India-China agree to exchange information on Brahmaputra basin

India-China agree to exchange information on Brahmaputra basin

The Hindu, 12 December 2013

Union Water Resources Minister Harish Rawat on Thursday said India and China have agreed to share information on the hydro power projects activity being undertaken in the Brahmaputra river basin following Prime Minister Manmohan Singh’s recent visit to Beijing.

Delivering the inaugural address at the two-day conference on  "Promoting Hydro Power: A Counter Strategy against rising fossil fuel prices" organised by IPPAI in New Delhi, Mr. Rawat said a new beginning had been made with the decision to exchange information between New Delhi and Beijing and India would like to take this further.

"Prime Minister took up the issue of sharing of waters. China has agreed to share only hydro information. We have made a beginning and we would like to take it ahead. In Brahmaputra, nearly 85 per cent of the water emanates from India. We are able to tap only 5 per cent of it. We are also working on inter-basin water transfer in India," he added.

Mr. Rawat said setting up of multipurpose dams in the Brahmaputra would help reduce floods and provide for many benefits. Wherever appropriate sites are there, we should set up big hydro, he added. Acknowledging that major problems are faced with regard to environment, security, land acquisition, he said the UPA II government has set up a high powered committee and the Cabinet Committee of Investment (CCI) to monitor big projects.

"I have issued instructions to the Central Water Commission (CWC) to bring down the clearance time for various projects to one-third of the existing timeframe," he said.

Feng Yanan, India Representative, Sino Hydro Group said that as a Chinese company they could not work on hydro projects close to the border. He said they had constructed 40 per cent of the work in the Three Gorges dam in China. “Chinese Banks could extend cheap loans for some of the hydro projects in India and Indian companies should work with them in joint ventures,’’ he added.

Harry Dhaul, director general, IPPAI said hydro power was of great importance in India and should be the obvious choice as it is climate-friendly, firm power with almost zero variable cost.

Listing out the advantages of the hydro power, he said, "Hydro power tariff becomes significantly lesser than coal based tariff over time; hydel plants have a much longer life as compared to coal fired plants; there is no strain on transport infrastructure for regular movement of fuel and saves precious foreign exchange." 

http://www.thehindu.com/news/national/indiachina-agree-to-exchange-information-on-brahmaputra-basin/article5452123.ece

Time for a New Approach to the Global Power Crisis

A New Approach to the Global Power Crisis
Peter Bosshard
Huffington Post, 12/12/2013
www.huffingtonpost.com/peter-bosshard/a-new-approach-to-the-glo_b_4428971.html?utm_hp_ref=world

As you read this, a power outage is affecting much of Africa and South
Asia. After hundreds of billions of aid dollars have been spent on
energy projects, 1.4 billion people continue to live in a state of
permanent blackout. Development finance has focused on big power plants
that destroy the environment and bypass the rural poor. This week civil
society groups are making a push for a new approach to the global energy
crisis.

The Grand Inga Dam on the Congo River exemplifies the traditional
top-down approach to the energy sector. With a capacity of 40,000
megawatts and a cost of 80 billion dollars, the project could provide
electricity to 500 million African consumers through the world's vastest
transmission network. Its promoters say that it could end Africa's power
outage in one fell swoop towards the end of the next decade.

The World Bank has already expressed an interest in funding the Inga 3
Dam, the first stage of the Grand Inga scheme. It has identified Inga 3
as a model project for the energy sector in Africa and South Asia. The
Bank is currently trying to raise billions of dollars in government
contributions for its IDA fund, from which it plans to finance the Inga
3 Dam.

Before governments pledge their energy dollars to the World Bank's IDA
fund, they should think again. If the Grand Inga scheme ever gets
completed, it can provide 500 million consumers with 80 watts at a cost
of 160 dollars each. High-quality solar lanterns combined with cell
phone chargers currently sell for less than one third of this price - 15
years before Grand Inga turns on any lights.

Like wind and micro-hydropower projects, solar home systems don't rely
on expensive centralized grids to supply energy to rural communities.
Millions of them are already being installed throughout Africa and South
Asia. The price of such technologies would drop much further if the
World Bank or any other sponsor ordered 500 million systems.

With power projects, it is not just the benefits to consumers that
matter, but the impacts on society at large. The Grand Inga scheme would
rely on imported technology, and would employ a few hundred technicians
to operate its power plants. In addition, thousands of guards would be
required to protect plants and 8,000 miles of transmission lines from
terror attacks and pilferage. An order of 500 million solar home
systems, in comparison, could create hundreds of thousands of productive
jobs throughout the supply chain.

Social impacts don't end with job creation. Transparency International,
the anti-corruption watchdog, has identified large public works as the
most bribery-prone economic sector - more corrupt in fact than oil or
weapons trading. The Democratic Republic of Congo has a sorry history of
grand corruption in infrastructure projects, and its existing Inga 1 and
2 dams are suffering from huge cost overruns. In comparison,
decentralized energy solutions are at a scale that can be managed and
controlled by the fledgling institutions of fragile states.

Why, then, are the World Bank and other financiers promoting the complex
and expensive Inga project? From a self-interested perspective banks
find it easier to finance billion-dollar projects with limited overhead
than cheap and effective supply chains for poor consumers. Maybe more
importantly, poor African farmers serve to justify the mega-dams, but
they are not their intended beneficiaries.

The Inga 3 Dam, which the World Bank has designated as a model project,
will supply electricity to the Congolese mining industry and South
African cities, not the rural poor. Industrial consumers need
centralized power stations, not decentralized renewable systems. Even
the transmission lines of the Grand Inga scheme will carry electricity
at such a high voltage that they cannot supply power to the regions they
bisect at affordable rates.

Donor governments will meet in Moscow on December 16-17 to pledge their
contributions for the International Development Association, the World
Bank fund for the poorest countries. These negotiations offer an
opportunity to change course. Governments should shift their support for
energy projects from the World Bank to institutions such as the new
Green Climate Fund and the Energizing Development consortium, which are
better placed to promote clean local energy solutions that benefit the
poor. They also need to establish strict guidelines and standards at the
new climate fund.

Civil society groups are calling for a change of course in global energy
finance through a global petition, advocacy work and a protest in
Moscow. Their approach has worked before. In the 1990s the World Bank
pulled out of mega-dams after governments threatened to cut their
contributions over destructive projects in India and the Amazon. Public
pressure then saved many precious ecosystems and local communities from
destruction. In the meantime, better alternatives have become readily
available. You can sign the global petition at bit.ly/IDA17.

[Visit www.internationalrivers.org/node/8175 for more information and
http://org.salsalabs.com/o/2486/p/dia/action3/common/public/?action_KEY=14745
to sign a petition on the topic.]
________________________________________________

This is International Rivers' mailing list on the role of international financial institutions in promoting large dams.

You received this message as a subscriber on the list: ifi@list.internationalrivers.org

To be removed from the list, please visit:
http://salsa.democracyinaction.org/o/2486/unsubscribe.jsp

Nepal gov't addresses concerns of Chinese hydropower project contractor

Nepal gov't addresses concerns of Chinese hydropower project contractor

Xinhua News Agency

11 December, 2013

URL: http://www.globalpost.com/dispatch/news/xinhua-news-agency/131211/nepal-govt-addresses-concerns-chinese-hydropower-project-con

The government of Nepal has addressed the demands and concerns expressed by the Chinese developer of the West Seti Hydropower Project in South Asian country, the Investment Board of Nepal (IBN) said on Wednesday.

The IBN, an agency to commission hydropower projects, said it has also received written commitments from relevant ministries towards addressing the issues raised by CWE Investment, a subsidiary of the China Three Gorges Corporation, one of China's largest hydropower developers.

CWE Investment is developing the 750 MW West Seti Project in power-hungry Nepal.

The Chinese company in the first week of October asked the IBN to take care of a number of issues directly linked with the project construction including land acquisition, resettlement of project affected people, the transmission line plan and the power purchase agreement rate.

"The IBN and the ministries including the Ministry of Land Reform and Management, Energy Ministry and Finance Ministry have agreed to resolve the issues demanded by the project developer," IBN Joint Secretary Mukunda Poudel told Xinhua.

He said his agency has received a written commitment from the mentioned ministries, except for Finance Ministry. In the commitment, the ministries have outlined their roles during the project construction and promised to fulfill them at any cost so as to ensure the implementation of the project.

The project to be developed under the financial and technical assistance of the Chinese government is expected to cost a total of 2 billion U.S. dollars.

The Exim Bank of China has agreed to offer soft and commercial loans worth 1.6 billion U.S. dollars for the construction of the project.

"We will receive the commitment letter from the Finance Ministry this week. Compiling all of the commitment letters we will correspond with CWE next week asking the contractor to get ready for project development," Poudel added.

CWE Investment has been seeking government commitment in the above mentioned areas for the last two months while the Nepal government has not been able to resolve the issue. As a result, the company and the IBN have not been able to develop a working plan for the project, which also prompted doubts against the successful implementation of the project among the stakeholders.

"West Seti is a crucial project for Nepal. Since the Nepal government is committed to play a supportive role in every aspects of the project development, we request the developer to begin work soon with full morale and without fear of anything," a high ranking official at the Prime Minister Office said in condition of anonymity.

According to a memorandum of understanding signed by the Nepal government and CWE Investment in August 2012, the project would be completed by 2019. However as construction has not begin, there are speculations that the project might not be completed as planned.

The government of Nepal has enlisted West Seti as a top priority project, hoping this mega hydro project can be a remedy to this Himalayan country where people suffer from power cuts up to 16 hours a day during the winter season.

Death of Lake Turkana Near - New Report

http://allafrica.com/stories/201312092285.html?viewall=1

Kenya: Death of Lake Turkana Near - New Report

BY JOHN MUCHANGI, 

9 DECEMBER 2013

 

 

A section of women in the Elmolo and Rendile village that overlooks Lake Turkana having a chitchat as they embark on their chores. The lake provides a source of livelihood for the communities many of whom are fishermen

2013 could be the last year Kenyans have to see Lake Turkana in its natural state because beginning next year it will gradually reduce, and eventually reduce to two small lakes, after Ethiopia completes construction of the massive Gibe III dam

Lake Turkana may be reduced to two small lakes once Ethiopia completes its massive irrigation project and dams on River Omo, a new study says.

The lake receives 90 per cent of its water from River Omo but the Ethiopian government plans to divert up to 50 per cent of that water to irrigate sugarcane plantations near the Kenyan border.

"The lake level will inevitably drop 20 metres or more ," says the report, What Future for Lake Turkana?

It was released last week by the African Studies Centre at the University of Oxford.

Kenyans will start to feel the pinch next year when Ethiopia completes the massive Gibe III dam and begins to fill it up.

Experts say the dam's reservoir will take three to five years to fill. After that half of River Omo's water will go to irrigate plantations in the lower Omo valley.

This means 2013 could be the last year Kenyans have to see Lake Turkana in its natural state because beginning next year it will gradually reduce and will be regulated by Ethiopians.

Turkana is Kenya's largest lake and the world's largest desert lake.

"Ultimately, the lake could reduce to two small lakes, the northern one fed by the Omo, and the southern one by the Kerio and Turkwel rivers," says Sean Avery, the lead author of the report released last week.

Avery is a civil engineer and hydrologist who has lived in Kenya since 1979.

The report is the latest of similar studies that have been ignored by both Kenyan government and donors financing the controversial project.

Angry activists say more than 300,000 Kenyans who directly depend on Lake Turkana will lose their livelihood and may start to fight for scarce resources.

"We are calling on the government of Kenya to respect the rights of its people and halt its involvement in power purchases from Gibe III Dam," said Ikal Angelei, founder of Friends of Lake Turkana.

Gibe III will be Africa's biggest hydro-electric power project and will produce the equivalent of the entire electricity generated in Kenya.

The government has agreed to purchase power from the dam beginning 2016 and has even secured a Sh37.5 billion World Bank loan to build a high-voltage power line from the controversial dam to Kenya.

The bank, when approving the loan last year, said it was convinced the project will not harm the environment.

"It will expand access and lower the cost of electricity supply to homes and businesses across Kenya and help to reduce thermal power emissions in Kenya, a clear benefit to the region's environment," said Makhtar Diop, World Bank Vice President for the Africa Region in a statement.

The move has been heavily criticised by environmental groups across the world.

The Oxford reports says the World Bank has not carried out any study on the impact.

In 2004 the Bank had dismissed the Lake Turkana's importance, stating: "...While most of the lake lies within Kenyan territory, that is a sparsely inhabited semi-desert pastoralist region with no significant use of the lake's waters. It should therefore be relatively easy to negotiate 'no objection' from Kenya should that be required for multilateral/bilateral funding."

Avery says the Bank undertook no significant ecological and socio- economic studies of the lake before it made these pronouncements.

A separate report released in January by US-based environmental lobby International Rivers says it is difficult for Kenya to pull out of the electricity purchase deal.

"Many believe that official Kenyan government support has reflected an unfortunate combination of military/diplomatic pressure from Ethiopia, financial arrangements with key Kenyan leaders, and fear of the legal consequences of breaking electricity purchase contracts," says the paper titled East Africa's "Aral Sea" in the Making?

The Oxford report says hydroelectric dams do not consume water once in operation but they permanently regulate river flows.

"The filling of dam reservoirs will cause temporary drops in the water level of Lake Turkana and, once in operation, the dams will permanently regulate river flows," it says.

So what will deal Lake Turkana the mortal blow is the massive irrigation project that will follow Gibe III.

Ethiopia has already began evicting more than 250,000 of its own people to irrigate the 245,000 hectares of sugar plantations in the lower Oromo Valley near Kenya.

The country wants to become a sugar superpower but Angelei says it is "notoriously unsympathetic to its citizen concerns."

The eviction has attracted outcry and the government has reportedly drafted more than 2,000 soldiers downstream of the dam and most of the Omo valley is now off limits to foreigners.

"The Kuraz scheme alone will require over 30 per cent of the Omo flow as a minimum and this rises to nearer 40 per cent when the 'remaining' area is included," Avery says in the final report.

He adds that the total abstracted water could easily reach over 50 per cent of Omo River.

"The potential reduction of inflow to Lake Turkana is therefore huge, and far greater than previously reported," he says.

Veteran archaeologist Dr Richard Leakey says the project could easily kill the lake. "The only remaining thing is when. This is a global disaster in waiting. Lake Turkana is going to dry up," he said.

The dried up lake might have greater consequences than loss of livelihood by fishermen. "Lake Turkana's lake bed holds salts deposited over thousands of years. What will be the consequence when these are exposed by the receding lake, and then blown onto pastures and farms by the lake's strong winds? " says the report.

The Oxford study says the discovery of vast underground water in Turkana is not helping the dying lake.

"Recent reports by Unesco of vast underground aquifer finds west of Lake Turkana might be thought to diminish the importance of the potential demise of the lake," it says.

The aquifers have enough water to supply all Kenyan needs for the next 70 years, according to Radar Technologies International, the company that confirmed the water's existence.

One of the aquifers is to be the "new Lake Turkana" because its storage volume is equal to that of Lake Turkana ."

The Nairobi-based UN Environmental Program is currently trying to broker a deal between between Kenya and Ethiopia to save the lake.

Activists and researchers say the move is welcome but might be late because Gibe III is 75 per cent complete.

"It is a matter of the utmost urgency, " Avery says.

Reservoir emissions: a quiet threat to expanding hydropower

http://www.eenews.net/stories/1059991386

Reservoir emissions: a quiet threat to expanding hydropower

Henry Gass, E&E reporter

ClimateWire: Friday, December 6, 2013

Hydropower is a frequent target for criticism. Regardless of your views on global warming, turning a serene stretch of river into an artificial lake humming with electrical equipment can make you unpopular, and the announcement of any new hydropower project is often swiftly followed by outcries over habitat disruption and community displacement, among other concerns.

But hydropower's clean energy bona fides are rarely questioned.

In fact, hydropower reservoirs do generate carbon emissions, and some scientists think these emissions could be substantial -- maybe enough to cancel out the system's green benefits.

Steven Bouillon, a carbon cycles researcher at the University of Leuven in Belgium, said the magnitude of emissions depends on the design of the reservoir. Bouillon is leading research in Africa to quantify emissions from inland water systems, including reservoirs.

Hoover dam and Lake Mead

Hoover Dam and Lake Mead, the reservoir behind it. Photo courtesy of Wikipedia.

"We're quite convinced that for certain reservoirs, the effects on greenhouse gas emissions locally will offset the benefits of clean energy production," he said.

When reservoirs are built -- for hydropower or other purposes -- the grass, vegetation and trees submerged underwater begin to slowly decompose, releasing the carbon dioxide they had been storing through photosynthesis for centuries.

How much of this carbon dioxide actually gets "outgassed" into the atmosphere is a product of several factors. The gas can bubble to the surface of the reservoir and escape; it can be released as the water passes through a dam's hydroelectric turbines; and it can be released farther downstream. Some gas could also never make it out at all, buried in sediment in the reservoir or farther downstream, or carried all the way out to the ocean.

The size of the reservoir can make a difference. Shallow reservoirs with a wide surface area can emit more, because they've flooded more carbon-rich land, which can easily escape as gas out of the shallow water. Conversely, deep dams with a small surface area have much lower emissions.

The methane problem

Methane -- a much more potent greenhouse gas than CO2 -- may be a bigger concern, however.

Submerged vegetation emits some methane naturally, but stagnant reservoir water can also create an oxygen-deprived layer of water at the bottom of the lake, and this anoxic environment can turn some of the decomposing carbon into methane instead of CO2.

And to make matters worse, many hydropower stations draw water from the bottom layers of reservoirs to generate electricity, all but ensuring a portion of the methane gas is emitted downstream or as it passes through hydroelectric turbines.

A June 2012 commentary article in the journal Nature Climate Change claimed that the carbon emissions from all of Brazil's hydroelectric reservoirs were equal to or greater than the annual emissions of São Paulo, the country's largest city.

Richard Taylor, executive director of the International Hydropower Association, said these reports exaggerate reservoirs' role in the natural carbon cycle. Indeed, the world over, carbon stored in forests and vegetation routinely seeps through groundwater into rivers and then outgases into the atmosphere (ClimateWire, Nov. 21).

"You have a natural system going on, unrelated anthropogenic activities going on," Taylor said. "We know we can measure emissions on the surface of a reservoir, but the story is much, much more than that."

With carbon constantly cycling through water and forest systems, and constantly flowing in and out of the atmosphere, do reservoirs really change anything? Or do they just emit carbon gas that would've found some other way into the atmosphere?

1 long-term study, mixed results

There has been only one study chronicling pre- and post-flood emissions from the same hydroelectric reservoir, a seven-year study of the Eastmain-1 dam in northern Quebec. Cristian Teodoru, a postdoctoral researcher at the University of Leuven, led the team that spent three years monitoring emissions from the landscape before it was flooded at the end of 2005. They then spent four more years measuring emissions from the flooded landscape.

Teodoru and his colleagues found that in its first post-flood year, the reservoir was a large net source of CO2 but a much smaller source of methane compared with pre-flood levels. In subsequent years, however, net carbon dioxide emissions declined steeply, while net methane emissions remained constant or increased slightly.

Another concern raised by scientists is that, while these emissions may decline over time, the big spike in outgassing early on is much higher than emissions from fossil fuel generation and could take decades to recover from.

Taylor, who's read the study, described the methane emissions as so small they're "negligible." But in its paper, Teodoru's team ultimately concluded that "the reservoir will continue to emit carbon gas over the long term at rates exceeding the carbon footprint of the pre-flood landscape."

Teodoru said net emissions from reservoirs could be even greater in tropical and subtropical climates, since the bacteria in the water breaking down the carbon-rich vegetation work faster in higher temperatures. Northern reservoirs, including Eastmain-1, are also frozen for much of the year, he said, stifling potential emissions.

"If you compare the same surface in Canada to one in Brazil, you'd have totally different emissions," Teodoru said.

The tropics and subtropics could also soon see a hydropower boom. Scientists believe up to two-thirds of the planet's hydropower capacity is still undeveloped -- the majority of it in the Southern Hemisphere -- and forecast hydropower capacity to double by 2050.

With so many factors contributing to the natural carbon cycle, Taylor said research has yet to fully conclude what impact reservoirs have on this cycle.

He also argued that some research up to now has been flawed. Many studies investigating carbon emissions from reservoirs use the Balbina Dam in Brazil as a case study. The dam is wide and shallow, and it's been shown to emit more methane than most coal plants.

Ways to build lower-emitting dams

Taylor called the dam an outlier, with a uniquely poor design and location contributing to exceptionally high emissions. Balbina has a 250-megawatt generating capacity yet has the same surface area as the deeper Itaipu Dam, whose 14,000 MW capacity is second in the world to China's Three Gorges Dam.

Balbina, Taylor said, is "atypical, yet the most intensively studied project on greenhouse gas emissions."

That said, there are steps hydropower developers can take to minimize reservoir emissions.

Developers should try to avoid building dams near major carbon sinks, for example, and should install an off-take system that draws water from the upper levels of the reservoir, not the methane-rich lower levels, Taylor said.

The International Hydropower Association has developed a sustainability assessment protocol that looks at more than 20 topics from the project planning stage to construction and production where emissions could be prevented.

"As we learn, we will evolve that practice," he said. "Certainly, we would look at water quality. If that's well-managed, I think the greenhouse gas issue's well-managed."

Ultimately, Taylor said he hopes the industry can move past this issue and focus on other things, saying he thinks the industry is "very tired of being the butt of this."

"All renewables work together, and the storage of energy in hydro reservoirs is key to the increased utilization of renewables," he said.

"We're managing [emissions] the best we can," he added. "I can't say there's going to be a perfect solution, but I don't see that as the most pressing issue."

Memories of Nelson Mandela

Memories of Nelson Mandela
By Peter Bosshard, International Rivers
December 5, 2013
www.internationalrivers.org/node/8171

Nelson Mandela, who passed away today, was one of my very few personal
heroes. Through the World Commission on Dams report, his life-long
commitment to human rights dignity briefly shone a light on our own
modest work.

When I was a young activist in the Swiss anti-apartheid movement, Nelson
Mandela's heroic struggle and sacrifice offered inspiration and
determination. Every year we celebrated the birthday of the incarcerated
freedom fighter with defiant parties in the heart of Switzerland's
financial center, which sold much of the apartheid state's gold. In 1990
we undertook a joyful pilgrimage when Nelson Mandela visited Geneva for
a meeting with anti-apartheid activists shortly after he was released
from prison.

My respect for Madiba (as Mandela was known among his admirers in South
Africa) deepened when I had the chance to read his epic autobiography,
Long Walk to Freedom, and visit his prison cell on Robben Island. I was
captivated by his perseverance through decades of oppression, and
appalled by the senseless waste of human talent and hope for his country
through 27 years of incarceration. Most of all, I was touched by the
personal strength of an activist who managed to uphold his principles
when there appeared to be no hope, and who showed magnanimity for this
oppressors by refusing to become, as he put it, a "prisoner of hate".

In November 2000, Nelson Mandela honored the launch of the World
Commission on Dams report in London with his presence. The independent
Commission had been chaired by South Africa's former water minister
Kader Asmal, and its ground-breaking report espoused the same insistence
on human dignity and political inclusion that marked the life-long
struggle of the two ANC comrades.

Not by coincidence, the most important contribution of the WCD report to
the global dams debate was its focus on the rights of all affected
parties. The report states: "[This approach] is based on an
understanding that no party's rights will extinguish another's. In fact,
where rights compete or conflict, negotiations conducted in good faith
offer the only process through which various interests can be
legitimately reconciled."

As we celebrated the launch of the WCD report in London, Nelson Mandela,
who had by then retired from political life, clearly enjoyed the
opportunity of traveling the world in freedom. In his speech, he paid
tribute to the Commissioners for their "invaluable guidance" and spoke
to "the careful use of our collective life support systems, the rivers
entrusted to us as stewards of nature."

Even if it is only a tiny part of his legacy, I am grateful for the
spotlight that Nelson Mandela put on rivers and dams through the WCD
report. The freedom fighter has passed away, but his life continues to
be a monument to human strength and conviction. Rest in peace, Madiba.

[Nelson Mandela's speech at the launch of the WCD report is available at
www.internationalrivers.org/node/8028]
________________________________________________

You received this message as a subscriber on the list: africa@list.internationalrivers.org

To be removed from the list, please visit:
http://salsa.democracyinaction.org/o/2486/unsubscribe.jsp

Pay as you go Solar in Africa

http://www.scientificamerican.com/article.cfm?id=pay-as-you-go-solar-energy&WT.mc_id=SA_CAT_ENGYSUS_20131128

Pay-as-You-Go Solar Energy Finds Success in Africa
Selling solar energy on an installment plan is an affordable alternative to kerosene fuel

By David Wogan


A creative way of selling solar energy is gaining traction in sub-Saharan Africa: customers can pay as they go.

Only one in six rural inhabitants in sub-Saharan Africa has access to electricity. For households living off the grid, kerosene lamps are the primary lighting source�an expensive technology that is also unsafe, because kerosene is flammable as well as poisonous when inhaled or ingested. TheWorld Bank estimates that breathing kerosene fumes is the equivalent ofsmoking two packs of cigarettes a day, and two thirds of adult females with lung cancerin developing nations are nonsmokers. �The poorest people in the world are not just paying a bit more for their energy, they�re paying a disproportionate amount�, says Simon Bransfield-Garth, CEO of Azuri Technologies, a solar services firm based in Cambridge, England.

Across the U.S. and U.K. electricity from a utility costs between 10 to 15 cents per kilowatt-hour (kWh). A villager in rural Kenya or Rwanda, however, pays an equivalent cost of $8 per kWh for kerosene lighting. Often 30 percent or more a family's income is spent on kerosene. Charging a mobile phone is even more expensive. That same villager would pay nearly 400 times more to charge a mobile phone in rural Kenya than in the U.S. Solar-powered charger kits are a promising alternative, but many rural families cannot afford the up-front cost of these systems, which start at $50.

With a Pay-As-You-Go model (PAYG) for solar kits, on the other hand, customers can instead pay an up-front fee of around $10 for a solar charger kit that includes a two- to five-watt solar panel and a control unit that powers LED lights and charges devices like mobile phones. Then they pay for energy when they need it�frequently in advance each week�or when they can (say, after a successful harvest). In practice, kits are paid off after about 18 months and subsequent electricity is free to the new owner. PAYG customers are finding that instead of paying $2 to $3 a week for kerosene, they pay less than half that for solar energy. The PAYG concept is a familiar one for hundreds of millions of Africans who purchase mobile phone minutes and kerosene fuel incrementally.

Azuri is one of a number of start-ups selling solar energy to off-grid customers in installments. Their customers buy scratch-off cards containing a code that they send to the company via an SMS message. The customer then receives an unlock code that they enter into their solar kit.

Another company, Angaza Design of San Francisco, has integrated an analog modem into their solar charger that �talks� with the customer�s mobile phone to authenticate a transaction. M-KOPA�a spin-off of the widespread and successful M-PESA mobile payment network�leverages its existing mobile network to receive payments. Payment plans start at less than 50 cents a day and customers can add funds to their account at their convenience.

So far, PAYG has shown notable levels of success. Azuri counts over 21,000 customers in 10 countries (Kenya, Uganda, Tanzania, Ethiopia, Rwanda, Sierra Leone, Ghana, South Africa, Zimbabwe and South Sudan). M-KOPA already has 30,000 customers and is looking to attract a large portion of the 15 million active M-PESA users spread throughout the continent. Angaza is on track to reach 10,000 customers in the next nine to 12 months. Bryan Silverthorn, the firm�s chief technology officer, says the feedback has been �aspirational.� In their experience, solar kits are empowering off-grid Africans�literally giving them the power to dramatically improve their quality of life.

Companies report that the PAYG business model replicates well from country to country. They reach rural communities by working typically spreads quickly via word-of-mouth advertising. Once one family has had success with a PAYG solar system, other families often purchase one as well.

Yet challenges remain. Many PAYG start-ups are running into limits of working capital; companies front the initial cost of these solar kits and are not fully reimbursed for 18 months. This leads to cash flow constraints that intensify when customers default. �The financial models don�t yet exist to provide debt capital, and companies can only fund operations out of their equity for so long. So there is a need for debt instruments to enable this to be funded at scale�, Bransfield-Garth says.

Still, the PAYG model may offer important lessons for the developed world as the installed solar base grows. Says Silverthorn: �There are all these debates about when solar will reach grid parity in the United States and elsewhere. Africa is a place where, for a huge swath of the population, solar energy is now the cheapest option. No one knows what will happen next.�
________________________________________________

You received this message as a subscriber on the list: africa@list.internationalrivers.org

To be removed from the list, please visit:
http://salsa.democracyinaction.org/o/2486/unsubscribe.jsp