rural electrification – Just Transition Initiative

Summary

Through an analysis of projected energy finance flows and key financiers’ financing strategies, this paper shows a shift from grant-based climate finance to financial instruments with clear return profiles, such as concessional loans and private capital. It finds that the choice of financial instrument does impact the provision of complementary social services in rural electrification schemes. While grants are associated with higher investments in complementary social services, private financiers are focused on innovation and scale. Electrification projects that are financed purely privately were found to negatively impact social cohesion by increasing the inequality in access to energy.

The authors identify that apart from the financing gap of USD13 billion identified in the national plan as the main roadblock to successful implementation, there exist a whole set of interrelated, mutually reinforcing barriers to successful electrification, such as low institutional capacity, a lack of human capital and technical knowledge, corruption, and a dysfunctional utility. The authors use stakeholder maps and case studies from three rural electrification projects as part of the analysis.

The study concludes that, if only commercially viable energy projects were to be financed going forward, up to 19 million Madagascans might be excluded from future electrification efforts. Thus the paper recommends the need to promote climate finance literacy and the use of multiple electrification pathways. The author provides some examples, such as “grid extensions” through concessional loans, “scalable innovation” using private capital and risk guarantees, or grant-based “social mission” programs. The author suggests that the findings are relevant not only to Madagascar, but to most, if not all, least-developed countries (LDCs) aiming to decarbonize their economies.

Summary

The author develops a conceptualization of power to examine if, how, and where power relations—specifically those related to gender and class—are disrupted or stabilized when renewable energy systems and their new institutional arrangements are introduced in rural communities. The author then seeks to determine the overall impact of these disruptions or stabilizations on social equality.

Based on the empirical study of a small-scale hydropower project implemented by an international development organization in Mawengi, Tanzania, the author theorizes how electrification processes and power relations are mutually constituted. This paper illustrates seven steps in the process of rural electrification and their effects on local society, revealing a range of interfaces, interactions, and feedbacks that have material and social effects. Using extensive interview data, the author examines the steps of the Mawengi hydropower project, with the goal of understanding: (1) the relationship between actors involved and how they exercised power in the process, (2) the role of non-human agents, and (3) sources of stabilization and destabilization of social hierarchies.

The author found that the introduction of electricity services resulted in growing social inequality in parallel with enhanced social mobility at an individual level. The author discusses how purposeful acts to limit the influence of local elites in the electrification process destabilized the community further even as electricity consumers and utility members became more important social actors. The author suggests these new actors can use their position to promote or prevent local socioeconomic inclusion in future utility projects.