork, pumping, etc.). It will further reinforce the contribution of energy to development to fight poverty.

Solar pumps to ensure a sustainable source of drinking water are now being set up in Koury and will be run and maintained by Yeelen Kura.

Within the new rural electrification reference framework being set up in Mali (called AMADER), a new phase of development is being prepared for Yeelen Kura. The new framework, along with accompanying financing from the World Bank, will increase the number of customers to 6,500 in the near future.

Further information

• EDF
• Download the case study ( 164 kb)
• Watch the interview of EDF's Access Program Manager

Author WBCSD Publication Date 23 Feb 2007 Document Type Case studies Issue/Topic Business Role/CSR Development Electricity Utilities Region Africa Company EDF Group Source EDF Include In RSS WBCSD News & Updates Sustainable Development Case Studies		570 kb   164 kb