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Project name Peru Rural Electrification Project
Country/region Peru
Duration 2006-2013
Short Description

The World Bank and GEF-funded Peru Rural Electrification Project included a component promoting the productive use of electricity. This component, which had a total budget of approx. 4 million USD (2008-2013), is based on a similar project combining rural electrification with business development services (BDS) in Indonesia. The World Bank through the Directorate General of Rural Electrification (DGER) of the Ministry of Energy and Mines (MEM) supported a combined effort of NGOs and electricity distribution companies at local level to identify opportunities to increase income generating activities and assist micro and small enterprises to improve existing and start new businesses. The local NGOs providing BDS to rural businesses were contracted by DGER.

The cross-sectoral activities took place at the local level and were developed by each NGO resulting in a bottom-up approach to identifying opportunities and designing the promotion programme. The NGOs assisted small enterprises to address knowledge, market, finance, technology and other constraints. The support  included the following elements:

  • Field-based teams comprised of a team leader, specialists for finance, marketing and technology, and promoters,
  • Household surveys, community consultations, focus groups and key informant interviews to assess constraints and opportunities in the targeted communities,
  • Active identification of market participants, channels and potential market opportunities and agents - buyers, suppliers of inputs, equipment fabricators, etc.,
  • Market assessments to target high potential kWh/year increases and opportunities for electrical equipment to add value, particularly by micro, small and medium enterprises,
  • Delivery of multiple business support services for start-up or expansion of electricity-using enterprises, such as information on business opportunities, assistance to access finance and link with suppliers and buyers, skills training, and facilitation of contact with the distribution company on electricity supply and connection,
  • Collaboration with other programs operating in the communities (e.g., activities of microfinance organizations, municipal governments, equipment suppliers, agricultural extension programs),
  • Coordination with distribution companies on necessary infrastructure and grid connections.

The main economic activities in the targeted communities were home based or located in or near the fields of the producers. They vary within the range of small-scale agriculture, livestock and dairy production, artisanal mining, textiles, off-farm industries and services like transport or product distribution. While agricultural production is usually at the individual level, agricultural processing is often done at a cooperative or association level.

The first three pilot projects  in Cusco, Junín and Lima Provinceshave helped over 4,970 families and micro-enterprises to adopt electricity and use equipment to process cereals, coffee, cocoa, baked goods, meat products, milk, wood and metal products and handicrafts, and to pump water for expanded agricultural production and processing. Currently eleven more projects are being implemented aiming to reach up to 15,000 more producers.

Total results of the project (2008 - 2013) were:

  • 21,111 producers in 14 regions have been assisted and adopted electricity using equipment
  • Small enterprises invested 15.2 million USD in electrical equipment
  • Electricity usage by producers increased by 19.1 GWh/yr

As part of the continuation of the rural electrification programme the productive use component has also entered into a second phase.

Implemented by

Local NGOs contracted by the Peruvian Directorate General of Rural Electrification

Funded by

World Bank, Global Environment Facility and ESMAP

Further Information

Results Story: Promoting Productive Uses of Electricity in Rural Areas of Peru: Experiences and Lessons Learned" (2013) 

Report: "Promoting Productive Uses of Electricity in Rural Areas of Peru: Experience & Lessons Learned" (2012)