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Bank Policy Initiatives for the Energy Sector : Energy Policy Issues : Rural Energy Development

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Introduction

64. The economic and social development of rural areas is a Bankwide concern. Adequate energy supplies and appropriate energy utilization technologies in conjunction with other technical, financial and physical resource inputs are essential for such development. Nearly 70 per cent of DMC populations live in rural areas where their energy needs are largely met by traditional, noncommercial energy sources such as agricultural waste, animal dung and fuelwood. The current utilization practices of traditional rural energy sources tend to have low efficiencies of the order of 10 per cent and adverse environmental impacts are prevalent in most rural situations. Centralized sources of energy supply, such as electricity and hydrocarbon products (liquefied petroleum gas) are generally not easily extendable to rural areas because of technical complexities and high costs associated with developing rural distribution networks. As a result, the consumption of energy supplied from such sources accounts for a low share of the total energy consumption in the rural areas. Decentralized renewable energy systems may offer more viable options to meet rural energy shortages.

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