Presentation on theme: "NEP - POVERTY AND SOCIAL IMPACTS ANALYSIS Patricia Fernandes, 5 November 2014."— Presentation transcript:
NEP - POVERTY AND SOCIAL IMPACTS ANALYSIS Patricia Fernandes, 5 November 2014
National Electrification Plan Sustainability and Access by Vulnerable Groups Electrify 100% of Myanmar’s households by 2030 Connecting 7.2 million households (16 years) Financial sustainability Poverty and Social Impacts Analysis Understanding consumers’ concerns How to protect poor and vulnerable consumers Inputs to NEP Design 2
National Electrification Plan Source of data for PSIA 3 Quantitative data on energy consumption Limited availability IHLCA – “Deep Dive” Qualitative analysis Ongoing research program of the Livelihoods and Food Security Trust Fund (LIFT) Further qualitative analysis implemented by Enlightened Myanmar Research (EMR)
What quantitative data on consumption? 4
National Electrification Plan IHLCA 2 5 28% of households connected to the public grid in 2010 Marked differences between rural and urban areas 77% urban vs 10% rural households Highly correlated with income Better off much more likely to use electricity (particularly the public grid) than poorer households. Substantial gaps in access to reliable electricity Communities and households developed innovative alternatives
National Electrification Plan IHLCA 2 6 Households connected to the public grid reported spending 1.4% of total expenditures on electricity Households accessing electricity from private suppliers reported spending 2.2% of total consumer expenditures on electricity Constant across the income distribution (for poor as well as rich households).
National Electrification Plan IHLCA 2 7 Low spending Low tariffs Generous lifeline tariff cut-off, coupled with low electricity consumption. Low consumption (below 100 kWh/month) In urban areas: 30% of households below 50 KWh/month and 66% below 100 KWh/month In rural areas, 53% of households below 50 KWh/month and 88% below 100 KWh/month
National Electrification Plan IHLCA 2 8 IHLCA data does not suggest that electricity affordability is a concern for households currently connected to electricity services in Myanmar. BUT in a context where better off households are currently much more likely than poorer households to be connected to the grid. This finding was not reflected in the qualitative analysis and warrants additional study.
What qualitative analysis findings? 9
National Electrification Plan Qualitative Analysis: Rural Areas 10 Region/StateAccess to Electricity Government Service Private Company Community initiative or SMEs(hh. selling electricity) Individual connections only (solar panels or generators) Chin Village 1 - Hydro) Village 4 - (Hydro) Mandalay Village 7 - (Generator) Villages 10 and 11 Ayeyarwa Villages 12 and 13 Magway Village 3 - (Grid) Village 5 - (Generator) Shan Village 2 - (Grid) Village 6 - (Hydro) Rakhine Villages 8 & 9 – (Generator)
National Electrification Plan Qualitative Analysis: Urban Areas 11 City Poorer Ward Middle- Income Ward Better-off Ward Industrial Zone HakhaCHN-1CHN-2CHN-3 SMEs spread across the cities to conduct interviews MandalayMDY-1MDY-2MDY-3MDY-4 YangonYGN-1YGN-2YGN-3YGN-4
Barriers to Access, Use & Quality 12
National Electrification Plan Barriers to Access in Rural Areas 13 Self-Reliant Electrification Approach (SRE) provides no financial support to communities Access is limited to better off villages Costs of the connection from the main “transmission” line to the village Limited technical support provided Little regulation of the role of electricity committees that oversee SRE at village level
National Electrification Plan Barriers to Access in Rural Areas 14 Within villages a significant proportion of the population remain without access The fees associated with connection to the grid Poor households excluded from the planning stages No instances of cross-subsidization In five villages with a functioning electricity scheme, poor households did not use electricity Batteries, candles and paraffin lamps.
National Electrification Plan Barriers to Access in Urban Areas 15 Barriers to access were less relevant in the main urban centers Significant for smaller cities (Hakha) and for informal settlers in poorer wards (Yangon and Mandalay) Informal settlers face particular challenges High reliance on informal service providers for poor and marginalized groups
National Electrification Plan Uses and quality of service in rural areas 16 Uses very consistent in rural areas Lighting and TV “bBeing linked up to the outside world” Lighting and “homework’ Livelihood activities Diesel for livelihood activities Cost of diesel (and fluctuations in cost) significant constraint to profitability High demand among rural SMEs for grid-based electricity services Good quality of grid-based services
National Electrification Plan Uses and quality of service in urban areas 17 Uses varied more markedly across wards/income groups and cities More appliances: refrigerators, stoves, kettles and rice- cookers and air-conditioning among higher income households Use of electricity for cooking in better-off wards Issues of quality of service were stressed in poorer wards, by middle-income respondents & in Yangon Availability Reliability of the supply Speed/cost of repairs.
Perceptions of Affordability 18
National Electrification Plan Perceptions of cost in rural areas 19 Overall lack of knowledge about the electricity tariffs charged by Government and the increase taking effect in April Across all 13 villages visited, only a very limited number respondents had heard about the tariff increases. Standard government rates were applied only in two of the four villages In the other two sites, tariffs collected were much higher at 200 Kyats/kWh and 50 Kyats/kWh Set by the electricity committee.
National Electrification Plan Perceptions of cost in rural areas 20 In rural areas the poorest villages and most vulnerable households within the communities are not connected For currently with access payments were considered affordable: Not concerned about the upcoming tariff increases; Not planning to further reduce electricity consumption. In terms of coping strategies, landless/land poor households did resort to late payments The poorer groups in the rural areas visited Could not afford to pay electricity charges Even for the minimum lighting in the evenings
National Electrification Plan Perceptions of cost in urban areas 21 Generally good understanding of the new tariffs Greater clarity in terms of the different charges in the bill Wealth Quintile Average Usage (units kWh) Previous monthly bill (average) Current monthly bill (average) Estimated increase % Well-off1,44350,50070,0038 Medium2829,80011,50017 Poorer1384,9005,000 marginal changes
National Electrification Plan Perceptions of cost in urban areas 22 Yangon and Mandalay Middle-income households Strong negative feedback but no negative coping strategies Focus on lack of quality improvements Poor and marginalized households Not impacted by changes Pre-existing concerns with making payments SMEs Middle-sized businesses Electricity & Diesel Concerns with quality
National Electrification Plan Perceptions of cost in urban areas 23 Laying off staff Reducing production But focus on quality rather than tariff reduction Cities Number of SMEs by consumption (Units kWh) ,00010,001-20,000 Yangon8170 Mandalay13102 Total21272
Implications for NEP Implementation 24
National Electrification Plan Implementation in rural areas 25 SRE Approach Subsidization of village connections Connections for poorer households Technical Assistance Regulation of functioning of Electricity Committees Governance Social Accountability Inclusion Review tariffs (subsidization for poor and marginalized groups)
National Electrification Plan Implementation in urban areas 26 Subsidizing connections to the households Poor and marginalized groups Informal settlers (documentation requirements) Improvements in service quality will be key Acceptability of further increase by middle-income households Review service/tariffs available to SMEs