NATURAL GAS DISTRIBUTION FOR LOW INCOME FAMILIES

1
NATURAL GAS DISTRIBUTION FOR LOW INCOME FAMILIES
2
PROFILE OF PROMIGAS

• 40 years of experience in the transport and
  distribution of natural gas
• Transports 51 of natural gas consumed in
  Colombia
• Ownership interest in 5 transmission and 5
  distribution companies

1,300,000 connected users
2,200,000 connected users
3
THE TARGET SECTOR

• Target Sector
• Strata 1 2
• 80,000 households yet to be connected
• Caribbean Coast
• Highest poverty levels in Colombia
• 5 to 7 member households
• Monthly income ltUS168 min. wage
• The Problem
• Gas mains exist near 48 of 80,000 homes
• Gas is affordable, but high switching costs

Households cannot afford US370 connection fee,
220 of monthly income
4
THE GPOBA PROJECT

• US 5 million to provide grants to connect 35,000
  households
• Provides Colombian government with a platform for
  replication
• Builds upon a 1 million PPP project with Dutch
  Government

• Output Definition
• Strata 1 or 2 household (at least 50 in Strata
  1)
• New connection
• Service used at the connection for at least 3
  months
• Sufficient for operation of kitchen gas stove
• Stove provided to household at no cost

Focus on access vs. consumption subsidies (new in
Colombia) Expands scope of output beyond
connections to use of gas for cooking
5
PROJECT PROPOSAL
Figures in dollars are based on a tax exchange of
2,300 pesos per dollar.
6
KEY BENEFITS

• Financial
• Annual savings of 50 of one monthly income
  (incl. connection payments)
• Once connection is paid, annual savings of 80 of
  one monthly income
• LPG and Electricity prices are 1.4x and 4x the
  price of gas, respectively
• Environmental
• 34 hectares of forest or mangrove swamp preserved
• Natural gas reduces polluting emissions
• Health Reduction of fire hazards and
  smoke-induced respiratory diseases

7
(No Transcript)
8
(No Transcript)
9
SUPERVISION KEY INDICATORS

• Level of defined output achieved, e.g. number
  of connections made
• Breakdown of beneficiary households by strata
• Breakdown of total households in service area by
  strata
• Annual reports on service quality
• Average monthly consumption per household
• Average household expenditures on alternative
  fuels prior to gas connection
• Average residential tariff for households
• Total project costs and average cost per household

Measuring impact will facilitate scaling up and
replication