Ahmedabad, located on the banks of the Sabarmati River, is the largest city in the state of Gujarat and the fifth most populous city in India. Approximately 40 percent of its 5.6 million inhabitants live in slums and informal settlements, mostly without any public service provisions including water, sanitation or electricity.

In 2001 only a small proportion of poor households had legal electricity connections supplied by the Ahmedabad Electricity Company (AEC), most households were connected to unsafe illegal systems of electricity resulting in losses for AEC. 

After consulting with local NGOs, the Self-Employed Women’s Associated (SEWA) and SAATH Charitable Foundation, the Ahmedabad Municipal Corporation and AEC, with financial support from USAID, initiated a electrification pilot project.

The object of the project was to remove illegal power lines in streets and homes  by connecting poor households to the electricity grid. In return participating households were granted a minimum de-facto tenure of ten years and financial assistance to pay connection fees.

Stakeholder implementation roles were defined on the basis of the strengths that each stakeholder brought to the project. 

Responsibilities of the Ahmedabad Electricity Company Limited  

• Appoint lead project coordinator. 
• Prepare technical layouts. 
• Release legal supply after obtaining legal documents and receipt of necessary fees.
• Provide check meter at source point.  
• Monitor consumption patterns and identify pilferage.
• Establish metering and bill recovery system. 
• Coordinate Slum Awareness Campaign. 
• Impart training to NGOs. 
• Take the lead on relevant documentation, metering, billing, pilferage management, and training and awareness.  

Responsibilities of SEWA and SAATH  

• Obtain legal documents from the Ahmedabad Municipal Corporation.  
• Submit application to Ahmedabad Electricity Company Limited (AEC) in the slum dwellers’ name.
• Collect dues from slum dwellers on behalf of the AEC. 
• Identify community-based organizations (CBOs) or groups and provide necessary support.
• Establish metering and bill recovery system. 
• Train CBO in the bill collection system. 
• Educate CBO and slum dwellers.
• Influence policies within the AEC for upscaling the program on the basis of the lessons learned from the pilot.  

Responsibilities of Community Business Organisations  

• Create awareness and motivate slum dwellers to access legal electrification. 
• Check the billing system once in a month. 
• Collect dues from slum dwellers on behalf of the AEC and the NGO.
• Submit applications to the AEC on behalf of the slum dwellers. 
• Act as a watchdog against pilferage of electricity

The lead agencies for the project are the Ahmedabad Municipal Corporation, AEC, SEWA and SAATH with financial support provided by USAID.

In the pilot project the cost for connecting the customer and installing internal wiring were split between the household, the AEC, and USAID. In the scaling-up phase, the slum households bore the cost of connections and usage charges, and the AEC used its own funds for network expansion. In both phases SEWA bank helped households finance their share of the connection charge of 35 US Dollar with micro-credits.

All households who participated in the energy saving training benefitted from decreased monthly costs of approximately three to seven US Dollars. In order to accommodate the households’ financial situation, the companies changed their invoicing system from bimonthly to a monthly practice. Furthermore, invoice documents are now registered officially, enabling households to access other municipal support systems, for example gas connection.

Participation in the program also included a guaranteed and certified tenure status for ten years. The certificate is issued by the Ahmedabad municipal corporation and protects inhabitants from eviction during this period.  

The project demonstrated that the losses incurred by the electricity companies due to thefts in slum areas could be substantially reduced.

Initially, the project was viewed with scepticism; the slum dwellers feared they would be evicted, the energy companies assumed the invoices would not be paid and the city administration suspected the community would reject the project. However, the two NGO’s managed to build confidence and trust between slum dwellers, private energy companies and city administration.

The Federal State of Gujarat transferred the program to other Indian cities, including Mumbai and to cities on the African continent.