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August 19-24, 2004 1
Bangladesh Rural Electrification Program:
A Success Story of Poverty Reduction
through ELECTRICITY
Prepared for presentation at
32nd Session of the International Seminars on Planetary Emergencies
Ettore Majorana International Foundation & Centre for Scientific Culture,
in collaboration with
World Federation of Scientists & ICSC-World Laboratory
Italy, Erice 19-24 August, 2004
Abul Barkat, Ph.D.
Professor, Economics
University of Dhaka
Bangladesh
August 19-24, 2004 2
Empirical evidences/indications
about economic & human poverty
reduction impact of rural
electrification in Bangladesh.
Objective
August 19-24, 2004 3
PRESENTATION SEQUENCE
Bangladesh Economy & Society: The Big Picture
“Electrification for All by 2020”: Status & Challenges
Bangladesh Rural Electrification Program: Evolution
Overall Economic and Social Impact
Poverty Reduction Impact
Economic Social & Cultural
Conclusions
Recommendations
August 19-24, 2004 4
BPDB = Bangladesh Power Development Board
CBN = Cost of Basic Needs
CU = Commercial Unit (retail, wholesale shops)
DCI = Direct Celoric Intake
GER = Gross Enrolment Ratio
HDI = Human Development Index
HE = Household with electricity (rural)
HH = Household
IE = Irrigation equipment
IU = Industrial unit
PBS = Palli Bidyut Samities (Rural Electricity Cooperatives)
PH = Public Health
PRSP = Poverty Reduction Strategy Paper
RE = Rural Electricity/Electrification
REB = Rural Electrification Board
RFP = Rural Electrification Program
WE = Household without electricity (in electrified village)
WE-NEV = Household without electricity (in non-electrified village)
Acronyms used in presentation
August 19-24, 2004 5
Bangladesh Economy & Society :
The Big Picture
Population (in million) = 140
# Households (in million) = 25 (rural 76.9%)
# Villages = 87,928
Population density (per Sq. Km) = 839
Population growth rate = 1.54
GDP growth rate = 5.5%
GDP composition (current price) = US$ 53 Billion
(Service 49%, Industry 29%, Agriculture 23%, Electricity 1.3%)
Balance of trade (deficit) = Tk.70.5 Billion
Per capita GDP (US $) = 421
GDP/capita (PPP US$) = 1,610
Human Development Index (value) = 0.502 (2001)
Life expectancy (yrs) = 60.5
Adult literacy rate = 40.6
Literacy rate (7 yrs +) = 45.3
Gross enrolment ratio = 54
Poverty: Higher poverty line (CBN) = 49.8%
- urban = 36.6%
- rural = 49.8%
% landless household = 45 (Census 2001)
August 19-24, 2004 6
Electrification for All by 2020 : Status
& Challenges
Current status 2020 target
Villages electrified: 45% (39,684) 100% (87,928)
Household electrified (all): 31.5% (Census 2001) 100%
Rural HH electrified : 22% 100%
Rural poor HH electrified : 5% 100%
Per capita production (Kwh): 144 470
# consumers (million) 7.1 24.3
Installed capacity (MW) 4,710 (73% public) 17,500
Max demand (MW) 3,900 14,600
Distribution line (Km.) 209,932 319,259
Investment requirement (US $ billion) - 15.1*
(* 2004-07 = 3.6; 2008-12 = 4.5; 2013-20=7.0)
· Annual loss of industrial sector due to power outages = US$ 1.5 Billion
(55% production loss, 31% foreign exchange loss, 14% value added loss)
· El. consumption pattern: 40% domestic, 42% industrial, 8% commercial, 4% agr.,
6% others.
August 19-24, 2004 7
Bangladesh Rural Electrification
Program: Evolution
RE in BANGLADESH CONSTITUTION (Article 16)
1971: only 250 villages/ 87,928 electrified
BPDB, by mid 1970’s, slow and overburdened with absolute
monopoly
REP founded in 1977, Presidential Ordinance
REP began in 1978 with the aim of accelerated rural
development, economic & human poverty reductions
RE in “National Strategy for Economic Growth, Poverty
Reduction & Social Development” (IPRSP)
PBS: Nucleus of REP; Member -owned cooperative concept.
August 19-24, 2004 8
D17
R9
R12
D1
Palli Bidyut Samities (PBS)
PANCHAGARH
THAKURGAON
DINAJPUR
NILPHA
MARI
LALMO
NIRHAT
RANGPUR
KURIGRAM
GAIBAN
DHA
JOYPUR
HAT
BOGRA
NAOGAON
NAWAB
GONJ
RAJSHAHI
NATORE
SIRAJGONJ
PABNA
KUSHTIA
JHENAIDAH
MAGURA
JESSORE
NARAIL
KHULNA
JHALO
KATI
BARGUNA
PATUA
KHALI
BARISAL
GOPAL
GONJ
MADARI
PUR
SHA
RIAT
PUR
MUNSHI
GONJ
FARIDPUR
RAJBARI
JAMALPUR
SHERPUR
TANGAIL
MYMENSINGH
NETROKONA
SUNAMGANJ
SYLHET
MOULAVI BAZAR
HOBIGONJ
KISHOREGONJ
GAZIPUR
NARSINGDI
DHAKA
MANIKGONJ
N'
GONJ
BRAHMAN
BARIA
COMILLA
CHANDPUR
LAXMI
PUR
NOAKHALI
FENI
M
A
Y
A
N
M
A
R
MEHER
PUR
BAY OF BENGAL
KHAGRA
CHHARI
RANGAMATI
BANDARBAN
COX'S
BAZAR
INDIA
INDIA
INDIA
SATKHIRA
BAGERHAT
PIROJ
PUR
BHOLA
CHUA
DANGA
R18
R11
R15
R16
R2
R3
R4
R5
R6
R7
R8
R10
R13
R1
R14
K1
K2
K3
K4
K5
K6
K7
K8
K9
B1
B2
B3
B4
B5
B6
C1
C2
C3
C4
C5 C6
C7
C8
C9
C10
S1
S2
S3
S4
S5
D2
D3
D5
D6
D7
D9
D10
D12
D13
D14
D15
D16
D18
Sreemongol
Patia
Kutubdia
Sandwip
Hatiya
Fulbari
Savar
Nawabganj
Bhaluka
R17
D4
D8
Rauzan
CHITTA
GONG
Monirampur
August 19-24, 2004 9
REP: Interaction of Objectives
IE = Irrigation Equipment, CU = Commercial Units, IU = Industrial Units, HH= Household
Construction of power
distribution line
Practice of local
governance through PBSs
Individual level
IE
CU
IU HH
Community level
(Health & educational
institutions etc)
Direct objective
Providing electricity in
rural areas for accelerated economic
activities
Increased income, employment, savings,
consumption, asset building etc.,
Reduction in Economic Poverty
Broader impacts
Creating environment for realizing human capabilities
Health, education, women’s empowerment,
reduction in disparity – rich-poor, male-female,
knowledge-awareness building etc.,
Reduction in Human Poverty
Higher Standard of Living for Rural People
August 19-24, 2004 10
REP: Laudable Growth (1983-02)
67 PBS (13 in 1983)
35,672 villages (41%) (AGR, 1983-02=17%)
141,736 km. lines (AGR, 1983-02=17.8%)
4.06 million connections (AGR, 1983-02=42.8%);
•90,921 Industries
•567,842 Commercial
•121,715 Irrigation equipments
•3.4 million domestic (AGR, 1983-02=42.5%)
•Although 41% villages covered, rural
household’s access 18% (2002) (with
high poor-rich divide)
but a paradox
August 19-24, 2004 11
Overall Economic and Social Impact
1. Direct beneficiaries (≈ 21 million people)
2. Employment
3. Irrigation & agricultural production
4. Industrial development
5. Commercial activities
6. Spill-over effect on support services
7. Standard of living/Quality of life
On
August 19-24, 2004 12
Overall Economic Impact ...contd...
Agriculture = 1.100 million
Industry = 0.984 million
Shops = 0.849 million
PBS = 0.016 million
•Directly associated with RE 2.95 million
persons:
RE’s contribution 42%
EMPLOYMENT
August 19-24, 2004 13
Overall Economic Impact ....contd...
24% higher yield per acre with EI. powered
irrigation compared to diesel operated.
Cropping intensity also high.
El. irrig. equipment more dependable.
Operational cost three-fourths compared to
diesel operated.
RE irrigation more environment-friendly.
RE contributed 1/3 food self-sufficiency.
Irrigation & Agricultural Production
August 19-24, 2004 14
Overall Economic Impact ...contd...
Industry, second highest consumer of rural electricity-using
42.3% of the total MWH.
RE cost effective: Cost per Tk output is Tk. 0.65 in electrified,
Tk 0.84 in non-electrified.
RE depict higher productivity: Production per hour, Tk. 131 v/s
Tk 45.
RE promotes backward –forward linkages, & diversification.
RE –mediated industrialization creates & crystallizes demand
for support services.
RE connected industries- environmentally less hazardous.
Industrial Development
August 19-24, 2004 15
24% shops use rural electricity.
Electrified shops - more attached to market.
Availability of electricity facilitates constellation of
shops.
Stock-in-hand: El-retail 4 times than non-el. retail;
El-wholesale 6 times than non-el. wholesale.
El-shop open for longer duration after sunset,
sales turnover 2-4 times higher.
RE contributes 14 % of national annual sales
turnover of retail & wholesale shops.
Overall Economic Impact ...contd...
Commercial
August 19-24, 2004 16
Rural Household: Electrification status (2002)
Electrified (EV)
35,672 (40.6%)
Non-Electrified (NEV)
52,256 (59.4%)
Electrified
Household
HE 35%
Non-electrified
Household
WE-EV 65%
Non-Electrified
Household
WE-NEV
Villages
87,928
Among
poor
21%
Among
non-
poor
54%
Poor
58%
Non-
poor
42%
Rich
90%
August 19-24, 2004 17
RE CONNECTIVITY BY
HOUSEHOLD ECONOMIC STATUS
(in electrified village)
90 %
54 %
40 %
33 %
32 %
21 %
Rich
Non-poor
Average
L3
L2
L1
poorest
August 19-24, 2004 18
POVERTY REDUCTION
IMPACT: ECONOMIC
30,643 17,301 27,436
62,120
23,808 29,088
HE WE-EV WE-NEV
Agricultural Non-agricultural
92,963
41,110 56,524
Average annual income (net) of household and share of
agriculture and non-agriculture (last year) (in BD. Taka)
Impact on INCOME:
HE 65% higher than WE-NEV & 126% higher than WE-EV.
HEs agri & non-agri. income: both high
August 19-24, 2004 19
HH reported some association of
electricity with increased income
% HH reported increase in income somehow associated with RE
HE WE-EV WE-NEV
Household electricity 40.8 Not
applicable Not
applicable
Outside HH electricity 66.2 59.1 21.3
Absolute new source of
income (emerged with
electricity) 13.6 6.9 1.6
Source not new but income
increased due to electricity 62.9 50.4 16.7
August 19-24, 2004 20
Share of income attributable
to electricity
HE WE-EV WE-NEV
% shows share of electricity
16.4% 12% 3.6%
15,229
92,263
4,947
41,110
2,058
56,524
August 19-24, 2004 21
Impact on Income- Poverty
Reduction
Income (net): Annual Household (Bd. Taka)
92963
41110 56524
220986
76000
195165
58864
35104 38989
All Rich Poor
HE WE-NEV
All Rich Poor
All Rich Poor
WE-EV
August 19-24, 2004 22
Income Poverty Reduction: …contd..
Electrified household earns more;
income hierarchy (high to low): HE WE-
NEVWE-EV
Poor in HE earns 50% higher than poor in
WE-EV & WE-NEV
Poor in HE earns more than average HH in
non-electrified villages
Rich-poor gap in HE less than in WE-NEV.
August 19-24, 2004 23
RE share showing
income –poverty reduction
Households by
electrification
status
Rich Poor
HE 15.2 (Tk. 220,986) 17.2 (Tk. 58,864)
WE-EV 8.6 (Tk. 68,237*) 14.3 (Tk. 35,104)
WE-NEV 3.8 (Tk. 195,165) 6.1 (Tk. 38,989)
Poor’s relative share higher than rich
(Parentheses show annual income) (* Only 1 rich in the sample, so, medium landowner also included)
August 19-24, 2004 24
A Projection: What might happen to income
with 100% rural households electrified?
9.3 percent of annual income of rural HHs (19.1 million)
can be attributed to electricity.
Assuming "all rural households have electricity" the total
annual HH income (at current market price) will increase
to Tk. 1,775 billion from the present Tk. 1,105 billion.
Projected net gain in annual income (Tk. 671 billion) due
to 100% electrification of rural HHs is equivalent to 26%
of current GDP,43.3% of which could be attributed to
electricity.
Rural Bangladesh
August 19-24, 2004 25
Impact on economic poverty
reduction: EXPENDITURE
•Health expenses:
Similar progressive pattern as in education
•Potential cost savings on kerosene fuel if
switched to 100% RE
Annual Tk. 7361 million; 2.2% import bill
•Consumption pattern- food-non-food:
Urban pattern for electrified HH
Rural pattern for non-electrified HH
•Education expenses:
Higher for electrified than non-electrified
Much less gender disparity in electrified
Much higher for female in electrified than non-electrified
August 19-24, 2004 26
Electrification urbanizes
consumption pattern
47
53 5353
47 47
HE WE-EV WE-NEV
Food Non-Food
Annual household expenses by food and non-food items (in %)
August 19-24, 2004 27
Electrification influences
strengthening household economy
77 81 82
23 19 18
HE WE-EV WE-NEV
Recurrent Capital
Annual household expenditure by recurrent and capital items (in %)
August 19-24, 2004 28
Impact on economic poverty
reduction: SAVINGS
On average, higher in electrified HH
( propensity to save)
Higher for both rich and poor in electrified HH
Less rich-poor disparity in electrified HH
Poor in electrified save 3.3 times more than poor
in non-electrified HH
Asset & income strength make HE more credit
worthy.
August 19-24, 2004 29
Impact on Savings: Electrification enhances propensity
to savings; reduces rich-poor gaps in savings
Rich-poor differences in average household savings by income and
landownership groups (in Tk.)
Income Group Land Group
11698
3680
17762
5376
75379
68418
159743
77822
HE WE-NEV HE WE-NEV
Poor Rich
August 19-24, 2004 30
IMPACT on LAND OWNERSHIP: HE owns more
land & influences in reducing ownership
inequality
Changes in average ownership of cultivable land by household electrification
status: 1997 and 2002 (in decimals)
157
68
134
178
74
148
HE WE-EV WE-NEV
1997 2002
August 19-24, 2004 31
Impact on economic poverty reduction:
Changes in HH land ownership
Changes in landownership of poor and rich
1997 2002
HE: Bottom 40 %
Top 10%
3
43.7
3.7
43.4
Gini 0.62 0.61
WE-NEV: Bottom 40%
Top 10%
1.2
50.6
1.6
51.6
Gini 0.67 0.67
August 19-24, 2004 32
Present (2002) Present (2002)
Present (2002)
ASSET STRENGTH of the electrified
households improved by a much higher rate
HE (n=1380) WE-EV (n=421)
Past (1997) Past (1997)
WE-NEV (n=690)
Past (1997)
Low: 34.1%
(470)
Medium: 36.2%
(500)
High: 29.7%
(410)
Low: 49.0%
(338)
Medium: 33.3%
(230)
High: 17.7%
(122)
Low: 45.9%
(317)
Medium: 33.3%
(230)
High: 20.7%
(143)
Low: 28%
(386)
Medium: 35.4%
(489)
High: 36.5%
(505)
Low: 59.1%
(249)
Medium: 29.9%
(126)
High: 10.9%
(46)
Low: 56.3%
(237)
Medium: 31.1%
(131)
High: 12.6%
(53)
2.2
Movement of 1997 asset group into year 2002
87.9
10.1
2.1
8.7
80.4
10.9
9.0
91.0
90.0
10.0
9.5
81.7
8.7
6.5
91.3
76.2
19.4
4.5
4.6
75.4
20.0
1.5
5.1
93.4
August 19-24, 2004 33
Impact on economic poverty reduction:
Changes in HH asset situation of the poor
Movement of 1997 low-asset group into year 2002
% 1997 low-asset group moved up by 2002
Households by electrification
status
Up to medium
and high asset
groups
Up to high asset
group
HE (34.1% 28%) 24.9 4.5
WE-EV (59.1% 56.3%) 10 -
WE-NEV (49% 46%) 13.2 2.1
Parentheses show % of total households in the category in 1997 and 2002 respectively.
August 19-24, 2004 34
Impact on economic poverty reduction:
Incidences of poverty; electricity
influences shift from poor to non-poor
Possession of electricity positively and significantly
influences shift of HH from poor to non-poor (Binary
probit).
In terms of both absolute & hard core poverty (DCI and
CBN), population in electrified HH is much better-off than
national averages and their counterparts in non-
electrified HHs.
Incidence of poverty is highest among WE-EV, and
poverty gap between HE and WE-EV is substantial.
Implies: electrification in the village only without
electrification of individual households will not be
sufficient enough to reduce poverty.
August 19-24, 2004 35
Impact on economic poverty
reduction: Incidences of poverty
39.9
21.8
51.2
27.1
43.4
23.1
Absolute Poverty Hardcore Poverty
WE-EV
WE-NEV
WE-EV
WE-NEV
22.3
36.3
47.9
61.2
35
51.8
Lower poverty line
WE-EV
WE-NEV
WE-EV
WE-NEV
Upper poverty line
DCI Methods CBN Methods
August 19-24, 2004 36
IMPACT TOWARDS EDUCATION –POVERTY REDUCTION:
Knowledge-poverty
Overall literacy, adult literacy, GER, per capita educational expenses,
educational performance - all high in electrified HH
Male & female literacy - high in electrified compared to counterparts
Quality of education better in electrified HH: more time for study after
sunset; better quality of that time (light and fan); parents devote more
time in assisting children’s study; TV mediates strengthening
knowledge- base
Per capita expenditure for female in electrified poor HH is even higher
than that for rich in non-electrified HH
Electricity has neutral impact on literacy of rich, but high impact on
literacy of poor.
POVERTY REDUCTION IMPACT:
SOCIAL & CULTURAL
August 19-24, 2004 37
IMPACT on EDUCATION: EL significantly
influences literacy, reduces gender gap &
rich-poor divide, improves quality
76
5862
65
5050
71
5456
HE WE-EV WE-NEV
Male Female Both
Overall literacy rate by sex
66
82
47
75
Poor
(landless)
Rich
(large landowner)
Rich-poor divide in
overall literacy rate
HE
WE-NEV
HE
WE-NEV
Similar for adult literacy
August 19-24, 2004 38
Impact on Education: Quality
Gross enrollment ratio
64
55 54
HE WE-EV WE-NEV
Average time spent on study
by students after sunset (6 PM)
(in minutes)
126
103 109
HE WE-EV WE-NEV
August 19-24, 2004 39
IMPACT TOWARDS
HEALTH-POVERTY REDUCTION:
Women in electrified know much more about crucial
public health issues than counterparts in non-electrified
Women in electrified poor HH are more knowledgeable
than even women in rich HH of non-electrified villages.
Knowledge-wise poor in electrified are better off
than rich in non-electrified villages
Rich-poor gap in knowledge -- least pronounced in
electrified HH
Spill-over effect: Women in non-electrified HH of
electrified villages are more aware than counterparts in
non-electrified villages.
Knowledge of public health issues
August 19-24, 2004 40
Knowledge about 20 PH issues
HE WE-EV WE-NEV
Overall knowledge coefficient
of 20 public health issues
Knowledge gap Knowledge coefficient
0.359 0.562 0.592
0.641
0.438 0.408
August 19-24, 2004 41
Rich-poor divide in public health knowledge (overall
knowledge coefficient)
Rich
(Large landowner)
61
72
41
70
36
59
HE
WE-EV
WE-NEV
Poor
(Landless)
HE
WE-EV
WE-NEV
Share of major sources of knowledge
about 20 public health issues
(aggregate share)
56
28 17
8
14
17
27
42 46
916 20
HE WE-EV WE-NEV
TV Radio FP Workers Others
Knowledge about 20 PH issues (contd..)
August 19-24, 2004 42
Impact towards health - poverty
reduction: Health Practice
Treatment by medically competent persons (MCP) while sick: electrified fare much better;
less rich-poor divide; less gender disparity; females in electrified poor avail more services
from MCP than even males in non-electrified
Differences in proportion of child delivery assisted by MTP: significant
ANC, PNC, Maternal morbidity services by MCP: electrified significantly better than non-
electrified; rich-poor divide less in electrified; poor in electrified HH better placed than
even rich in non-electrified villages (ANC, Maternal morbidities)
IMR: Least in electrified HH followed by WE-EV and WE-NEV.
Estimated 101 infant deaths can be avoided EVERYDAY if 100% rural HH is electrified.
CPR: Higher in electrified; higher among electrified poor HH than even rich in non-
electrified villages; TV most influential factor prompted FP use; profound role in attaining
national demographic goal
Use of hygienic latrine: Higher in electrified; use of open space by poor much less
pronounced in electrified.
August 19-24, 2004 43
57
44 43
HE WE-EV WE-NEV
% reported treatment availed
from MCP while sick, last year
59
4646
54
4140
HE WE-EV WE-NEV
Male Female
% reported treatment availed
from MCP for sickness of
male/female (last year)
Rich-poor divide in
seeking treatment from
medically competent
persons
55
64
43
64
Poor
(Landless) Rich
(large landowner)
HE
WE-NEV
HE
WE-NEV
Impact on treatment while sick: high
share availing MCP; less rich-poor gap
August 19-24, 2004 44
Proportion of last birth (child delivery) assisted by
medically trained persons
Rich-poor divide in proportion of last child
delivery assisted by MTP
36
23
18
HE WE-EV WE-NEV
30
68
15
25
Rich
(Large landowner)
Poor
(Landless)
HE
WE-NEV
HE
WE-NEV
Impact on child delivery: high share of delivery
by MTP; reduced rich-poor gap
Similar influence over ANC, TT, PNC, treatment of maternal morbidity
August 19-24, 2004 45
Family planning use: HH electricity
influences attaining national demographic
goal
66
84
55
62
Poor
(landless)
Rich
(large landowner)
Rich-poor variations in CPR
HE
WE-NEV
HE
WE-NEV
Self-reported most
influential factors prompted
FP use
65
23
80
7
81
6
HE
WE-EV
WE-NEV
HE
WE-EV
WE-NEV
Health/FP Worker Television
August 19-24, 2004 46
Use of hygienic latrine: A most spectacular finding
% reported use of hygienic latrines and
open space for defecation
% of poor and rich HH using hygienic
latrine and open space for defecation
Hygienic latrine Open space
61
5
29
19
32
21
HE
WE-EV
WE-NEV
HE
WE-EV
WE-NEV
53
78
7
27
63
29
Poor
RichPoor
Hygienic latrine Open space
HE
WE-NEV
HE
WE-NEV
HE
WE-NEV
August 19-24, 2004 47
INFLUENCE on WOMEN
EMPOWERMENT
1. Women’s knowledge about gender equality issues:
Very high in electrified HH
Rich-poor gap is less pronounced in electrified HH
Poor in electrified HH more knowledgeable than even
rich in non-electrified villages.
2. Aggregate empowerment score: freedom of mobility
+participation in family decision + knowledge about gender
equality issues:
Higher in electrified HH
TV=main source of knowledge.
August 19-24, 2004 48
IMPACT on GENDER DIMENSIONS:
WOMEN'S EMPOWERMENT, CHANGING
STATUS & MODERNIZATION EFFECTS
Overall women's mobility score
0.488 0.459 0.419
0.512
0.541
HE WE-EV WE-NEV
Gap to achieve full freedom in mobility
Mobility score
0.581
August 19-24, 2004 49
Women’s empowerment scores: mobility,
participation & knowledge about gender equality
issues - all high in HE
Overall participation score of women Women's knowledge score of gender equality
issues
Overall women's empowerment score
0.7
0.58
0.4
0.3
0.42
0.6
HE WE-EV WE-NEV
Participation score Gap between ideal and actual situation
0.8
0.5
0.48
0.2
0.44 0.52
HE WE-EV WE-NEV
Knowledge gap
Knowledge score
0.662 0.533 0.499
0.338 0.467 0.501
HE WE-EV WE-NEV
.Overall women's empowerment score
Gap between ideal and actual situation of women empowerment
August 19-24, 2004 50
Impact of TV in enhancing
women’s empowerment
Share of major sources of knowledge of women about selected
gender equality issues (aggregate share)
HE WE-EV WE-NEV
TV Neighbor/Relative Radio
NGO Govt. worker
6.0
3.4
10.3
15.4
64.0
10.8
7.7
16.8
30.7
34.0
19.1
33.1
26.1
11.2
10.5
August 19-24, 2004 51
Electricity influences
demographic changes
Slightly high average household size of electrified
HH is due to less poverty-induced out-migration
of family members, higher incidence of joint-
family structure, & more job opportunities in the
electrified areas.
Dependency ratio is lowest (0.64) in HE.
TFR is less in electrified; also less among
electrified poor than even the rich in WE-NEV.
Electrified areas attract in-migration.
August 19-24, 2004 52
HUMAN DEVELOPMENT INDEX
HES HDI value
HE 0.642
WE-EV 0.440
WE-NEV 0.436
Bangladesh HDI=0.502 (2001)=139th position in the world
HE’s HDI equivalent to 100th position
August 19-24, 2004 53
IMPACT on DIRECT USERS of DOMESTIC ELECTRICITY:
CONSUMER PREFERENCES, DEMAND, BENEFITS,
PROBLEMS of SUPPLY INTERRUPTIONS,
& WILLINGNESS-to-PAY MORE
Distribution of average expenditure incurred to get electricity
connections at home (Av. Tk.1480)
PBS, Tk. 253
(17.1%)
Others, Tk. 55
(3.7%)
Wiring Charge, Tk. 218
(14.7%)
Wiring Materials,
Tk. 953
(64.4%)
August 19-24, 2004 54
REP has created a huge market for electrical
appliances: Indications of improving standard of
living & employment opportunities
•Approximate number of total tungsten bulbs in use 12.6 million
and fluorescent bulbs 1.54 million.
Estimated number of electrical equipment purchased
by domestic connection holders (in million)
5.74
1.8
1.57
1.01
0.170.150.08
0.009
Fan
TV
Cassette
Iron
Refrigerator
Mobile phone
Juice machine
Toaster
Households reported use of
electrical appliances(%)
69
47
29
18
53.3 1.5
Fan
TV
Cass. player
Iron
Refrigerator
Charger
Mobile phone
August 19-24, 2004 55
Problems of Supply
23% ever faced trouble in paying bill.
Three reasons mentioned: 67% could
not pay due to want of money, 14%
did not get the bill in time, 14% got
incorrect bill.
Irregular supply highly pronounced;
summer & between 6-10 pm are
times of most interruptions.
August 19-24, 2004 56
People willing-to-pay more if better
quality assured & sustained
45% consumers expressed willingness-to-pay more if no power fluctuations
& available round-the-clock. Customers willing to pay 7.42% more amount
than now.
Potential increment in revenue (annual) Tk 372 million.
Marginal willingness-to-pay curves for electricity
D
D1
Future (with increased quality)
Quantity/Quality (24 hrs of supply) (degree of fluctuations)
Present
T
A
K
A
August 19-24, 2004 57
KEY CONCLUSIONS
1. RE contributes to economic development and
poverty reduction. RE’s profound economic
development impact is evident in all sectors:
Agriculture, Industry, Commercial activities,
Household economy.
2. Economic poverty reduction impact is evident in
enhanced employment generation, increased
income of the poor, increased savings, progressive
expenditure pattern, increased influence over
asset building.
3. HH possession of electricity significantly
influences shift of a HH from poor to non-poor
category.
August 19-24, 2004 58
KEY CONCLUSIONS (contd…)
4. Human poverty reduction impact is depicted
through enhanced literacy, improved quality of
education, higher women empowerment status,
better health status of the poor.
5. People’s exposure to electricity-driven media (TV)
matters much in human capital formation and
improving knowledge –base. Such exposure
influences economic activities, and both
education and health practices.
August 19-24, 2004 59
KEY RECOMMENDATIONS
1. Access to electricity of households, & social &
economic institutions should be expanded to
accelerate the process of economic growth,
strengthen pro-poor orientation in growth
process and to further human development
(compatible with IPRSP).
2. RE should be viewed as one of the key
strategies for national poverty reduction.
3. Strategies should be devised to ensure poor
households’ access to electricity (e.g., poor in
electrified villages may be targeted first).
August 19-24, 2004 60
L3
(13.3%)
21.1%
L2
(42.2%)
21.1%
L1
(4.7%)
One-time investment
(Tk 750-Tk 1000)
Regular payment of monthly bill
(Tk. 125-Tk 150)
Proposed Payment
System
Approaches to increase the poor’s accessibility to
household electricity (in electrified villages)
Categories of poor Priority issues to
resolve
60.2 % of all HHs
(electrified village)
Key Recommendations (contd..)
August 19-24, 2004 61
SUGGESTED MECHANISMS TO ENHANCE ACCESS TO
ELECTRICITY BY VARIOUS SECTORS: DIRECT &
INDIRECT ACCESS TO PBS-RE
RE
Connectio
n
Non-poor: who
can afford
Poor: who
can’t afford
NGO/GOB: IGA,
skill training,
micro credit
Production Sector:
irrigation, industry,
commercial
Social Sector:
Health, Education,
Training
For one-time cost and regular
payment of bill: Block grant from
Govt, and /or from community
collection
Household
Key Recommendations (contd..)
August 19-24, 2004 62
Key Recommendations (contd..)
4. Studies need to be conducted to understand
more about causal linkages between RE and
various dimensions of poverty. Secondary
analysis of BD database (ESIES) as well as well
thought out fresh studies should be
conducted to facilitate informed policy making
& rational investment choices.
5. Bangladesh RE experience and the
methodology deployed in the study – both as
“best practice experiences” should be shared
worldwide.
August 19-24, 2004 63
“Life without electricity could be anything but
human development in the truest sense of the term”
Imam Hossain
Member of PBS Board and Teacher-cum-farmer.
