Back in 2004, the electrical utility in Brazil’s biggest city had a major problem. AES Eletropaulo was losing a large proportion of its revenue due to almost half-a-million illegal connections, most of them in São Paolo’s slums. Not only that, but they were causing often multiple-house fires on a monthly basis, along with frequent electrocutions. But the utility’s efforts to fix the problem were stymied by its poor relations with slum-dwellers, which made it almost impossible to work in these communities.
AES Electropaulo decided to shift course and made a concerted effort to open a dialogue with São Paolo’s urban poor. New credit instruments were extended to poor families, and campaigns conducted on smart energy consumption and the benefits of safe connections. The breakthrough came with AES Eletropaulo’s decision to train large numbers of local agents who conducted door-to-door outreach to households in slum areas to listen to their comments and concerns. In the process, new safe, efficient connections were extended to 1.4 million households across the vast metropolis.
AES Electropaulo’s effort is just one example of the approaches being taken by countries around the world to meet one of the world’s greatest development challenges: delivery of modern energy services to the urban poor. The global urban population is set to double by 2030, reaching five billion people, with 90 percent of that growth expected to occur in developing countries. This urbanization is being driven in large part by poor migrants from the countryside who settle in urban slum areas or informal settlements on the fringes of urban areas outside the control of municipal authorities. In either case, new inhabitants lack access to electricity connections and clean cooking fuels, and often are forced to pay high rates for illegal, substandard services.
Approaches to this challenge were discussed at the second day of the Knowledge Exchange Forum  being put on by the Energy Sector Management Assistance Program  (ESMAP) in Washington on May 7-9, 2012. These discussions followed on a six-week virtual consultation on urban and peri-urban energy access issues that took place in February and March. The virtual consultation, sponsored by ESMAP, brought together over 100 experts from Africa, Asia and Latin America, and included forums on electricity and household energy.
“Energy services in cities in the developing world are being stretched beyond the breaking point,” said Venkata Putti, Senior Energy Specialist at ESMAP. “It is critically important for municipal governments, utilities and civil society to understand what works – and what doesn’t – when it comes to extending services to poor communities.”
Other approaches were introduced during the Knowledge Exchange Forum. The Indian NGO Shelter Associates discussed how it combined community outreach and GIS technology to target specific locations for rehabilitation of energy services in slum areas in India. In Kenya, Kenya Power substantially expanded the number of connections for slum dwellers by putting in place simple technologies such as pre-paid meters and outdoor connection boards (which help curtail power theft) while extending credit to low-income consumers in the form of “stimaloans” (“stima” means electricity in Swahili). Another session focused on how liquefied petroleum gas (LPG) could be delivered to the urban poor to serve as a cooking fuel to replace various types of biomass, the smoke from which poses a serious health hazard.
A number of case studies of successful approaches to improving energy access to the urban and peri-urban poor – from India, Bangladesh, Colombia and Brazil – were recently published by ESMAP.
Over the next two years, ESMAP will establish a strategic partnership with the Cities Alliance , a global coalition focused on reducing urban poverty, to scale up such approaches and introduce greater expertise on energy issues into national dialogues on city planning and slum rehabilitation.
As Billy Cobbett, Manager of the Cities Alliance, summarized the state of energy service delivery in many poor communities around the world in his remarks to the Knowledge Exchange Forum: “Services are already provided. They are just provided informally – or, if you will – illegally. There is no quality control. And the poor often pay more for these services than the rich in the same cities.”
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