partnerships in practice improving access to energy for the poor the lp gas rural energy challenge...

Partnerships in Practice Improving access to energy for the poorThe LP Gas Rural Energy Challenge

James RockallManaging DirectorWorld LP Gas Association

CSD-14 Partnerships FairNew York, 5th May 2006

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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

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LP Gas in contextConsumption

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

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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

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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.

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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

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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

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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