São Paolo, Brazil

Energy and Slum Settlements: Public-Private Partnership for Electrification

A Case from the South: São Paolo, patient Brazil

São Paulo, one of the largest cities in Brazil has, like most cities of developing countries, a considerable number of slums scattered around its city area. A significant proportion of the poor people of the city live in these areas, and often have no access to fresh water, sewage services or electricity.

In the early 1980’s, the State government of São Paulo realized that it was impossible to eradicate the city’s numerous slums. Instead, they chose to supply public services to these areas in order to improve living conditions. One of the means to achieve that was to provide electricity to slum-settlements.

One of the most important, often overlooked, factors of poverty is low energy consumption and limited access to energy sources. People living in poverty spend a higher proportion of their total income on energy, and are forced, because of their incapacity to face higher initial costs, to rely on less efficient energy devices. In addition, the use of traditional fuels has many negative impacts on the health of the populations concerned, as well as on the environment as a whole. These populations also have a limited access to the knowledge spread by radio and television.

In recognition of this, the State government, with ELECTROPAULO, the public electricity company, undertook the electrification of slum-settlements. The staff of this company, comprising a number of social scientists, identified the slums to be serviced first on the basis of most urgent needs.

The installation itself was done by the company. It was easy and relatively inexpensive since the population density in slum areas is high. All that had to be done was to locate poles and conduct the wiring.

Usually, projects like this one face a major obstacle: the costs associated with managing electricity meters and a billing system. To avoid this problem, a flat rate was charged irrespective of each consumer’s actual use, and it was subsidized by the State government. No meters were installed. The finance directors of ELECTROPAULO feared that this system would be costly, but in the long term, the operation proved to be profitable.

Initially, 100,000 shacks were targeted, and it was estimated that the provision of 50 kilowatt hour per month for each shack would be enough to install 1 or 2 lamps with 60 watts of power, and to run a radio or other domestic appliances. The government subsidy was administered through the company’s regular budget, and required no external funds. The total cost was less than 100 million dollars spread over a 10- year period. The amount was taken from ELECTROPAULO’s annual income, which is approximately 4 billion dollars.

The results were very conclusive. In 10 years, the electricity consumption per shack increased to an average of 175 kwh per month, and ELECTROPAULO started to install meters and charge each shack for its own consumption. By 1991, 215,000 shacks were electrified, and this meant benefiting a population of 750,000 people. That year, sampling indicated that each shack had an average of 4.2 lamps, 83% had an electric shower, and 80% had refrigerators. Most of them also had radios, television sets, and mixers.

Through this policy, a new market for electricity was effectively created. The use of electricity for lighting meant that public security improved, children could play outside in the evening and the streets were safer.

The installment and use of television sets led to better access to information, and also reduced heavy drinking among men in the evening. Although there is no statistical evidence to prove it, a number of demographers believe that the sharp decline in Brazil’s rate of population increase (from 3.8% in 1970 to 1.9% per year today) is due to access to television, which usually spreads living and cultural patterns similar to those of developed countries, including the shift to smaller families.

Moreover, there were less accidents with fuels and fires usually associated with using kerosene, LPG and candles. The risks to health and to the environment were reduced, and these populations, who before were important contributors to urban pollution, converted to using a more effective, less damaging type of energy.

Projects like this could easily be extended to the slum areas that encircle most of the large cities of the developing countries since the needed technology is available locally, or through subsidiaries of multinational companies, and the action of the government was simply to bring together the interested actors.

We thank the São Paulo State government, Professor Jose Goldemberg of the University of São Paulo’s Insituto de Electronica e Energia, and Mrs Susan McDade of the UNDP’s Energy and Atmosphere Program for providing us with information about this project.

For more information, please contact:

Dr. Jose Goldemberg
Instituto de Electronica e Energia, Universidade de Sao Paulo,
Av. Prof Almeida Prado 925
Cidade Universitaria, 05508-900
Sao Paulo, SP, BRAZIL,
phone: 55-11 818 5053, fax: 55-11 818 5031,
E mail: goldemb@IEE.USP.BR

Susan McDade
Technical Specialist
Energy and Atmosphere Programme
304 East 45th St., Rm 999
New-York, NY 10017
tel: 212 906 6085, fax: 212 906 514
E mail: susan.mcdade@undp.org