Electricity Services for Rural Areas Project

The proposed project would complement ongoing IDA support (through the Energy sector Adjustment Credit) to the Government strategy for energy sector reform and liberalization that is spelled out in the Letter of Sector Development Policy issued in 1997. The project development objectives are to: (a) promote social equity between urban and rural areas by increasing access to electricity in rural areas, through private providers; (b) ensure proper regulation as well as competition in the energy sector, leading to affordable and reliable energy supply to urban and rural population; (c) lessen the barriers to development of renewable energy sources. These development objectives would be achieved by (i) supporting the establishment of a national agency for rural electrification, (ii) providing financing for a decentralized rural energy fund, aimed at attracting private investment and mobilize significant internal and external resources, and (iii) contributing to Senelec's investment program for grid-connected electrification.