Basic energy services are the cornerstone of any robust poverty reduction strategy. Providing power to the poor is a prerequisite for the improvement of many other indicators of development. For example, it is very difficult to study at night, run a hospital, or start a business without some basic access to electricity.
That is why power access is often the focus of international development policy. Currently, the Electrify Africa Act of 2015 has been introduced to the U.S. House of Representatives and is awaiting consideration. This piece of legislation directs the President to partner with aid recipients in Africa to develop their power resources.
However, while providing power is an important first step in relieving abject poverty in developing countries, it also can be an opportunity to sidestep further environmental damage. Growing concern with climate change is motivating large aid donors to turn their attention towards green growth and the development of renewable energy resources for their recipients. The logic behind this is that, with the help of already-industrialized nations, developing countries should not have to progress through dirtier energy resources, such as coal and oil, and instead can benefit from more efficient, earth-friendly technologies.
The World Bank, cognizant of both the threat of climate change and the lack of energy services for the poor, is adopting an overall strategy of “green growth.” Rachel Kyte, the World Bank’s climate change envoy, explains that “we have to keep economies growing to bring shared prosperity for all, but we also have to bring down greenhouse gas emissions.” Balancing growth with a reduction in emissions could involve encouraging developing economies to invest in renewables, emphasizing climate-friendly agriculture, or instituting some sort of carbon tax.
One tangible way in which the World Bank already encourages green growth is through issuing “green bonds,” development loans set aside for renewable energy projects. The value of issued green bonds currently amounts to about $8.4 billion total.
Green energy investments can take many different forms, depending on the unique needs and economic environment of the country in question, and do not always involve large infrastructure projects. In Malawi, for example, there is a large focus on providing small solar lights to some of the poorest communities, so that children can study at night, and people can make money by using their personal solar devices to charge mobile phones. SunnyMoney, a social enterprise backed by the UK’s aid agency, is working to distribute the technology in small villages in Malawi. The lights are paid for initially with donor support and sold to villagers on credit.
Even small solar devices can have a huge impact on quality of life. Acreo Kamera, the headmaster of St. Martin’s secondary school in Nambuma, is enthusiastic about the lights’ impact on education. “I would say the performance of the pupils will definitely improve enough to get people to pass exams. Now they can stay later at school and revise. Without light, pupils have had little chance to read or write. Everyone will save money on torches and batteries and reduce living costs, too,” he said.
Elsewhere, in countries such as Bangladesh and Morocco, government-supported green energy programs are providing jobs and basic energy services, not only improving quality of life for the poor but creating long-term economic investments. In rural Bangladesh, a government-run program has resulted in the installation of an estimated 3.5 million home solar systems, also creating thousands of jobs to service the new infrastructure. Similar developments are being undertaken in Morocco, with a special long-term emphasis on creating an energy grid suited to running off of sustainable energy sources such as wind and hydropower.
Providing basic energy services to the poor is one of the most direct ways of encouraging growth and development. Access to electricity, even if it is just enough to charge a phone or power a light, can enable those in developing countries to fully take advantage of their educational and economic opportunities. However, in a world where climate change is a growing threat, aid donors and aid recipients are forming strong partnerships to provide power services to the people that really need them.
– Derek Marion