Christian Kornevall Access to Electricity

Dar Es Salaam, September 29

© Sustainability Affairs
- 1 - 01-04-06
 Who we are...
 A leading power and automation
technology company with strong
market positions in its core
 Headquarters:
Headquarters: Switzerland
Zurich, Switzerland businesses
 About
About 133,000
133,000 employees
employees in  Two units in Tanzania that employ 130
in around
around 100 countries
100 countries
people:
 Orders
Orders 2002: US$
in 2002: US$ 18.1
18.1 billion
billion
- ABB Tanelec in Arusha
 Revenues
Revenues 2002: US$
in 2002: US$ 18.3
18.3 billion
billion
- ABB in Dar Es Salaam
 Listed
Listed
on on stock
stock exchanges
exchanges in in
London/Zurich,
London/Zurich, Stockholm,
Stockholm, Frankfurt  Our aim is to create value for
andFrankfurt
New Yorkand New York all our stakeholders
 We seek to meet the needs of
our customers, our employees
and the communities where we
do business
© ABB - 2

download from www.abb.com/sustainability

 1.6 billion people have no Access to Electricity

Earth’s City lights (NASA)

Sub-Sahara Africa South Asia East Asia (not including China)

32% 50% 14%
35% in India alone
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Source: IEA World Energy Outlook 2002

 The link between poverty and Access to Electricity

Tanzania
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Source: IEA analysis; income from the World Bank’s World Development Indicators, 2001
 ABB’s Access to Electricity program
“Access to electricity is of key importance in the fight against poverty.
It is a key enabler and precursor for sustainable development.”

 ABB wants to contribute to the

electrification of poor rural and
semi-urban areas
 ABB seeks to improve its ability to
meet the needs of the rural poor
 ABB will grow its long-term
business engagement in the least
developed countries

“Our main focus in Tanzania is the productive use of affordable

energy and the development of local business, SME:s and markets”--
-
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Access to Electricity – ABB’s response to UN Global Compact

• Afghanistan • Madagascar
• Angola • Malawi
• Bangladesh • Maldives
• Benin • Mali
• Bhutan • Mauritania
• Burkina Faso • Mozambique
• Burundi • Myanmar
• Cambodia • Nepal
• Cape Verde • Niger
• Central African • Rwanda
Rep. • Samoa
• Chad • Sao Tome and
• Comoros Principe
• DR of Congo • Senegal
• Djibouti • Sierra Leone  An appeal to industry to grow business in
• Equatorial • Solomon
Guinea Islands the Least Developed Countries (LDC)
• Eritrea • Somalia
• Ethiopia • Sudan  ABB does business with 38 of 49 LDCs
• Gambia • Togo
• Guinea • Tuvalu
• Guinea Bissau • Uganda  The revenues 2001 were 334 million USD,
• Haiti • United Rep. of (1.4% of total revenues)
• Kiribati Tanzania
• Lao People's DR • Vanuatu
• Lesotho • Yemen  Example: Power supply to Ukerewe Islands
• Liberia • Zambia 10 MUSD, financed by Spanish
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government
(Source: UNCTAD)
 Addressing the bottom of the pyramid

The income pyramid

ABB’s main stream

of operations
developed
countries
Extending
Business as
Usual

Focus of Access
to Electricity developing countries;
semi-urban areas A bottom up rural
transformation concept
1 $ per day

least developed countries;

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rural areas
 Rural electrification – organic growth

tourist spot
village

small
town

plantation

mini
stone
hydro
quarry
power
mine transmission
line
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 What is an Access to Electricity project?

 Local involvement and partnership

 Explore alternative business models

 Need for commercial and technical

expertise

 Need for project developers

 Projects should be profitable

 Broader scope than electrification only –

including SME development, water,
communications and roads

 A good project should follow the

intentions of UN Global Compact download from www.abb.com/sustainability
© ABB - 9
 First Pilot Project with WWF - Selous Game Reserve

 Electrify Ngarambe Village

275 homesteads, 1800 people
Selous Game Reserve

 WWF goals:
 Reduce pressure on the use of biomass
 Renewable energy resources
 Energy efficiency and state-of-the-art technology

 ABB goals:
 Demonstrate the positive impact of electrification
 Create economic activity
 Explore an economic model for sustainable supply of electricity
 Use available ABB low cost technology
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 ABB’s business models for Access to Electricity

 ABB’s main stream

business model
 Organic growth model
 Partnership model
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 Potential areas for Access to Electricity projects

 Rural growth spots

 tourism
 mining
 agriculture
 SME:s
 Semi-urban areas
 Communities around
game reserves
 Other development initiatives,
e.g. Lake Victoria
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 What ABB offers in Access to Electricity

 Adapted business models

 Low cost / high value products
mainly produced in Tanzania
 Vocational training
 Strong local implementation
experience
 To prove pilot schemes
before scale-up
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 Our expectations on this meeting

 To find a role where we can contribute with our

technology to create income, employment and growth in
Tanzania
 To speed up the implementation of the government’s
BEST program and the new SME policy
 To be an implementing partner in the team that grows
new sustainable business in Tanzania
 To generate project ideas for Access to Electricity
 To start-up joint pro-poor pilot projects
 To accelerate rural electrification in Tanzania
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