Integrated Rural Energy Utilities: literature review completed

08-04-2009, Somerset West, South Africa

A literature review on Integrated Rural Energy Utilities (IREUs) published by Restio Energy Ltd as part of a REEEP-funded project suggests an IREU would make sense in each of the countries reviewed and that there is a strong interest from various parties in Uganda to continue with development.

This is the first report emanating from a project entitled 'An Integrated Rural Energy Utility Roadmap for Africa', which seeks to understand the feasibility of establishing IREUs in Africa.

Rural energy service delivery remains a significant challenge for many countries in Africa. Modern energy forms, and particularly electricity, are generally not available to the majority of rural areas. Households suffer from a variety of problems including poor access to quality lighting sources, poor access to modern fuels for thermal needs, with resulting reliance on woodfuel and high indoor air pollution exposure, limited grid coverage and limited affordability of solar or other alternative electrification options

Interventions have been undertaken in the rural energy sector in Africa and there is a plethora of ongoing projects, programmes and national activities. Many rural energy supply projects have a good initial start-up period, while supported by international funders, and ‘expert’ technical assistance. However, over time, the level of innovation, management and skilled resources drops off because the projects are too small to employ highly skilled staff. Private sector involvement in rural electrification has not yet been a long term success.

An Integrated Rural Energy Utility (IREU) is a medium- to large-scale decentralized entity that delivers a range of renewable and other energy services to primarily rural regions, meeting both thermal and electricity needs in an energy efficient manner, and within an institutional framework that has necessary critical mass and long-term financial integrity. The report reviews key elements of the ongoing energy delivery environment in South Africa, Uganda and Tanzania, with a view to answering three questions:

Is an Integrated Rural Energy Utility an appropriate way to deliver energy services in one or more of the three focus countries (South Africa, Uganda, Tanzania)?
Given the context in these countries, what are the main issues that a more detailed IREU design phase will need to take into consideration?
Are there particular ongoing activities in one or more of the target countries that would lend themselves well to becoming more like an Integrated Rural Energy Utility?

The review suggests an IREU would likely make sense in each of the countries reviewed and, in particular, there is strong interest from various parties in Uganda to continue the project with Uganda as a focus area. There is also a case for continuing the project in South African, where there is already a successful ‘quasi’ IREU with the offering of LPG and solar home systems in rural Kwazulu Natal by the NuRa utility.

The review can be downloaded below.

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