© Sustainability Affairs Access to Electricity Christian Kornevall Dar Es Salaam, September 29

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

© ABB billion people have no Access to Electricity Sub-Sahara Africa 32% South Asia 50% 35% in India alone East Asia (not including China) 14% Earth’s City lights (NASA) Source: IEA World Energy Outlook 2002

© ABB - 4 The link between poverty and Access to Electricity Source: IEA analysis; income from the World Bank’s World Development Indicators, 2001 Tanzania

© ABB - 5 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”-- -

© ABB - 6 Access to Electricity – ABB’s response to UN Global Compact Afghanistan Angola Bangladesh Benin Bhutan Burkina Faso Burundi Cambodia Cape Verde Central African Rep. Chad Comoros DR of Congo Djibouti Equatorial Guinea Eritrea Ethiopia Gambia Guinea Guinea Bissau Haiti Kiribati Lao People's DR Lesotho LiberiaAfghanistanAngolaBangladeshBeninBhutanBurkina FasoBurundiCambodiaCape VerdeCentral African Rep.ChadComorosDR of CongoDjiboutiEquatorial GuineaEritreaEthiopiaGambiaGuineaGuinea BissauHaitiKiribatiLao People's DRLesothoLiberia Madagascar Malawi Maldives Mali Mauritania Mozambique Myanmar Nepal Niger Rwanda Samoa Sao Tome and Principe Senegal Sierra Leone Solomon Islands Somalia Sudan Togo Tuvalu Uganda United Rep. of Tanzania Vanuatu Yemen ZambiaMadagascarMalawiMaldivesMaliMauritaniaMozambiqueMyanmarNepalNigerRwandaSamoaSao Tome and PrincipeSenegalSierra LeoneSolomon IslandsSomaliaSudanTogoTuvaluUgandaUnited Rep. of TanzaniaVanuatuYemenZambia (Source: UNCTAD) An appeal to industry to grow business in the Least Developed Countries (LDC) ABB does business with 38 of 49 LDCs The revenues 2001 were 334 million USD, (1.4% of total revenues) Example: Power supply to Ukerewe Islands 10 MUSD, financed by Spanish government

© ABB - 7 Addressing the bottom of the pyramid developed countries developing countries; semi-urban areas least developed countries; rural areas 1 $ per day The income pyramid ABB’s main stream of operations Focus of Access to Electricity A bottom up rural transformation concept Extending Business as Usual

© ABB - 8 Rural electrification – organic growth village small town mine plantation stone quarry mini hydro power transmission line tourist spot

© ABB - 9 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

© ABB - 10 First Pilot Project with WWF - Selous Game Reserve Selous Game Reserve Electrify Ngarambe Village 275 homesteads, 1800 people 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

© ABB - 11 ABB’s business models for Access to Electricity ABB’s main stream business model Organic growth model Partnership model

© ABB - 12 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

© ABB - 13 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

© ABB - 14 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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