1. Poverty Reduction Strategy Process (PRSP) and Energy How can PRSP Support Pro-Poor Energy Interventions? Stephen Karekezi, Lugard Majoro and Waeni Kithyoma AFREPREN/FWD African Energy Policy Research Network/ Foundation for Woodstove Dissemination Email: afrepren@africaonline.co.ke Website: www.afrepren.org

2. The Challenge

3. What are pro-poor energy interventions? Millennium Development Goal (MDG) compatible  Increased electricity access for all rural & peri-urban institutions and enterprises °Tunisia’s rural electrification level is now estimated to be over 90% °Estimated cost from MDG Review – of the order of $2 $10/capita/year  Improved and cleaner cooking stoves & fuels °Over 90% of urban households in Senegal use LPG °MDG Review – of the order of $5 to $10/capita

4. What are pro-poor energy interventions? Millennium Development Goal (MDG) compatible  Access to motive power °Treadle pumps, gensets, windpumps & micro/pico hydro °40,000 households using treadle irrigation pumps in Kenya °Treadle pump – $25 to $50  How can Poverty Reduction Strategy Process (PRSP) support pro-poor energy interventions ?

5. What is Poverty Reduction Process (PRSP) Main tool used for policy & national budget priorities and economic planning Basis for donor coordination – aid resources aligned to PRSP priorities  Linked to EC-led Country Strategy Papers (CSPs)  Other donor-led development strategies Macro- Economic Policy & Budget Priorities Sector Budget Priorities

6. What is Poverty Reduction Process (PRSP) Designed to be consultative process involving all country’s major sectors and stakeholders Guides Central Government budgetary allocations to sectors such as energy, health, education and agriculture Macro- Economic Policy & Budget Priorities Sector Budget Priorities

7. Impact of PRSP Macro-Economic Policy & Budget Priorities Health, Education & Water: Big Winners but not Energy Sector Budget Priorities PRSP process increased financing for health, education and water but not energy sector – macro- economic rationale Health, education and water analysts able to demonstrate :  Investment in health, education and water = poverty reduction

8. Impact of PRSP Macro-Economic Policy & Budget Priorities Health, Education & Water: Big Winners but not Energy Sector Budget Priorities Consensus on priority activities and institutional approach  Education – Primary education  Health – Primary health care, HIV Need similar approach for energy $10 oil price increase = 1.5% drop in GDP)

9. Energy & Per Capita Income Plus project-level evidence but still not as persuasive as evidence from health, education and water sectors - UNEP/Riso COOPENER initiative addressing this issue

10. PRSP & Energy - Country Status In some countries, energy sector does not feature prominently in PRSP Compounded by limited attention to energy in MDGs (Millennium Development Goals) StrongModest Mozambique  Ethiopia  Zambia  Kenya  Tanzania  Eritrea  Uganda  Malawi 

11. Ensuring PRSP Addresses Energy Sector Initial formulation stage Review (approximately every 3 years) Macro- Economic Policy & Budget Priorities Sector Budget Priorities

12. 1 st Priority: Ensure Energy is Mentioned in PRSP Macro-Economic Policy & Budget Priorities EUEI 1: Enabling Environment for Energy Sector Development Sector Budget Priorities EUEI 2: Facilitate Large Scale Energy Investments & EUEI 3: Energy Service Delivery

13. 2 nd Priority: Ensure PRSP Supports Pro-Poor Energy Services Macro-Economic Policy & Budget Priorities EUEI 1: Create Enabling Environment for Pro-Poor Energy Initiatives Sector Budget Priorities EUEI 2: Facilitate Large Scale Energy Investments & EUEI 3: Influence Delivery of Pro-Poor Energy Services

14. Examples EUEI: Create Enabling Environment for Pro-Poor Energy Initiatives EUEI 2: Facilitate Large Scale Energy Investment EUEI 3: Influence Delivery of Pro-Poor Energy Services Policy study on electrification targets and how best to use energy subsidies -Connection fund -Low-cost electrification options - Kerosene, LPG stoves - Improved biofuel stoves - Diesel sets - Micro, pico hydro & windpumps - Solar and biofuel dryers

15. Country Preparatory Meetings - Priorities Create Enabling Environment for Pro-Poor Energy Initiatives  Facitate Large Scale Energy Influence Delivery of Pro-Poor Energy Services  - National electrification targets - Energy subsidies studies - Impact of oil price increases $10 increase = 1.5% of GDP) - Rural energy or electrification fund - LPG & Kerosene - Gensets - Solar dryers & Solar PV - Treadle pumps - Small credit schemes - Community micro hydro - Improved cookstoves, 

16. Key Actors to be Identified Create Enabling Environment For Pro-poor energy interventions Facilitate Large Scale Energy Investment Influence Delivery of Pro-Poor Energy Services Ministry of Finance and/or Planning, Independent policy institutes - Ministries of Energy - Utilities and mini-grid operators - Ministries of agriculture & health - Small credit institutions - SMEs - Municipalities - Local governments - Rural institutions (NGOs, CBOs, religious institutions) - Universities