Energy and Poverty Reduction

Nuon provides knowledge and resources to promote (economic) development by making energy accessible in electricity-deprived areas.

Oxfam Novib
Foundation Rural Energy Services
Business in Development Challenge

A large part of the world population has no access to electricity, particularly in developing countries. That’s a big problem. Because a good energy supply is key to reducing poverty. Decentralised renewable energy sources such as solar panels offer a clean energy solution for people living in regions that are too sparsely populated for the construction of an electricity grid.

Nuon is committed to finding structural solutions: users must be able to move forward in the future without our assistance.

Oxfam Novib

Since 2000 Nuon has been working with Oxfam Novib on projects aimed at supplying energy and reducing poverty. In December 2004 Nuon and Oxfam Novib embarked on a project with the Dutch Ministry of Foreign Affairs in Kwazulu Natal in South Africa. The project involved the conversion of old sea containers into small-scale business units in a region afflicted by more than 50% unemployment.

By the end of 2006 five of the planned six containers had been converted. Instead of the last container, an existing house, which already accommodates a cooperative of entrepreneurs, will be fitted with an energy system for electricity and, possibly, gas.

In March two representatives of Nuon paid an evaluation visit to the project. This interim evaluation revealed a number of positives as well as a few points that need more attention:

  • The activities in the business units are up and running, the businesses are developing and the income of the entrepreneurs is growing;
  • The new Public Private Partnership is having a positive impact thanks to intensive mutual communication;
  • The entrepreneurs need a lot more operational support than expected.

The project could not be completed in 2006 as planned and will be extended by six months in 2007. After the final evaluation, a decision will be made as to whether the project will be expanded and in what manner.

Foundation Rural Energy Services

In 2001 Nuon teamed up with other companies to set up two joint ventures dedicated to supplying households with renewable electricity, particularly through autonomous solar energy systems. Our partners are Yeelen Kura in Mali and NuRa in South Africa. The Foundation Rural Energy Services (FRES) was created by Nuon to manage these two joint ventures. Nuon helps to cover the operating and staff costs of FRES and also provides the foundation with technical expertise on request.

Yeelen Kura and NuRa depend on government investment subsidies to grow their operations. In 2006 Yeelen Kura received a subsidy from the Mali government enabling its expansion to 5,000 customers in 2008. At the end of 2006 the company had 1,700 customers. A number of villages will also be connected to a mini-grid fed by a diesel generator. In July 2006 Ludo van Halderen paid a visit to Mali to attend the opening of the first mini-grid in the village of Bla. In 2006 Yeelen Kura also received finance from the Dutch government for a solar power station capable of supplying electricity to five hundred customers in the environs of the village of Kimparana.

NuRa saw its customer base decrease in 2006 while awaiting the South African government’s decision on a new subsidy request for 8,000 systems. Until the decision was taken, systems at customers whose contract had expired could not be relocated to new applicants. At the end of 2006 NuRa had 10,343 customers. In addition, 5,421 applicants were awaiting connections.

In 2006 the opportunities were explored for setting up a FRES energy company in the Mpigi district in Uganda. This involved a study to find a suitable local partner as well as consultation with authorities, NGOs and donor organisations.

In 2006 efforts were started to attract donors with a view to connecting more customers in Africa. This was mainly done through Nuon’s customer magazines.

Business in Development Challenge

In 2006 Nuon was Prize Partner of the Business in Development Challenge. More than one thousand entrepreneurial people around the world entered a poverty reduction competition. At Nuon 34 employees were responsible for assessing the business plans and coaching participants in writing their plans.