Waiting for spontaneous positive effects of electrification projects to trickle-down in rural areas is not a satisfactory option. In case of community electrification intervention with Improved Water Mills (IWM) technology, we need to break down this notion and therefore, it is necessary to integrate community electrification intervention with productive use of electricity at rural micro-enterprise level. The most efficient way to deliver effective and lasting impacts when designing a rural electrification scheme is to ensure that such programs provide a direct impact on livelihoods and revenue generation, in addition to the more conventional impacts on standards of living. Increasing revenue generation can be accomplished by transforming the IWM community electrification intervention into a profit making business enterprise as well as by improving productivity of an existing production process and by creating new lines of activities that will generate employment and local demand.
Indeed, the current IWM community electrification pilot (proof of concept) has made an attempt to prove this integration by introducing productive enduse of energy at rural enterprise level and transforming the domestic electrification aspect by introducing a commercially sensitive tariff structure, which has further examined whether it could transform the generally conceived community electrification component into a profit making enterprise.The outcome of this brief pilot (proof of concept) was positive. This report presents the detailed outcomes and lessons learned from the pilot, which can be summaried as below.
- Diversifed use of electricity at households (HH) and rural micro-enterprise level is crucial for making a community electrification project effective and widely accpeted by communities.
- This diversifed use of electricity at HH and enterprise level needs to be commericliased by introducing
- a tarrif payment system. Besides, the micro-enterprises have to be properly linked to the market for a self-sustained revenue models. The crux of the matter in commercialisation process is generating multiple revenue streams.
- While rural electrification does not drive industrial development, it can provide an impetus to rural businesses and consequently a positive impact on household income. However, these effects don’t come automatically, unless there has been a specific program to promote productive uses of electricity. Project components to promote productive uses could, therefore, greatly increase electrification’s benefits.
- A strong community driven tariff system is highly helpful in the case of the IWM community electrification project and this approach will also be useful for other community electrification interventions.
- Introducing training, data management, recording and repair and maintenance is very important. The proof of concept has designed such module which can be used for the full-fledged IWM community electrification program.
- Generating improved business competitiveness through productive uses of electricity will translate into better income, better community services, and in general, a better opportunity for integrated development.
- Even if all of the other components of a productive use of energy (PEU) program are in place, the program will fail if the market cannot or is not willing to absorb the increase in products and services. For example, if a small business pottery manufacturer gets excited about participating in a PEU program, (s)he might well be able to increase production tenfold. Yet if a mere threefold increase in supply exceeds maximum market demand, the newly expanded business is not likely to survive. Hence, the IWM community electrification program has designed a market-linkage mechanism, which will ensure a balance between market demand and actual supply.
- Sustainable market development of IWM community electrification and micro-enterprises can be promoted by providing access to finance to these micro-enterprises as well as introducing timely and appropriate skill development training to the entrepreneurs.
- This proof of concept is expected to help accelerate progress in the IWM sector, by enabling policy makers and development partners to better understand the complex agents of community electrification and productive use of electricity.