Norwegian development assistance to increase access to energy

75 Document 3:12 2013–2014 Report Rural Electrification in Zanzibar In 2000–2013, the embassy in Tanzania supported two major development projects in the archipelago of Zanzibar: rural electriication on the islands of Unguja and Pemba and construction of a subsea power cable from Tanga on the mainland to the island of Pemba. Zanzibar’s power company ZECO is responsible for implementing the projects. The Ministry of Foreign Afairs has funded rural electriication in Zanzibar in several phases since the 1980s. Support in 2000–2012 totalled NOK 102.8 million. The Norwegian-funded projects have provided over a hundred villages with access to electricity. Norwegian support has contributed to the extension of the power grid to 80 per cent of Zanzibar’s population. About 25 per cent of the inhabitants of Zanzibar, of whom 7 per cent live in rural areas and 57 per cent in urban areas, are connected to the power grid so that they have power in their own homes. 86 According to the Ministry of Foreign Afairs, ZECO has connected increasing numbers of households to the grid in the period after the projects were completed. Based on the 2012 census, the embassy in Tanzania estimated that the proportion of households connected to the grid in Zanzibar is 45 per cent, with 53 per cent on Unguja and 24 per cent on Pemba. Power lines in Stone Town on Zanzibar. Photo: Office of the Auditor General The aim of the Norwegian-funded rural electriication projects was for 20 per cent of the population, in villages that received access to electricity, to connect to the power grid during the project period. According to Norad’s inal evaluations of the projects, the 20-per cent target was far from achieved. Evaluations of previous projects showed that the connection rate has been about 10 per cent. Because fewer homes were con- nected to the grid than was the goal, the inal evaluation concluded that the develop- ment impact of the projects was less than anticipated. 87 86 Norad 2010 End review of Tanga-Pemba subsea cable, p. 16, Norad 2009 End-review of Phase IV and Extension of the Zanzibar Rural Electrification Project, p. 9. 87 Norad 2009 End-review of Phase IV and Extension of the Zanzibar Rural Electrification Project, pp. 15 and 40. 76 Document 3:12 2013–2014 Report One main reason for the low connection percentage is that it is too expensive for indi- vidual households to connect to the power grid. The cost of actual power consumption comes in addition. According to the inal evaluations, preferential loans that can inance connection fees for low-income residents were only available in some of the electriied villages. It is therefore primarily the wealthiest households in villages that beneit from access to electricity in their own homes. Fans, radios and televisions are the most common purchases following connection to power supply, while very few people buy electric stoves. Food is still prepared with wood and charcoal. 88 The evaluations show that the projects have had a positive efect on citizens in terms of improved welfare services, especially in health and education. Access to electricity has also had a positive efect on sole proprietorships. Increased access to electricity has improved the productivity and turnover of sawmills and enterprises that produce furniture. The evaluations show that access to electricity has had positive efects on tourism on the island of Unguja, where several hotels have been established in areas surrounding the electriied villages. At the same time, the hotels have not employed locals to any great extent. 89 The evaluations do not show that other new businesses have been established as a result of the access to electricity. The expansion of the grid was completed in accordance with the schedule and, thanks to budget savings, it was possible to electrify more villages than planned. 90 However, the inal evaluation points out weaknesses in the sustainability of the projects, because ZECO is not able to maintain the infrastructure. Furthermore, it points out that the infrastructure built with Norwegian support in the 80s and 90s, is starting to rot. 91 The Norwegian-supported projects were implemented by a project unit with a Norwegian project manager, who worked independently of ZECO’s daily operations. According to the inal evaluation, the objective of capacity building in ZECO was set aside as a result. Box 3 Corruption charges against Zanzibar’s power company ZECO In January 2013, the Control Committee in Zanzibar’s parliament submitted a report that revealed widespread corruption in ZECO. Among other things, it was revealed that while many electricity custo- mers paid exorbitant amounts to connect to the power grid, most of this money never reached the company. At a parliamentary hearing, the opposition stated that donors must be made aware that their money is being misused. While the charges do not directly apply to the use of Norwegian aid funds, they do involve the fees ZECO collects for new connections to the grid. The audit of the Norwegian project support in Zanzibar had no serious remarks. Source: http:allafrica.comstories201310230215.html, Ministry of Foreign Affairs In an interview, the embassy in Tanzania stated that it is aware of the shortcomings of the projects. The embassy noted that this is the rationale for the commencement of a new joint project on capacity building in ZECO. The start-up phase of the project has been challenging because of the basic lack of expertise and capacity in ZECO. The auditing irm PWC has been engaged by the embassy to recommend control measures for the use of Norwegian aid funds in the project. 88 Ibid, p. 11, 33, 36, 41; Norad 2006 End Review of Phase IV Electrification Programme Zanzibar, p. 16; Winther, T. 2006 Social Impact Evaluation Study of the Rural Electrification Project in Zanzibar, phase IV 2003–2006, p. 25. See also Section 4.4.2. 89 Norad 2010 End review of Tanga-Pemba subsea cable, p. 32; Norad 2009 End-review of Phase IV and Extension of the Zanzibar Rural Electrification Project, pp. 33–34; Winther, T. 2006 Social Impact Evaluation Study of the Rural Electrification Project in Zanzibar, phase IV 2003–2006, p. 25. 90 Norad 2009 End-review of Phase IV and Extension of the Zanzibar Rural Electrification Project, p. 15. 91 Norad 2009 End-review of Phase IV and Extension of the Zanzibar Rural Electrification Project, pp. 9 and 15.