Poverty Reduction Strategy Process (PRSP) and Energy How can PRSP Support Pro-Poor Energy Interventions?

1. Poverty Reduction Strategy Process(PRSP) and Energy How can PRSP Support Pro-Poor Energy Interventions? Stephen Karekezi, Lugard Majoro and Waeni Kithyoma AFREPREN/FWD African Energy Policy Research Network/ Foundation for Woodstove Dissemination Email: afrepren@africaonline.co.ke Website: www.afrepren.org

2. The Challenge

3. What are pro-poor energy interventions? • Millennium Development Goal (MDG) compatible • Increased electricity access for all rural & peri-urban institutions and enterprises • Tunisia’s rural electrification level is now estimated to be over 90% • Estimated cost from MDG Review – of the order of $2 $10/capita/year • Improved and cleaner cooking stoves & fuels • Over 90% of urban households in Senegal use LPG • MDG Review – of the order of $5 to $10/capita

4. What are pro-poor energy interventions? • Millennium Development Goal (MDG) compatible • Access to motive power • Treadle pumps, gensets, windpumps & micro/pico hydro • 40,000 households using treadle irrigation pumps in Kenya • Treadle pump – $25 to $50 • How can Poverty Reduction Strategy Process (PRSP) support pro-poor energy interventions ?

5. What is Poverty Reduction Process (PRSP) • Main tool used for policy & national budget priorities and economic planning • Basis for donor coordination – aid resources aligned to PRSP priorities • Linked to EC-led Country Strategy Papers (CSPs) • Other donor-led development strategies

6. What is Poverty Reduction Process (PRSP) • Designed to be consultative process involving all country’s major sectors and stakeholders • Guides Central Government budgetary allocations to sectors such as energy, health, education and agriculture

7. Impact of PRSP • PRSP process increased financing for health, education and water but not energy sector – macro-economic rationale • Health, education and water analysts able to demonstrate: • Investment in health, education and water = poverty reduction

8. Impact of PRSP • Consensus on priority activities and institutional approach • Education– Primary education • Health – Primary health care, HIV • Need similar approach for energy • $10 oil price increase = 1.5% drop in GDP)

9. Energy & Per Capita Income • Plus project-level evidence but still not as persuasive as evidence from health, education and water sectors - UNEP/Riso COOPENER initiative addressing this issue

10. PRSP & Energy - Country Status • In some countries, energy sector does not feature prominently in PRSP • Compounded by limited attention to energy in MDGs (Millennium Development Goals)

11. Ensuring PRSP Addresses Energy Sector • Initial formulation stage • Review (approximately every 3 years)

12. 1st Priority: Ensure Energy is Mentioned in PRSP

13. 2nd Priority: Ensure PRSP Supports Pro-Poor Energy Services

14. Examples Policy study on electrification targets and how best to use energy subsidies • Connection fund • Low-cost electrification options • - Kerosene, LPG stoves • - Improved biofuel stoves • - Diesel sets • - Micro, pico hydro & windpumps • - Solar and biofuel dryers

15. Country Preparatory Meetings - Priorities - National electrification targets - Energy subsidies studies - Impact of oil price increases $10 increase = 1.5% of GDP) • Rural energy or electrification fund • LPG & Kerosene • Gensets • Solar dryers & Solar PV • Treadle pumps • Small credit schemes • Community micro hydro - Improved cookstoves, 

16. Key Actors to be Identified Ministry of Finance and/or Planning, Independent policy institutes • Ministries of Energy • Utilities and mini-grid operators • Ministries of agriculture& health • Small credit institutions • - SMEs • Municipalities • Local governments • Rural institutions (NGOs, CBOs, religious institutions) • Universities