National 10 (Spotlight Weekly)

RURAL ELECTRIFICATION
Setting An Example

Bangladesh makes an impressive development in the rural electrification by utilizing the concept of rural electric cooperatives in the distribution

By SANJAYA DHAKAL in Dhaka

Since the Bangladesh government started the rural electrification through the Rural Electrification Board (REB) in 1977, 93 percent of the Upazilas (districts) have been covered by 67 different Palli Vidyut Samiti (PBS) – or village electricity councils – scattered across the country.

The REB distributes electricity to 73 percent of the total number of consumers in Bangladesh. This segment of population, however, consumes only 33 percent of the total electricity.

Dhaka PBS : Noteworthy achievement

Out of total 130 million population, 32 percent have access to electricity in Bangladesh. The installed capacity of power in the country is 4710 MW – out of which private sector contributes 27 percent. The total length of distribution line is over 200,000 kilometers.

After the success of rural cooperative concepts like Grameen Bank in the micro-financing sector, Bangladesh is now making another mark in distribution of electricity through village cooperatives known as PBS.

Not only in distribution, the PBS have also accomplished successes in reducing system loss and bill collection. Compared to the overall system loss of 17.17 percent, the PBS register only 14.01 percent. Likewise, average bill collection of the PBS is also remarkable at 97.74 percent.

PBS, generally, are cooperatives of village people who are affiliated to the REB. They buy electricity at certain rate from the REB and sell it to the consumers. The management body of PBS is elected by village people. And only those people can vote who pay their bills regularly.

The REB also sets target for the PBS and regularly monitors it as well as provides it with technical and other assistance. The board arranges lending to PBS, builds distribution networks and sub-stations to handover to PBS, assists PBS in its tariff fixation, provides training and so on. The PBS, on the other hand, is responsible for consumer connection, substation and line maintenance, consumer complaints handling, line extension, purchase and sale of electricity and tariff setting.

“The concept of rural electrification has met with a degree of success in Bangladesh. The PBS enjoy wide autonomy and REB provides them with all kinds of necessary assistances,” Md. Tauhidul Islam, member of the REB, told a gathering of south Asian journalists at a recent program organized by the United States Energy Association (USEA) in Dhaka.

“In 1977 the first master plan (for 25 years) had targeted to cover all Upazillas. After 23 years, we were able to cover 93 percent of them with total consumers of 4.84 million,” said Islam. “By 2020, we plan to cover 60 percent households in each village and we will attempt to make most of the PBS viable.”

Donors have injected over 1 billion US dollars in the rural electrification projects in Bangladesh. At present, 25 percent of the PBS have become self-sustainable.

Dhaka PBS is the oldest of the 67 PBS in the country covering an area of 1412 square km. Out of 1128 villages within its jurisdiction, 740 are electrified with 11,50,000 population enjoying the access to electricity.

“We have been able to achieve sustained growth, expansion as well as reduce system loss. Right now, the system loss at Dhaka PBS is around 9.68 percent,” said Sarwar Hussain, manager of the Dhaka PBS.

Socio-Economic Impact

Following the spread of rural electrification, the experts have found marked changes in the socio-economic lives of rural folks.

A study conducted by Dr. Abul Barkat, professor, Department of Economics at Dhaka University, has revealed that the electrification has brought about remarkable transformation in every aspect of rural life.

Dhaka city : Undergoing transfromation

“I was skeptical about the potential of rural electricity, but after the study I was amazed about the power of electricity to change society,” said Dr. Barkat.

The study showed that there are 20.5 million direct beneficiaries of rural electrification showing distinct economic and human development impact as well as having spill-over benefits even to the non-electrified households.

The study that interrogated 14000 respondents of different villages pointed that both absolute as well as hardcore poverty were significantly less pronounced in electrified households compared to non-electrified ones with less rich-poor divide in income. “The rural electrification influences the shift of a household from poor to non-poor category,” said Dr. Barkat.

The study showed that impact of electricity on employment is both direct and indirect. In agriculture, around 1.1 million persons are directly involved in farmlands using rural-electricity connected irrigation equipment. Currently, 63,220 industries using rural electricity employ 983,829 persons; and electrified industries on average, generate 3.3 times more employment than the non-electrified industries. More so, women in electrified households are involved more in income generation activities. Furthermore, there has been an enormous spill-over effect on employment in support-services including shops, restaurants, banks, schools, colleges etc.

About 40 percent of the population in the electrified households is below absolute poverty line. The figure is 43.4 percent in non-electrified households of electrified villages while the national average is 44.3 percent. Likewise, the hardcore poverty in electrified households was 21.8 percent compared to 27.1 percent in non electrified villages.

The average annual income of the electrified households was 65 percent higher than that in the households of non electrified villages. On average 16.4 percent of the income of electrified households can be attributed to electricity. The study also revealed that other things being the same, 100 percent electrification of rural households (currently 17.88 percent of rural households are electrified) might increase the annual rural income by Taka 671 billion, which is equivalent to 26 percent of the total current GDP, and as high as 43 percent of this incremental income can be attributed to electricity.

These apart, the rural electrification has also been found to have profound positive impact on asset-building with less skewed land ownership. In electrified villages bottom 40 percent of the electrified households were found to own 3.7 percent of total cultivable land compared to 1.6 percent in non electrified villages. The rise in income also ensures better quality of life in electrified households.

Another remarkable impact of rural electrification has been found on demography. The population growth rate in the electrified household is less than that in non-electrified ones. Electricity in the household contributed 16 percent of the reduction in the Total Fertility Rate (TFR). The TFR of the poor in the electrified household is 26 percent less than that of the poor in non-electrified villages. The infant mortality rate is also higher in non-electrified villages (57.8 per 1000 live births) compared to electrified ones (42.7). In addition to that, the electrification also had positive impact on health, quality of education and so on. The Human Development Index (HDI) obtained for electrified household is 0.642, for non-electrified in the electrified villages is 0.440 and for households in the non-electrified villages is 0.436. The overall HDI of Bangladesh is 0.478 – earning it 145th position in the world. The HDI of the electrified households (0.642) corresponds to the lower-mid-level index for medium HDI countries in around 100th position.

The success of rural electrification through PBS in Bangladesh provides an example for Nepal as well. The immense socio-economic benefit the electricity can have on rural population must not be left unexploited. This is particularly important at a time when the insurgency has resulted in destruction of power stations in the rural hinterlands of Nepal. The rural electrification, as such, could also address the root causes of insurgency – the poverty, unemployment and poor living condition.

Of late, Nepal Electricity Authority (NEA) has already started the process of establishing community electricity distribution centers. Quite like the concept of PBS, NEA, too, is planning to sell electricity in bulk to such communities, who are authorized to distribute and charge the consumers. In a country with more than 3900 Village Development Committees, Nepal also must move ahead with the rural electrification campaign to speed up its economic transformation.