GS I :' Ewq Energy Sector Management Assistance Programme Bolivia Household Rural Energy Strategy Report No. 162/94 JOINT UNDP / WORLD BANK ENERGY SECTOR MANAGEMENT ASSISTANCE PROGRAMiME (ESMAP) PURPOSE The Jomt UNDP/World Bank Energy Sector Management Assistance Programme (ESMAP) was launched in 1983 to complement the Energy Assessment Programme, established three years earlier. ESMAP's original purpose was to implement key recommendations of the Energy Assessment reports and ensure that proposed investments in the energy sector represented the most efficient use of scarce domestic and external resources. In 1990, an international Commission addressed ESMAP's role for the 1990s and, noting the vital role of adequtate and affordable energy in economic growth, concluded that the Programme should intensify its efforts to assist developing countries to manage their energy sectors more effectively. The Commission also recommended that ESMAP concentrate on making long-term efforts in a smaller number of countries. The Commission's report was endorsed at ESMAP's November 1990 Annual Meeting and prompted an extensive reorganization and reorientation of the Programme. Today, ESMAP is conducting Energy Assessments, performing preinvestment and prefeas Sility work, and providing institutiornal and policy advice in selected developing countries. Through these efforts, ESMAP aims to assist governments, donors, and potential investors in identifying fundin& and inplementing economically and environmentally sound energy strategies. GOVERNANCE AND OPERATIONS ESMAP is governed by a Consultative Group (ESMAP CG), composed of representatives of the UNDP and World Bank, the governmertts and institutions providing financial support, and repre- sentatives of the recipients of ESMAP's assistance. The ESMAP CG is chaired by the World Bank's Vice President, Finance and Private Sector Development, and advised by a Technical Advisory Group (TAG) of independent energy experts that reviews the Programme's strategic agenda, its work program, and other issues. ESMAP is staffed by a cadre of engineers, energy planners and economists from the Industry and Energy Department of the World Bank. The Director of this Department is also the Manager of ESMAP, responsible for administering she Programme. FUNDING ESMAP is a cooperative effort supported by the World Bank, UNDP and other United Nations agencies, the European Community, Organization of American States (OAS), Latin American Energy Organization (OLADE), and countries including Australia, Belgium, Canada, Denmark, Germany, Finland, France, Iceland, Ireland, Italy, Japan, the Netherlands, New Zealand, Norway, Portugal, Sweden, Switzerland, the United Kingdom, and the United States. FURTHER INFORMATION An up-to-date listing of completed ESMAP projects is appended to this report. For further information or copies of ESMAP reports, contact: ESMAP c/o Industry and Energy Department The World Bank 1818 H Street N.W. Washington, D.C. 20433 U.S.A. BOLIVIA HOUSEHOLD RURAL ENERGY STRATEGY JANUARY 1994 E5XCHANGE RATE US$1.0 - Bs. 32 CONVERSION FACTORS USED 1 ton crude oil equivalent (toe) - 42 GJ Eadl Mlkg Charcoal 29.0 LPG 4I.7 Kerosene 43.5 ABBREVIATIONS AND ACRONYMS CDR Consejo de Desarollo Rural COBEE Compana Boliiana de Energia Eldetrica DEFER Drecci6n de Fomento Energetico Rural DGH Direoci6n Genera de Hidrocarburos DINE Direcci6n Nacional de El3cticidao ENDE Empresa Nacional do Elecrifcidad S.A ESMAP Energ Se Management Astae Program lIALCO Instituto Nacional de Cooperatimas MACA Ministeio de Asuntos Campesinos y Agricultur MEH Ministedo de Energfa Hidrocarbutos NGO Non-overnmental Organizton YPFB Yacimientos Petroifferos de Fiscales Bolivianos TABLE OF CONTENTS pjgg INTRODUCTION EXECUTIVE SUMMARY L BACzKGROUNnD .......................................... l A. Economic and Demogrphic Trends ..... ............ ............. . ... 1 Physiographyand Population .......... .................... .1 The Bolivian Economy 2. ... ....... . . .. ............. . . ... 2 B. The EnergySector .3.......... . .... ... . . .. . . 3 Eneqy Demand .........................3 EnerV Resoures and Supply ........ SectorInstitutions 5... C. Enea Poi.y Objectives ............ ........ Geneal Objectives.. ......................... ..... . 6 perational Objectives ........................... ............ 6 Household EnegyI Iues .7... * ....... .......... 7 IL URBAN HOUSEHOLDI) ENERGY DEMAND .. ....... . ......... . ... 8 A. Socio-Economic Profle of Urban Household Enery Demand ................. 8 B. Evoludoninthe Prices of Household Fuels .............................. 10 C. Trends in Urban EnergyDeimand .. ............. ......... . 11 IIL GOVERNMENT POLICY FOR URBAN HOUSEHOILD ENERGY ............ 13 A. 'Me Economic and Fnancial Cos of Urban Household Fuel ................ 13 B. Fuehwood ...................................... ... ............ . 13 C. Eectriciy ... ........... 14 D. Hydrocarbons ..................................................... 15 Kerosene ...................................................... 1S LPG ............................... I........................ 16 Natural Gas Disibution ... ... .. ........................ ............. 17 E. Non-PriceMeaures to romot EEnergy Savings . ..................... 18 IV. GOVERNMENT1 1'POLICY FOR RURAL ENIERGY ........................ . 20 A. Ihe Rural Ecom,y ............... ............... 20 B. Socio-Economic Determinants of Rural Household Energy Consumption ....... 22 Rural Levels of Incme ... *.. ....................... 22 Local Awallab,ityof Biomasw . . . . .. . . ............ 23 C 'heStuctureofRural Household FuelConsumption ................... 23 Conusmption of Dung for Cooking . ............ 23 Fuehvood ................................................... 24 Kiersene .................................................. . 25 LPGtent of R t rfcto . . . . .... . . ...... . . . . . ............ 25 EUmet of Rund ' rEadon.. :................ .. ... 2S D. Ruand Productive Demand for Enery ..... . ...... ................ 26 Productive Demand in Agricldture .................................. 26 EnerV Demnnd in Rural Industies ................................. 27 E. Ruand Enery Po4y and Investmnent ................. . ................ 27 V. POUCY AND INSTTrTEIONAL ISSUES IN RURAL ENERGY .............. 29 A. 'he W - nImplicationsof Incrased Consumption ofBiomassFues ......... 29 Diftu...*n of Improved Household Biomasstoves .. .................... 29 Enero Savinp in Rund Industries ......... .................. . 30 ReforestationPtoject ............................ 1........ .31 Measurs to hmrove the sup* of Lpo ... ... .... ....... . ..... . 32 B, The Weuiem Eainof RuralElechSiration ..............3 lhe Cost and Benefits of Rural Eer aon .................. . . 33 Household Benefit from RundrlElectrcatin ........ .............. 35 Promoting he Use of Modern LPG andKerosneIAmps in Low-tncome Househokl .. ... 38 Options for Pre.Electification ..................................... 40 Meauresto ReducetheCost of Rural .E. ifaon .............. 42 C. Least-Cod Options to Cover the Productive Demand for Energy .. .... 44 VL STRALTEGGY FOR RTJRAL.ENtERGY PLA.NNING . ...................... . 46 A. ThehDefiition of a S aegy ................................................ 46 B. Poliy Objectives and ogrmns for Rural Energ .............. ........... 46 C. Prviding An Efficient tuo Framework for Rural Energy Pnning ...... 48 Principlesfora Rationall ontutionalFramework . .. . -............ ........ 48 Division of Labor betwee the MEH and MACA .................. .... 48 The Vertcal Dvision of Labor in Rural Energy Planning and Implementation 50 Reorganization of the MEH ................. .. * ............... t 51 D. Methodology for the Preparation and Implementation of Rural Energ Projects .. 52 Preparation and Implementation of Rural Energy Programs .............. 52 Preparadionof Micro-Regionaland Macro-RegionalEnergyPlans ....... ... 53 E. Implementaion oftheStrategy-The Next Step ........................... 53 ANNEXES k Consulant Reports Prped for the State ... ................................ . 54 II: Tableson UrbanHousehold Enery Consmption ........................... 56 m..: Optionfor Rund WLP Supply ........................ ........ ...... 58 Iv: EnergyintheSugarIndusuy ....... .................................*... 64 V: Energy Denand in Rural Industries ............................................. . 66 k Eipeiencewiththe.Disemnation ofImproved Househol StovesinBo . .ia....... 69 VI: Ehperence in Bo"vwith Reforestation Projects ............................ 73 VMI: ProductiveDemandforElectricityin Rural ...on . ................. 75 IX: Estmation of Consumer Surplus in Rural Elecrification Projects ................ 79 X Rural lncme and Credits in Bolivia ..8.. .............................. 8S XI: Options for Isolated Systems-Dentro Thermal Power Plants.................... 88 XIik AreasWith Favorable Mini-Hydro Potential ....... .. ............. 89 XmI: Amessment of the Potential Role of Wind Power .. . 95 XIV: he Regional Energy Plnning System in Bolivia . ................. 100 XV: Simulation of the Cost of a LPG Lamp Promotion Program ................... 105 TABLES 1.1 Pysio.Ecological Zones in Bolivia . ................................. 1 12 Strure of Final Energ Consumption, 1989 . ........................... 3 3.1 LPG Prie Structure .... ........ .......................... 17 3.2 Natural Oas Price Stcture ....... ..................... 18 4.1 Rural Family Incomes and Debt C-apacity ................................. 22 4.2 Woodfuel Resources in Bolivia . ...................... ........ 24 5.1 Rural Household Demand for Lighting ................................. 36 5.2 Economic Benefits of Rural Elctrifiation ........................ ....... 37 FIGURES 1.1 Composition of GDP, 1989 ....................................2 2.1 Average lncome and Expenditure by Ppulation Quintile .......................8 2.2 Urban Household Energ Consumption by Fuel. 9 2.3 Income Elasticity of Household Fuels............. 10 2.4 Income Elasticity of Household Energy ...................................- 10 2.5 Household Enerty Prices 1980-1989....................... 4............... 11 2.6 Evolution of W rnDenand ............... 11 2.7 Evolution of Household Eleticity Denand . ......................... 12 3.1 -he Econonic and Fina a Cost of Cooking ............ . ... 13 3.2 llYPG3 Deand-Supply Balance ........*........... 17 4.1 Ruralnhome Dirbution ....23 5.1 IlPGLamnp PromotionlProgmai ............... ......... 39 INTRODUCIION In recent years, the Bolivian Government has made substantial progrs in estr and lbealizing its national economy. As this progress continues, authorities are focuing on the need to further ratonalie ctial economi subsectors to promote sustainable grwth and balanced development 'Me urban and rural energy sectors warrant priority attention in the Government's restructurg effort. Reflectig the low level of per capita income, Bolias per capita enerV consumption of 300 kgoe is low relative to global (1500 kgoe) and Latin American averages (1000 kgoe). In addition, the significant qualitative and quantitative differences between urb and rural energ consumption hihligt the need to estabih a national energy strategy which can both moderate the increasing disparities, and foster energy production, conservation, and environmental int. ihe ESMAP/MEH Sousehold and Rural Energy Project" has focused on the critical poly and insitudond e ing the Government during this transitional period. 1/ it rommendations reardig the neglected rural enerW sector, in partbiuar, define a strate which Wi improve resource allocation by providing priorities and coherence for rural energy planning work, and improve the effciency of project implementation. Importantly, this strategy wl greatl improve the qualiq of life of thousands of nural households through improved lighting more efficint cooking techniques, and greater aocess to electical power for household and industrial tu. I/ Thh rpd wa_ prepared lowig a sari. of vi to Bolii beween 989 ad 1990 by wu Word Bak/B P amdoes The WMA mossd e£W . oW steM t (Miio Lead) Who Wamitd by W. F1wor(Selo r E PI ). The nancon_ hduded Moem 0. Vo otnm(orfty SpaI F. DotOa, C S.vll*u, (bnt D _tupla Spedac), L ClB (Economi), . Dpdo e (Wa Em Spedalat), P. Hv**Wd C. SW, . G um (EMey Planning Spo ), AL Mams, R. Ono=o M Eecrfaion SpoaSs), W. Matthlwd 3. C.rn (nas SpocdaH), C. Ml (Rua Crd Spocl C Raboo (Econot), A. Tarnwle (Aohol Fuel), Ta , AL VrodT (SolW Er Spclis) ad 0. Vadlnd (Ruwal B and Hydropower Speclit). Mr. L. Mulnq aso proded aste_ on mul i ectrin tdon laws Mr. J. Dum sowd a in..un coordiwtor for the dutioan of ot u4. Ib mbdon is ptel for th very ecie ooopeation from the Mierlo de EneWab e droaus MB), mid the Mnsbe do Agrcutr y Asuntos Ca4mpi (MACA). EXETIVE SUMMARY 1. This tudy anaymes the issues that need to be addressed to mmize the cost to the economy of the supply of household fuels as well as to minimize the financial cost to household and busineses of the various foms of energy. In addition, the report discmes the appropriate rol of Government In parcuar, how to sengthen the Govenment's capability to better formulate, monitor and acust polices and projects designed to seve its energy policy objectives To that de, its sts out a household and rural energy strategy, based on the Government's ongoing efforts, that aim to bring about a better level and strucur of energy pricesand better dtribution of acooss to energy by rural households than is presently the case. ThI strategy is the resut of a coaborative effort, begn in 1989, between the Government of Bolivia and the joint UNDP/World Bank Energy Sector Manaent Assistance Program (ESMAP). It was financed by the Government of the Netherands. 2. Ac= ChametedsThe household energy sector is the lrgt of al energy consming sectors in Bolivia. Households account for 44% of total eneg use, conaumg about 30% of all modern energy (42% of electricity and 20% of petroleum products) and 95% of taditional energy. The household sector is also the fastest growing sector with regrds to ee y (7.7% annual rwth rate) and LPG consumption(6.7% p.y.). Kerosne onsumption fell by 13% per year duriqg the 1980s, partly due to the rie in consumtion of electicity and LPG, party due to the Government's dmand restricting poliy regpafing kerosene. 3. nwmgLiudnz nda and pattrna Bo1iia annually consumes about 2.1 mlion toe of ener. Its per capita energy consmption of 300 kgoe is low relative to wolwde (1500 koe) and Latin American averages (1000 kgoe). Within the urbar areas mainly modern ener forms ae usd, viz 93% of urban househods use electricity; 87% LPG and 11% kerosene Biomass fuels ar hardly used by urban househols in fac, only 10% of urban households use firewood. Rurl houweholds mainy (90%) use bioe Dung repreents 20% and wood some 70% of nrual enery use, the remainder being represented by modern fuelL Some 50% of rural househokl have LPG cookers, althogh LWO is used only as a suppementay fuel, mainly for cooking purposes. Keen is used both as a cooking and lighing fuel, because only some 15% of mral household have acos to eleciity. In addition, candes are used by the poorest rwal households for liting purposes. 4. In urban areas, electicity demand is expected to continue to rise due to urban population growth and prbably rising per capita incmes Kerosenedemand is expected to sagnat or fal, whle urban dmannd for LPG is expected to grow with the rate of populaion gowth, becaue the urban market share is dose to satuation. The use of natunl gas in the domesd sectr wil depend on [i investments in distribution, [i pici poliy, and l[ilj generd economic development in Boliva But gen the lead time for the construction of a distrition system and the rate of urban popuation growth natural gas wil not make a major impact on household egy consuptionI duing this decade To bold urban LPG use consant (in absolute terms) the reddential gas connection rate would have to be quadrupled over the projected 1990.95 ratel In rura areas LPG, kerosene, and electicity demand is expected to rise moderately, if consmers are gv reliable acem to these fuels Ho8sd_od and Ral nergy Sbtateg Pap a S. pike =kn5lhe high level of use of modern foms of energy due to a combination of rising incomes, increased availability of LPG and electricity, rapid utbanization (5.4% p.y.) and a low prices of LPG, kerosene and delericity. The ai-fold oinceae in the price of LPG since 1985 has not changed this situation. Moreover, the electricty tarff remains at about 56% of economic cost The current prioe of LPG (0.85 Bs) is above economic cost (0.73 Bs), which b expeted to rise even further, (1.06 Bs), because of the need to import LPG to meet internal demand. Natural g, if it were available to residential consumers has the lowest financial price. However, the commercial viability of natural gas distribution to the residential sector depends on it competitiveness, which means that i pne will have to doubled. 6. Seor . MEH is responsble for formulating energy policies and for reguating the activities of the sector, eocept for forestry, which is the resonsity of MACA. However, due to lack of funds and qualfied staff, MEH is a veay weak ministiy that cannot propery cany out its functions, whether this be in the field of household energy or in the area of epot of natural gas. DINE of the MiWH regulates the power sector, including the determitin of the tarff DIFER is responsble for rural elecification. ENDE and COBEE are the primaty ntities authorized to develop and operate generating and banmion facilities. ENDE is responsble for planing and coordinting all power system exansion - generation and transmission - an the nationl level Y1PFB is engaged in all phases of the hydrocarboit M-usty from eploration to drilling, produion, refining, md marketing. Distribution of oil products is increasingly beig left to the private sector. Biomass fuels are collected free of charge by the rural population from their own and common lands, although some are traded through the informal sector. 7. ErDkIem Despite its mportance the household energy sector has not receved the poliqy attention it deserves. Because of its size and its growth rates and overall energ cons paerns the sector has a key role in determining future supply and demand trend Speci.l, the growing use of electicity may have large macro-economic reperauioL e hWgh degree of direct Govemaent involvement in the urban household energy sector helped to achieve some important rem s Yet, its high cost, due to an inadequate pricing poliy and subsidies and its urban bias, as well as limited private sector partcation in the sector, demonstrates that long-term progress wiV depend on the redefinition of the balance between the use of direct Government intervention and the ue of policy tools that use the market mechanism to acheve the Goverment's desired energy policy objectives Two principles should shape this balane: [i] Govemment intrvention is justified only where market failures block the achievement of program objectives; lie where such circumstances exist, and where legl and/or institutional obstacles are the main obstacles, it should be determined whether their removal would be more costefective than direct Goverment interntion As a general rule, the Government should be responsible for guiding policy a shaping public awareness, supporting energ R&D, securing funding for information and education amps and monitoring progress Private sector investors, including NGO's, should have primary responsibility for implementing the strategy. Hosedold and Rual Ener Srate poep 8. As far as the urban household enerV sector b conoered the badc quesos arm: s the suctnre of supply is adequate for the needs of the ban populadtions, and [i is pricing policy and regulation promoting the welfar and the objectives of the setor? lk_ahom1wMa 9. The Governmnit's urban household energy polc s basicaly sound. The urban sector is reatively well-regulated and wellerved as evidenced by the high Inc e of urban LPG and electrki rates. The two most Important supply-side Lsues for the 1990s-the rewal of COBEE's concession anJ the introduction of natural gs in the rsidenti area-hve eter be solved or are being addressed. A few loutw on the demand side, however, mei attention. 10. The first isue is the Government's household eneg prcng polcy. Both the leels and sucetu of household energy prices In Bolivia are still Inadequate, notwitsanding cdhangs introduced since 1985. Energy pricing poliqy is sti aated by a cost plu8s stem controlld by the Oovenment, instead of greater compedtion betwc-n fuels through market forces. Further strctural change in energy pricing policy thereore is necessary. Such a change in poic should also take into account: (a) The looterm strutl a4nustme- of enery supply in Bolivia. LPG demand wi aceed domestc LPG production sometime durir-g the second half of the 19908. LPG, therefore, may have to be importedl The estated cost of impored LPG will be higher (Bs. 1.06/kg) than the curent prke of LPG (Bs. 0.85/kg). For natural gas distribution to be finay vWiable and thus able to attract prlvae investors in the Vs dbution business and to compete with LPG and kerosene pries without subsidies, natural gs prices for the resdential and commercial consumers wil have to be ineased by at least 100% to US$630 per MCF. (b) The attainment of dasrbunl o _ bjectiMe. ITis sub-ise concerm interrgloa differences in t costs; the question of whether the natral ren of the favorable hydropower resources in the La Paz aea shoud acorue to the coumers in La Paz or be used to aco-subidize the expamion of power di tion to rural areas; and the progresive taxation of the energ cos o of higer income groups. For the poorest 20% of La Paz households, ectricit orre- sponds to 29% of household fud con t; in the highest 20% income up it acrresponds to 58% Thus, a first step towards the achiemet of an income ditibutonal objecive is to ta electricity at a hih average rate than other household fuels. 11. The Gover'ment should stimulate a politicl dialogue on the social and economic impact of the pdicy to cross-ubsidize household tariff with the industia and commercil con sumer tariff As far as ga ditibution is concerned, the Government should promote moro compettion on a commercial basis. Ihe basic equity issue of Bolvian household elctrty _Houdwl ad Rual Stratg Page consumption is that only half of the populadon bas acos to electricity. The nonelectrified segment of the populadon spends at least tW as much per month on fuels for lighting than the electrified households, but still has a much lower quality of lighting. Subsides for electricity con smption reduce the availabirty of finance for rid xanion and power capacity, and thus restict a laWe potton of the population's access to electricity. Secomdly, subsidies to urban households are given not only for badc consumption of electriity for lighting, but also to consumpdon of electricity for household appiances. As a result, a high-Income household receives a muc higher monthly subsidy tan a low-inoome household. For reasons of both effidency and revenue-raising the Govemment should limit subsidies (through a lifeline trif up to, for example 60 kwh/month) only to low-income households Tnstead a tax on electicity contion to finance rural electrifcation project could be conidered. 1 The seond Issue Is to define a strategy to deal with the antcipd LPG _d/suppRyp. Although urban and total demand growth for LPG is epected to be lower in the 1990s than during the previous two decades, demand will outstrip supply before the end of the decad even under the most optimistic of the present supply scenados, e.g the diswovey and deve- opment of new ol and ga fidds. Promoting natural ps as a subditute for LPG in the residential aea should cnntinue to be a key element in the Government's strategy to address the scarcity crii But it is sl not certain whether it will be possible to establsh a pricing strctu whih will cowr cost, alow adeqte marins to producers, transmittes and distibutors, and stM produce competitie ent.-user prices. Even i a competitive scheme can be developed during the 1990s, natal gas will have only a modest impact on the overall upply demand balano and wi requir elter a relatively igb level of subsidy financing during the market buildup phase or a substtial Inrease in the price of LPG and/or of natural as Ibis objective needs to be supplemented by a policy to promote more efiient use of LPG through the diffusion of improve WG stes and information on economng cooking pratice Go2erm=ep dt Duin te 1&MmConse=uen 13. Energy co tion of al hoseholds is mainly covered by non-traded bioma resources A minority of biomass consumption is covered by taded dung and firood which is supplied through the informal sector. Thus, in practice, there is no Govemment juriiction over biomss supply. LPG and electidc have begn to penetrate the rural market. But as rural incomes are much ower ($250) than urban incomes ($855 La Paz), We the Infrastructure and operadonal costs of commercial energy supply are higher in the runl area, the penetration of thee source of enerV has boen low and often unreliable. This situation gives rise to three issues: (a) To what xtent can and should Government take on a larger regulating role in rral energy? Household and Rural EnV Strategy Pae v (b) To what extent can the market for commercial enerV be widened by a more rational sucture of supply and institutional support? (c) Is the present structure of rural energy demand and supply compatible with the economic, enironmental and social welfore objectives of the Govrcnment, and if not, what level of subsidies (if any) are needed to bring about a more optimal stucture? 14. Rural household energy demand b four to five times as high as the rural productive demand for energy. Both are largely satisfied through sef-coliection of biofuels or through supplie from informal channels of distribution. The supply of LPG and of kerosene is relatively efficient, and about half of the rural households have LPG cooker In this environment, the MEH seem to have had difficuty in enisaging a regulatory or interventionist role in the rural energy sector. During the 1980s, annual public investments in rral energy projects were less than US$ 4 per rural inhabitant and were directed almost exclusively to rural eection projects. NGOs stepped into the void created by the absence of public initiatives in the sector and started to develop renewabe energy technologies for use in rural areas. 15. During the 1980s, the welfare gap between the urban and the rural households, each comprising half of the Bolivian population, widened as no action was taken to correct for imperfec- tions, inter alia in the rural energy market. (a) Whereas the penetration of LPG and dectrity in urban households inaeased from less than 50% to more than 90% during the decade, only 10% to 20% of rural households have access to electricity. (b) LPG cookers are found in about 50% of rural households, but are used mainly for secondaty cooking tas due to financal constraints (c) Most of the non-electrified households use candles or widc kerosene lamps to meet their needs for lighting, although the use of LPG or presuized kerosene lamps would result in both lower fuel costs and a sbstatialy higher quality of lightin (d) Potential productive rural demands for energ are not satisfied because of hie absence of appropriate technology and/or financing meanism While several NGOs and university insdtutes have made laudable efforts eperimenting with now technologies, they have lacked the resources both to base their development effort on proper market research and to dseminate, on a large scale, technologies that are mature for commercial application. H Mhd and Rwal EneD Statg Pp Vi mhm T1 the 1990s 16. The MEH is rural energ strates for the 1990s should: (i) incroaseresource alloca. tion by providing priorities and coherence for rural energy planning work; and (ii) improve the efficiency of project implementation by providing a more rational framework for rural energ planning and implementation. To increase rwal electrification rates through the etension of the electric grd will demand high levels of investment to make an inpact as well as per connected bousehold. The Government should carefull evaluate whether the benefits of rural electrification are justified by their high economic costs. The Government should note that the argument for subsidies to rural electrification substantialy underetimates the rural population's willingess to pay for electricity. 17. Resource allocation in rurad energ can best be optimised by concentratir- effors during the 1990s on the implementation of programs that address the welfare needs of the majority of rural households for improved lighting and cooking tehnoloies The following programs have ben listed in order of priority and would aim for. (a) to lower the cost of lighting, while inreasng the quality of lightng levels for househos, auie the electfied areas the access of LPG lamps will be facilitated for households that presently use kerosene lamps or candles to satisfy their ligng needs. 1 died areas. to provide low income households access to elecicity through a program that will provide credit to fiance their connection cost; (b) to reduce the cost of rural electrifiation projects through the deveopment of lowcost minihydro schemes and the promoton of rational approaches in project prepatraion and implementation; (c) 30% of rural households to use improved stoves through the introduction of improved Idtchen designs to reduce fuels needs and increase the consumer's comfort level (see figure 5.6 and Annea V); and (d) 10% of rural households to be supplied with LPG through detralied rural bottling plants 18. Reaching these objectives will require that: (i) the Government create an environment favorable to private sector investment and participation in the energy sector: and (ii) undertake invetment activities to implement the rral energy strategy with the help of foreig asssance The high priority investment opportunites are set out In the table. Houehol and Rual Eerg Stategy Pos v Project Tide Total estimated Number Implementation cost in USS of people period affected Rural lighting 20.0 million 1.500.000 1993.2000 Mini-hydro 5.8 million 40.000 1993-2008 LPG bottling 1.0 million 100,000 1993-2000 hnpr. kitchen 2.5 million 5S00,000 1993-2005 Total 28.3 million 2.140.000 Progam -! SatIyng the demand for lghtin 19. Government policy for the satisfa 2on of basic lighting needs has focused exlusive on the implementation of rural electrification projects. But, rural electrifcation, which involves high and increasing costs, is a reaistic option for no more than those 30% of mral households that are located in relatively concentrated rural areas. A continuation of the policy wil be costl in tem of investments and in subsidies and will only benefit a small minority of the rural population, while nothing is done to improve the energy situation of the majority of the rural population which lIe outside the electrified areas. The estimated marginal cost of rural elctrict y e for cooldng and lighting are higher than tose of kerosene and LPG based on the same end-use. These costs range from USs12-37/kWh to USO3-44/kWh respectively. While rwal electrificaton can be diffcult to justify financily or economically whn oriented solely on household lightng and cooking, the viability of expanding the rural grid can be augmented if productive end-uses can be strengthened and/or developed (coupled with national tariff regimes). While a small minority of the off-grid households can afford the purchase of a diesel or gasoline-powered stndalone generator, the majority meets the demand for lighting by using kerosene wick lamps, candles or LPG lamps. Field studies in a non-electrified area in the Yungas showed that this structure of con- sumption penalizes low-income households, financialy, through a higher monthly bill for fuel expenditures, and qualitatively through the provision of low levels of lighting svices. These studies have shown that: (a) 20% of the rural households which used LPG lamps were able to enjoy a level of lighting consumption that was equivalent to the lighting consumption of eletrified households in neighboring villages and for a similar monthly fuel cost; (b) 50% of the rual households which used kerosene wick lamps paid twice as much monthly on lighting than electrified households for a level of lighting serves that was one-sixth of the consumption of poor electrified households; and Hoehold and Ruml EeD S8trev Pag Vii (c) 30% of the rural households who used candles paid three times as much as a poor electrified household for a monthly lighting consumption that was 20 times lower. 20. As these households are located in the same area, the use of kerosene wick lamps and candles cannot be at -ibuted to a supply problem, but must be due to the existence of a cash fow problem that prevents the acquisition of a LPG lamp: (a) Ihe financial value of the monthly fuel savings of about US$ 4.4 during the 3.S years lifetime of a US$ 40 LPG lamp will provide a candle-using household with an IRR of 124% on its investment. If the acquisition is loan-financed, the yearly savings (fuel savings minus amortization) amount to US$ 38, which is equivalent to 7% of the average yearly income of the poorest 20% of the rural households. If two lamps are purchased the annual saving drops to US$ 28 and the financial IRR to 50%. In addition to the financial benefits, the candle consumer will obtain a welfare increase from the increased level of lighting consumption that can be estimated to have a value of US$ 157 per year. (b) A household using kerosene wick lamps that purchases two LPG lamps will obtain a financial IRR of 55%, and annual savings of US$ 14. The economic value of the benefits from the increased level of lighting is US$ 81 per year. 21. This non-rational structure of consumption represents a major market imperfection, which warrants Government intervention. The first priority in the rural energy sector is to imple- ment a program to decrease the cost and to improve the level of the lighting consumption of the low-income households that rely on cancles and kerosene wick lamps: (a) In non-electrified areas, the program should aim to reduce the use of candles and of kerosene wick lamps as primary lighting sources to less than 10% of the households by providing loan-financed LPG and presrized kerosene lamps (b) In presently electrified areas, the progrm should increase the connection rate of kerosne and candle-using households in the area of service to more than 90% by making loans, not subsidies, avaiable for the financing of houehold connection osts. 2/ 2/ There is a lack of concensus among the experts as to the interpretation of the demand cuve for lighting and the conclusions derived from it of estimates of consumer surplus. Te authors of the report view this cure as a lighting demand curve, while other aperts consider it to be merely a plot of unit fuel costs against monthly household use of four fues for lighting at different levels of consumption and expenditure and not a demand curve (see Annex DE). Household and Rwual Enu Strt pop 8X 22. Such a program for the 1992 to 2000 period can be hmplemented through the etablishment of a US$ 10 million revohlng fud, and a yearly provision of USS 300,000 for the adminstration of the program. The RDCs will be responsible at the regional level for identi4f the target group, fixing annual targets for market penetration, and monitoring the results. Most of this work can be done through subconacb with NOON, while the development of the market and the provision of loan finance should be done through the merchants that already sell LP lamps and through the power distnbution cooperatives. Ihe program wi improve the lighting stuation of more than 300,000 households and reduce the annual lighting cost of these households by about US$ 5.8 million. 23. For households outside the electriflable areas which currenttly use LPG lmps, the program will: (i) support the establisment of commercial fims that diseminate PV-sste and PV-lanterms and provide for the servicing of the systems after their acquisition by consmers and (ii) support the diffusion of the ystems by a combination of loans and subsidies to the comer Propr 2:Dvlomn of otefcn mcr o ad m1n1-iydm ordeds 24. The substantial ivestment needs of rral elecr tion projects make it iprtive to maximie the potential for cost savings and the benefits from the aviability of electricity. To this end, MEH should, inter alia, implement a program that aims to realize to exploit cost-efficet micro and mini-power schemes. 25. Some 65 mini-hydro plants with A total capaciy of approximately 80 MW are in operation. Half of these units are used for mining, the others are for wurban' use, of which some have combined mining/urbn uses. Further expanson has bee resictd by the low poultion densi in ars with high physical mini-hydro potential 14% of the national teritoy has minir hydro potential whie the optimal stes are located in 5% of the national territoy. In the latr, only 66 communiies wth between 100 to 2,000 inhabhants could be identfied These communites permit the development of sites in the 20 to 100 kW rang. In addition, some sites can be deveoped for isolated minin projects and saw mills. Finally, sm agro-pocesng uses can be identified for directshaft mini-hydros, eg. coffee. Thirty optimal projects have been identified with costs per kW in the US$ 1,200-1,500 range. Total investment volume of these projects is US$ 5.8 million, and their total capacity i 43 MW. Assuming a load factor of 17% the epected en cost wi amount to US$ 0.10/kWh. Over the next 10 to 15 years it is estiated that thee is a market for the development of 100 micreplants and 10 mlniplants with a total capacity of 3.5 MW. These project can provide electric to 40,000 persons. Pogrm I: rcasdtWin ae of enmy1 cookng 26. The widespread use of fuewood and dung for cooking does not result from a partular preferenoe for the fuel, but from the low levels of income in rural Bolv which forces Household and Rural Ene Strate Par I the households to rely on ree' fuels. Local scarcities of fuelwood lead, first, to the consumpdon of dung as a fuet then to a switch to LPG and kerosene cookers. Roughy SO% of the rura households currently have LPG cookers, although LPG is used mainly for secondary cooking taskL The present system of supplying LPG in cylinders by uks from the urban bottling Wlants is relatively efficient, pehap a more widespread use of LPG in the rural areas can be served better by a more decentralized system of LPG bottling. 27. The objective of energy policy in this area is to improve the comfort and the environmental compatibility of the continued use of biomass fuela The policy should also ease the process of transition towards the use of modem fuels by modernizing the system of LPG distribution to the standards required by rural mass consumption. The proposed program has two components that aim: (i) to test the feasibility of promoting the use of more efficient stoves through the promotion of improved kdtchen designs," and (ii) to implement a US$ 1 million pilot project involing the establishment of two decentralied systems of LPG botting and distribution in rural areas 28. The justification for the decentraized LPG botting project is the following Although Bolvia boasts of one of the most comprehense L supply and distribution sytem and most LPG-intensive economies in the world for its GDP per capita level, there are apparent shortcomings and less-optimal operations which could be improved upon. There is still wessive centralization of the bottling function, the lack of supply reliability (particularly in peri-urban and rural areas), and excessive centralization in an institutional sense. For, YPFB not only owns and operates the production, wpply and storage faclities, but also the bottling plants, and s even involved in a limited way in cylinder distnbution. The LPG supply and distrbution systm would benefit from an institutional restucturing by limiting YPFBs role to the gs sWply function, leaving distribution in bulk and bottled form to the private sector. Also, a strategy of bulk distnrbution through the establishment of small decentralied botting plants should be actively pursued This would mean the supply of LPG in bulk to a eries of rura networks consistng of smaa, simple storage and botting stations that each serve a specific rural population oenter. The networks will improve the stabflity of supply to the immediate areas and reduce cost, because they decrease the average distance between the botting opeation and the consumer. In view of posible higher future cost for imported LWG such cost reducing policies should be vigorously pursued. 29. In order for these progams to be surcesl a credible effort is requirec, both financally and institutionally. his implies, inter alia, a sustainable system of long-term financial and technical support which means that ptogram implementation, including a consumer lending mechanism, should include prvate sector par on. Such long term support for the rural electification activities can be provided, in rticular, through the Electrification for Alternative Development Project and its implementtional arrangements initiated by USAID. Similar institutional and financial arangents should be developed for the sale and disbution of LPG and kerosene lamps including private sector participation. The LPG pilot botding plant project should be executed and financed by the private sector, although credit should be made available, to help investors overcome their urban bias by demonstrating the rural operation's financal Household and Rual E aergy Strategy Pape id viability. A change in Government poliy to transfer the LPG botting function entirely to the private sector would create the right clmate for the private sector to take an active interest in the exansion of the energy servie system into rural areas The improved kitchen design project, for which donor finaning should be sought, can be executed in tandem with the expansion of the LPG distribution and botding network in the ruraL 30. In addition to these high priority investments, the study has identified a number of supportive activities that aim to improve (i) the quality of project selection, preparation and implementation in general; and (ii) the economic and financial viability of rural electrification projects in partiular. These supportive activities are set out in the table. Prawect tle Total estmated cost (USSM Implementation nerlod Project prioritization 1.0 million 1993-2005 Water pumping study 0.5 million 1993-1995 Kiln improvement 0.5 million 1993-2000 RE seminars 0.1 wilion 1993-1996 Productive RE use promotion 0.5 million 1993-1996 Reforestation study 02 million 1993-1994 31. The impact of the exin and the potential productive demand for energy in Bolivian agriculture on the national energy balance is low. But new technologies that make beter use of available low-cost potential energy resources can make an important contribution to improving the economic condition of Bolivian farmers. Unfortunately, the efforts to develop now nergy-related rural technologies in Bolivia have: (i) blced market focus, (ii) been too loclized, and (iii) not been upported at the national level by dearly-defined goals and the financial bang necessaiy for large scale, market-oriented technologies. lTe concept of the "Project cycle' that comprises the whole chain from project identification, preparation, appraisal implementation, monitoring and evaluation of the reults of a project is not well understood by even the most professional of the NCOs Efforts have mostly focused on the technical testng of equipment, while the testing of methods for a larger-scale diffsion of sucessu technologies has been neglected. 32. The program in this field seels to strengthen the promotion of new water-pumping technologies by basing the initiatives on !management by obRjectives." This involves: (i) focusing efforts on the development of technologies that have genuine market prospects, (ii) setting tawets for their market penetration, (iii) defining apprpriate financial and institutional mechanisms for their effective diffusion in the market and (iv) carefull monitoring and evaluating the results of the projects The MMH and MACA wM need to colaborate closely on the implementation of the pro- jects; the MEH can support the technical work, MACA the diffusion worL Since the demand for lIoudKod and Rural EnergV Strategy Pe z energ for water pumping is likely to be the fastest growing segment of rural productive energy demand during the 1990s, testing and promoting of successful technologies in this area will be a key priority. Process for the low-cost drying of crops are another priority area as well as the reduction of fuel use in the energy-intensive rural brick industries. 33. To improve the financial and economic viability of rural electrification projects, MEH should implement a program that aims: (i) to increase the quality of the technical-economic feasibility work for rural electriftion projects; and (ii) to promote the productive demand of rural electricity. These objectives can be realizad through seminars for public and private sector staff involved in the planning and implementation of rural electrificaton projects on least-cost designs, and the use of demand analysis as a tool to fine tune project designs. Also, a pilot project to promote productive uses of electricity should be implemented to test the cost-efficiency of new approaches to tace this issue. 34. Finally, concemn about the pressure on fue1wood resources in certain areas of BolMia has led FAO and some bilateral donors to implement reforestation programs that icporate energy use as one component. Unfortunately, these projects are not based on a vie concept for sustainability. Therefore, there is a need for medium- and long-term susainability of energy-related forestuy projects. £hgf nte Framework for Rura En= Pannn an : VIM I_ 35. Ihe second objective of the rural energy strategy is to improve the efficienqy of project implementation. To achieve this objective, the framework for rumral energy planning an Implementation must be reformed. While MEH formulates the general objectives and goals that have to be reached, the local implementng agencies should define how the goals can best be reached in individual areas. In the proposed system: (a) At the strategic level, MEH in consultation with MACA would have four tasks: (i) formulating the objectives, the policies and the programs for sector work, (ii) iden- tifying sources of finance for the execution of programs, (iii) preparing calls for tenders for the implementation of program components that ace carried out at the national scale and selecting executing agents, and (iv) monitoring and evaluating the results of the polWies and programs (b) At the functional level, the RDCs would have four tasks: (i) regional Implementa- tion of the national energy programs, (ii) publishing the regional call for tenders for the selection of regional executing agencies, (Ii) preparing the plans for the implementation of 'coDlective" energy systems in their regions, such as rral electriicaton projects, and (iv) monitoring the performanoo of the executing agen- cies in their regions. Household and Rua Energy Stategy Page Zia (c) At the operational leveL relevant NOOs, university institutes and private consultants would have two tasks: (i) executing the individual program compo- nents, and (ii) serving as consultants in technical advisory coWmittees during the preparation of new program proposals. The executing agencies would be selected on the basis of the quality of the proposals they have prepared in reponse to a call for tender. 36. COFER has been replaced by a small unit in the MEH, the "Direccion de Fomento de Energia Rural" (DIFER). This Direccion would be responsible for the four strategic level tasks defined above and, in addition, act as executive secretariat for the "Consejo Directivo de Planificacion Rural de Energia" which would be established with representatives from MACA, MEH, the Corporaciones de Desarrollo and the NOs. The function of the "Consejom would be to identify national priorities for interventions, investments, and policies for two to three year at a time on a rolling basis, and promote the coordination of activities at the horizontal level between MACA and MEH and at the vertical level between the MEH the RDCs and the NO0s. 37. However, due to lack of funds DIFER cannot yet function effectively. The structura reasons for this ineffectiveness (lack of funds, low salaries) will persist unless some action is taken. One proposal is to create a semi-autonomous, and technially well-staffed, Advisoy Unit inside MEH (similar to the unit that developed the National Energ Plan), that will be financed by a bilateral donor. This temporary Advisory Unit will train DIFER staf( prepare project proposals for the investment and supportive activites identified in this report for donor funding, assist to operationalize funded 'projects as well as the institutional arrangements recommended by this report. Also, to assist the "Consejoe in developing a methodology to achieve the objectives set out in paras. 1.23 and 1.24. Tbis Advisory Unit could function for a period of 3-5 years after which its functions can be taken over by DIFER lTis transfer should be facilitated by the fact that all actors partcipating in the "Consejo" will have improved skflls and abilities as well as proven methodologies and procedures to continue the tasks developed by the Advisory Unit. Finally, the Government needs to allocate sufficient funds to enable DIFER and the "Consejo to perform its fuctions effectively. L BACKGPOUND A. E_ and abic Trenads 1.1 Bolivia had a poplation of 7.4 million in 1990, half of which was rural (ie, lived In population oenters of less than 2,000 inhabitants acrdin to the definition ofINE, the Nadonal stica Institute). Urban population had grown at a rate of 5.6% per annum during the 1980h veru a total poplation growth of 2.6% per annum and a rural population growth of 0.8%. If the grwth rates for total and urban population continue, the share of rural popuation wil drop to 39% in the year 2000 and to 30% in 2010. 12 The natioral territoiy is large compared to the population and covers 1.1 mIllion khn. The territoty can roughy be divided into three major physiographic zones, with the following population and area: IAbleL1.: Physio-Bologicl Zones in Bolivia ._______ _ .*.% of area Population miL Population in % Hands (Altiplao) 16 2.8 38 Valle (Vanles) 19 3.1 42 Lowlands (Uaos) 65 1.5 20 1i3 'Me H RiWamb (AltUm at an average altitude of 3,800 m ams. are found in the westen part of the country, and =oprise major parts of the departamentos La Paz, Oruro and PotoaL Ecologically, the Higlands exbit both temperate and subtopical zones. 1.4 Te Yallys at an average altitude of 1,500 m a.m&.L, cross the country from TarIa in south to La Paz in north and comprise major parts of the deartamentos Tarija, Chuqusaca, and Cotiabamba. Eologically, the Valleys fal into temperate and subtical zones. 1.5 Te l&xlandg are found in the eastern and northastern part of Bolivia at altiudes averaging 500 m axi.L, and comprise major parts of Santa Cruz, Beni and Pando. Ecologially, the Lowlands are tropical in the north and varies from ubtWical to temprat in the outh. 1.6 Although populaton density per km2 is low, the pressure on arable resowurces is high. About 5.7% of the national territory is llakle but only 2.6% is crpped. past cover 30% of the territoy. Hal of the land area s Most forests are found inthe dinly populated northern and eastern lowands and extending into higher elevations on the eastrn side Houseold and Rua EDergy Strategy Page 2 of the mountain range. The remaining 15% of the territory is without any agricultural use. To promote a higher compatibility between potential agricultural resources and the size of the ppulation, Bolhvian Governments over the years have been encouraging migration from the Altiplano to the Lowlands. 1.7 Bolivia has the snd lowest GDP per capita in Latin America and the Cp4~O O Caribean; its per capita GDP was US$ 570 in 1988, compared to a regional average of US$ 1,840. During the three decades prior to the mid-1980s, the state was the dominant economic force in the economy. The larger mines were nationalized under the mangemntOf the state-owned Boliin e Mining Coirporation (COMIBOL). T'he state petroleum company YPFB became the sole . wcoessionaire for hydrocarbon exploration and development. The state set up numerous Pf productive enterprises and accounted for over two thirds of total investment and about a fifth Of f turin output. At the same tCme, private sector activities were largely EKLU Cwmposlt of GDP, 1989 Conditioned by Government decisions, through sidized credit programs directed at particular sectors, an extremely complex and protective sstem of taiffs and quotas, allocation of foreign exchange, and n: irketing boards and price controls for most ag 'utural commodities. 18 At the end of the 1970s, the limits of the state-led approach had become apparent. Continued economic growth was undermined by three structural weaknesses. First, the central government was extremely dependent on the external sector for its income: Export and import taxes accounted for over half of the Government's revenues. Yet the eport basis was eroded by: (i) an overtaation of the two key exporters-COMBOL and YPFB, which saw their investment pos- sibilities restricted, (ii) the collapse of international tin prices and (iii) the rapidly diminishing qualit of available tin ores. Second, central planning was unable to enforce rational investnent priories because of strong regional and interest group pressure, that resulted in costly "white eleph- ants and unsustainable heavfly subsidized sector development programs. Third, partly as the result of the first two characteritics, savinp in Bolivia were largely insufficient to finance the level of xpenditure. The consolidated public sector deficit continued to increase as expenditures rose and state enterprises, inter alia YPFB, were forced to keep consumer prcs at subsidized levels. House1l and Rual Eer Stt Pape 3 1.9 The combined result was a huge accumulation of foreign debt. During the first half of tie 1980s8 the Imblances resulted in negative GDP growth rates and yperinflation. he infra stucture remained poor. The desired strtwural change towards a more industialized economy was not achieved. The contribution of manufacturing to GDP was not higher in 1988 than in 1965 when it was 15%, (See Egumi 10. 1.10 New governments elected in 1985 and 1989 have taken full account of the need to reverse past trends. Government policies have suceeded in controlling inflation through monetary dicipline. Subsntial moves have been made to liberalize the economy and encourage the private sector. Negotiations and the purchasing of debt at low rates have contributed to a substantial reduc- tion in foreign debt. These policies have reversed previous economic decline, with GDP growth of 2.5% per annum in 1987-89, against -2% per annum in 1980-85. L mhe Eny Sector vM DoMUld 1.11 Bolivia annually consumes an estimated 2.1 million toe of energy. Reflecting the low level of per capita income, per capita energy consumption of 300 kgoe is low relative to worldwide (1500 kgoe) and Latin American averages (1000 kgoe). Basically, energy consumption in the urban centers is based on hydrocarbon fuels and electricity, whereas rural demand is covered principally by biomass resources. Because of the large size of the rural population kiomas energy covers about 40% of total final energy demand. Transport consumes more than half of final roem pro dsmanw Most of Slectic conmpinis consumed by urban households and thecommor- cial/public sedor (see akLJ.L). Table 12: Struure of Final Energy Consumption, 1989 Petroleum Products Biomass (fuelwood, animal Electricity dung, bagasse, charooal) Household/Commercial/ 22% 95% 60% Public sector Agricultural sector <1% 2% <1% Industry and Mining 8% 3% 39% Transportation sector 69% 0% 0% Total 51% 42% 7% ESj/ MAP project estimates. Household ad RIal EnerD Strategy Pae 4 En= Reure nd Sw1x 1.12 Bolmia is relatively rich in energy resources, which permits the country to be self. sufclent, and to export natural gas to neighboring countries. In addition to the kioma resources (woodfuels, dung and bagase), Bolivia's energy resources comprise (Some 18000 MW, of which only 300 MW has been exploited) and ail and gM (about 24 mtoe and 3.8 td respectil). fiu radiation is high, whereas the 1l resources are modest 1.13 As metal mining declined, the hvdrobon sector became the strategic sector for Bolivian development. Hydrocarbons provide the major source of foreign exchange earnings (31% of eport revenues In 1989) and of Government revenues (44% in 1989). An important inrtruc- ture exists in the form of transmission and distibution pipelines for white products and natural gas that extends to the major cities. But diiculdties emerged: (a) Production of petroleum liquids (including condensate) averaged 21,000 bpd in 1989, down from a high of 49,000 bpd in 1973. Ihis decline s attributed to well depletion, decining oil discoveries and obsolete machineiy. Oil exports, which were 32,000 bpd in 1973 have now virtualy ceased and a critical issue for Bolivia is whether it can maintain its current seMf suffideny in oil products through the 1990s. A reinforced exloration effort will be needed to discover new liquids reserves. Natural gs production accounted for 81% of national hydrocarbon production. (b) Domestic consumption of natural gas amounted to 0.014 TCF whes exors to Argentina were 0.18 TCF. But due to the disovezy of important gas deposits in Argentina, the interest of the Argentinean Government in Bolivian gas declined and the Bolivian Government was under pressure to reduce export prices. This intensified the efforts to search for altemative exports of gs to Brazl Finally, a scheme was desiged to export gas indirectly through the use of natural gas in a 525 MW power plant in Porto Suarez at the Brazflian border and the export of electricity to BraziL 1.14 lZne power sector comprises about 600 MW of capacity. Current power generation is evenly divided between hydro and thermal generation, the latter supplied by a combination of gs turbines and diesel engines. The countz's large hydro resources remain relatively expensive to exploit and gs represents the least-cost expansion solution in the medium term. Diesel generators and small hydros are the primay power sources for the isolated system. Small isolated systems and small, autonomous production plants account for nearly one-fourth of total installed capacity and represent 15% of total electricity production. H11_11dadd Ruril ErgV Stegy Page S 1.15 MEH is responsible for formulating energy policies and for regulating the activities of the setor, acept forestay which is the responsibility of the Minisay of Agriclture These functions are carried out by two main deprtments within the Ministy, one responsible for hydr- ocarbons (DOH), and the other for electric power (DINE). Power tariffs and petroleum prices are set by the MEH.l The 'Corporacion de Fomento Energetk Rural," COFER, funded through the MEM, is responsible for rural energy and alternative forms of energy. Overall sector planning is provided by the 'National Energy Plan" unit, which is a team of consultants permanendy" employed by the MEH. 1.16 Poer Sector reglaign. The National Electricity Directorate (Diroocidn Nacional de Electricidad-DINE) of the MEH is the national entity whih regulates the electric power sector. DINE adminters the national energy policies formulated by the MEH and related to the electic power sector, Including determination of electricity tariffs for all companies operating in the sector. DINE's regulatozy role is authorized through the National Electric Code of 1986, which also details aspes of concession contracts for power generation and distnbution. COFER is responsible for rural electrification planning but its current funding is only sufficient for maintaining basic office functions. The National Cooperative Institute (Intituto Nacional de Cooperativas-INALCO) is the regulatig body for all Bolivian cooperatives, including electric power cooperatives. 1.17 Generation and Trns ENDE and COBEE are the primary entities authorized to develop and operste generating and tansmission facilities Part of ENDEs mandate as the national power company is to assure the supply of electic power to all distribution companies, as well as to some ming and large industral consumers. The privately-owned COBEE isreponsible for electic power supply and distribution to La Paz and (bulk sales) to Oruro. In addition, the various regional development corporations (RDCs) pursue the development and operation of rural development projects, some of which indude power generation components, e.g, Cordepando in Cobija. 1.18 ENDE officially is responsible for planning and coordinating all power system epansion- generation and ansmissioo the national leved Ideally, the development and operation of new generating plants should be compatible with least-cost development plans prepared by ENDE. By law, all plants generating over S MVA must be operated by ENDE. COBEEs operation of large generation facilities is made possible through a grandfather clause in existing legidation. Enidties other than ENDE may develop and operate plants generating less than S MVA, as long as it is coordinated with ENDEs national plan. 1.19 . The state oil company, YPFB, is engaged in all phases of the hydrarbon induty from exploration, to drilling, production, refining and marketing Distribution of oil products is increasingly being left to the private sector. YPFB produces around 65% of Bolivias total gas production, the balance is producd by private contractors Tesoro and Oocidental (US) and Perez Company (Argentuna). Natural gas for internal market consumption has always R _Ssd-oU id Rual Eegy Stae Pop 6 been pplid exclusively by YPFB. In 1990, however, Perez Company began to supply around 50% of lntenal market needs. YPFB's sare of the export market is presently around 56%. C Eng Polc Objectv 1.20 In general tems, the objectives for en*r poli in Bolivia are: (i) to covea in ernal demand, (ii) to do it in the economic and environmental least-cost way, (iii) to increase eport inowme, and (iv) to provide financial revenues for the public sector. ,9=fd Obicives 121 The immediate operational oondusions from these objectives for post-1985 energy poliy were dictated by the needs of the stucura economic reform prom. First and foremost, the Govement had to implement: (a) meas that provided greater autonomy to the public energy enterprise and promoted private sector lntiatives (b) pricing reforms to increase economic efficiency, to improve the financial situation of the energy companies and to generate revenues for the state budget; and (c) investment projects tdat either led to ieased exports (the Puerto Suar compla of projects for exports to Brai) or to substitution of local consumption to free up spplies for xports (the etsion of natural gs distrbution into the commecl and household sctors). 1.22 As a resul, issues that were intsic to the energy sector were pushed to a SOA" level, wh as the need to: (a) address the welfare and poliy implications of: (i) the continued reliance of the rurl population on biomass fuels, and (ii) the low penetration of elericity in rural areas. (b) provide an incentive framework for enerV savings and operational effcienc, and (c) review, monitor and manage the environmental implications of eneW comption and investment. Hsebldd and R1ra Enearv Str Poag 7 Hob EnaL |ue 1.23 The basic question to be addressed is the same for both the rural and the urban part of a household energy strategy: What is the most rational struure of enery consumption from a maro-economic point of view? Because of the great qualitative difference between the issues of urban and rural household energy, they will be dealt with separately. 124 The energy consumption of urban households is covered by the 'commercial energy secor. bis sector is served by professional energy supply firms and regulated by public pricing policy, rule and norms. Here the basic questions are: (i) whether the structre of supply is adequate for the needs of the urban popuation and (ii) whether the public policy of pricing and regulation promotes the welfare and efficiency objectives in the sector. 125 Energy consumption of rural households is mainly covered by non-traded biomass resources. A minority of biomass consumption is covered by traded dung and firewood which is supplied through the informal sector. Biomas supply, therefore, ls outside Government juridiction. LPG and electricty have begun to penetrate the runl market. But as rural incomes are lower than urban incomes and the ifrasure and operational costs of commercial energy upply are higher in the rural area, the penetration of these sources of energy has been low. hib situation gives rise to three i8sues: (a) To what extent can and should Government take on a larger reguating role in rral energy? (b) To what etent can the market for Pcommercial* energy be widened by a more rational structure of supply and of institutional support? (c) Is the present structure of rural energy demand and supply compatible with the economic, environmental and social welfare objectives of the Government, und If not, what level of subsidies are needed to bring about a more optimal structure? Hoehold and Rural Ena State Par e EL URBAN HOUSEHOLD ENERGY DEMAND A. k Pfi of Urban Household Enr Demad 2.1 The urban population in Bolivia (persons living in villages of more than 2000 inhabitants) compried about 3.3 million persons in 1990, divided into 670,000 households. About three quarters of the urban population lived in cities of more than 10,000 inhabitants, and La Paz, Santa u, Cochabamba and El Alto made up about 80% of city dwellers he average number of persons per household was 4.6 and falls with increasing income. La Paz households in the lowes iome quintile include, on average, 5.6 persons; the richest one percent of households, 3.25 2.2 The average per capita income of La Paz households was US8$ 855 MNALIC EAUXNDW' and averag annual expeditures per capita US$996. aiMost of the urban house- .. holds can be classified as poor-80% of .. households in La Paz have an annual per . . . ... capita ioome of lessthan Us$ 850. The W _ . . .. . upper 20% of households have an average X income per capita of US$ 2,2S and per capitaexpendltumsof US 1,828.Te comprise the middle dass plus the richest ...... ... . 1% of the ppulation. (see EFL=1) R . T | The richest 1% of households in La Paz hae an average income per capita of US$ 13,437 and averae expenditures which are EFM 2.11: Arage Income and Expenditure by half of dtat With some tion, it Populati Qutile can be said that the average consumption pattetn of the upper 20% shows the future trend for the pattern of urban demand in Bolivia, wherea the conmption of the upper 1% is divorced from the medium- and long-term reality of the majority of the urban population. 2.3 The most prevalent household fuel is electic which is found in 93% of urban and 98% of La Paz households (see Annex I Table 32). LPG is used by 87% of urban households, and ker e by 11%. Chaacoad is hardly used at all and fehwood is used by 2% of the population in La Paz and by 10% of the urban population in generaL The urban consumption of woodfuels L/ Mmh Oius are rs from the World ank/INE financod soco4conomic sur of fai 1989. lhe Vllogta result of _pndkr beig hgher than Income, Iltas the difficultes in obtaining reable income data Hoehd incom is usu* underrepot by househo Th ^erefore ao the income dwa ftom the agwe quod in tX repost, there is no doubt t t# data on tot eseditum provide a more appropria estime of the lvd of inme for the lower inoome groups Hou0sehold ad Rmm EnrySttg e is low for a country of Bol's per capita income, whereas the penetration of LPG Vbf OSt os yFe and of electricity Is high. This is because 18 oa 9~O 0 wood resources near the urban enters are rather scarc and because the hyrolcti resources and the domnestic production of LPG are relatively cheap. Even in Trinidad, which has abundant wood resources, less than one fifth of urban households use fuelwood to any e_et. 2.4 Final urban householdWrO energy demand in 1989 was 317,000 toe, . which amounted to 16% of national final energy demand. Although use of electricity is more widespread, LPG was the dominant household fuel with 152,000 toe, electriciTy was second wi 126,000 toe, wherea kerosene and *other fuels* demand demand ito amounted to 14,000 and 24,000 toe. Ecofr o1 Urban Household Energy andpios 2.5 Whiletotal equppditureper capita trples between the lowest and the highesd income quintile, ener consumption in physical units of commercial fuels doublens the richest 20% of households consume 15.6 kgoe per month and per capita, the poorest 20% consume 7.6 kgoe (see Eas wl2l and formigh Income). The positive income eIast1dt of eletricitY con- smiption is high 4/, wheras LPG consumption inceases only little. and kerosene consumption fails with increasing income. 2.6 The high ncome elasticity of elercity demand is due to the superior quality and comfort of electricity in use with household appliances, such as refrigerators and freezers; and its excusive application in electronic equipment The high cost of these appliances puts them outside the reach of the majority of the urbn population. Because of the high urban conniection rate of elecicty, very few urban LPG and kerosene consumers use these fuels for ligting These fuels are, used lmost excusively for coodkngd Sinm the energ consumption for this basic need is about the same for low, as well as for high income households the income elasticity of LPG demand is rather modest. The income elasticity of kerosene demand is negative, as LPG cookers offer better comfort. Less than 12% of electicity using households use electricity for cooking - hardly any of the poorest 40%, but more tha a third of the richest 20%. Therefore, there is relatively little Datam from COBIBE on the mavea consumption of kWh/month show tbat 4.2% of user Consnm 84 kW; 39% consume 104; 56% consume 279, and 0.2% consume 2I2. Household Nd Rual Energy Stt Pag 10 competition between elecrcity and the hydocabonfuels in the household market, Le, the fuels serve different needs. 2.7 Tne richest 20% of the W 5 households use on average SO bolivanos ..t (USS 20) per month on household enery, the poorest 20% spend 29 .......a.o........ 11). Yet, in both relative and in welfre *..,. terms the burden of enery expendiures Is. . ==._ R. higher for the poorest households: They *e 4h aav n. amount to 15% of income and 5.7% of total expenditure of the poorest 20% of la Iw *M Paz households; the richest 20% use 3% of 33 lnp Itidty of Houseold Fuels their income or 3.8% of total expenditures. On the whole, though, the burden of house. hold energy expenditures for urban house- holds is relatively modest by international standards. I. Evluton In the Pces o Household Fuel During th 19808 2.8 A substantial shit in the reltiv aNd the real prime of household fels occurred during the 19 decade. (see 2I) In 1980, for politicl reason, hydrocarbon fuel prices were below their economi cost. During the first four yes of the 1980s, the real prices of all household fuels fell as hyprinflation led . toa a m of distortions in both realand relative levels of Government controlled ... prices. Prices of woodfuels were not controlled by the Government4 but were pulled down by the fall in the real prices of LPG and kerosene. With the adoption of Egg .4: Income Elasticty of Household Energy the Government's economic abilion plan 1V85, fuel prices were increased to cover their economic cost. Hydrocabon fuels were increased to international levels, that is, to their true opportunity coo Th led by the end of the decade to a six-fold increase in M prices over their 1980 level and to a tripling of kerosene prices. Bolivia never had an explicit policy of subsidizing urban electricity demand. Therefore, the consequence of price stabilization reform was that electricity prices were restored to their 1980 levd. H_ewhod and 1111 EADV Sate Page 11 C. Trnuds In Urban EneV Demand ~p 2.9 Elrty and LPG have been the two fastest growing urban m*~~ houehold fuel. In spite of the sx-fold m .. increase in its real price and a staguaing national inoome, LJPG demand (see Eiglri 2A increased by 6.7% per year from 1980 to 1989. In the sond half of the 1980s, the growth in demand was choked of because demand had outstrpped the availability o.domestic supply, and imiports were not feasible. Statistic about LPG use ~~IiiI2i ~g. by secor are not available for this period. But because of the economic crisis during EIguaZ1t Househuld Efer8 PicebIdex the 1980, it I not likely that LPG demand in induty and commerce reached the average growth rate. LPG demand was fueled by the annua 5.4% growth in the urban population and a market share that grew by replacing fuelwood and kerosene for cooking* That the market share increased in spite of the eroding competitiveness of LPG pric confirms the preon th (i) that little cross-price elasticity of demand edsts between the fuels-LU' Is the preferred fuel for cooking and electicity for lighting-and (ii) the burden of fuel expenditures is bearable even for low income households. 2.10 From 1970 to 1989, ~.o household elecbltrct demand grew by 7.7% per year, and increased from 175 GWh per year to 700 OWh. Since the electricity- intensive mining sector declned during the 11 same period and industria production ' made litte progress, the share of household ........ demand in total elecity onsmption in- cceased from less than 25% to more than . .... .... 40% (see EiKg_r.2. Demand was A partiularly strong from 1975 to 1980, when per capita income increased slightly. Icome per capita fell during the 198L, but household electricity demand continued to e 2 .: Evolutlw ot W Dad be fueled by the growth of the uban population, and an increase in the connection rate of urban households. The slower rate of growth compared to the second half of ouswol and Rual Euer SStea ePa 12 the 19703 may idicate that household elecrcity demand is influenced by the increase in income to a certin aet; but could also be attributed to the limiting effect of the higher penetration rates. 2.11 Kerosen consumption fell by 13% per year during the 1980s, as the Government impoed a demand-resicting polic to make its use in the cocaine industay more dicult. Natural Pe had not yet penetrated into the domestic market during the 1980s, as the urban distribution companies were commencing operations 2.12 The Wltem plmcatio of the income and pnrce elastiities of household fuel demand are: (a) The share of elecity in O0AAW i urban household demand ~ , ~ PW 7~9'~ will grw. Demand growth _ Wi continue to be strong yw fueled by both urban |E_l population growth and . probable rng per capita incomes. Including I K f E E fi. | demand other than household, electricity con- ! W4 sumption is epected to grow somewhere between 5.5% and 6.7% per year. - ElguaLl Evoluion of Household Elcriiy (b) The demand for kerosene Demand should continue to stgnate and falL (c) The urban market share of LPG is clse to sawation. Urban demand for LPG can be expected to grow more or less with the rate of urban population growt (d) The use of natural gs in the domestic sector during the 1990s will depend on: (i) the investments in distribution, (it) the pricing polfc and (iii) the general economic development in Bolivia. Most of the household market for natural gas is expected to be in new urban developments, where the distibution infrastructure can be established at rdatively low cosL But even under the mot optimistic scenario for natural gas deelopment, the rate of urban household growth wi far exceed the residential pgs connection rate. Houehold md Rural Energy Sbrateg Page 13 IIL GVERNM1ENT POLICY FOR URBAN HOUSEHOLD ENERGY A. The Economic and Finadal Cost o Urban Hoehold Fuel 3.1 For the majority of the poplaton,cooking represents the major use for household fuels and the one area where there is a genuine possibility for fuel ''" substitution. Flare 3g 1 illustrates the E relationship between the pricing signals sent to the consumers by the administered .... prices and the relative economic costs of the different fuels if used for cooking It shows that elecricity has the highest economic cost of all fuels, followed by natural gas. But while all other fuels are. I t,E.x E t . priced at their full economic cost, the , nfiancial price is below the economic cost for electricity and for natural ps. The Elgu 3r.1 The Economc and Financal Costs of financial price stil makes electricity the Fuels for Cooking most ecpensive fuel but natural gas is the cheapest fuel for cooking. The relevance of this ratio has to be related to the role which each fuel plays within the Government's strategy for household fuel supply. B. Fueswood 3.2 Fuelwood is used as a fuel by less than 10% of the urban households and in a few artisanal production activities like the production of chiche and some bakeries About half of the urban fuehwood consumers collect their own fuehwood; the other half obtain it from commercial supplies. The Government has no interventionist poliqy for this sector, and there is no need for it. Fuelwood is being eliminated from the urban market as a cooking fuel in spite of being the cheapest source of supply apart from natural gas. / I/ Fuewood Is not a homogenow product libe the other fuela Therefore, fuehwood prics are lss trN nt th for other fuels Prces vay between regions and with uban markt plac EMAP fianced data work for this prect found prices valying from US$ 3.6/GJ to US$ 85/GJ. No specific causl factors explain the variao Thefore, estimts of fuelwood prims am, estimate Household and Rural Energ Sbteg Pagp 14 C. Elkcbrt 33 Electricity is promoted for its application in uses other than cooking But in spite of its pric*, the comfort of electricity has carved a nikhe on the high income end of the market as a fuel for cooking Tne high share of urban electrified consumers (the highest percentage of non- connected ubaconsumers in the cities s found in Trinidad with 1S%) is tesmony to the high priority given to urban electrification by the Bolvian authorities. The vast majority of household eecticity b supplied by the ditbtion companies that are connected to the interconnected nadonal stem, Le, COBEE (North), ELFEC and ELFEO (Center), CRE (East), CESSA and CEPSA (South) The remaining urban electrified households are served by Isolated systems handled by either ENDE or local cooperative companies. The granting of licenses for generation and t n i a responbity of the Ministy of Energy and Hydrocbons (MEH, while l;ensing for distribution Is a responsibility of the munialities However, the major control insuments sch as pricing polices and electicity service regulations are outside ihe juridiction of the municiaty; the MEH Is responsle for pricing and disibution. 3.4 Elci t are regulated by the Electricity Code. It specifies that the prie stting funcions are a responibit of lIN (Direccion Nacional de Electricidad of the MEH). Aowrding to the Code, tariffi should be set at a level that allows recouping of costs plus a 9% rate of return on the rati base. f/ In prctice, the application of this financial appra has led to a sructure of tarIff, wbere: (a) The average tariff received by the power cmpanies Is below long-run marginal cos4 but covers the financial cost of production. (b) lhe Plan Nacional de Energia estimated the economic price for household eatricity (its long term average cost) at USS 0.069 per kWh. The prie paid by houweholds in La Paz is about 56%, and the payment received by COBEE about 45% of the economic price. (c) Household power cons on is being subxidized by indusil and commercial consumers In the case of La Paz, which is spplied by COBEE, the averp residential tariff in 1989 could barely cover the marginal distribution costs / (d) The subsidies to household consumption are not targeted at low-income consmers, they manly benefit the higher-income groups The reawn is that the lifline tariSr concept is not applied. Consumers pay a fixed monthly charge for the firs 50 kWh of consumption. The pgression in the tariffs for conmption beyond this level i/ The Cods allows to owa the folowing c operatin% ma_ta and mu osm; derdaton oe tangg as; to; a 9% rt of rtr on the rate base V/ See EMP, La Paz Prae Power Techl Astance, Febua 1. Household and Rural Energ Strategy Page 15 of consumption is very low: the household tarf charged by COBEE range from 0.066 to 0.075 Bs./kWh (US$ O.0257 to 0.0292). V Since households in the lowest income quintile consume less than SO kWhs on average, the overall result of the tariff structure is that average cost per kWh of consumption is higher for low level consumers than for high level consumers. (e) Taxes make up about a quarter of the average price (fixed charge plus tarff plus taxes) of monthly kWh consumption. 3.5 The Government currently is undertaking a review of both the LRMC and the electricit tarM to have these deflect economic cost. 3.6 The crosswsubsidy of household consumption by industial and commercial consumers is defended by supporters on social welfare grounds. But it is doubtful whether the present stucture of tariffs in Bolivia makes a positive contribution to the achievement of equity Soal. The basic equity issue in Bolivian household electricity consumption is the lack of access to elecricity by a majority of the population. Tne satisfacion of the needs of this population should be the immediate social concern. Their prosects for gaining access to electricity wil to a larg degree depend on the avaiablW of finance for grid epnsion and power capacity. Subsi to electricity consumption reduce the availability of finance. Secondly, while electricity for liting is a basic need in a modem society, there is no social justification to subsidize the consumption of electricity for household appliances as well. This, however, is the case in COBEE's area of seie For reasons of both eficiency and revenue-raisng, the Government should limit subsidies only to low-income households. D. Hydrocarbons 3.7 Peroleum pruct prices are regulated by the DGH the Direccion General de Hidrocarburos. From the 1960s until the mid-1980s, petroleum product prices, in particular transpot fuels, were usually subsidized. With the new economic policq of 1985, economic cost pricing has been established as the basic principle for the pricing of petroleum fuels, although its still not being applied. Kwin 3.8 Kerosene is distributed to households through subsidiaries of YPFB (the source of supply for 82% of kerosene-consuming households), local zgcncies, shops (9% of kleroene cnsuming households that normally live in minor urban centers not served by a YPFB subsidiazy) sales from trcks, and in exceptional cases, through distnbution contracts which YPFB signs with mutccipaities. Due to the low cost of COBEBD's h1rpoe supplies, thoese tariffs are the lows In Bolhiia Ho and Rwral Enery Strategy Papw 16 3.9 The poliy of the Government is to restric the household consumption of kerosene in order to filitate control of its use as a solvent in ccaine proesing. The pricing polic supports the Government objective of demand resraint. The economic price of keros can be defined as the international price of kerosene plus shipping, freight and distrbution cost As such the TPian Nacional de Energia" in 1990 calculated it at US$ 29.2/bbl or 0.55 bs per liter, whih is vety dose to the actual consumer price. Lm 3.10 Except for a short period during the mid-1980s, the domestic production of LPG has been larger than domestic demand for the last three decades. Govenment policy has therefore supported the growth in the domestic market of the LPG. The domestic LPG infructure is excellent, a fact which has propelled LPG into the number one fuel for urban households in terms of overall penetration and toe. LPG is obtained from the two refineries in Cochabamba and in Santa Cruz and from four natural gas extaction plants. A well-developed LPG lquid pipeline system connects all the major supply sources to 11 primary depots/botting plants located in the larer population areas. These depots are used as transhipment sources for a network of smaller, secondary bulk depots. Both the primary and secondary depots serve larger industrial/commercial cients directly by bulk road tanker. They also have bottflng plants which fill 10 kg cynders for disbution to agents and direct household customers. 3.11 The system of production and distribution is well organized with only some minor problems. The LPG production, supply, storage and bottling facilities are wholly-owned and operated by YPFB. But as part of the privatiation drive in BolMia, private operators are encouraged to invest m bottling plants as welL Cylinder disution is almost totally in the hands of ote lk IdutQrn which sel directly from trucks to the household customers. The largest number of distrutors is found in Santa Cruz where 10 cwmpaniem operate. The urban centers are divided up into supply areas each with an agreed upon routes corresponding to the number of ditrbutors The areas rotate among the ditrbutors on a monthly bask Thbis stem makes it pssible to identify the responsibility of supply in times of scarcity and makes it poile for households to compare the level of quality of service provided by the different diibutors.t 3.12 Each distrbutor receives a frve-year operating contract provided they maintain a specified minimum inftrucue (cylinders, offices, insurance, equipment, vehicles). Ibis ensures a cetai safety of both supply and of operations. Safety is also supported by a non-bureauoratic sstem of replacing worn out cylinders: the margin for the ditrtor includes payment for the acquisition of 8 new cylinders per 1000 sold cylinders. At the end of each month, the distributor is obliged to hand over to YPFB the number of new cylinders that coresponds to his sales. A weak I Ths "atnm was conceived In reqi.nse to the crisis of scarcity which volvd in the begifng of the 1W4 wh LPG was uped through stores. As suply w ler tbIan dmd, LPG boes we siphond off to a black mtet. Since It wu dfficult to idenfy the source of maJpulalon in tho thea "t it w placed wit te preent stmr. HoIehod and Ral Eergy S lrg Page 17 spot in the infiascture is that the number of controllers is too small to effectively protect the households apinst cheating with the LPG content in the cylinder 3.13 The key poliyi ssue for the 1990s is to define a smt= e dealwithte gnming La4~dqnd/a q1y1 = see EFur 32. Urban and total demand growth for LPG is expected to be lower in the 1990s than during the previous two decades. But unless new oil and gas fields are discoered and developed, demand wi outstrip supply ... ... g M before the end of the decade even under the mostoptimistic ofthe prest supply F scenarios. Tis scenario calls for an active /. polei to promote more efient use of c LPG through the diffusion of k grund LEQ aincre and to infom households on how to economize cooking practices. Te e to tbe co o£ implication for LPG pricing is ambiguouL . In the medium teNr, there is an exortable l surplusof LPG on the market; at the end Of the 1990s, LP wfi have to be impored. ... The medium-term eonomic cost of LPG is gu art LpG Demand/supply Balarcw lower than the long-run economic cost. In the short term the relant opportunity cos of increase LPG consumption is the netback price of LPG exports to Chile plus the linerna costs of distbution. In the long run, the enomic cost of LG wil be equivalt to the cost of imports plus the costa of disautuon. The twopre souctures for LPG are shown in Tabe31. 3.14 ihe November 1990 price revision led to a financial price of LPG (B. 0.85/kg) that is higher the Tte3I: LPG Price Structure the short tem ecnomic prie (bs. 0.73/kg) but lower than the long-term ecnomic price (B. 1.06/kg). Thi is a se- poe r 1ost LK Prito structr (uJsS/ton 1e1 poliy for the transon period. omort aSmor US LPG(FOS) o135 Freight to Arica: 30 ft" guL MDI&W9tIDLto QJIDiIhD1d Arfia- LaPetz : 80~ 185' interat Dpot : 20 -23 3.15 Promoting natual gas as a substitute for SottliTig : 20 20 LP in the residentia and commercia area is the key Ecnoictriceim t a 4 element in the present Governments demand stateg to SB/kg a 1.06 0.73 address the, scaricity crisis. Bolivia's natural gas CowSmer prfico a 0.65 0.8S tranmisiongrid Was rorinall ConceiVed and constructed E'wrt pri ce cif Chiito 'Freight cast La Paz to border to supply buk industrial cusomers and gas-fired power Ice: Netthai & Caldero, LPG genertionk plants. It is now basically completed and Distribution In botivia reaches the city-Sato of mostlakWecitiesIn Bolivia: LaII Houehold and Rural Energy Strtegy page 1 Paz, Santa Cruz, Cochabamba, Sucre, Oruro, Potosi and Tarija. Natural gas is presently being supplied to 5 power plants (2 in Santa Cruz, 2 in Sucre, and I in Tarija) and 208 industIal customers (84 in Santa Cruz, 49 in La Paz, 32 in Cochabamba and the rest in Tarija, Sucre and Oruro). Residential and commercial markets are not yet developed, accounting only for 160 customers in Santa Cruz and 15 in Cochabamba. 3.16 In 1986, the Government instructed YPFB to transfer natural gas distribution responsibilities to the private sector. As a result distribution companies were formed, with YPFB and other local institutions as shareholders, in Santa Cruz, Cochabamba, Sucre and Tarija (respectively SERGAS, EMCOGAS, EMDIGAS and ENTAGAS). Tne Ministay of Energy and Hydrocarbons and YPFB are concerned about the technical experience and financial means of these distribution companies and a work is being undertaken with World Bank assistance to identify the best means to implement a program for natural gas distribution. 3.17 Prices of natura g are set by ministerial decree. Prices are based on historical levels and are not supported by cost of service studies, nor do they include a depletion allowance. They are changed, periodically, usually following fluctuations in the US$/Bs. exchange rate. Existing ditribution companies sell only to industrial customers. But a price of USS 3.3/MCF has been set for residential and commercial consumers. The household natural gas price is substantially below the average cost of natural gas sUpply to the end-residential consumer of US$ 6.3, according to the price structure shown in Table S. Adding customer investment in installations and connection, the average cost per MCF of residential consumption rises to US$ 7.3. However, because of the high share of fixed investment costs in the total cost of natural gas supply, the mA ao inmet g onUtion is much lower. In theoty, the heavy subsidy makes natural gs the cheapest fuel to the residential consumer, if it were available. However, the commercial viability of natural gas distnbution to the domestic and commercial sector will depend on a solution to price competitiveness of natural gas if natural gas prices are to cover the full financial cost of supply which is twice as high as the present authorized price of natural pgs for households. The situation is analyzed in Table 3.2 and E4gr 3.1. L Govenment Polly: Non-prkce Measures to Promote Enr Savgs in Urban Households Table 3.2: Natural Oas Structure Residentit and Coircial 3.18 So far, the Government has not launched any (US$/Cf) energy saving ampaigns. The institutional infrastructure for City-Pte price: 1.77 doing so was too weak. The one exception is a progiam to Distributfoin Costs: £ distribute energy-savinwlight bulbs donated by the Dutch Total supply cost: 6.31 Government through ENDE. The light bulbs were sold at Cutr Ice stant 0399 hiy sbsidized pries to household customers at ENDE Total conar cost: 7.30 billing offices. About half of the 200,000 light bulbs have Source: ESUAP 1991 Natural Oas been sold during the last four years. Unless the light bulbs report on Bolivia continue to be subsidized by foreign governments, the I_I Houehold and Ral Enr Stateg Pap 1 program has no immediate future in Bolivia: the economic cost of the light bulbs relative to the economic cost of electricity supply is too high to provide an attractive rate of return. 3.19 In the medium-tem, it will be more cost-effective to base energy-saving campaigos on mI in schools and through television, radio and newspapers. 3.20 An additional polic for the longer term would be to introduce norms for m)D.tiQl LhosolQ Id Ian and to establish a institutional framework that can ense its application in practice. At present, the situation is not yet mature for this poliqy as a substantial black market for smuggled imported goods is still in operation in spite of the drastc reduction in import tariffs to 10%. Tbe prospects may improve as more competition is introduced into the oligopolistic commercial import market and leads to a lowering of prices that makes bMack market operations increasingly unattractve. Housebold and Rural Energy Strateg Pae 20 IV. GOVERNMENT POLICY FOR RURAL ENERGY A. The Rural Ecnomy 4.1 In 1988, agriculture accounted for about 22% of GDP; another 20% of GDP originated from related economic activities. The rural population (persons living in agglomerations of less than 2000 inhabitants) in 1 1989 amounted to 3.7 million, of which 3.4 million were members of peasant families. Rural energy demand is overwhelmingly based : on the consumption of biomass fuels and main- n z b m 4.2 Rural household energy R -t>2t E d M M emand accounts for 28% and rural =&Wmthe . M E demand accounts for less than 5% of Ildt 0k national enerVy consumption. The total rural ... Xt X consumption of modern fuels (hydrocarbons and electricity) amounts to only 2% of the I t r ik. national demand for commercial fuels. < k _ f bf h 4.3 The rural economy is very heterogenous. This is one of the reasons why it has been difficult to define an optimal national poliqy for the sector. Basically, rural households can be classified by a matrix consisting of six blocks based on two criteria: the geography/climate-three regions; and the size/commercial orientation of the farmer which divides farmers into two categories-the 550,000 "gm3ng1p farmmU who produce mostly for own consumption, and the 40,000 "commercial farme who produce mostly for sales. 1V (a) 51% of the rural population, or about 300,000 households live in the AWQ. Difficult climatic conditions including droughts and frost limit agidultuwal potential. Soil is severely exhausted by extensive use, and, in any given year, two-thirds of the land has to be kept idle to allow soils to regenerate. Farmers are almost exusively 'campesinos, who cultdivate low-productivity small farms to produce staples and IV Al campedlnos e reated to the market, as they depend on it for goodsuch as augr, salt and cooking oiL Dat ampeao howsholds should be fiuther sbdid Ito wo mjor groups of anatc purposes st, those houahokds who do not produce enough food to suan themselve and seond, thode that, wle poor, hae a small production auplus whic could be eqpndd For the first, few "prodcie projet can b Idenified, help to them ha to be ien through 'socialr project, such as the arearon of mloyment through labor hensve infiarrcture, projcts About one thW of the ampeuinos belong to this cateo. Household and Rural Enr Strtg Pag 21 vegetables (potatoes, maize, beans, quinua, etc.). They have poor lin to markets and credit institutions and sell, on average, less than 30% of their output (b) 31% of the rural population, or about 190,000 households live in the Despite the low productity levels, relatively favorable weather and soil conditions allow two-crop farming in the region. The mostly campesino farmers are engaed in cash crop production, including fuits, flowers, and timber as well as dairy farming. The largest obstacle to raise agricultural productivity is poor market access, partly resulting from poor transport. (c) 18% of the rual population, or about 110,000 households live In the LImnao& Ibis is the most dynamic region for commercial agriculture. he average landholding of the farmers is much larger than tose of the other two region, but recent migrants in the newly settled areas ('los colonos') can often only use 1-2 hectares and have no title to their land. Major crops grown are sugar, rice, cotton, soybeans, and oilseeds. Some of the prduction is exported, most is sold in urban markets locally as well as in the Altiplano. Large-scale, extee cattle farms are found in the northern areas. 4.4 The total area under cultivation (not including pastures and fallows) is estiated at about 2.3 million hectares, of which the 'campesino farmers cultivate 2.2 million hectares. TMe 'campesinos' grow about 70% of the food whih is consumed in Bolivia; the rest is covered by imports and by the production of "commercial farmer Food seaift is becoming a coneem as the production of food per inhabitant is fahllin During the 1980., the cultivated area expanded by only 150,000 hectares (6.5% in total or 05% per year) while production per hectare sagated or declined due to drought and over-eloitation of the resource base. 4.5 This development has lead to a reevaation of the approach to agrultura development in Bolivia. During the 1970s, the national strategy for agricultural development was export oriented and focsed on 'commercial agriculture in the Lolnds. As Boivia did not have a natural competitive advantage in the cops such as cotton, sg and soya, this development was heaviy subsidized. The limits to this approach became apparent through the falure of finding profitable market outlets for the export production and through the rsing cost of the food import bilL 4.6 The definition of an appropriate national policy strategy for the rural sector is a difficlt tadL From a purely technical/economic point of view, an appropriate balance has to be found in three interlinked areas: (a) The promotion of export crops as well as of domestic food production, respecty. (b) Interventions in support of campesino farmers and 'commerial farmer Housebold and Rural Energy Stte pap 22 (c) The allocadon of resources to promote farming between the three major geographic/climatic regions. 4.7 To determine the "correct" technical/economic choice for the three issues is already a daunting taskL But in addition, the strategy must baance economic considerations against wIfa od objectves. Ninety five percent of the poorest 30% of Bolivian households are found among the "campesino farmers. Activities in their support are related to poverty alleviation and have regional inplications. In the Altiplano and the Valleys, 61% of the farmers own land smaller than S hectares; in the Lowlands 84% of the farmers own more than 5 hectares. 4.8 The difficulty of defining an appropriate policy at the macro level has two important implicatons for policy-makers. First and foremost, the situation makes it particularly important to base project selection on sound microeconomic criteria. Secondly, project identification has to take place at micro-regional lvel The derived opertional challenge is to find a means of reconcilng this micro-based approach with the need to balance the different national objectives. L. Sod-EconIC Determioants of Rural Houoshold Enery Consumption Rural mkls f Icom 4.9 The average income per capita of US$ 250 in rural Bolivia is lower than the average income in urban areas. For instance, Ia Paz has an average income pe' capita of US$ 853. Contray to popular belie£ the relianoe of the rural population on woodfuels has more to do with the low level of income of the rural population than with the ample availability of "free' biomass in rural areas. As rurl families move up the income Table Cis Rural Prmily nome.s and Debt Caaity ladder, they shift Y"rs 1989 their consumption Coaditin Ahmber of Aver. Ic. Aver. Eouse- Amort. I Anual Total Debt increasingly to fmilies per person hold Lneame ima sert. *ap*- capacity modern fuiels The (1000) Wt$ Us8 ratio city, Us$ Us$ 0) rural share of BEtr. poor 131 90 505 0.05 25 125 modemn fuels is low Very poor 197 160 900 0.10 90 450 because the average Poor 131 250 1,400 0.15 160 600 rurl income is low. Middle 131 450 2,500 0.20 500 2,500 r mo. Rich 53 3,000 16,650 0.35 6,000 30,000 In addition, the size Very rich 19 25,000 140,300 0.35 50,000 243,000 of the rural market for modern forms of sor 656 250 enery is reduced Aagmsau that en Inestmet loan has to be repaid over 7 year. at 1OX b e c a u s e t h e Lterest. Source for Lacom fiurea Calvin MIler, ftaluaciLn del Credito dribution of rural Rural an Bolivia, ESSUPIHKO, June 19". incomes is as Household and Rural Energy Stateg Pae 23 skewed as the urban incomes: the three categories of rural poor who in able 4.1 make up 70% of the rural families have a 12% share of rural Income (see FigurA1), the richest 2% dispos of 51% of total rural income. 4.10 The level of income is a major determinant for the market of any energy technology. It determines the cash flow for "petty' investments like LPG stoves and the debt capacity or annual amortization capacity for "major investments like the household connection to a rural electricity grid or the purchase of a water pump for irrigaton. Only a minority of rural households has an income which is high enough to allow these expenditures in light of other priority demands. Based on an estimate of the maximum savinpg capacity for each income category of household, it can be concluded that the range of technological options that can be offered to the three lowest income groups (70% of the rural population) is very limited. The debt capacity of this population is between US$ 125 and US$ 1,700. Since other needs than energy have to be attended, only energy technologies that cost a fraction of this amount (perhaps a fourth) can find a market to this section of the rral population. That is, relevant eneg technologIes ha"e to be In te USS 30 to 400 range. Local Availabt of Bioma 4.11 The use of biomass energy for cooking, and of kerosene and of candles for lighting, accounts for more than 90% of total rural household energy consumption and some 20% of national energy consumption. Charcoal is hardly consumed in rural areas. In all three regions, the biomass fuels are collected by women and chidren, with men playing a subsidiary function of principally tee cn Te local fuel mix , l!I is determined by the availabilty of the local biomass energy resources, fuelwood, dung, stalks and roots. The consumption of E faielvood makes up about trefuhsOf . the biomass consumption for cooking, dug S . ... covers the remanng need. C. The Strcte of Rural Household Fuel Consumption QMLUV- ~ ~ ~ ~ ~ R 4.1: of Dungm forlo 4.12 The consumption of some 550,000 tons of dung for energy purposes (120,000 toe) covers about 20% of rural energy demand. Me bulk of this is used by households a fuel for cookin Dung is the least attractive fuel for cookin& It is used in areas where farmers have cows and where fuelwood is Hounehold and Rual Energy Strategy Pap 24 scarce, as in extensive regions of the Altiplano. A relative important percentage of dung for fuel is commercialized, and either sold to rural industries or to rural households. Fuelwood 4.13 The consumption of fuelwood per capita in the rural households is correlated with the availability of fuelvood; it is highest in the Lowlands, and lowest in the Altiplano. The averag number of man-days per month spent by a household on fuel colection b 17 In the Atiplano 1.2 tn the Valleys and 1.0 In the Lowlands. Since fuelwood collection is normaly done in connection with the guarding of grazing animals, the households perceive the opportunity cost of these collection times as close to zero. 4.14 In view of the huge differences in the regional avalabbit of wooden resou_ per hectare per Inhabitant (see I&WL.2) the interregional differences in the time used for fuelwood collection are surprisingly small Forests cover most of the land in the lowlands, whereas the Altiplano is practically totally able 4.2 Woodtuel R.esoure.s in Boltiva denuded by forests. wodfuI potetil, 1990 Fuelwood in the Altiplano is "c~~~~Suface staadtn stock TOR An. growth, tow/lha Altiplan o is l k2 (lOOo1 tns) (1000) bL'ossC wood obtained from the "thola. " a shrub Ultir tho a shrPstures shrubs 93,000 22,000 1,834 whch can reach borests 2,515 13,218 5,659 0-10 0-3 some two meters, t Pasure mAshrbs59,000 66,000 11,600 but is normall cut sts 109,000 709,000 290,000 7-15 3-4 when it is not taller LOWlaud VP"turs and shrubs 189,000 720,000 150,000 tha 40 cms. Yet, roresto 408,000 3,165,000 1,500,000 10-25 4-9 on the whole, A 1 t i p 1 a n o TOTA 863,000 4,737,000 1,959,293 households do not Sourc.e Oscar von Bortles, luforestacior on 1 Altiplano, Valles, y otras areas perceive that there afeatadas por la deforstelon on la produoclo de laa y earbon, October 1990, is a problem of project report fuelwood scarcity, and where fuelwood is scarce, dung is used as a fuel for cooking. Although fuelwood is more widely available in Santa Cruz and in the Beni provinces, the habit of purchasing fueAwood is more widespread in these two provinces than in the Altiplano and in the Valleys U 4.15 Intrareglonal differences in fuelwood collection are larger. In some local areas, fuelwood scarcity is a real and perceived problem. One of the most affected areas is Yamparaez IV Ths may have to do with e fact, that a wider avalabily of fuetwood fadttes not Os* autocolleUion but, In particular, the commerdal olection of felwood. he M supy factor thus seems to outwgh the demand !actor. Household and RuO Enrgy S,tategy Pqe 2 ilt the Province of Chuquisaca where households use 2 man-days per week for fuelwood connection. 4.16 Local scarcities of fue}wood are expected to become more common in the future as an estimated 30 to 40% of Bolivian territory is affected by erosion to some estent Erosion is caused by inadequate agricultural practices, which again are a consequence of the pressure of a growing population on scarce arable lancL While fuelwood collection plays an inignificant role in erosion, deforestion reduces the availability of fuelwood supplies. Over the last 20 years more than 4 million has have been deforested - annual deforestation is estimated at 800 hectares in the Altiplano, 43,000 hectares in the Vaeys, and 270,000 hectares in the Lowlands ,Kerosen 4.17 Kerosene is used by rural households as the most important fuel for lightng and as an important fuel for cooking. Kerosene is purchased by the campesinos in local shops. Price is correlated with distance from the urban centers of supply, and with the quality of the road. While urban prices in 1990 were around 0.8 Bs. (US$ 0.24) per liter, in the more distant rural cnters, the price climbed to 1.50 Bs. (US$ 0.45) per liter. 4.18 The consumption by rural households is low, in the range of 1-5 liters per month. Because of the anti-cocaine policy of the Government, there are no poilities for an expands of the role of kerosene as a substitute fuel for fuelwood in cooking 4.19 Unless a farm household is too poor to afford it, LPG is the preferred fuel for cooking in rural areas. Acquisition of an LPG stove is typicaly the first consumer good investment in rural areas after improved roofs. LPG cookers are found in about 50% of runl households, and 16% of rural households use LPG as the primary fuel W. In fue}wood scarce areas, households begin to switch to LPG out of necessity. On the whole, however, LPG is used for its convenience as a supplementary fuel to fuelwood, used for minor meals and when the wood is wet. In addition, some use is made of LPG for lighting Princpal rural users of LPG consume about 10 kg per household and per month, secondary LPG users average 2 kg. TMe consumption of the 340,000 rural LPG-consuming households amounted in 1990 to about 15,000 tons, or about 8% of total LPG consumption in Bolivia. Extent of Rural E3wetrification 4.20 Less than 10% of rural households in the Altiplano and 20% of rural households in the Valleys consume electicity. The coverage in the Lowlands is more diffiult to estimate, but is likely to be similar to the percentage in the Valleys. The penetration of electricity in rural Bol"ia W3 EImates based on fidd visi of the ESMAP/MEH LPG coskant Maths and Cdem hese fues have to be rvisd once the ESAU/INE erW Suq ha boen procem_ Household and Rural Energy Strategy Page 26 is low because of supply-side and demand-side factors. On the supply sde, a constraint to increased penetration is the high cost of rural electrification projects that ranges from USS 750 to USS 1,700 per connected household for relevant rural projects W. On the demad sde, the constraint is the low level of rural household demand, iLe., the low level of capacity to pay for connections and the low level of productive demand for power. Tlypically, productive rural demand is 20% of the total demand in rural electrification projects. D. Rural Produe Demand for Energy 4.21 lTe producdve demand for energy In rual BolHvia comes from farming (energy for irrigation, plowing, etc.), processing of agricultural products, from agro-industries and from artsanal and servce industries. Although electricity can be used for water pumping in irrigation projects, it is used only in the transformation of agricultural products. fdutWaq& Demand in A9gricutr 4.22 OCampeslud9 farming is a labor and draft-animl intensve aciity with few demands for fuels. Energy demand is minimal and will continue to be so. During the 1990s the potential for energy using activity is in e3pansion of irrigation, potable water pumping for household and animal needs and in the drying of crops. In addition, some demand for energy wil come from small scale processing of farm products, such as coffee. 4.23 The commercial farmers make up less than 10% of rural farmers and account for more than 90% of total rural energy consumption. The sugar industry is the single most important rural consumer of energy, based mainly on the combustion of bagasse (see Annm JY). The approximately 7,000 tractors that are found in Bolivia account for most of the rwal productive demand for petroleum fuels. Of these, the majority are found in commercial farmin& Energ Demand in Rural Industries 4.24 Field studies of the most important energy-consuming industries-the limestone industry, the gpsum industiy, the brick and tile industiy, and chicha production (an alcoholic drink)--showed that eVpenditures on energy added up to more than 30% of total costs in all industries, except for the small dhicha breweries where energy costs are only 8 - 12% of the turnover (see AnnxV. 4.25 Fuel use is variable as the kflns can easily be adapted for use with different fuels. The limestone ndu uses gas, dung, fuelwood or dung; the um indusay rely on fuelwood or V Acordng to th 1991 Wold nk B repo, Ma a Neglet in the Power Se1or: The cos and option to overcome it, the Inemt costs in genation, unsson and dbuion Is UMS 1,750 in aveage (coMnd rura and urbn) for LaIn Amerk*n counties to Ictemet one kIW of capady. Houseold and Rural EnV Strateg Page 27 as and some gasoline for milling; the brick ad W2 use woodfuels, heavy fuel oil or natural gas The local availability of fuels and the relative price of the fuels seem to be equally important determinants for fuel choice. 4.26 Fuel consumption in these industries can be reduced by between 18 to 30% by insulation of the kilns. A program to insulate the kilns should be feasible: the savings are sufficiently large to interest the individual entrepreneurs and the relative few number of establishments makes it easy to reach the target group. A program should leave out small-scale operations, where the kilns are fired only one to five times a year. Investments in these wil not prove to be cost-effective. 427 The scope for improvements in chicha breweris smalL Energy cost is a mall fraction of turnover, and the producers wil, therefore, not be much motivated to invest in improved stoves. Some savings can be gained, however, by promoting improved cooking habits, e.g, using lids, reducing the fire once the boiling point is reached. 4.28 Ninety percent of the charcoal produced in Bolivia is used in the smelting plant ENAF in Oruro. Chuca prodo takes place mainy in the Chaco, from where it is shippd by train via Argentina to Oruro. Due to the quality control by ENAF, producers have invested in high-yielding charcoal kilns. No energy-saving program is likely to have any impact under these circumstances. L Rural Energy Policy and lnvemts 429 During the last two decades, the domestic orientation of the MEHs policy has focused on urban energy needs. As a result an explcit energy policy for the rural population is still missing The absence of a rural energy policy had two consequences. First, with no overal policy to guide development, there was no mechanism for evaluating potential projects and for bWancing the energy needs of the various rural population centers The result is that the sad mm a= is an uncoordfinted area where each institution acts without a coherent strategy. Coordination of rural electrification planning is virtuall nonexastent between COFER (the agency nominally responsible for rural electrification), the MEM and other ministries responsible for rural development, such as MACA. The RDCs submit yearly plans to the Minisfty of Planning for rurd projects; the energy components of these are rarely coordinated with COFER, ENDE or the Mm Similarly, cooperation between RDCs and NOOs engaged in rural development has been spotty. For the most part, NGO as well as bilateral work in rural energy projects have lacked any tpe of national/regional coordination. Thus, rural energy project implementation mostly depends on financial opportunities, social pressures, political interest or personal ideas. Frequently the projects are only panially implemented or soon left to collapse, while efforts concentrate on new and unconnected projects. Household and R1a Energy Strategy Pae 28 430 Second, partly due to inattention to the needs of the rural population, and in part due to the "self-collected fuel* character of rural energr, the g ih k iJnmmAnJw O has been modest. Annual investments in rural elearifiction projects in Bolhvia have been between USS 5 - 10 million in each of the years 1988 and 1989. I In addition, there have been some public investment in geothermal energy in Potosi, and also some suall public investments in what is termed 'non-conventional" energy. Altogether these irvestments amount to approximately US$ OA million per year. The public energy investment per inhabitant in the rural area is USS 1 - 3 per annum. The majority of this investment has been made in the 5 . 10% of the rual area which is already under the process of electrimcation. Almost no energy investments were made in other areas. 4.31 in addition, some investments are channelled to energy projects by NGOs that operate in rural areas. Foreign donors channel an estimated USS 70 - 100 million to projects through NO0s, somne of which is energy-related. How much is unknown, but it is likely that it amounts to no more than US$5 million per year. Finally, investments made by electrification cooperatives are not counted as public investments, and, therefore, have to be added as welL All in alL rural energy investments during the second half of the 1980s have amounted to less than USS 15 million per year, or less than US$ 4 per rural inhabitant 4.32 The overal result of the institutional situation is: (i) underinm=tmzLin ruri aner needs, and (ii) a ladk of mandmdriven in n Successfl rural programs are carried out by institutions which provide senrices in response to soundly assessed demand. This contradicts the supplydriven policies of many service orgnizationswhich try to induce clients to consume that which is judged best for them Since the needs of the rural population have to attract more attention by the MEH during the 1990s for obvious equity reasons, the MEH has to define what the key needs of the rural population are, and which institutional issues have to be addressed as a matter of priority. W a amount includes only public _tvetm in decity procts, Le. Ivtmet performed by compemwldw have at lkast 50% public merbip. No amount rlai to the hnem of pVa eloriy avu are dowmeZned Household ad RuTal ergy Stratea Pae 29 V. POLICY AND INSTITUTIONAL ISSUES IN RURAL ENERGY 5.1 The key policy issues to address in rural energy are: (i) the welfare consequences of the use of biofuels as the main source for cooking; (ii) the welfare consequences of the low penetration of electricity in rural areas; and (iii) least-cost options to cover the productive use of energy. A. The Welfare Imp of an Incrasd Consumption of Blombs Fuels 5.2 Modern fuels are preferred by runal consumers, but the lack of affordability leads to a continued reliance on biomass fuels. According to forecasts made by the TPlan Nacional de Energia" in 1990, both fuebvood and dung demand in Bolivia are expected to grow by about 15% up to the year 2000. The growth in demand has two welfare consequences. First, it is expected that the scarcity of fueiwood will become more pronounced during the 1990s as an estimated 30 to 40% of Bolivian territory is to some extent affected by erosion. This will lead to an increase in the time used on fuelwood collection. Second, the consumption of fuelwood and of dung for energy uses will have some negative consequences for agricultural soils and affect agricultural productivity. 5.3 There are three options that can ensure a better long-term compatibility between fuelwood supply and demand: (i) promotion of fuelwood savings through more efficient stove and pot designs; (ii) fuelwood substitution by LPG WI; and (iii) increased woodfuel supply through reforestation and forest management projects. The promotion of LPG has a negath-e impact on the balance of payments; the other two options have a high degree of uncertainty attached to the expected reslts of their promotion. Diffusion of Impraved Household Biomass Stoves 5.4 Rural stoves in BolMia are self-construted stoves made out of either clay or scrap metaL A few eramic stoves are sold in the markets in the Altiplano and the Valleys. ESMAP tests have shown that the efficiency of the most common stoves is low and that substantial savings can be achieved through better designs. An improved ceramic model designed by the ESMAP project and built by ceramic craftsmen for a market cost of 10 Bs. (US$ 3) showed energy savings of 50% in the laboratory. In practical household use, the achievable savings from a switch to the improved stove are probably half the amount. 5.5 Previous attempts at promoting improved fuelwood stoves in Chuquisaca failed (see AnmnVI,). The model, a Lorena-tpe stove, was technically and economicaLly inadequate. Thi W Kerosene is an other potenl Interestg opion. Some rul households use kerosene cookers in addion to kerosene lamps. But the _atocine powq of the Goernment attes to limt the onmmption of kerosone for ay purpoe Household "ad Rul Energy Strategy Page 30 disappointment repeats the worldwide experience with the diffusion of improved fuelwood stoves for rural areas. As long as fuelwood is a "free" good, which is not difficult to obtain, and the improved stoves offer no user-advantages beyond energy saviings, it is difficult for diffusion programs to achieve lasting results. 5.6 An alternative approach, with greater chances of success is to promote low cost Improved kitchens where the Improved ceramic stove Is part of the oversll desig. Field investigations of the ESMAP Bolivia Household Energy Project showed (i) that rural women expressed an interest in investing in a new stove if it provided a higher comfort, and (ii) that the kitchen area of Altiplano farm houses is usually rebuilt in three to four years intervals. Three different types of self-built kitchens were designed that offer substantial advantages in comfort over present practices with construction costs for the materials ranging from US$ 7 for the cheapest model to US$ 37 for the most expensive model (see AnneV). The improved ceramic stove devel- oped by ESMAP is a component in all three kitchen modules. It would be built by the traditional ceramic stove and pot makers after previous training in the method of production. The cost of production is estimated at 5 Bs. (US$ 1.6). The stove would be sold by the pot makers on the traditional rural markets. 5.7 No previous experience exists with this type of approach in rural areas, but the idea merits testing. A pilot area should be found where there is a scarcity of fuelwood. Here, the diffusion of the "improved kitchen design" should be tested by an experienced rural NGO during a two-year petiod. Based on the results of this pilot project, the MEH will be in a position to determine whether the promotion of improved rural stoves based on this concept has a future in Bolivia. If the results are positive, a "nationwide" campaign should be implemented. 5.8 The use of a pressure cooker provides particularly high energy savings in the Altiplano because of the high altitude, the low boiling temperature, and the decrease in cooking time with temperature. Since cooking times are also reduced, the diffusion of pressure stoves among households should be possible, provided that the prices are subsidized. Since pressure cookers are expensive (US$ 50), subsidies of at least 80% are needed to promote a large-scale diffusion in the Altiplano. This is a high cost; if all rural Altiplano households were to receive a pressure cooker, the cost of the subsidy would amount to US$ 12 million. But presumably this cost could be justified by the benefits from avoided degradation through their use. Therefore, a subsidized distribution of pressurized cookers should be tested alongside with the promotion of improved kitchens. The impact on consumer welfare and on fuel savings should be monitored to provide information on the level of benefits of such a program. If the benefits outweigh costs, a diffusion program at a larger scale can be launched. Enw Savinga in Rural Indutries 5.9 Fuel consumption in the brick, tile, limestone and gypsum industries can be reduced by between 18 to 30% through insulating kilns. A program to insulate the kilns should be feasible: the savings are sufficiently large to interest the individual entrepreneurs, and the relative few Household ad Ruwal Energy Stratea Pae 31 number of establishments makes it easy to reach the target group. A program should leave out small-scale operations where the kilns are fired only one to five times a year. Investments in these will not prove to be cost-effective. 5.10 The scope for improvements in ckih breeie is smaLl. Energy cost is a small fraction of turnover, and the producers will, therefore, not be motivated to invest in improved stoves. Some savings can be gained, however, by promoting improved cooking habits, e.g., using lids, and reducing the fire once the boiling point is reached. Reirestation P_ct 5.11 Reforestation activities in Bolivia have been few; successes even fewer (see A&S YLI). The efforts of forestry agents in the Altiplano are frustrated by what they perceive as the farmer's non-interest in trees. FAOin 1990 f - # P: R>o launched a five-year "wood and . t . energ reforestation program in f_ l Bolivia with a budget of US$ 9.6 ._ u this t million. The problem with the wo ... 0. .......... activity is that the authorities have . . . . a no reforestation concepts to rely on which have proven to be sustainable A g f in Bolivia praxis. ; _ 5.12 Until a viable reforestation scheme has been w e=: _ P f. developed, MEH and MACA t I t c fi should not launch any new energy- 1 E forestation investment activities. The immediate priority for the two ministries is to start a project that X i n.. . attempts to develop a viable ft.. scheme. The ministries should . spo>c cofinance an evaluation of past and =3 present reforestation activities in Bolivia by an experienced team consisting of a forester, a forestry economist and a sociologist. Based on the findings of this evaluation which would need three to four months for field and other fact finding work, and one month for the drafting of the reort, the two ministries will be in a position to evaluate the prospects for "wood and energy programs in Bolivia. Household and Rurl Energy Strate Pae 32 Meau=e to Improv the Suppl ofg LQGt Rura Ama IV 5.13 The development of the market for LPG can be left to the market forces: (a) LPG distribution is a well-established commercial sector activity and the supply of LPG to the rural demand centers is relatively efficient. Ten kg cylinders are sup- plied from urban LPG bottling plants by truck to the rural agglomerations. Con- sumers purchase their supplies either directly from the trucks or from the local merchant store who sells LPO with a modest mark-up. (b) Unlike the case of fuelwood and dung no negative externalities are associated with the consumption of LPG. 5.14 The role of the MEH in rural LPG development can therefore be limited to defining an efficient framework for the functioning of the market forces and to monitor abuse of monopoly positions. 5.15 When judged from the need to develop a rural mass market for LPG during the 1990s, the present system has two weaknesses. First, the large distances from the urban LPG bottling plants involve economic costs because of an expensive transport of the tare weight of the bottle and a need for a large stock of cylinders. Second, the system is not geared to the cash-flow problems of the poorer farmers-whenever a cylinder is empty, the consumer needs to have more than Bs. 10 to replenish the supply. The question can be posed whether a more rational sytem can be established with lower costs and higher consumer convenience. 5.16 An alterna iye scheme for rural LPG distribution is to supply LPG in bulk to a series of rural networks consisting of small, simple storage and bottling stations that each senve a specific rural population center. The networks improve the stability of supply to the immediate areas. But abo the surrounding areas should also benefit as small-scale informal distribution channels for LPO will be "spinned off? from the networks. Estimates from the project's rural LPG pre-feaibility study show that the scheme is economic, since the cost of investments in the small storage and botting stations are more than counterbalanced by savings in transport costs and in cylinder investments, resulting in an economic rate of return of more than 10%. Ihe financial rate of return of the investments for a private entrepreneur is slightly less as some of the economic savings are eternal benefits" accrued by the households due to a lower need for households to have reserve cylinders 5.17 The pre-feasibility study proposes to test this concept in a US$ 1 milion pilot project for two networks in the Altiplano. Since the networks are to be operated by private entrepreneurs, most of the investment will be recuperated from the sale of the networks to private investor If a donor can be found to finance the pilot project, a detailed feasibility study can be prepared for the two areas, after which an international call for tender can be issued for the equipment Once WI For a more deaod diazon, soe Ann= U Houeold and Rural Energy Sbate Pope 33 the results are known, a domestic call for tender can be published for the operation of each network through either leasing or acquisition. . The Wefr Implati of Rural Ee Ibe Costs and the Market for Rural Electrification 5.18 lTe pattern of population settlement has obvious implications for the planning of acollective energy systems like rural electrification projects. Some rural housenolds live in such dispersed settlements that grid based electrification systems are not feasible. For those who live in villages the question for energy planners is whether the construction of n electricity grid . . E i , for the vilage can be based on a connection to the national grid or whether an isolated grid should be built. As a rule of thumb | | l in Bolivia, isolated grids are the most economic choice for ;ks a communmties that are situated more than 100 kms from the m nearest national grid. X i 5.19 The limits to rural electrification are defined by i i the balance between the cost of the projects and the benefits E o from rurAl electrification. As one moves from agglomerations that can be served through grid extension to agglomerations that have to be supplied from isolated gids and to the dispersed settlements, the cost for serving the markets increases I, while the p_lion's cacit to pay for electr srvices and their demand for elcrct derease (a) Farmers in the more populated rural areas have higher average incomes because they get better prices for their products. They are closer to the market and obtain their inputs at lower prices because of a better local infrastructure. (b) Most of the productive demand for electricity comes from the service sector (see TAkL 6. Ann M fl). Since this depends on the level of rural income, the productive demand for electricity falls even more rapid than the household demand as one moves from the more to the less populated areas. 5.20 Providing electricity to an addItial 10% ofrural households by the year 2000 would demand an investwent level of US$ 60 to 100 million (including the incremental cost of apcity epansion). Since the most profitable rural electrification projects were the first to be implemented, the cost of investment per connected household is increasin& Thus, each additional 10% of W As long as the tm are compaed at the same lel of eleci quit. Stand alone PV tems, thatan cover the demad for ghtng and radio, but little mone can be obtained at about USS 700, which Is as lwor lowe than the coa of invesument p connecred household In grid based nual eleificatdon pojets Household and Rwal Energy Strategy Ne 34 penetration will demand substantiaLly increasing resources and the financial cost of new rural elecdrifiation projects will quickly become prohibitive. 5.21 Full cost recovery would lead to rural electricity tariffs that are substantially higher than urban household tariffs. Although urban tariffs between regions/distibution companies are allowed to differ according to local cost conditions, it was thought that full cost rural tariffs would make electricity unaffordable to a majority of households. Therefore, typically, the investments in rural electrification are subsidized 30-40% often with foreign donor assistance. For the ral electrification projects in the 1990s, a continuation of this policy would imply subsidies of US$ 300 to 500 per conected household; and the payment of US$ 20.35 million in subsidies if another 10% of rural households are connected to new grids. 5.22 Where the acceptable balance is between the costs and the benefits if grid expansion is a question of political choice and of the overall availability of finance in the public sector. But based on rough estimates, the market for rural electrification projects can be split up into: (a) areas, that can be supplied through grid extension (20-30% or rural population, or 130,000 to 200,000 rural households in the year 2000); (b) areas, where rural households can be supplied by isolated grids (5-10% of rural population, or 30,000 to 65,000 households); and (c) areas, where rural households live so dispersed that only individual systems are feasible (60-70% of the rural popuation, or 390,000 to 420,000 households). 5.23 From the above data, it can be concluded that the key poHtkall ku in rural electrification are: (i) whether the expansion of rural electrifiction can be justified by the benefits fiom electrification; (ii) whether equity is served by a policy which subsidizes the electricity casumption of the relatively more well-off farmers, while the poorer areas neither receive the benefits from electrification nor receive an equivalent amount of subsidies; and (iid) what the Government can do for the rural majority of the rural population that will not be served by electricity in the foreseeable future. The key technial sues are: (i) what the least cost options are for rural electrifica1ion; (ii) what the most appropriate planning and institutional framework is for rural electrification; and (iii) how initiatives can be organized to provide higher energy welfare to the population that is not served by electricity. Houshld and R11a Energ Strateg Page M 5.24 The estimated margina cost of rual electricitynueSufr ;S: <:{ bare higer than those i - of kerosene and LPG based on the same P~r osmesz about,.15 kWh p.:'s:oith.: Ts.h end-use. These costs range from USe 12- X is sedt o.rE soi.|t 37/kWh to USe3-44/kWh respectively. ye1 and a rain uai an r.aa While rural electrification can be difficult ':~ : bate. ( K@i;a b.t.e o;rs l tna to justify financialy or economically whrn *t~# tha a- aS muc nir En oriented solely on~ household lighting and SOrc of nr~ B mos.bm*ln cooking, the viability of expanding the rural 15 ?hivI The;m inrdut grid can be augmented if productive end- of lctict inahueldedst ti uses can be strengthened and/or developed rNlCmn of;i ahes watIM aouroe of; ; , t1 (coupled with national tariff regimes). ken la^s U'O 1a^~ e electrification project, most of the ... | f~ j: n productive demand for electricity would be .q covered through standalone generators, i otead, will only be realized if a grid- 1 bo o~s h based system is implemented. Therefore,i the disusion below will focus on the a effiency of these is much higher than for wick kerosene lamps and dose to the efficiency of. LPG lamps), would still entail a substantial v r tSt> , welfare and economic benefit to a candle-using X a fi. householdL Taeore, the Immleate prrI o ruralenerg poHicy btoamist the poorest rwrl poplatonIn swdItIng to presurized kerosene m *o u*tshidaaoeI and LPO-lam as the primary source of = X ( h Iing. The reduction in the monthly fuel costs by a switch to a LPG lamp provides such a huge M i > $ > rate of return to the consumer (see text box) that the continued use of candles and kerosene wick lmps can only be classified as a major O t > market imperfection. he causal factor for this 5 . Z S i the scarcity of cash for buyig the neded auxliay equipment (the lamp). This is an s. aeample of the general rural problem of low incomes and inappropriate financial systems to serve the need of the rural population (see Amn9LX. Therefore, subsidized loans are justfied in this case as they help to overcome a market imperfection. 531 A reasonable poliqy target for the penetration of hydrocarbon-based lamps would be two lamPs per rural household outside the electrified areas. At a low cost, such a program can provide substantial welfare benefits to the poorest part of the rural population. If the Asunta Valley figures on the relative use of the fuels for lighting are representative of rural Bolivia, the NPV of the value of the benefits of a program that provides modem LPG or kerosene lamps to the 120,000 (year 2(W) households that use candles and the 200,000 households that use kerosene wick lamps amounts to US$ 182 mdillon. A presurized kerosene lamp costs around US$ 20, an LPG lamp USS Household and Rual Enel Statey Pag 3 40. 20/ The choice between promoting LPG or kerosene lamps wil depend on which option can provide a given lighting quality at the lowest life cycle cow, and, next, on the relative availability of the two fuels The investment needed to provide each household with two lamps would amount to US$ 12.8 mIlion for a kerosene amp program and to US$ 256 miionn for a LPG lamp program. 532 The financial cost to the Government of supporting such a program is difficult to estimate a priorL It involves costs for the administration of the program and financial losses on consumer loans that are not repaid. Nor is it possible to evaluate the size of the revolving fund that is needed to provide the loans to the consumers. The extreme case is iliustrated in EiF .1 (see Anm& It assumes that: (i) the households that already have LPG lamps would ask for loans when they replace a worn out lamp; (ii) 50,000 target group households would benefit from the program the first year, after which the number of new target group households falls 10% every year until the year 2000, when the program ends; (iii) that every households purchases two lamps and replaces them after 35 years; and (iv) that the down payment is 20% and that the loan is repaid over 35 years 5.33 In that case, the program would need a revolving fund of US$ 8.2 FlghL: Reults and Costs of a LPG Promotion million (of which USS 3.3 million would Progm have to be paid in the first year) to provide loan finance to the customers through the local merchant stores. The cost for the dministration and the monitoring of the X progamm should be below US$ 300,000 per year. The annual demand for LPG lamps would be140,00lampsthe first year (US$. * 5.6 million investment if the price per LPG lamp is US$ 40) and stabfilizat alevel of 200,000 lmp per year (US$ 8 million). From 1990 to 2000,15 miion LPG lamps g e S .N U U 13 iPi wold be sold, at atotal cost of US$ 61. The program should be merged with the i program to increase the connection rate of WUwig low income households in rural electrification projects. The RDC should be responsible at the regional level for idenication of the target group in the departments, the fixing of annual targets for results, the implementation and the monitoring of the program. The work can be subcontracted to NGOs, while the development of the market and the provision of finance should be done through the merchants that already sell LPG lmps. IV Thes figues are estmates and need to be confmed by INE's nua enI wre Household and Ral Eneg Stat Par 4 5.34 For the rural population that already uses LPG lamps, a LPG lamp promotion program is of no interest, unless it provides "free rider effects. Some households (e.g., large cattle farmers in the Beni) have a sufficiently high Income, and correspondingly high electricity demand, to afford the inWtallment of a ,mau LiaLor og liD- ow §gxahz. For the vast majority of the potential population these $ 1500.2000 generators are out of their financial reach. A less investment-intensive option is to cover the 'lifeline consumptiont of electricity through the installment of e ms orinad .g ent In the Altiplano, a Spanish NGO is installing a PV system at a cost of USS 750. Another NGO, SEMTA, that operates in the Altiplano has developed an equivalent system based on a 75W win igenerar. The cost of this system is also around USS 750. 21/ However, both systems are difficult to market for reasons on both the demand and the supply side. 535 First, compared to a consumer in a rural electrification project who pays US$ 100 for his connection, the upfront cost of a PV system is USS 650 higher. Second, contrary to popular pectation, these systems do not have "cero' operating costs. In order to ensure continued operation, these systems need to be backed up by a monthly or bimonthly technical service, the cost of which, based on the experience in Bolivia, is at least 15 Bs. (US$ 3 per month). This operating cost equals the monthly expenditures on kerosene or on LPO for lighting, and is close to the cost of 'ife-line' consumption in rual electrfication projects Finally, the range of potential servces is lower than in an electrifiction project - to run a refrigerator on a PV system would require investments in additional modules. 22/ In addition, the risk of system failure is likely to be higher. 2J/ 5.36 The obstacle on the supply side is that a PV-promotion program is difficut to organize. Solar home systems are most appropriate in rural areas that will not be electified by conventional means; but this very feature makes the provision of technical support and payment collection difficult. Effective collective options must be designed and implemented, and a viable t The wind twbine tem deev ucid testi e advante of the ystem is that thepercentage of national cm tis stem is y Wgher. disadvante is that wind is a ls avaable energ source than sola radiation in most of Bolivia, and that the potential for ot reduction is higher for PV modues than for the wind turbines. PV pricms feg frm a high of US$ 30.70 per peak watt in the early 1970s to about US$ 5 (reta) today. Te price of wind tbines per rotr damet fell by 30% over the same pedod. at f we ticlude th anortatlo of the US$ 750, the month ost of the electriy wil increase by US$ 10 - 16, if the sytem is motied over 10 years or 5 yeas, respctie. All wBy 1990 the houhol PVstallatPon prct on Bulas Islands in the Phiippe had installed 110 smal PV syms sad one communiy battey gg system Nearly half of the installtons had component faflues withn the firt two years of opeatlow 19 wo battery failure, 22 lamp and ballst faiur and 10 BCU failures. There wrae no reported module filues. Household and Rural Enrg Stategy Pae 41 stucture for providing technical support to remote areas must be identified 24/. The simplicity of solar home systems does not obviate the need for the careful design and production of reliaole components Although PV modules are technically and commercialy mature, other balance-of- system components may not be, and should be, thoroughly tested before commercialzation is initiated. Because poor component reliability can threaten succesul commercialization, a national component policy should be defined before any program is launched. The Spanish N(O has made a laudable effort to reduce the cost of its PV systems by increasing local production of components. A larger-scale PV promotion program should start to evaluate the technical experience of the project. 537 PV-lntens are an intermediate alternative between LPG/kerosene lamps and PV systems. The cost of the system is US$ 125 on the US market which means that they could probably be acquired at USS 150 on the Bolivian market. There are good prospects for cost reduction in the next years as increased demand leads to economies of scale. The cost of a widely distrbuted system can be further reduced, if local grocery offers in-store battery-charging PV panels so consumers have to invest in the battery and the CFL only. 5.38 A Government-sponsored PV promotion program, therefore, should be targeted at two different market segments, and use different levels of subsidies: (a) One market segment, to be developed by a 100% subsidy, is the homes of school teachers and other Government offcials who: (i) work in rural areas outside the reach of grid-based systems and whose homes are not connected to a generator; and (ii) for isolated rural health posts where PV powered rerigeration of vaccine can be useful. However, as no study has been made on this market, therefore, the its exent i not known. (b) The other market segment consists of non-electrified farming households. The Spanish NGO, referred to above, sels its PV system with an 80% subsidy to the consumer whic is not a viable option for a larger program PV systems and lanterns should be sold with a 10% down payment, a 40% subsidy, and a five-year payment arrangement for the remaining 50% of the cost. How large this potential market is depends on the number of households in the isolated areas which can afford to pay US$ 100 per year in loan repayments, with due account of the other needs of the household. This needs some investigation before a qualified guess can be made. But presumably, It is somewhere between 5 to 20% of the households, or 20,000 to 80,000 of the year 2000 rural households. This puts the annual cost to the E/ In t Blurs Island project, it was decided that sedg out a technician to collect paymen from te consumers in re asould comt more tdan what wd be coeued Therefor, the remote fume were eipcted to pay whe they came to town to buy provisons Ths voluntwy nre of repiment led to an ares rate of 40%. A colcion opton could be to make groups of _nmrs repnsible for payment of members; for eampl, mcmbers of the group who have not yet had a ystem Intalled wil not receive one, unt members of the oup who already have them are arent in their pament Housold and Rul Er Stategy Parg 42 Government of such a program at US$ 0.75-3 mfllion per year (excluding the cost of adminting such a program). Mas to Ruc the Cost of Rur EltriiatLo 539 In view of the high cost of rural electrifcation projects, attention has to be paid to ways of rducing the cos and maxming the benefits from the investments. Thisinvolve promnotion of ufficxent investmets iX. in detailed feasibility work; . . A . P C promotion of the productive use of MfYftfbSIlOdIp481ityWr electricitr, and the use of least-cost s | m options for power production in T i p 4 M th 5.40 The roductivei i demand for electricity is usuay t.40% lower than the household demand f ~ ~ * ~ ~ 1l~ for elecricity in nral elecification projcts (see Annex VI for an ! m _ analysis of the productive demand for elericity in rural Bolivia). But it is an important determinant for the overall profitabiity of the project: (a) From the point of view of a utility, productive end-uses not only have the effect of load-building, they also augment the off-peak load, The marginal cost of investment for satisfying a larger productive demand for electricity is relatively low. A high level of productive demand, therefore, decreases the cost of investment per kWh of demand or kWh of consumption. (b) The economic and financial viability of rural electrification projects depends on a rapid growth of demand which is a function of economic activity. A potentially large productive demand for electricity is an indication of fast local economic growth, and thus faster growth of rural inoomes and electricity consumption levels. 5.41 The exstence of a productive demand for electricity is an important criteria for the selection of rural electrification projects by the regional development corporations and rural electricity cooperatives. Only areas that already have a basic infrastructure in place, such as access roads are considered eligible for electriftion projects. In principle, DINE approves only publicly financed rural electrification projects where the productive demand makes up at least 50%. This passive policy of favoring productive uses of electicity can be supplemented by an active policy in Household and Rurl Eer Stategy Par a favor of promoting productive uses for electricity In rural elecification projects. A promotion progam should be directed both at new electrification prqjects and include a wbackfll program for xisting rral electrIfication schemes. The implementation of the program ought to be monitored to pernit evaluation of its coss and the benefits. 5.42 Dehema,MA OM lan of 3 to 4 MW are a potential but not realistic poity for the generation of electricity in rural areas (see AnnuM. Feasiblity studies were made for a US$ 10.3 million 3.S MW plant in Trinidad and a US$ 1.4 mllion I MW plant in San Ignaclo. But dentro-thermal plants should not be part of energy planning during the 1990s: (a) The estimated cost of production of about US$ 0.16 per Kwh is not cheaper than the production cost of diesel-powered units. (b) The establishment of forestation schemes based on mono-cultures may not be environmentaly sustainable in the Amazon areas. (c) The technia and organizational risk are high The plant requires etnse maintenance and cleaning and extensive support must be given to the rral eectrification cooperatives in planning, designing and implementing these generation pln,ts. 5.43 Although only a fraction of the impressive physical hydropower potential has been developed so far, little development of mer-g t zRg anlb has taken plc during the last 40 year Some 65 mini-hydro plants with a total capacity of about 80 MW are in operation; half of these plants are used for minin the other for village use. 5.44 The potential market for new mini-hydro schemes is small because of the absence of a local demand in the areas of high physil potential (see Anm ). Most of the earliest rural electrification schemes were developed to serve the needs of a mine and were based on mini- hydropower. Mining development slowed down during the last decades because of natural resource and political factors; therefore, little demand for new mini-hydros came from this sector. Although the political situation for new mining development is more favorable in the 1990s, the resource linitations remain. Nor will there come much demand from vilage electrification schcmes-the areas with the highest hydropower potential have a low population density. Fourteen of the national territory has mini-power potential. Ite optimal sites are located in 5% of the national territory. Tle area contains no more than 66 communities with populations ranging from 100 to 2,000. These communities permit the development of sites in the 20 kW to 100 kW range. In addition, some sites can be developed for isolated mini projects and saw mis FPinaly, some agro. procsing uses can be identified for direct-shaft mini-hydros, e.g, coffee. ?/ / The minihydro sit are too far away from the nadonal grid to make it economic to develop thea si for prodcion to the national g8id Ho_didd and Rura Eere State Pap 44 5.45 From the point-of-view of the national energ balance, the potential contribution firom mini-hydro development is smalL But the feasile projects are economic and can be developed without need for subsidies at cos from USS 1,000-1,500 per kW of capacity. lTe use of locally-manufactured components can be irased provided technical assitance is given to assist in the improvement of manucturing capacity. For the neot 10-15 years, there is a market for the development of 10 cplant and 10 minlpl with a total capacity of 3MW. These projects will provide electricity to 40 or 10,000 households. C. Last.Cost Options to Cov the Productive Demand for Ene,V 5.46 Productive demand for energy in Bolhvian agricuture is mainly a demand for water pumping and for the drying of agricultural products The MEH and MACA should, therefore, concentrato activities around the least-cost satisfaction of these two needs. Provided that the technology can be manufactured locally, renewable energy systems will often be the most economic solution. Unfortunately, up to now the work on renewable energy stems in Bolivia has lacked focus. 5.47 The use of irrigtion is expted to grow rapidily during the 1990s. Some expansion of Irigation wM take place through gravity based systems, some through mehanical systems In areas where the latter is feasible and the wind potential is sufficiently favorable, wind water PM= can be an attractive option - the life cyde cost per mn of water of a typical US$ 1,000 wind pump with a 5 meter rotor is lower than for small gasoline powered units EV-w= mM are an other optiUO, but presently, these systems do not yet represent cost-savingp over diesel and gasoline- powered pumps. 5348 Three different producers are producing wind mils for water pumping in Bolivia (see . The Ltst wind potential is found in Santa Cruz where some 600 wind powered water mls have been instaed so far. In some local areas of the Altiplano, the wind energy potential is also sufficient to enable the use of wind turbine for water pumping It is impossible to estimate what the annual market would be for these systems, but presumably, some 100 - 400 mai systems oomd be sold per yer. The MEH can support the development of the wind mills by financing a solid monitoring and testing of the marketed systems in Bolivia, and by supporting studies on the wind energy potential in areas where a larer epansion of irrigation is expected during the 1990s. The marketing of the systems has to be left to MACA. 5.49 In other parts of the world, rural water pumps have been developed that can be moved by anial traction. uThis may be a partla attractive option for water pumping in dispersed rural farms in Boliva, as studies made by the ESMAP/MEH project indicate that there is idle capacity of animal power. Unfortunately, the study is totally supply-based. It provides information on the availability of animal power and on existing techniques for making use of animal power. No information is given on the demand for aninal traction or on the economic benefits from the use of new technologies for animal traction. A verification of the market for novel Household and Rual Energ Strteg Page 45 techniques for making use of animal power in agriculture and in rural transport and the eventual implementation of dissemination programs should be undertaken by MACA. 5.50 Ihe University of Cochabamba has developed low-cost soar f.jy for the drying of fruit and vegetables that can be sef-constructed by the farmers, provided that they acquire plastic fim The technology is low cost, fully matured and can be disseminated by MACA. Since this technology has a widespread, and not local specific application in Bolhvian agriculture, a nationwide campaign for the dissemination can be implemented. It will yield insights on how new energ technologies can be marketed, and therefore have a value that goes beyond the benefit from the technology as such. 5.51 During the 1980s several programs in favor of the development of bioag energy were launched in Bolivia. By 1990, some 48 biogps digestors were installed half of which were out of operatio. In part, the experience reflects the technical difficulties of biogas programs in other parts of the world, in part the difficulties were caused by a lack of focus on viable systems for appropriate regions. Instead, attempts were made to develop biogas digestors for all regions, including the Altiplano, for which they were totally inappropriate. Lately, a potentialy promising concept was concived, whereby PIL, the Bolivian dairy company was to loan finance the installaion of 10 biogas digestors at small farms, with repayment being made in milk deliveries. It was not Implemented as the GOZ, wch durig recent years financed biogas development in Bolivia, ended its involvement in 1991 due to disappointment with the results. Biogas development is an interesting concept But in view of more pressing priorities and the its low chances of success, additional resources for its development are not justified in this decade. Housekold .d Rural Faerg Stutegy Pap 46 VL A STRATEGY FOR RURAL ENERGY PLANNING A. Te Ddetion of a Strategy 6.1 Because the welfare of a majority of the rural popuation is seriously affected by the exitnce of market Imperfections to a rational use of energy in rural areas, the M1H must replace its passive rol with an acdivist strategy that provides genuine leadership to guide the work of the RDCs and the NC)Os and that more than doubles the level of energy investments per rural capita. The formulation of a strategy for rural energy policy involves four steps: (i) the definition of the key objectives for rural energy policy; (ii) the definition of the key programs to flfil these objectives; (Mii) the definition of the most appropriate institutional framework to promote the policy objectives; and (iv) the definition of what regional energy planning work has to be done. B. Polc Objectives and Pgams for Rural Energy Development for the Year 2000 62 Based on the analysis of the rural energy issues, the immediat gWctves for rural energ policy during the 1990s should be (i) to improve the quality of lighting; (ii) to develop cost- effective micro- and mini-hydro projects; and (iii) to rationalize the use of energy for cookin& The Mulkanht kw"for the orresponding three pagm that should be attained by the year 2000 are: QkWei: To provide all rural households with the means to enjoy a liting standard that is equalent to the lifeline consumption" levels in electrified rura vllagos Oue Tet fNor PE~.4rogrm C wnponents: (a) In already electrified areas, the MEH should increase the connection rate of potential household customers to at least 90% by making loans available to low- inoome households for the financing of the connection costs. (b) In nonelectrified areas, the use of candles and of wi kerosene lamps as the principal means for lghting should be reduced to less than 10% of rural households by a vigorous promotion of LPG and of pressurized kerosene lamps. (c) Ihe level of a commercial demand for PV stems, wind power, and PV lamps should be tested in a pilot project where the subsidies are not higher than 40%. If the result is positive, the program should be exended to a national program supporting (i) the establishment of commercial enterprises that diseminate PV- systems and lamps and provide service for their maintenance; and (ii) promote the Household and Ruwl Energ Strate Page 47 development of a market for the systems by providing loans and subsidies to their acquisition. hoam I D pn of Cost- Efective Micr and HMnL-Hvdro lects QbI&iy-: To maximize the rates of returns from rural electrification projects. Quatiaty fo?r Progm omponent: (a) A program for the development of hydropower at some 100 micro-sites and 30 mini- sites over the next 15 years should be implemented. The program should include support to local industry 'or maximum local production of components. The value of this program should be enhanced by a number of supportive activities, including (b) A pilot project for the promotion of productive uses of electricity should be implemented for both already electrified areas and for new rural electrification projects. If the balance between the cost and the benefits turns out to be positive, a nationwide project should be implemented. (c) Seminars on least-cost designs and the use of demand analysis as a tool to fine tune designs should be carried o-it for staff involved in the plamning and implementation of rural electrification projects. Progam 3 I RatIon Use of Eer for Cooking WSective: To protect the environment against energy consumptionpatterns that lead to ecological damage that threaten the long-run sustainability of local agricultural production. Ouantitatiev Taret for Prep m Coponents (a) A program for the promotion of improved kitchens and of pressure cookers should be tested and evaluated before the end of 1993 in a pilot area in the Altiplano. I viable, the program should be extended to cover 30% of biofuel-consuming households by the year 2000. (b) Technical and loan assistance should be given to private entrepreneurs for the establishment of rural LPG bottling plants and LPG distribution services, so that 70% of rural consumers will fall under the direct zone of supply of these centers. In addition, the following supportive activities could be undertaken: Household and Rwal Energy Statey Page 4 (c) A program for promoting the insulation of kilns in the gypsum, tile, brick and limestone industries should be tested in a pilot area, and if found viable, the program should be extended to cover al ucommercial scaleu enterprises in this sector. (d) 'he possibility for developing a viable scheme for energy-relevant reforestation projects will be analzed during 1992. C. ProddUg an ESlent InstIn mework for Rral Energ PlanIg Principles for a Rational Institutional Framework 63 A series of institutional reforms are needed to implement the programs efficiently. (see A &. .'MThe institutional framework should: (i) allow to make maximum use of market forces, and (ii) to take into account (a) the respective strengths and weaknesse Of the A oiarItttm*1egd~.un.t public sector and of the NGOs, aidd (b) the . large socio-environmental diversity of rural lag diversityd tla nDoMa W 6.4 The MEH should formulate the w. 1 general objectives and goals, but should leave it LS P M #0t1 to the local implementing agencies to define . ter t a how the goal can best be reached in individual areas. The MEH must have a well-designed 8f0 system for monitoring and evaluation at its dl . disposal to be able to control that the objectives ' ' A1~8as th.attoni are reached in the different areas and to provide guidance on best practices to the RDCs < tad and the implementing agencies. oa rt.tc pm 6.5 Thus, the reforms that are proposed below have three basic aims: (i) to strengthen the policy formulating and monitoring capacity of the MEH, (ii) to improve the coordination of activities between MEH and MACA, and (iii) to provide a framework for a more effecthie use of the RDCs and of the NGOs in project implementation and identification. Division of RQles Befteen the MEH and M 6.6 At the policy formulation, planning and coordination level the lack of coordination between the MEH and MACA needs to be corrected. MACA does not regard as its function to be involved in rural energy plaming and implementation activities. Yet, rural energy issues and Household and Rual Energy Strateg Page 49 agricultural development patterns are interlinked. Rural producthe energy demad is a derived demand from mostly agricultural and agro-industrial activities, and rural bhosehold energy demand has repercussions on agricultural productivity - the consumption of biomass for energy purposes, e.g dung competes with its use as a fertilizer; and the exploitation of fuelwood resource. for cooking may lead to soil erosion. Thus, although the MEH has the overall responsibilit for the definition of poliqy targets for rural energy; some issues fall under the responsibility of the Ministry of Agricture; and some need close coordinatict. It makes little sense to establish, for example, financing mechanisms for energy purposes outsiua the framework of the financing system in the affected area for small agricultural, or agro-industrial projects, in general. It would be equally suboptimal not to cooperate and coordinate coliecting of survey information on rural families. 6.7 ITe division of responslbility for individual issues should be determined by institutional xpertise. A rational cut-off crieteria for the involvement of the MEH would be whether or . E not an activity affects the physical ~ aaf enosaAdte)* flows of the enersystem. If an ;O' | se activity has a potential direct or i :I W I tm indirect impact on the consumption i E of fuels, the energy secor is P1 othstewiu k# affected and it becomes an issue for 150o neettrMC n o h iit7o energy policy. In addition, the t E MEH can support research in rX fib t e t n E agricultural applications of relevant Ot ACMIW*b5 tnE spin-offs from R&D activities * i ffi t W.i 1 . related to the physical enery a @ k r n e sysem, such as solar diyers of ---p W ei a agricultural products. The ..tta tHthf h *eaLinrjd Se ov1 disseminationof the systems should . X . . be left to MACA-affiliated l R j institutions. ~ti radmnsu 6.8 Based on this decision criteria, as far as the MEH is concerned, rural energy policy deals with: (a) All issues related to household energy demand (except reforestation) (b) Within the area of produdtve enery demand issues dealing with (i) fues, (ii) renewable energy systems that can replace fuel consumption, and (iii) renewable energy systems for productive epplications makng use of know-how that has been created from general energy R&D work, e.g, solar dryer systems Household and Rural Energy Strategy Pe so 6.9 Since energy eperts cannot provide any specific expertise to activities related to 'animal traetion' or to the promotion of greenhouses, these subjects fall outside the responsibility of the MEH. Only MACA and its associated institutions can provide the needed sector expertise capable of making a proper evaluation of project proposals in this field. Reforestation activities are handled by the Forestry Department in MACA 6.10 The 'Consejo Directivo de Planificacion Energetica" provides a model for an eficient framework for coordinating of sector policies between the two ministries and between the exeuting agencies. The Consejo was created in 1989 to improve the coordination between the MEH and the sector enterprises, ENDE and YPFB. A similar "Consejo Dfrectlvo de PnRural de Energisw should be established with representatives from MACA, MEH, the CDRs and the NGOL The to-be-created Dbecdon de Enera Rura" in the MEH should function as the secretariat to the Consejo, which is led by the Subsecretario de Energia. The function of the "Consejo' would be to identify national priorities for interventions and investments and policies for two to three yeas at a time on a rolling basis. Twice a year, the Consejo would convene representatives from MACA and the MEH only to review common policy objectives and the evolution of project. Both ministries should be represented at subsecretarial leveL Once a year, the Committee should be enlarged with representatives from the RDCs and the NGOs, in order to promote a consensus on the main immediate targets for sector development and to make a critical revew of the progres and the experiences of the sector work during the past year. The Vertical Division of Labor in Rural Energ Planning and Implementation 6.11 Rationally, the vertical division of labor in the planning sstem must ensure that the implemented projects are based on national priorities and that the implementation is adapted to local needs. Within the rural energy planning framework, there are basically three functions to fulfill: (i) policy formulation, implementation and monitoring at the national level (ii) project implementation and coordination at regional level, and (iii) project implementation at micro regional leveL This suggests the following division of labor: (a) At the strategic level, MEH, in consultation with MACA, would have four task: (i) formulating the objectives, the poLicies and the programs for sector work, (ii) iden. tifying sources of finance for the execution of programs, (iii) preparing calls for tenders for the implementation of program components that are carried out at the national scale and selecting executing agents, (iv) and finally, monitoring and evaluating the results of the policies and programs. (b) At the functional level, the CDRs would have four tasks: (i) regional implementa- tion of the national energy programs, (ii) publishing the regional call for tenders for the selection of regional executing agencies, (iii) preparing the plans for the implementation of "collective" energ systems in their regions, such as rural electri- fication projects, and (iv) monitoring the performance of the executing agencies in their regions. Household and Rual Eeg Stltegy pap 51 (c) At the operational level, relevant NOOs and universities would have two task: (1) eecuting the individual program components; and (ii) serving as consultants in technical advisoiy committees during the preparation of new program proposals The executing agencies would selected on the basis of the quality of the proposals they have prepared in response to a call for tender. an=&ioL of the MEH 6.12 The implementing functions assigned to COFER would no longer be needed, whie the poliy formulation and result-monitoring skills of the MEH must be upgraded. To carry out the four MEH tasks defined above, COFER has been replaced by a 'Direeclo de Fomneto bA,ek Rural,' which, unlike COFER, should be physicaly located within the MEH and staffed by a small and highly skiled team of three professionals and support staff. While all three professionals would work on the policy formulation side, two of the staff should work with the preparation of progams, and the third should be responsible for the organization of evaluation work and the establishent of data bases within and outside the Ministry. 6.13 The analytical quality of the staff needs to be high because it Is more diffiullt for MEH to devise coherent programs for individual energy stems needed in the rural sector, than for collective energy systems, such as electrification grids and natural gas pipelines that are upported by professional feasibility studies made by ENDEA the YPFB and internatdonal nstitutions. Also, since the large welfare impact of rural energy work is not reflected by its modest impact on the national energy balance, the staff must be able to support its proposab with strong arguments to boost the priority of rural issues within MEH Finay, the staff needs to be sufficently influential to be able to counter proposals from NOOs and CRDs that are geared to serve their own buiness interests rather than the interests of the target groups. 6.14 Ihe Direocion can be small because: (i) the implementation of the rral energy programs would be based on the principle of subsidarity", Le., only tasks that local agencies cannot handle wil be resolved by the RDCs, and only tasks that cannot be resolved meanin at reganal level wi be handled at the national level by MACA and the MEH; and (ii) the Dreocion wi make extensive use of outside consultants. The Direccion, therefore, has to be provided with a sufficient budget for this purpose. 6.15 The outside consultants can be provided by NGOs, university institutes or private consulting fims in Bolivia. The selection of consultants for major tasks should take place on thb basis of a call for tender, ie., published by the Direocion, while consultants for minor tasks should be drawn from a list of consultants/frms that have responded to a yearly or bianual 'expression of interest. 6.16 Unfortunately, the new DEFER already suffers from the same defects as COFER, including, a lack of funds, and low salaries. DEFER, thus, cannot as yet function effectivel, a situatica that wi persist for some time to come. Given the need to provide effective leadership Household and ual Energy Strategy Page 52 and guidance to promote economic development in rural areas by providing least-cost energy to productive needs of agriculture, rural industries and households, it is recommended to create a semi-autonomous, and technically well-staffed, Advisory Unit inside MEH (similar to the unit that developed the National Energy Plan) that will be financed by a bilateral donor. This Advisoly Unit will train DEFER staff and prepare them for their pro-active function in promoting rural development through the focussing on technologies that have genuine market prospects Also, to prepare project proposals for the investment and supportive activities identified in this report for submission to donors, to assist in operationalzation of the funded projects as well as of the institutional arrangements recommended in this report. Finally, to assist the 'Consejo' in developing ways to achieve the objectives of the rural energy strateg formulated by the Government. Tils Advisory Unit could function for 3-5 years, after which its functions could be taken over by DEFER. Because by that time proven procedures and methodologies will have been tested in practice, while skills and abilities will have been honed through learning by doing! this transfer of tas to DEFER should pose no problems. The Government, however, needs to allocate sufficent fUnds to enable DEFER and the 'Consejo' to continue to perform its functions effectively. D. Methodology for the Prpion and Implemntation of Ruil Eergy ProeJcts 6.17 Ideas for initiatives could come from the politcal stem (the Minister of Enery, Cabinet, Parliament, etc.), from the Direocion itsel, or from the annual meetings of the "Consejo Nacional de Planificacion de Energia Ruralm Viable project ideas wil be prepared into programs by the Direccion with, if needed, the help of outside consultants and be presented to the political level for approvaL Once approved, funding can be sought for the program either from the national budget or from donors If donors are inaterested, they wi usually be able to find the financial meas. Apart from nral electrification projects, rural energy programs usually demand rather small budgets, as they are not capital-intensive. 6.18 Whle attempts are made to identify sources of funding. the work on the preparadon of the programs can continue with the finishing of details, the preparation of a plan for evaluation of the programs and the drafting of calls for tender for the implementation of program components. Tne evaluation plan wil contain prescriptions for the internal and the external evaluation of the programs effectiveness and the contractor's performance. Depending on the caracteristics of the program, its implementation can be contracted to either: (i) one main contrwtor for overall programming and quality control at the national level and to other contractors at the regional level (call for tenders to be published by the RDCs), eg, tne LPG lamp program, or (ii) to one contractor only, e.g, the responsibility for maintaining a data base on rual energy issues. Separat calls for tenders are issued for the work of external evaluators that cay out mid-term and ex-post evaluations of individual programs. The selection of contractors/executing agencies that bid on the execution of a program or evaluation job should be based on both the price and on the qualit of the proposaL A basic principle should be that different consultants are hired to canry out the Household and Rul EnerV Stategy pop 53 appraisal, the Implementation, and the evaluation of progms. As the evaluation of programs needs to be undertaken lby eperts, MEH should limit evaluation contracts to hIstitutes from two or three uniersities only. 6.19 A conunon mistakeinruralenerVyphuninginothercountrieshasbeento prepare rural energy plan on the basis of rather lage investments in detailed data collection on the situation in the different rural areas, but without defining a piori what the data should be used for. Data on the avaiability oe k -l energy resources and on local energy demand would lead to identifying what the key issu.d to be solved. In practke, this approach usually leads to the accumulation of a huge amount of quantitative data, but litle qualitative data on what the real issues and options are. These "regional energy plans then accumulate dust on a shelf without being put to practical use. 6.20 The reason for the failure of this approacb is that a rural energy plan can only be meaningfully prepared on the basis of well-defined policy objectives and a knowledge of what kind of investments are avalable for its Impleentation l Tis kind of mistake is not made in rural electification as the planners in a rural electrfication cooperative or in a RDC preciey know what kdnd of data they need and what the financial constints are for project implementation. 621 Preparing micro-regional plans for implementating the proposed strategy wM be objective-oriented and resembles, therefore, the rural eldrificton planning approacL As the strategy dictates what kind of projects are to be implemented in the nedt dtree to five yeas, the data collection work at micro-regional level can be tailoed to what is needed in order to dep the projects at local leveL to set local quantitative targets and to monitor the results. To this end, data collection will be undertaken through "rapid rural surveys" and %eneficiary assesment" technies. The collected information should be stored in regional data bases so that the RDCs or implementing agencies can draw on the data for other purpos. L. otplhue tatlooftite Sategy-Te Nedt Step 622 In order to implement the proposed rural energy strategy, MBH needs to recive technawd asistance for the buidup of the Direacion de Energia Rural". The asstance shoud Incude the provision of an institution4l energy expert over a two-year period and short-term consultants in the fields of LW distrbution, data bases, rud credits, rapid sure tachniques and evaluation worL The tassaweto draw upthetenmsofreferenceforthestaffoftheDlrecDkon,to assit in the preparation of the programs, the establishment of data bases, the drafing of cal for tenders, and the preparation of evaluation programs. MEH should initiate discussions with donors to obtain agreement In prnciple to fine indidual progam of the strategy during the 1990s. Huehold and Rua Fnergy Strategy Pae 54 Ane L C_oultant Reports Prepared for the Stratea Biomass Tedhnology Group and *Stoves, Kilns (and Dendro-Thermal Plants) Oscar Aguar for Rural Bolivia, October 1990. Reforestacion en el Altiplano, Valles y Otras Ing. Oscar Von Borries Areas de los Uanos, Afectadas por la Deforestacion en la Produccion de Leoa y Carbon*, October 1990. Federico M. Butera, Jes.ts Durin B., InstitutionalAnalysisof COFER, September Coar Sevifa 1990. Renata Caros hnpacto Social de la Utilizacion de Energia en la Mujer de Areas Rurales de Bolivia, June 1990. COWIconsult Evaluation of Wind Energy in Bolivia, Febuary 1990. Edwin Delgado Viabilidad de la Energia Bolica en Bolhiva, August 1990. Jesus Duran B. Estrategia de Energia Domestica y Rural de Boliv December 1990. Fred. Hvelplund, Cecar Sella, Rural Energy Plannng and Implementation Gonzalo Guzman in Bolivi, October 1990. Myk Manon, Ronald Orozoo, Issues in Rura Electrification Organizaton, Orville Voodand Plnnig and Productive Uses in Bolivia, April 1990. Wiliam 0. Matthews, Jorgo Calderon LPO Distbution - Bolivia Household and Rural Energy Project, March 1990. Calvin J. Miller Evaluacion del Credito Rural en Boliva, June 1990. Claudia Ranaboldo Blivia Household and Rural Energy Project Promotion of Improved Fuelwood - and LPG Stoves, May 1990. Household ad R1a Ervgy Sate pop 55 Caudia Ranaboldo Promocion de Fogones Mejorados en Areas Rurales de Bolivia, October 1990. A. Tarnawiecdd Bolivia - Review of Alcohol Fuel Substitution Proposals, June 1990 (rev. September 1990). Ren6 Terin, Martin Vilarroel Informe de la Consultoria Sobre Energia Solar, Biogas y Traccion Animal, October 1990. Orville Voiland The Status of Mini Hydro in Bolriia, September 1990. Household and Rural Energy Strtegy pae 56 Annex Ik Tables on Urban Household Energy Consumption Table 1I.1: Household Income and Epediture (Bs./month) Expenditure Inecome Mean Lowest Highest Max Lowest Highest quintile 1% La Paz 824 508 4058 716 197 9530 Oruro 510 355 1570 461 152 3532 Quillaco 646 444 912 580 242 1810 Tai;ja 764 508 1400 571 217 2173 Trinidad 904 725 3566 896 288 7019 Total Urban 758 670 SurU: 1989 ESMAP/INE Household Energy Survey 1US$ - 2.55 bolivianos Table 1.2: Penetration of Fuel Use in Urban Households. peratage Total La Paz Trinidad Urban Fuelwood 10 2 19 Charcoal 0.1 0 0.3 Kerosene 11 18 12 LPG 87 84 79 Electricity 93 98 85 Other Fuel 7 1 12 Source: 1989 ESMAP/INE Household Energy Survey Household and Rural Energy Strateg Po gS7 Table 113: Total Urban Houhold E um ion by Fuel TOE/Year % of Total Kerosene 18,000 5 LPG 190,000 51 Electricty 158,000 36 Other 30,000 8 Total 396,000 100 Source: 1989 ESMAP/INE Household Energy Survey Table IL4: HueldEneray Expeditur by Income ClQs In Az oshl (DIMQhMW 1989 Income Cass Kerosene LPG Electric- Total % of total % of total ity income expenditure Low 5 13 11 29 15.0 5.7 Mid-Low 3 13 14 31 9.9 5.3 Middle 3 13 18 34 7.3 5.0 Mid-High 1 14 25 40 5.9 4.6 High 1 13 36 50 3.0 3.8 V. High 0 13 68 81 0.8 1.8 TOTAL LA 14 78 171 37 52 4.5 PAZ TOTAL 42 6.6 5.5 URBAN BOLIVIA Sourc: 1989 ESMAP/INE Houshold Energy Survey *3 Household and Rural Enp Stategy Par S8 Annex Ith Options for Rural LPG Supply 1. The supply of LPG to the rural demand centers is relatively efficient. 10 kg cylinders are transported from the urban LPG bottling plants by truck to the rural agglomerations. Consumers purchase their supplies either directly from the trucks or at the local merchant stores which sell LPG with a modest mark-up. As expected, studies by ESMAP revealed a correlation between the price of LPG and the distance of the rural demand center from the nearest bottling plant as well as the quality of the road. While a 10 kg cylinder cost 7 Bs. in La Paz, the highest encountered rural price (at a distance of 220 kms from the nearest botding plant) was 11.5 Bs.: in the majority of the cases (for distances in the 50 to 90 kms range) the price was 9 Bs. 2. While the price difference can be justified with reference to cost within the present system of supply, the question is whether a more rational system can be establshed with lower costs and higher consumer convenience. While Bolivia has a very decentralized botting system from the urban consumers' point of view, the bottling system is very centralize0 from the rural consumers point of view. This saves on investment cost in bottling plants, but in Alves costs resulting from: (i) an epensive transport of the tare weight of the botfle in addition to the liquid LPG payload; and (ii) an excessively large cylinder stock requirement for the total number of customers. 26/ 3. An alternative would be to supply LPG in buk to a series of rural networks consisting of small, simple storage and botding stations that each sei ve a specific rural population center. Within Bolivia, a total of 32 potential networks have been identified where such networks can be built up. 27/ A typical network would comprise the following elements: (a) A central office and garage/parking area. A location near the main bulk depot would be logical Indicative level of investment: US$ 52,000. Central ad- ministration costs per year: USS 22,000. (b) One or more LPG bulk tank trucks, typically with a 45 tonnes payload. Indicative level of investment: USS 40,000. Tank truc operating costs per year: USS 15,000. (c) Small storage depots, one for each targeted community, complete with a tank of 5 tonnes capacity to receive and store bulk supples from the truck, pumps, hoses, and weigh scales for cylinder fllng. The inital filling demand for each depot should be 20/ Tis results from the Immobton of inder in intransot and from the lack of supp reliaty, particulr fher out In the dbution chain that leads to a hoarding of qllers and a highernnormal ptoduc In- tory in the system ZZ For detai am the MI/SM repo#t, -UG Ditdbution BolhVar by Wlliam G. Matthews and Jorge Caldeo Mhe desination of fte 32 potential zones w based on the folowing ae:tera (i} locati of YPFB pimary or seconday storae depot sapply sowue. (I netwok of acces oads; (i) concenated populton within a radius of appromeye 200 kmb maxmu of dte dqmot/supply source; and (ho) the pment state of nual LPG ditrbution In the pardeular area Household and Rurl Eerg Strtegy pp 89 higer than fifteen 10-kg cylinders per day. Indicative investment per mini-plant: US$ 48,000. Operating/Management cost per year and pet mini-plant: USS S,O00. 4. The economics of this sytem were calculated for a proposed demonstration project in the Altiplano inolving two supply areas, comprising a total of 13 mini-plants. The proposal asumes that: (i) the initial sales volume would be 6.7 tons per day, (ii) the Initial investnent would cost $ 700,000, (iii) the first year operating costs would be $ 137,000, and (iv) the number of cylinders per client would be reduced from 2.5 cylinders in the present centralized dtibution sstem to 125 cylinders in the 'network case.' The results show that the cost of bottling and transport/distribution to clients in each of the 13 population centers would be reduced from 4.87 Ba ($1.6) per 10 kg. cylinder under the present system 2W to Bs. 2.83 ($0.90) in the "network ca." S. While In theoty, the "network system" offers some advantages, the implementadon presents some difficulties: (a) All consumers in an individual network ought to be confronted with the same stan- dard price. Some regulatory body and/or tranwsport fund would have to be es- tablished to ensure thiat the highest cost oudets in the networb are being supplied in the right proportion. (b) A solution has to be found for cylinder servicing (c) Insurance and liability of the distributor vis-a-vis accidents by the customer has to be assured. (iv) Tle issue of control and certifcation of product quality must be addressed. ;W/ hn 1994 t cost of L in dh plae abamtWu frm ho delq tnudlcwu S to 9 Bper p rylh . The pply comt bulk YPFB La Paz s esmated at 5.5 B1 per 10 kg botlo in tho prefeabilhy aty. lbb Om a 3 to 3.5 hL cost for the xa8t qgihder basod dirbut and botting plant, or a "st that I dmil to the forecasd coat in the demonration projed Implitly, the wpon theefore sumes that the prese cmst is unrelstic in the longer n. Hoiuhold ad Rral Ener Sstea pp 0 - -- L - IA *r _~- _ l -'l % ! ^ ! i~~MPA POLMCO DE| Ir o ) - 9 -- L ~~~BOLIVIA .o 4sg ~~~~-4. N . =--a, R ) ,e I~~~~~~~~~~~~wgt~ %.N ARGENTINAARA___U_A AREN O I YN AI LOC rOTS!-Ot TorZV ypLg -~ ~ ~U DEOS8=r plApTS\ Household ad'RaI Energ Stmate per 61 BOLMVA - LPG SUPPLY/DISTRIBUTION SYSTEM MAIN SUPPLY ................. SOURCES DEPOTS/BOTTLING PRIMARY SECONOARY iCAMIRI GAS L E I PLANT Iv . pVUELTA GRANDE| r . COLPA GAS t PLANT _,1h _ RIO GRANDE GAS PLANT PALMASOLA REF STA CRUZ COCHABAMBA ,I X REFINERY * ,~* .,. Household and Rura Energy Stategy Pop 62 _ _ ~ - . I 4 rq De C es Cod VoL 2. Household and Rural Energy Strate Page 93 Average Capacity Total Capacity Number of Schemes Size kW kW 1-2 Small 1000 1000 5-10 Mini 200 1000 20 Micro 20 400 10 Micro 5 50 Total: 26-32 2450.4450 21. How reasonable are such assumptions? A study done by CORDECRUZ found a total of 171 hydro sites in the department of Santa Cruz. For the 7 provinces with the best hydro potential (and no grid extension) there were a total of 104 communities with populations of 151,000 (average 303). Approximately 50% of these communities were found to have a hydro site nearby (distance unknown). If we assume that 50% of these sites are economically feadble, there would be 26 micro sites of approimatel 20 kW in size. Thus the estimate of 20 micro sites for communities seems reasonable. 22. For the optimum areas then it is realistic to assume that about 35 projects can be developed within the next 15 years provided that financing is available. If a cost of $1,000-S1,500 per kW is used, there would be a total cost of $2,175,000 for 1450 kW. Total Demand in the Rest of the County 23. Within the rest of the country there are likely to be many areas with small sm that may be developed economically, even in areas near the grid. Given the less favorable precipitation in much of the countly west of the favorable zone, the percentage of demand centers that could be matched with a hydro site would be quite low. But, it seems reasonable to estimate that another 20 projects could be found, although the co of these projects would be higher. Total Demand/atoal Demand 24. Adding up the various prospects it can be estimated that the potential may exist to develop 100 micro (less than 50 kW capacity) and 10 mini-sites (less than 1000 kW capacity) in isolated rural areas in Bolvia, over a period of 10-15 years, providing a total installed capacity of 3.5 MW and rural electrification for 40,000 people. 25. Coniderable potential may exit for the rehabilitation of older plants which are no longer in operation. The total number of these plants and their installed capty is unknown, but it is substantial, since one source lists seven sites with a total capacity of 19.8 MW as candidates for rehabilitation. Occasionally such sites can be restored to operation for only $150-250/kW, f problems with the civi work are not signiicant Therefore, a program of locating the non- operational sites and assessing their restoration costs should receive high priority. Household ad Rural Ene Strategy Ppe 94 26. Whle the total cost of a project is vety important in the general level of energy cost, an equally signficant factor is the load factor. The effect of increasin the load fctor can be seen between the projects of La Suerte and Chaco (1 ). where an increase of 53% leads to a 33% reduction In energy cost for a project that has a capacity which is 9% lower. The effect b more pronounced when both projects are comared with a 30 year lifetime; then the energy coo are reduced from US$ 0.104 kWh to US$ 0.038/kWh. Table XII. Comparison of Load Factr and Energy Cost for Three Low Cst Hydmpower Sites Pndec Capacty Lead facor Capacity Cost E Cost La Suerte 130 kW 0.26 1044 S/kW 0.7 $/kWh 16 October 250 kW 0.37 720 0.024 Chaco 20 0.17 1150 0.104 Houehold and Rual Energy Strategy Pae 95 Anne XIII: Assessment of the Potential Role of Wind Power In Borlvia Status Quo of Wind Energy Development i Bolivia 1. Approximately 100 wind turbines have been installed in Bolivia, primarily for water pumping for irigation. Several of the turbines are installed in the area of Santa Cruz, but some turbines are also erected in Oruro and La Paz. The projects are primarily undertaken by non- governmental organizations. 2. Approximately 30 turbines for water pumping have been installed at Santa Cruz The first turbine was installed in 1971. Aocording to the manufacturer, the turbines operate without problems. The turbines are the multi-blade type and the rotor diameter is 3.5 m. Hub-height is approximately 20 m. The manufacturer is Riva Palacios, located in Menonita. 3. In the area of Oruro, the Programme for Self Development of Farmers (Programma de Autodesarroilo Campesino (PAC)), is operating as a NGO, financed, inter alia, by the European Economic Community. The programme includes different agricultural projects for communities and cooperatives, including installation and operation of wind turbines for water pumping for irrigation purposes. Until now, 20 turbines have been installed since 1980. 70% of the turbines are paid back by the farmers during a two or three year period. The major part of the turbines are manufactured by Cadenas Andinas SAM. (CASAM). The turbine is multibladed with a rotor diameter of 2 mn The cost of the turbine is USS 1,200 according to the manufacturer. 4. In the aea west of La Paz the Sevicio M6ltiple de Technologfa Apropriada (SEMTA) has manufactured and installed 15 turbines on experinental basis. According to SEMTA, the manufacturing costs are US$ 1,000 for a 5 m rotor diameter. 5. Projects related to Reearch and Development within the field of wind energ technology are limited. The R&D activities are mainly concentrated on development of small wind turbine concepts for battery-charging and household supply. 6. At the Technical School of San Aloso in Santa Cruz, studies on small electricity producing wind turbines for battety charging are carried out. The projects are mainly performed by the teacher at the metal workshop assisted by a few students. General knowledge of wind energ technology at the school is limited. The small turbine for household power supply is two Waded. 7. A development project for small power producingwind turbines for household power supply is initiated by SEMTA and tested under real application conditions in a pilot project 8. In Huachacallo, Oruro, the Centro Piloto de Educaci6n Rural (CIPER) are experimenting with a 3.5 m rotor diameter turbine for water pumpin' 9. No monitoring of the wind energy activities in Bolivia has been made and no data regarding power performance and reliability of the existing turbines are collected. No specific wind Household awdi Rural Energy Strategy P4gc96 measurements have been made to evaluate the wind resources in Bolivia Only general meteorological data and data from airports is available. PWei AQliations for WinzdPower 10. In a broad perspective wind power can only play a marginal role in meeting the energy demand in Bolivia. Grid supply can be ruled out as a possibility in the Bolivian context Developments can only take place in a small part of the country's rural areas. The relevant turbines are small, low-cost, simple construction turbines with rotor diameters up to 5 m. Household electrcty use for lighting and radio/TV is an interesting application. But further developments are needed befoie the potential role can be defined. But the rather large wind vad- ations over the year and the frequency of calm periods will set technical limits for the application of household turbines. The installed cost of these systems-about US$ 650 to 750-further resticts the market to the relatively few remote farmers who have the financial ability to acquire the system. 11. In the case of cattle waterlng wind turbine pumping from groundwater could provie drinking water in remote areas where other sources are scarce. The most promising use of wind urbines is for the pumping of water for Irrigtion purposes. To estimate the potential market the ground water recources and quality as well as farm topography has to be known. These fiatos wil restrict the market for wind technology. timation of Market Siz 12. The size of the comparatively limited market for wind turbines in rural mewg supply for irigation and household electricity use will, inter alia, be dependent on the wind regime, the wind turbine cost, and the benefits obtained by the farms and households. A large number of physical and economic factors have to interact positively, thus limiting application to a small percentage of farmers. 13. Because of their wind regimes, the most promising areas are certain regions of Santa Cruz and Beni In addition, some locations in the Altiplano have wind regimes that permit the application of wind energy. 14. in the central part of the Santa Cruz Department, the energy density of the wind during the irrigation period is sufficient to make wind energy a competitive energy option for water pumping. Approximately 22,000 farm households are located in the Santa Cruz Department. An estimated 10.000 are located in areas with adequate power density. 15. Provided that an active wind power development programme is implemented, a rough esfimate of the potential market for turbines for irriation is approximately 1500 wind tur- bines over the next 5-10 years or 150-300 wInd turbines per year. A rough estimate of the demand for household electricity turbines is 500 wind turbines during the next 5-10 years or S0-100 wind tubies per year. Household and Rural Energy Strategy Pae 97 IMnA of Wid Ene on the National Enr Balance and the Enmy 16. Even under optimistic assumptions, the potential contribution from wind power 10 or 20 yeas from now will hardly be noticeable in the total energy budget (0.5-1.0 per mile of total enerag demand in terms of toe). The impact on the economy will depend on: (i) the saviW compared to diesel powered irrigtion, (ii) on whether in extreme cases the application of wind energ permits irrigation to take place which otherwise would not have been possible, and (iii) on the cost-avings of household electricity generation systems based on wind power compared to diesl/gasoline generator or photovoltaic-based systems. 17. The following socio-economic aspects have to be taken into account during a comparison of water pumping by wind pumps versus diesel/gasoline driven pumps: Wind turbi characteriscs: * VWind turbines can be locally manufactured, and most repairs can be done by local artisans in the rural areas making the technology appropriate for even remote areas, - ETe necessary maintenance is simple and infrequent and spares can be made available from the local producers. * Small foreign exchange cost component. * Relatively high investment cost and low O&M costs means that the single farmer wil need assistance for financing for instance through NGOs or via agricultural credit facilities. The cost structure means that once the windmill is established the average farmer with low income will not experience recurrent problems of financing purchase of diesel oiL Diesel enge characterlstic: * Diesel engines are relatively complicated to manufacture and some speciaiized knowledge is necessary to make repairs, thus making the technology less appropriate for remote areas. * Regular maintenance is necessary and spares can only be obtained from dealers. * The diesel supply could be unreliable in remote areas due to lack of regular distribu- tion system. ° The cost of diesel oil may at a future stage become a foreign ehange item seen in a national perspective as oil resources are modest (reserves to production ratio esti- mated to 12 years in 1983). Further, competitive uses in transport and industty may cause sharp cost increases. Hsehold and Rural Energy Strategy Page 98 * Relatively low investment costs and high rnning costs means that the single farmer in some years may have serious difficulties in providing the cash for purchase of diesl oiL gXedin with Irri=ticn in Boliva 18. Irrigation investments have had a mixed record in Bolivia. Recent assessments have shown the following factors as being important for the success of irngation projects. First, small scale is essential-no large scale irrigation scheme has succeeded. Second, community involvement is essentiaL Third, follow-up assistance in improved farming methods and marketing can substantially increase the net returns. Fourth, net benefits vaiy negatwely with the altitude of the area. 19. The National Service for Community Development (SNDC) has implemented 39 small-scale irrigation projects in the Highland and Valley regions Ihe costs per hectare range from $18 to $229,407 per hectare and from $2 to $376 per beneficiary depending on the system applied. Detailed ex-post evaluations have been carried out on two of these projects which highlight some of the factors which influence the impact of the investment 20. The first project is located in a community of 250 people on the road from Potosi to Sucre. A $17,000 investment in irrigation increased the irrigated land in production by 152% and the annual yield by 203%. However, family income was only 32% higher in 1989 than when the project was initiated in 1982, far short of project goals. Increases in tansport costs and lower prices offered by the intermediaries reduced the benefits of the surplus generated In addition, because of the limited size of the local economy, production increases forced down prices fetched in the local markets. The project had not considered the context of commercialization and market absorption. 21. The second project is located in an isolated community in the department of Oruro which survives on a very limited base of potatoes and livestock, mostly llamas Due to weak techni- cal implementation and miscalculation of available water resources, production increased only 26%. Family income remains unchanged due to unchanged low productivity, and few market opportmities. No crop diversification resulted since the community is isolated from any technical assisance in agriculture and was not rained during project execution for the expanded opportunities afforded by irrigtion. 22. A recent evaluation 37/ of 558 micro-irigation projects in La Paz, Oruro, and Potosi reached positive conclusions. ITe report stresses the importance of community involvement throughout the project cycle starting with identificatiot. Communities often identified projects, paricipated in construction, and organized themselves to maintain the projects. Some problems were found in the technology chose. There is a strong need to balance the limited knowledge of W/ 'Informs de la miidon de eovaldon de proyeos de deollo agropecauio y microriego e los b _doprt os de La Paz, O0ruto Potoi;' MNPLAN, MACA, UNDP, and Swiss and Notherlande' Tcdcl coopetion, Ma 1989. Houseaold and RurdFal neg Strateg Par 99 the communiies in project implementation with the need for hydrologically sound invetments Most of the iriation projects did not change farming methods in the affected areas, due to lack of follow-up with tensdon and other services - similar to the individual eperiences of SNDC cited above. Even without changes in technology the benefits were wbstantial in reducing the variability of the amount harvested. Some examples show double benefits with extension and Irription, compared to Irriation alone. The cost-benefit ratio calculated at a discount factor of 12% p.a showed positive net benefits for 93% of the projects in terms of area Irrigated. The net benefits vety inversely with the altitude of the project area. 2/ 23. The lessons from past projects shiow that to increase the efficiency of rription investments, more attention needs to be placed on the commercialization of production and other post-harvest actities, the development of integrated packages including agricultural extension and credit information, and on coramunity involvement Technical problems in many small-scale irrgaion projects point to the need to refine site analysi procedures and types of technology selected. M/ From grom benefits of USi20/ha at 4,000 m and higher to 3500$/ha in areas below 3,000m Household and Rural Enery Stteg Pae 100 Ane XIV: The Regional Er Plhnnig System In Bol The Pblnng Hierarchy .h?A°UP at M MiserWa Level 1. In principle all public investments have to be accepted by the Milstar of Plnnig and C dt (MPC). Energy investments which are mainly eecbrty investments have to be approved by tbe MPC which requests the MEH to confirm whether a given project is in accordance with the current energy policy and plans. If the MEH and the MPC give their approva the MPC will approach the international loan market in order to procure the loan. A minimum rate of 8% will be charged to the borrowing agency. 2. DINE (the Miistry's office for electrcty) and COFER (the Ministry's agency for rural energy development) are supposed to ensure the vertical coordination of rural energr activities. DINE has a series of governing functions, including the responsiility for the approval of investment projects for new grid systems for electricity distribution when these are carried out by pulicly-owned organizations. DINE always requires that: (i) there has to be a market in which at least 50% of the electricity can be used for productive purposes, and (ii) that the costs involved in the supply of electricity in the new area must be covered by the sales revenue. There is a gap, however, between the intentions of DINE, and the practical possibilities of enforcing these intentions. If a local organization is able to raise funds, even for a project which does not fulfil the DINE criteria, in many cases, DINE is not able to siop the projesL Neither is DINE able to stop projects, which are carried out by a regional development corporation (RDC), if the project is financed by means of the RDC's own financial resources. COFER never received the financial resources that it needed to play a constructive role in project implementation 32/; its ability to influence rural energy planning was diminished by its location outside the ministy. When a RDC contemplates a large-scale power project as part of a regional development initiative such plans nominally are to be supervised by COFER and coordinated with ENDE development plans, but frequently neither entity is consulted. Currently COFER acts as a consultant for energy projects (mainly rural electrification) that are implemented by other organizations e Regonal DWvloment rganitior 3. The RDCs represent the policies of the Central Government and are responsible for the scial and economic development of their departments. In order to fulfill these responsibflities, the RDCs have to elaborate and implement plans within the different sectors, energy, education, health, etc. These plans have to be coordinated at a natonal level by the Mnisty of Planning and Coordination. The RDCs receive the various national plans and programs from the MPC in order to implement these regionally. An RDC can establish instruments of aid and consultancy in order to coordinate public programs with the programs of non-governmental organizations. 22J The mont salay bu4et for COFER taff of 24 pers is USS 3000, wh makes it impossible to mainta saff for longe periods. In 1990, 50% of COFRs staff had been enioyped less ta 12 mont Household and Rurl EnW Sbtrteg Page 101 4. The RDC system gives rise to two kind of problems The first is the issue of equity: the different financial and admintative capacities of the RDCs. Most of the income comes from fees on, eg., the production of raw materials in their erritoiy. Since minerals are unequally distibuted in the teitoiy, some RDCa have much higher Incomes than others Several RDCs have viraly no financil resources of their own. Consequently, they continue to be overly dpndent on scarce and unreliable TON ort and central government mico-management. The four Departments with the lowest per capita income, O.uro, Potosi, Beni and Pando comprise 20% of the Bolivian population, yet only 8% of the total annual amount which is invested by the nine RDC. is placed there. In the Department of Oruro, CORDEOR invested USS 1.8 per capita in 1988, whereas CORDECRUZ invested US$ 16.4 in the Department in Santa CruL 5. The finandal Inequity is felt in rural electrification. The relatively prosperous Santa Cruz and La Paz Departments have estabished rather favorable loan conditions for electricity projects, that are evaluated as feasible. If vilage dwellers desire elecicity, they are requested to form an electricity distrbution cooperative. CORDEPAZ requires the cooperative to finance 20- 40% of the material costs, and finances the remaining 60"0% through soft loans. During the constructon phase CORDEPAZ pays for adminstraton, transport of labor and material, and the wages of the site workers It is possible for members of the cooperative to pay a part of the 20.40% by themselves working on the site. All in alL the support of CORDEPAZ amounts to a subsidy of between ;20-35% of the totaL 1f however, an eectification project is not linked to the electricity distribution grid and not located in the Department of Santa Cruz or La Paz, it can have financing problems and may have to pay 18-20% annual interest on dollar-denominated loans. 6. lbe ad quIty is felt in regional energy planning. Some RDCs, such as CORDEPAZ and CORDECRUZ have the capacity to establish a regional rural energy planing and implementation process. CORDECRUZ's Planning and Project Unit, for example, has 99 employees of which 42 have a higher education. Three of these are allocated to the field of electrifion, and oocasionaly three otherm from the Engineering Division, are involved with electrification. Both RDCs have produced electification planifor some specific areas. Other RDCs either do not have the capacity for energy planning or have not realized their potential in this area. CORDECO, the RDC for Cochambama, for mple, does not consider the energy sector in its plan The eleicity plannig Is considered the responsibility of ENDE and the electicity distnbution company, ELFEC. 7. The second problem for energy sector planning is the poor coordao between regin and natial Initiatives due to a lack of a dear defntion oftRDC coordaton of sectoral projects. RDC coordination of the planning of the range of agricultural institutions in their departments is difficult within the existing structur MACA has regional offices in each department which report directly to its headquarters in La Paz. In addition, seven afated agencies have independent plannig units over which the RDC has no formal controL T'hus, while the RDCs are responsible for coordinating departmental planning, they have little authority to do so. In practice, coordination is function of the goodwll of parties involveci As a rule there is an inverse relation between the degree of RDC dependence on La Paz for technical approval or funding and the ease with which a project passes from design to execution. Household sad Rural Ener Strteg Pop 102 NMO 8. Within thite r. the institutions with the greatest capacity for providing etension services to remote areas have been the verAmentm l organka1dos (NCOs). Although the NOOs have a tendenc to cluster around the rual areas in the immediate viinity of the laer urban centers, they have had an increasing vible profle in mral Bol and their Impact on the poor has been quite impressive in certai areas. Many external funding sources viewed NOOs as viable alternatives to reaching the poor and provided support for their actities. Donors often deal directly with them for funding projects in the agricultural sector and basiall ignore the central ministries. During the 1980s, the scope of the NGOs involvement in the implementation of rural development projects gradualy became much more important than the execudon of projects by government institutions. 9. There are three general ty of NGOs operating in Bol"via: (i) religious organizations, (ii) internadonal private voluntary oranizations (PVOs), and (iii) national NGOs, or private development institutions (PDIs). The church has been active for the longest period and has a large infrasucture in health and educadon. The Intera al NVOs focus their actities in a number of dearly delimited geographical areas, and generally seek to provide integrated basic services including health care, education, water supply and sanitation, and agricultural development. PDIs are extremely heterogeneous. Most operate small projects in rural development with an emphasis on oommunity education and partication. Many have a politicl or ideological edge honed during the years of dictatorship in Bolivia. Recently, PDIs have begn to form asociatons and networks along sectoral, geographical and thematic lines. 10. A distincton must be made between the most serious and professional organiations - able to manage large amounts of funding for local energ planning and rural energy projects - and the glay of small and short-lived N}Os with little or no professional capability. The former can offer valuable experience and replicable plannig methodologies if a dearer institutional context is set up and their speialization is utlized. 11. NOOs can bring the following strengths: (i) detailed knowledge of local conditions, (ii) experience in community development, (iii) a wilingne to experiment with non-traditional forms of service provision, and (iv) staff commitment to poverty alleviation. Greater efforts should be made to ensure that these strengths can be effectively combined with those of government and community groups. The weakness is that NOOs do not have any responsibility for setting priorities for their actities. They have become important sources of employment and provide salares for their staff that usually are higher than public sector salaries. It is, therefore, in their economic interest to eqpand or maintain their lvel of activity. One can notice a tendency to mass produce project propos with the hope that one of them will be within the area of interest of a donor. The outcome (X) may not reflect that the genuine priority needs of the target groups are addressed, but that activities of secondaty importance are carried out, and (ii) that the administrative expenses of the NGO make up a very high share of the individual project budgets. Houehold and Rura Ener Strtg Pap 103 Political Rersntation at "Grass Root Level' 12. Small poje with active partication of the communities and a consensts approach to decision-making appear to be the most effective in promoting developmenlt *gm9wInge !J= . Although the reslts of such projects may be positive for the beneficiaries, their number is frequently so reduced that the overall impact is minimaL Success would then appear to depend on support of a large number of small effective projects and ensuring that these efforts are closely coordinated so as to avoia duplication of effort, or even worae conflicting objectives of different projects. 13. The government's professed shift to heavier reliance on free-market signals and private sector initiative implies that the clientele in question - BolMian farmers - must be funiished opportunities to have their concerns heard, to have a say in setting funding priorities, and to contnrbute as partners in the overall process of rural policy formulation. Policy analysis and planning require experienced staff who cannot only evaluate the potential impact of different polic alternatives on the macro economy, but who can also help leaders in the fam and rural sectors identity common goals and define the means to take action. 14. Participation from the rural and agricultural sector has two weaknesses at the national leveL First, the farm community is not organized in a uniform, formal manner across the country. There is no official form of representation or delegation of authority with defined limits. Second, participation implies considerable travel costs and investment of tine. This has been a sevet3. constrait to organizing producer associations at the national leveL 15. In each region, however, the representation of the farm community has been accom- modated in a few committees and boards where the public and private sectors cooperate. The types of orgnizations that represent farmers vaiy signipcantly among regions, ranging from cooperatives to chambers to peasants' unions. As farmers become more organized, these varied forms of representation are becoming more proactive. This is, however, a gradual process which is still in its early stages of development. The creation of the Peasant Agricultural Development Corporation (CORACA) is an indiation of changing attitudes among campesinos. Yet, despite the apparent effort to create a depoliticized, technical campesino organization, the increasingly independent political postures of peasant unions and parent organizations makes the future of CORACA and other such oiganizations uncertain. Without mobilization and generation of their own resources, any institution is unlikely to succeed as an independent and autonomous entity. Some producer associations are run by small farmers with the assistance of NGOs. These often coeu t with unions and other communal institutions, but are maintained strictly as technical and economic (as opp-Med to political) institutions. Farmer cooperatives have been promoted over many years by NG0 and international donors, although severely limited scope and coverage have generally been the result. B. Orniztion of Rl Electification 16. Rural power grid or off-grid electrfication is provided primariy by distnbution concessions (under municipal law) or cooperatives. Power is either purchased from ENDBs grid Household and Rural Energ Strategy Pas 104 and routed through one of its distrbution substations, or it is generated by small isolated plants operated by ENDE or a cooperative/distribution company itself Rural electfication through grid tnsion is to some eodent done by the eight main distibution entities other than COBEE (La Paz) &ad ELFEFEC (Cochabamba) which supply power principally to urban areas. Several isolated stems are found throughout the country principaly serving smaller urban areas (Tarija, Trinidad, Cobija). The largest, Trinidad, is run by ENDE. In small towns and rural areas, numerous communitias operate distribution concessions or cooperatives run independent systems (diesel, micro and minihydro) with capacities ranging from 20 kW to 1000 kW. A number of these systems serve or have served mining communities in the Altiplano and Valles. 17. Electric cooperatives can gain legl status by being registereJ with the national ooperatienstitute, INALCO. IMALCO is the regulating body for all cooperatives in Bolivia. The greatest benefit of being registered with INALCO, in addition to the legal status conferred, is that import duties are waived on equipment purchased from foreign vendors. There are more than 100 small electric cooperatives in Bolvia, of which 90 are in the department of Santa Cruz (Tropicos). In addition to the large, urban-based CRE in Santa Cruz; sizeable and connected cooperatives inlude CORELPAZ, a IZOOO-member cooperative in the Altiplano; CEY, a 4,000-member electric cooperative in the Yungas; and CESSA in Sucre. 18. Once operationaL many decentralzed systems face financal dificulties. Tariffs are not sufficient to cover costs, forcing many top depend on RDCs for subsidies. The financial situation sometimes is eacerbated by poor institutional management. Smaller systems often do not have the resources necessaty for basic preventive maintenance and repairs, and prefer to reserve their scarce funds for emergency situations. Household and Rursl Eneir Strategy Page 105 Annex XV: Simulaton of the Cost of a LPG lamp Promoton Propwn COd oftmi UNS 40 Pul5cIpdoL 1060 1666 1664 l'-S 1668 1n? 1066 16o6 aSm New comowm 000 "mm use S0 a.$u 5,781 M4 1060 1 7 13,6 1,005 saidIe 4aul 16.760 15O6t 1MISS 13*6 10,30 17 t16 6 8R01 TOW 60 400 400 3%460 _.05 2,i 2G.5 2.01 21*2 700,000 LPG u 2A0 0 gum sum gum 20000 go0 20_a0 1_mpImset 0 0 0 1AM M 26,719 _ 1*5 366 _ 37 Ceidb _pmaue 0 0 0 1713 1001 10,116 21t,o 1t 70a NbvwIttal 140*00 1300 1= 1A0 100 200,3O 1844 10904 204, X 13126 0 6*00.0 4,.140,00 *16* 8.004400 7,81,0 ?,A?7" t313 _7, Loeu.60%0oU ~~4.460,00 4.10,0 WAX7.60 6,00*0 6.41I%0 $s0566 6.4301 6.646710 ,0,6 RsUSliw. 1,060,000 2 .671 BO, 2 374.357 4,006 4,001 6ew 6*4*6 6 .6 300 Nd Los 3200 11t, 27143 76,71 1t6.5 6t4 MAW 100184 01° 0 Joint UNDP/World Bank ENERGY SECTOR MANAGEMENT ASSISTANCE PROGRAMME (ESMAP) LIST OF REPORTS ON COMPLETED ACTIVITES ReglonfCountry Activty/Report 2thi Date Number SUB-SAHARAN AFRICA (AFR) Afdica Regional Anglophone Africa Household Energy Workshop (English) 07/88 085/88 Regional Power Seminar on Reducing Electric Power System Losses in Africa (English) 08/88 087/88 Institutional Evaluation of EOL (English) 02/89 098/89 Biomass Mapping Regional Workshops (English - Out of Print) 05/89 - Francophone Household Energy Workshop (French) 08/89 103/89 Interafrican Electrcal Engineenng College. Proposals for Short- and Long-Term Development (English) 03/90 112/90 Biomss Assessment and Mapping (English - Out of Print) 03/90 - Angola Energy Assessment (English and Portuguese) 05/89 4708-ANG Power Rehabilitation and Technical Assistance (English) 10/91 142/91 Benin Energy Assessment (English and French) 06/85 5222-BEN Botswana Energy Assessment (English) 09/84 4998-BT Pump Electrification Prefeasibility Study (English) 01/86 047/86 Review of Electricity Service Connection Policy (English) 07/87 071/87 Tuli Block Farms Electrification Study (English) 07/87 072/87 Household Energy Issues Study (English - Out of Print) 02/88 - Urban Household Energy Strategy Study (English) 05/91 132/91 Durkina Faso Energy Asement (English and French) 01/86 5730-BUR Technical Asistance Program (English) 03/86 052/86 Urban Household Energy Strategy Study (English and French) 06/91 134/91 Burundi Energy Assessment (English) 06/82 3778-BU Petroleum Supply Management (English) 01/84 012184 Status Report (English and French) 02/84 011/84 Presentation of Energy Projects for the Fourth Five-Year Plan (1983-1987) (Englishl and French) 05/85 036185 mproved Charcoal Cookstove Strategy (English and French) 09/85 042/85 Peat Utilization Project (English) 11185 046/8S Energy Assessment (English and French) 01/92 9215-BU Cape Verde Energy Assessment (English and Portuguese) 08/84 5073-CV Household Energy Strategy Study (English) 02/90 110/90 Centrl African Republic Energy Asssement (French) 08/92 9898-CAR Chad Elements of Strategy for Urban Household Energy The Case of N'djamena (French) 12/93 160/94 Comoros Energy Assessment (English and French) 01/88 7104-COM Congo Energy Assessment (English) 01/88 6420-COB Power Development Plan (English and French) 03/90 106/90 C6te d'Ivoire Energy Asesmet (English and French) 04/85 52S0-IVC Improved Biomass Utilization (English and French) 04/87 069/87 Power System Efficiency Study (Out of Print) 12/87 - Power Sector Efficieny Study (French) 02/92 140/91 -2- Reglon/Counhy Actiity/Report lid. Date Number Ethiopia Energy Assessment (English) 07/84 4741-ET Power System Efficiency Study (English) 10/85 045/85 Agricultural Residue Briquetting Pilot Project (English) 12/86 062/86 Bagasse Study (English) 12/86 063/86 Cooking Efficiency Project (English) 12/87 - Gabon Energy Assessment (English) 07/88 6915-GA The Gambia Energy Assessment (English) 11/83 4743-GM Solar Water Heating Retrofit Project (English) 02/85 030/85 Solar Photovoltaic Applications (English) 03/85 032/85 Petroleum Supply Management Assistance (English) 04/85 035/85 Ghana Energy Assessment (English) 11186 6234-GH Energy Rationalization in the Industrial Sector (English) 06/88 084/88 Sawmill Residues Utilization Study (English) 11/88 074/87 Industrial Energy Efficiency (English) 11192 148/92 Guinea Energy Assessment (Out of Print) 11/86 6137-GUI Household Energy Strategy (;nglish and French) 01/94 163/94 Guinea-Bissau Energy Assessment (English and Portuguese) 08/84 5083-OUB Recommended Technical Assistance Projects (English & Portuguese) 04/85 033/85 Management Options for the Electric Power and Water Supply Subsectors (English) 02190 100/90 Power and Water Institutional Restructunng (French) 04/91 118/91 Kenya Energy Assessmet (English) 05/82 3800-KE Power System Efficiency Study (English) 03/84 014/84 Statss Report (English) 05184 016184 Coal Conversion Action Plan (English - Out of Print) 02/87 - Solar Water Heating Study (English) 02/87 066/87 Pen-Urban Woodfuel Development (English) 10/87 076/87 Power Master Plan (English - Out of Print) 11/87 - Lesotho Energy Assessment (English) 01/84 4676-LSO Liberia Energy Assessment (English) 12/84 5279-LBR Recommended Technical Assistance Projects (English) 06/85 038/85 Power System Efficiency Study (English) 12/87 081/87 Madagascar Energy Assessment (English) 01/87 5700-MAG Power System Efficiency Study (English and French) 12/87 075/87 Malawi Energy Assessment (English) 08/82 3903-MAL Technical Assistance to Improve the Efficiency of Fuelwood Use in the Tobacco Industry (English) 11/83 009/83 Status Report (English) 01/84 013/84 Mali Energy Assessment (English and French) 11/91 8423-MU Household Energy Strategy (English and French) 03/92 147/92 Islamic Republic of Mauritania Energy Assessment (English and French) 04/85 S224-MAU Household Energy Strategy Study (English and French) 07/90 123/90 Mauritius Energy Assessment (English) 12/81 3510-MAS Status Report (English) 10/83 008/83 Power System Efficiency Audit (English) 05/87 070/87 Bagasse Power Potential (English) 10/87 077/87 -3 - Region/County Activity/Report Mth Date Number Mozambique Energy Assessment (English) 01/87 6128-MOZ Household Electricity Utilization Study (English) 03/90 113/90 Namibia Energy Assessment (Englisb) 03/93 11320-NAM Niger Energy Assessment (French) 05/84 4642-NIR Status Report (English and French) 02/86 051/86 Improved Stoves Project (English and French) 12/87 080/87 Household Energy Conservation and Substitution (English and French) 01/88 082/88 Nigeria Energy Assessment (English) 08/83 4440-UNI Energy Assessment (English) 07/93 11672-UNI Rwanda Energy Assessment (English) 06/82 3779-RW Energy Assessment (English and French) 07/91 8017-RW Status Report (English and French) 05/84 017/84 Improved Charcoal Cookstove Strategy (English and French) 08/86 059/86 Improved Charcoal Production Techniques (English and French) 02/87 065/87 Commercialization of Improved Charcoal Stoves and Carbonizition Techniques Mid-Term Progress Report (English and French) 12/91 141/91 SADCC SADCC Regional Sector Regional Capacity-Building Program for Energy Surveys and Policy Analysis (English) 11/91 - Sao Tome and Principe Energy Assessment (English) 10/85 5803-SP Senegal Energy Assessment (English) 07/83 4182-SE Status Report (English and French) 10/84 025/84 Industrial Energy Conservation Study (English) 0518S 037/85 Prparatory Assistance for Donor Meeting (English and French) 04/86 0S6/86 Urban Household Energy Strategy (English) 02/89 096/89 Seychelles Energy Assessment (English) 01/84 4693-SEY Electric Power System Efficiency Study (English) 08/84 021/84 Sierra Leone Energy Assessment (English) 10/87 6597-SL Somalia Energy Assessment (English) 12/85 5796-SO Sudan Management Assistance to the Ministry of Energy and Mining 05/83 003/83 Energy Assessment (English) 07/83 4511-SU Power System Efficiency Study (English) 06/84 018/84 Status Report (English) 11/84 026/84 Wood Energy/Forestry Feasibility (English - Out of Print) 07/87 073/87 Swaziland Energy Assssment (English) 02/87 6262-SW Tanzania Energy Assessment (English) 11/84 4969-TA Peri-Urban Woodfuels Feasibility Study (English) 08/88 086/88 Tobacco Curing Efficiency Study (English) 05/89 102/89 Remote Sensing and Mapping of Woodlands (English) 06/90 - Industriul Energy Efficiency Technical Assistance (English - Out of Print) 08/90 122/90 Togo Energy Assessment (English) 06/85 5221-TO Wood Recovery in the Nangbeto lAe (English and French) 04/86 055/86 Power Efficiency Improvement (English and French) 12/87 078/87 Uganda Energy Assessment (English) 07/83 4453-UG Status Report (English) 08/84 020/84 Institutional Review of the Energy Sector (Englisb) 01/85 029/85 Energy Efficiency in Tobacco Curing Industry (English) 02/86 049/86 - 4- Region/Counhy Acvi*y/Report 2lg Date Number Uganda Fuelwood/Forestry Feasibility Study (English) 03/86 053186 Power System Efficiency Study (English) 12/88 092/88 Energy Efficiency Improvement in the Brick and Tile Industry (English) 02/89 097/89 Tobacco Curing Pilot Project (English - Out of Print) 03/89 UNDP Terminal Report Zaire Energy Assessment (English) 05/86 5837-ZR Zambia Energy Assessment (English) 01/83 4110-ZA Status Report (English) 08/85 039/85 Energy Sector Institutional Review (English) 11/86 060/86 Power Subsector Efficiency Study (English) 02/89 093/88 Energy Strategy Study (English) 02/89 094/88 Urban Household Energy Strategy Study (English) 08/90 121/90 Zimbabwe Energy Assessment (English) 06/82 3765-ZIM Power System Efficiency Study (English) 06/83 005/83 Status Report (English) 08/84 019/84 Power Sector Management Assistance Ptoject (English) 04/85 034/85 Petroleum Management Assistance (English) 12/89 109/89 Power Sector Management Institution Building (English - Out of Print) 09/89 - Charcoal Utilization Prefeasibility Study (English) 06/90 119/90 Integrated Energy Strategy Evaluation (English) 01/92 8768-ZIM EAST ASIA AND PACD IC (EAF) Asia Regional Pacific Household and Rural Energy Seminar (English) 11/90 - China County-Level Rural Energy Assessments (English) 05/89 101/89 Fuelwood Forestry Preinvestment Study (English) 12/89 105/89 Fiji Energy Assessment (English) 06/83 4462-FIJ Indonesia Energy Assessment (English) 11/81 3543-IND Status Report (English) 09/84 022/84 Power Generation Efficiency Study (English) 02/86 050/86 Energy Efficiency in the Brick, Tile and Lime Industries (English) 04/87 067/87 Diesel Generating Plant Efficiency Study (English) 12/88 095/88 Urban Household Energy Strategy Study (English) 02/90 107/90 Biomass Gasifier Preinvestment Study Vols. I & II (English) 12/90 124/90 Lao PDR Urban Electricity Demand Assessment Study (English) 03/93 154/93 Malaysia Sabah Power System Efficiency Study (English) 03/87 068/87 Gas Utilization Study (English) 09/91 9645-MA Myanmar Energy Assessment (English) 06/85 5416-BA Papua New Guinea Energy Assesment (English) 06/82 3882-PNG Status Report (English) 07/83 006183 Energy Strategy Paper (English - Out of Print) - - Institutional Review in the Energy Sector (English) 10/84 023/84 Power Tariff Study (English) 10/84 024/84 Reglon/Couany Acdvly/Reporl llth Date Number Vietnam Rural and Household Energy - Issues and Options (English) 01/94 161/94 Philippines Commercial Potential for Power Production from Agricultural Residues (English) 12/93 157/93 Solomon Islands Energy Assessment (English) 06/83 4404-SOL Energy Assessment (English) 01/92 979/SOL South Pacific Petroleum Transport in the South Pacific (English-ut of Print) 05/86 - Thailand Energy Assessment (English) 09185 5793-TH Rural Energy Issues and Options (English - Out of Print) 09/85 044/85 Accelerated Dissemination of Improved Stoves and Charcoal Kilns (English - Out of Print) 09/87 079/87 Northeast Region Village Forestry and Woodfuels Preinvestment Study (English) 02/88 083/88 Impact of Lower Oil Prices (English) 08/88 - Coal Development and Utilization Study (English) 10/89 - Tonga Energy Assessment (English) 06/85 5498-TON Vanuatu Energy Assessment (English) 06/85 5577-VA Western Samoa Energy Assessment (English) 06/85 5497-WSO SOUTH ASIA (SAS) Bangladesh Energy Assessment (English) 10/82 3873-BD Priority Investment Program 05/83 002/83 Status Report (English) 04/84 015/84 Power System Efficiency Study (English) 02/85 031/85 Small Scale Uses of Gas Prefeasibility Study (English - (Out of Print) 12/88 - India Opportunities for Commercialization of Nonconventional Energy Systems (English) 11/88 091/88 Maharastra Bagasse Energy Efficiency Project (English) 05/91 120/91 Mini-Hydro Development on Irrigation Dams and Canal Drops Vols. I, II and m (English) 07/91 139/91 WindFarm Pre-Investment Study (English) 12/92 150/92 Nepal Energy Assessment (English) 08/83 4474-NEP Status Report (English) 01/85 028/84 Energy Efficiency & Fuel Substitution in Industries (English) 06/93 158/93 Pakistan Household Energy Assessment (English - Out of Print) 05/88 - Assessment of Photovoltaic Programs, Applications, and Markets (English) 10/89 103/89 Sri Lanka Energy Assessment (English) 05/82 3792-CE Power System Loss Reduction Study (English) 07/83 007/83 Status Report (English) 01/84 010/84 Industrial Energy Conservation Study (English) 03/86 054/86 -6 - Regton/Countr Activiy/Report Thk. Date Number EUROPE AND CENTRAL ASIA (ECA) Eastern Europe The Future of Natural Gas in Eastem Europe (English) 08/92 149/92 Poland Energy Sector Restructuring Program Vols. I-V (English) 01/93 153/93 Portugal Energy Assessment (English) 04/84 4824-PO Turkey Energy Assessment (English) 03/83 3877-TU MIDDLE EAST AND NORTH AFRICA (MNA) Morocco Energy Assesment (English and French) 03/84 4157-MOR Status Report (English and French) 01/86 048/86 Syria Energy Assessment (English) 05/86 5822-SYR Electric Power Efficiency Study (English) 09/88 089/88 Energy Efficiency Improvement in the Cement Sector (English) 04/89 099/89 Energy Efficiency Improvement in the FertiLizer Sector(English) 06/90 115/90 Tunisia fuel Substitution (English and French) 03/90 - Power Efficiency Study (English and French) 02/92 136/91 Energy Management Strategy in the Residential and Tertiary Sectors (English) 04/92 146/92 Yemen Energy Assessment (English) 12/84 4892-YAR Energy Investment Priorities (English - Out of Print) 02/87 6376-YAR Household Energy Strategy Study Phase I (English) 03/91 126/91 LATIN AMERICA AND THE CARIBBEAN (LAC) LAC Regional Regional Seminar on Electrc Power System Loss Reduction in the Caribbean (English) 07/89 - Bolivia Energy Assessment (English) 04/83 4213-BO National Energy Plan (English) 12/87 - National Energy Plan (Spanish) 08/91 131/91 La Paz Private Power Technical Assistance (inglish) 11/90 111/90 Natural Gas Distribution: Economics and Regulation (inglish) 03/92 125/92 Prefeasibility Evaluation Rural Electrfication and Demand Assessment (English and Spanish) 04/91 129/91 Private Power Geneation and Transmission (English) 01/92 137/91 Houshold Runal Energy Strategy (English and Spanish) 01/94 162/94 Chile Energy Sector Review (English - Out of Print) 08/88 7129-CH Colombia Energy Strategy Paper (English) 12/86 - Costa Rica Energy Assessment (English and Spanish) 01/84 4655-CR Recommended Technical Assistance Projects (English) 11/84 027/84 Forest Residues Utilizadon Study (English and Spanish) 02/90 108/90 Dominican Republic Energy Asessment (English) 05/91 8234-DO Eiador Energy Assessment (Spanish) 12/85 5865-EC Energy Strategy Phase I (Spanish) 07/88 - Energy Strategy (Englsh) 04/91 - Ecuator Private Minihydropower Development Study (EngLish) 11/92 - -7 - RegIon/Counhy Acivty/Repori 271k Date Number Guatemala Issues and Options in the Energy Sector (English) 09/93 12160-GU Haiti Energy Assessmt (English and French) 06/82 3672-HA Status Report (English and French) 08/85 041/85 Household Energy Strategy (English and French) 12/91 143/91 Honduras Energy Assessment (English) 08/87 6476-HO Petroleum Supply Management (English) 03/91 128/91 Jamaica Energy Assessment (Englih) 04/85 5466-JM Petroleum Procurement, Refining, and Distribution Study (English) 11/86 061/86 Energy Efficiency Building Code Phase I (English-Out of Print) 03/88 - Energy Efficiency Standards and Labels Phase I (English - Out of Print) 03/88 - Management Information System Phase I (English - Out of Print) 03/88 - Charcoal Production Project (English) 09/88 090/88 FIDCO Sawmill Residues Utilization Study (English) 09/88 088/88 Energy Sector Strategy and Investment Planning Study (English) 07/92 135/92 Mexico Improved Charcoal Production Within Forest Management for the State of Veracruz (English and Spanish) 08/91 138/91 Panama Power System Efficiency Study (English - Out of Print) 06/83 004/83 Paraguay Energy Assessment (English) 10/84 5145-PA Recommended Technical Assistance Projects (English- (Out of Print) 09/85 - Status Report (English and Spanish) 09/85 043/85 Peru Energy Asesment (English) 01/84 4677-PE Status Report (English - Out of Print) 08/85 040/85 Proposal for a Stove Dissemination Program in the Sierra (English and Spanish) 02/87 064/87 Energy Strategy (English and Spanish) 12/90 - Saint Lucia Energy Asesment (English) 09/84 5111-SLU St. Vincent and the Grenadines Energy Assment (English) 09/84 5103-STV Trinidad and Tobago Energy Asesment (English - Out of Print) 12/85 5930-TR GLOBAL Energy End Use Efficiency: Research and Strategy (English - Out of Print) 11/89 - Guidelines for Utility Customer Management and Metering (English and Spanish) 07/91 - Women and Energy-A Resource Guide The International Networl Policies and Experience (English) 04/90 - Assessment of Personal Computer Models for Energy Planning in Developing Countries (English) 10/91 - Long-Term Gas Contracts Principles and Applications (English) 02/93 152/93 Comparative Behavior of Firms Under Public and Private Ownersip (English) 05/93 155/93 020994 ESMAP c/o Industry and Energy Department The World Bank 1818 H Street, N. W. Washington, D. C. 20433 U.S.A.