Excerpt of a speech by NRECA International’s Sr. Vice President Dan Waddle, delivered at the 2024 NRECA International Luncheon.
When we talk about who we are — we often refer to ourselves as a rural development organization that supports community electrification through the cooperative business model, focusing on rural community growth and prosperity.
Achieving economic growth
The challenge throughout our program has been to determine how to achieve economic growth. We all know from direct experience that economic prosperity doesn’t happen unless the right conditions are put into place to support it. And it’s now always clear what those conditions are, and what precisely is needed.
But we do know that capital is needed – significant capital for many purposes. Indeed, at its core, electrification expansion is about capital – building human capital in rural communities to organize, govern, and manage vitally important businesses – and organizing capital that is needed to build infrastructure, finance working capital needs – and to finance the conversion from mechanical to electrical energy.
While productive use programs that finance the conversion to electrical machinery remain an important element of our program today, the primary emphasis remains on supporting electrification expansion. While there has been significant progress in electrification expansion in Latin America and many countries in Asia, electrification rates in many countries in Sub-Saharan Africa remain below 50% – and for some less than 10% of rural people have electric service.
Channeling resources for cooperatives
What has become clear is that there are two primary business models that the focus of electrification expansion. Grid expansion is in almost all cases managed by government-owned utilities that own and operate grid infrastructure. Off-grid electrification is the province of private developers who invest in solar mini-grids and small solar home systems. The cooperative business model is rarely considered as a solution.
The difficulty with the present approach is that many government utilities are unable to borrow the funds needed to expand service to increasingly remote areas, while private, off-grid investors focus their investments on more affluent areas with relatively high population density. More remote, less affluent communities are left to wait – just as was the case in the United States in the late 1930s before the REA program began.
The cooperative business model arose out of the need to organize community self-interest, where market dysfunction failed to channel resources where they are needed. We believe that cooperatives need to be part of the solution to expand electrification access in Africa, and we are searching for the means to channel financial resources where they are needed as well as to convince our partners that this model has an important role to play to contribute to energy solutions for rural communities.
Cooperatives as engines of economic growth
We know that electric cooperatives can become engines of community economic development. We know from direct experience how they can succeed even when there is little initial experience and capacity to establish and manage utility operations. We know that creating a utility that employs community members has the direct impact of training a cadre of local professionals and tradesmen that would otherwise not have the opportunity to gain this essential career experience. And we know that once reliable electric power is provided, local businesses can use this resource to improve productivity, offer new services and generate more income for themselves and their employees.
But financing is needed.
Our goal this year and going forward is to find additional sources of capital to support cooperatives in Zambia, Malawi, Liberia, Nigeria and elsewhere in Africa. Our goal is to find resources from the international donor, philanthropic and development community, in coordination and collaboration with our local partners such as the Zambia Rural Electrification Authority.
Electrification expansion has taken huge steps forward, but there is much work left to be done, and we’re committed to do it. As always, we will turn to you, our cooperative family for your continued support in spirit, ideas, knowledge, and yes, may ask you to continue to contribute to this worthy cause. I’m confident that if we work together to find solutions, we will keep the momentum going and build electric cooperatives that can last generations.