Productive uses of energy support sustainable and resilient livelihoods in least developed countries

News, 17 September 2021
A new briefing examines how productive use(s) of energy (PUE) can support more sustainable and resilient livelihoods in least developed countries, and offers case studies showing that finance, skills development and dismantling structural issues that prevent uptake are essential to drive demand for and development of PUE.
Outdoor shopping arcade with business adverts

Shopping arcade in rural Uganda. Productive uses of energy can support more sustainable and resilient livelihoods, enabling small businesses to thrive in remote communities (Photo: Anette Bouvain via FlickrCC BY-NC-ND 2.0

Across the globe, 759 million people have no access to electricity. This is an enormous barrier to enabling households and small businesses to thrive in remote and poorer communities, where access to energy and other services is lowest.

A new briefing from IIED shows that productive use(s) of energy (PUE), especially when powered by renewables, can support more sustainable and resilient livelihoods in least developed countries (LDCs), by bringing immediate opportunities to community services and value chains in rural areas.

With case studies from Ethiopia, Uganda, Malawi and Bangladesh, the briefing discusses some of the different contexts in which PUE can aid agricultural practices, deliver more reliable services to remote areas and strengthen resilience to climate shocks.

Rural and remote communities tend to have less well-developed infrastructure, public services and economic connections.

Without the necessary appliances and equipment, technical skills and after-sales support, financing, business inputs and market links, businesses and communities will struggle to successfully leverage opportunities offered by electricity access, and countries will miss out on the potential of PUE to enhance livelihoods and development.

The briefing recommends: 

  • To advance PUE, cross-sectoral barriers need to be addressed by first understanding the socio-cultural and economic contexts and building on existing social and market structures  
  • Governments and energy developers should build PUE into energy projects and delivery business models from the outset and include explicit plans to ensure that the poorest and most vulnerable people will benefit 
  • To build demand, PUE interventions must be driven by the needs and desires of communities and the businesses they can run, and 
  • Financiers should leverage their COVID-19 recovery funds to synergise economic development with PUE. 

Affordability of PUE is key to who will benefit and how. The cost of electrical appliances and equipment is a significant barrier for many rural businesses and smallholder farmers, and a lack of economic connections and services also means more limited access to financing.  

IIED researcher Kevin Johnstone says: “Energy isn't an end-goal, it's an enabler. It must be built into existing rural development programmes, and finance must be made available to communities and rural businesses to bridge the affordability gap, and build confidence and skills.” 

PUE is not a panacea but, where coupled with efforts to enable economies, it can further universal energy access and sustainable development.  

Contact

Kevin Johnstone (kevin.johnstone@iied.org), researcher, Shaping Sustainable Markets

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