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Electricity Supply Business Models

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Submitted By Abdallah
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Introduction

Taking into account PACEAA’s overall goal of poverty reduction facilitated by clean energy deployment, it is important to consider how to appropriately mobilize resources so that social development is prioritized alongside the pursuit of economic growth. In this light, it is deemed that the mobilization should take place around the two key activities of the project, namely power generation on one hand and power distribution on the other; and for both areas of activity businesses should be organized with a strong social focus. In this chapter of the PACEAA project the business models and associated sample contracts that could deliver the desired pro-poor benefits are analyzed and discussed, and in the end suitable models are recommended. Here, a business model is taken to mean a setup or arrangement of a business organization with the objective of achieving monetary and other gains after committing investments.

The centre of attention in the PACEAA project is power generation by tea factories or companies, and rural electrification involving communities that are target beneficiaries for the generated power. Therefore, the business models that are considered include tea factories and benefiting communities around the tea factories as key players. At the generation level, the tea factories are expected to generate power or have it generated on their behalf, and the bulk of the electricity would be used by the factories. Some of the power available after meeting the factories’ requirements would be taken up by the rural electrification. Thus, the generation business model should be such that it caters for the electrification (social) needs of the communities around the tea factories. Socio-economic gains of the business are also expected to trickle down to the communities through employment of local people and creation of other economic spin-offs from

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