Rural Electrification approaches in different countries

The three reports presented here give a detailed overview over the rural electrification strategies applied in Cuba, Mexico and South Africa. Though the countries are relatively advanced in terms of the electrification of rural areas (compared to other developing countries), there remains room for improvement. As expanding the grid to reach remote villages with little energy demand is generally too expensive, less expensive solutions - Solar Home Systems (SHS) or hybrid systems (the latter a combination of regenerative sources of energy with a diesel generator) - are good options. These systems can considerably improve the standard of living of the poorest people; and they also constitute an important step towards sustainable development.

The activities in the three countries vary largely with respect to their approach and scope:

Cuba has electrified all schools and health stations in the country. This effort was taken very seriously, and a thorough job was done. Even schools with only one pupil and teacher were electrified. Cuba has currently not yet started a programme for household electrification.

Mexico realised one of the world's largest electrification efforts with a total number of over 40.000 SHSs being deployed. The programme was realised through an infrastructure fund. Current activities are realised at state or municipal level, which makes coordinated efforts like bulk buying and quality assurance more difficult. However, it does not have a specific rural electrification programme.

The South African electrification programme is the only one studied that includes private companies in electrification efforts. There, concessions for a fee-for-service model were awarded to private companies, that will receive 80% of the initial investment costs for the systems installed as a subsidy of the state. The other 20% need to be collected through user payments, which guarantees good maintenance and therewith functioning systems.

One insight attained, common to all three approaches, is that high subsidies are needed to reach the poorest people in the country. Also, in Mexico and South Africa, it was found important to charge for electricity, to make sure consumption does not expand dramatically, and to make sure funds for maintenance, repair and extension are available.

Maintenance may be guaranteed through a fee-for-service model, where users only pay if their system provides the specified service. Also, the involvement of private companies may be an option to reduce initial investment costs and to guaranty after-sales service. It might therefore be interesting for various countries to seek cooperation with private business in their electrification efforts.

For information on financing rural electrification, please take a look at the page on Financing Instruments.

For more information on market-based rural electrification models, please take a look at out RESuM (Rural Energy Supply Models) web-site (http://resum.ises.org).