The US-Pakistan Clean Energy Partnership, which was recently announced, should be recognised for the estimated impact that it will make on 30 million people by adding at least 3,000MW to the electricity grid. Pakistan is in an energy crisis — one that adversely impacts its economy and costs businesses up to 34 per cent of their annual revenue, according to the World Bank’s Doing Business 2016 report. Anything that can be done to address this state of affairs should be celebrated.
But do you know who aren’t celebrating this partnership? The estimated 70 million people of Pakistan who aren’t connected to the electricity grid, and aren’t likely to receive its benefits in their lifetime. In fact, without electricity to power a phone, radio or TV, it’s likely that they’ve not even heard of the partnership.
The Pakistan government has sadly been silent on its plan to bring this large proportion of the population into the 20th (let alone the 21st) century. Instead, it’s focused on big-ticket power plants, both dirty and renewable, that sit well with the voting public. This is an extremely short-term view. Every day, this population spends money on inferior alternatives, limiting its economic contribution. According to the IFC Pakistan Off-grid Lighting Consumer Perceptions report, the off-grid population spends $1.2 billion every year on poor alternatives, such as kerosene and battery-powered torches. But these alternatives aren’t adequate. A child can’t study by the light of a kerosene lamp, nor can a businessman keep his shop open after sunset.
Across the Atlantic Ocean, we see a different story. Hundreds of thousands of households in East Africa, in the short span of a few years, have gained access to modern energy through pre-paid solar systems from private sector companies, such as M-KOPA, Off-Grid: Electric and BBOXX. Mobisol, a German company operating in Rwanda and Tanzania, announced that it has sold solar systems to over 30,000 households in 2.5 years, amounting to over 3MW in solar generation capacity. Having demonstrated feasibility, African governments are now supporting such companies in their endeavours, such as the Tanzanian government pledging in 2015 to light one million off-grid homes by 2017. In Bangladesh, the government and development institutions have implemented the IDCOL programme to unlock consumer financing. In 2.5 years, the programme has gone on to facilitate electricity access for over 3.6 million people.
In Pakistan, the story is bleak in comparison. The social business that I co-founded, EcoEnergyFinance, is one of a handful of players that reach deep into off-grid locations to sell and service solar energy solutions. We have found that a lack of affordability, availability and service infrastructure prevent people from accessing such solutions, and this is reflected as well in the IFC report. The government can address this in the following ways. Firstly, by providing financial mechanisms that will unlock consumer financing of solar energy solutions by the private sector. Secondly, by ensuring that all solar panels and accessories imported into Pakistan are of high quality and certified by a programme like Lighting Global. And lastly by providing flexible funding to promote innovative and entrepreneurial solutions to the off-grid challenge.
The private sector is ready to step in and meet the growing needs of the 70 million people that are off-grid. With the support of the government, our progress can be accelerated, leading to a more prosperous Pakistan.
Published in The Express Tribune, November 21st, 2015.
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