Partnerships in Practice Improving access to energy for the poorThe LP Gas Rural Energy Challenge

James RockallManaging DirectorWorld LP Gas Association

CSD-14 Partnerships FairNew York, 5th May 2006

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What is the LP Gas Rural Energy Challenge?

• A Public – Private Partnership (UNDP/WLPGA)

• Address lack of access to clean energy through the use of LP Gas.

– A readily available, clean-burning, modern energy carrier; Liquefied Petroleum Gas (LPG) is one option to support sustainable rural development

• Objective: Support MDG’s through creating viable and sustainable LP Gas markets in rural / suburban areas of developing countries

– for domestic consumption – for industrial productive uses

• Through identifying and addressing barriers to rural market development

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LP Gas in contextConsumption

212 million tonnes/yr in 2004 – global increase of 2.4% on 2003

In context: Annual consumption (on energy content

basis) equivalent to 7% of annual oil consumption

Or:

11% of annual natural gas consumption or,42% of annual hydroelectric consumption

LP Gas is available, clean and modern without the need for technology investment

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Why partner?

UNDP Strengths:– expertise on financing mechanisms– Access to government– collaboration with local

organisations / NGO’s– Independence

LPG Industry Strengths:– Technical & safety expertise– Develop practical business

models– Access to private sector capital

A key success factor for both partners was access to investment, whether donor funding (UNDP) or

private sector capital

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What methodology did we use?

• First key step for the partners was the selection of 6 countries for multi-stakeholder workshops: – Ghana; Honduras; Morocco; South Africa; Vietnam and China

• Objectives of these workshops were:– Initiate dialogue between all stakeholders (public sector, private sector

and consumers)– Agree priority actions to remove barriers to development– Identify projects to demonstrate feasibility of rural market development.

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What works?

• All key partners participate in first phase workshop• Broad agreement on barriers • Where clear shared objectives exist, access to funding was

achieved:– $60million in South Africa– Significant private sector investment– Creation of local employment

– Underwriting of Microcredit for LPG access in Morocco

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What doesn’t work?

• Poor awareness of product – often perceived as unsafe and scarce• LPG is not renewable and often doesn’t fit in country development

objectives • Likewise, donor organisations can be sceptical• Lack of human resources on the ground • Failure to convince consumers to change• Private sector acceptance that this is more than CSR• Difficulty to realise scale required to have an impact on MDG’s

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What is LP Gas?

• A readily available, clean-burning, modern energy carrier; Liquefied Petroleum Gas (LPG) is one option to support sustainable rural development

• LPG has demonstrated health and environmental benefits compared to traditional fuels

• However, availability of fuel, canister size, financing of first costs, refilling costs and transportation are constraints to LPG use by poor people