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James Rockall Managing Director World LP Gas Association CSD-14 Partnerships Fair

Partnerships in Practice Improving access to energy for the poor The LP Gas Rural Energy Challenge. James Rockall Managing Director World LP Gas Association CSD-14 Partnerships Fair New York, 5 th May 2006. What is the LP Gas Rural Energy Challenge?.

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James Rockall Managing Director World LP Gas Association CSD-14 Partnerships Fair

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  1. Partnerships in Practice Improving access to energy for the poorThe LP Gas Rural Energy Challenge James Rockall Managing Director World LP Gas Association CSD-14 Partnerships Fair New York, 5th May 2006

  2. What is the LP Gas Rural Energy Challenge? • A Public – Private Partnership (UNDP/WLPGA) • Address lack of access to clean energy through the use of LP Gas. • A readily available, clean-burning, modern energy carrier; Liquefied Petroleum Gas (LPG) is one option to support sustainable rural development • Objective: Support MDG’s through creating viable and sustainable LP Gas markets in rural / suburban areas of developing countries • for domestic consumption • for industrial productive uses • Through identifying and addressing barriers to rural market development

  3. LP Gas in context Consumption 212 million tonnes/yr in 2004 – global increase of 2.4% on 2003 In context: Annual consumption (on energy content basis) equivalent to 7% of annual oil consumption Or: 11% of annual natural gas consumption or, 42% of annual hydroelectric consumption LP Gas is available, clean and modern without the need for technology investment

  4. Why partner? UNDP Strengths: • expertise on financing mechanisms • Access to government • collaboration with local organisations / NGO’s • Independence LPG Industry Strengths: • Technical & safety expertise • Develop practical business models • Access to private sector capital A key success factor for both partners was access to investment, whether donor funding (UNDP) or private sector capital

  5. What methodology did we use? • First key step for the partners was the selection of 6 countries for multi-stakeholder workshops: • Ghana; Honduras; Morocco; South Africa; Vietnam and China • Objectives of these workshops were: • Initiate dialogue between all stakeholders (public sector, private sector and consumers) • Agree priority actions to remove barriers to development • Identify projects to demonstrate feasibility of rural market development.

  6. What works? • All key partners participate in first phase workshop • Broad agreement on barriers • Where clear shared objectives exist, access to funding was achieved: • $60million in South Africa • Significant private sector investment • Creation of local employment • Underwriting of Microcredit for LPG access in Morocco

  7. What doesn’t work? • Poor awareness of product – often perceived as unsafe and scarce • LPG is not renewable and often doesn’t fit in country development objectives • Likewise, donor organisations can be sceptical • Lack of human resources on the ground • Failure to convince consumers to change • Private sector acceptance that this is more than CSR • Difficulty to realise scale required to have an impact on MDG’s

  8. What is LP Gas? • A readily available, clean-burning, modern energy carrier; Liquefied Petroleum Gas (LPG) is one option to support sustainable rural development • LPG has demonstrated health and environmental benefits compared to traditional fuels • However, availability of fuel, canister size, financing of first costs, refilling costs and transportation are constraints to LPG use by poor people

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