Partnerships in Practice Improving access to energy for the poor The LP Gas Rural Energy Challenge James Rockall Managing Director World LP Gas Association CSD-14 Partnerships Fair New York, 5 th May 2006

2 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

3 LP Gas in context Consumption 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

4 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

5 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.

6 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

7 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

9 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