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Final Urban, Peri-urban Energy Access Report AFREPREN/FWD (Scoping Phase)

By

Stephen Karekezi, John Kimani, Ayago Wambile and Oscar Onguru


EXECUTIVE SUMMARY

This study provides a broad assessment of the key urban and peri urban energy access issues in East Africa. The study gives special attention to clean modern energy services for the urban and peri urban population particularly the poor. In line with the overall GNESD “UPEA” study objective, the primary objective of the east African regional study, is to carry out an assessment of the urban energy situation and identify viable and proven policy options that can assist in providing cleaner and more sustainable energy services to the rapidly growing urban population in the context of a rapidly reforming energy sector. This will include an assessment of whether previous energy policy reforms have addressed these challenges or whether they actually contributed to the growing problem of inadequate energy services, through neglect, for the poor living in the urban and peri-urban areas in East Africa. Building on this assessment, the focus will be on ongoing and planned energy policy reforms and addressing the questions of how likely they are to lead to improved, cleaner and more sustainable energy services for the poor, and how the processes can be improved to promote better access to cleaner energy services from the poverty alleviation, environmental and productive use of energy point of view.

At the moment, the majority of the population in East Africa live in rural areas. But due to the high rates of urbanization, the pattern is rapidly changing. It is estimated that urban growth rates are almost double the national population growth rates. Urbanization entails changes both in production and consumption structures and these, in turn, alter energy use patterns. Rapid urban and peri urban population growth rate in East Africa has been accompanied by high levels of urban and peri urban poverty. The distribution of urban and peri urban income in most countries in East Africa shows a large disparity between the poor and the non-poor. In spite of the high levels of poverty, rapid urbanization is expected to result in large increases in energy use. Typical activities of the average urban resident are usually more modern and energy-intensive than the activities of a rural resident. Consequently, the ongoing rural-urban demographic shift is expected to result in a large increase in modern energy consumption.

The reasons for focusing on urban and peri urban energy in the region include:

  • Modern energy services could contribute to reducing poverty in urban and peri urban areas.
  • Due to high density in urban and peri urban areas, provision of modern energy is less costly and quicker .
  • Although urban and peri urban poor households in most cities in east Africa constitute over 50% of the total household, the provision of modern energy services to these households does not seem to be receiving the requisite attention from policy makers.
  • The poor in urban and peri-urban areas have limited access to affordable, adequate and reliable modern energy services
  • As urbanization accelerates so is energy use in urban and peri urban areas
  • There is significant impact of urban energy on fossil fuel imports
  • SMEs/Informal sector & energy – is a major source of jobs and incomes for urban poor
  • Heavy reliance on biofuels e.g. charcoal and fuel wood that harm human health and the environment.
Although the bulk of current energy investments in Uganda and Kenya are aimed at serving the urban and peri urban population, not all segments of these populations benefit equally. There is some evidence that a larger proportion of Government financing, subsidies and international development aid is aimed at developing modern energy infrastructure that largely serves the needs of the urban-based formal sector, commercial and industrial sectors and the medium and high income urban and peri urban households. Energy services for the urban poor and peri urban population is not a major concern that is high on the development agenda.

This study focuses on access to clean and modern energy services in urban and peri urban areas in East Africa. The study attempts to look at patterns of energy use among urban population while considering factors determining their accessibility to various forms of energy. Past initiatives to improve energy consumption have also been analyzed with emphasis on methods of delivery of the initiative, its adoption by the people based on habits, preference, cost of the energy service and the related technology. Constraints on fuel use based on dwelling place have also been examined. The extent of availability of electricity, to the urban and peri urban poor house holds is also explored among other modern energy sources available in urban areas. The study gives more emphasis to electricity which is a clean energy resource and was an area of focus for the earlier GNESD studies.

Some key study findings indicate that cconsumption of domestic energy in Kenya and Uganda, like in other countries in East Africa is heavily reliant on biomass. Various factors contribute to the heavy reliance on biomass, which include:

  1. Undeveloped grid electricity infrastructure, high prevalence of poverty, which limits the levels of economic power to afford grid power and other forms of modern energy. Poorer households use greater quantities of traditional fuels while higher income families tend to rely more on modern energy resources.
  2. As in most Eastern African countries, the rapid rate of urbanization in Kenya and Uganda has resulted in growing urban unemployment and a thriving informal sector. Informal sector now plays a big role in the economy. In addition to contributing significantly to the economy as a whole, the informal sector has become an important source of income and employment for the urban poor. The urban poor are engaged in a variety of economic activities in the form of micro, small and medium scale enterprises – SMEs. This is partly attributed to the use of simple and inexpensive technologies (inclusive of energy technologies) requiring rudimentary skills; ease of entry and exit; low capital investment; absence of registration; and, limited requirements to meet other regulatory formalities
  3. Many of the micro and small business enterprises - where the majority of the urban poor derive their income from - do not appear to benefit from modern energy supply as well as subsidies. For example, in Uganda, the introduction of a subsidized electricity tariff did not benefit micro and small businesses enterprises because they had no access to electricity at all. Worse still, even the few that had access to electricity, the tariff review of June 2001 and September 2002 led to a 53% increased in tariff, thereby eroding any benefits of the subsidy. Furthermore, the recent electricity generation capacity shortfall in Uganda has further denied the micro and small business enterprises access to electricity following load shedding
  4. To sum up, as most small and micro enterprises (SMcEs) are owned or employ the urban poor, initiatives that improve energy access to these SMEs are likely to lead to better income for the urban and peri-urban poor. The SMcEs are principally found in the informal sector, which has received minimal support from governments in terms of infrastructure support. The provision of energy services (bio-waste, wood, charcoal, kerosene, LPG and electricity) to production and income generation informal and micro enterprises that either are owned or employ the urban poor should therefore be prioritized.



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