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Electricity from the micro-hydro plant powers a sewing machine - and a TV.

The Eastern slopes of the Andes in North Peru are among the least developed parts of the country with the majority of people living in remote villages with little or no access to grid electricity. Whilst high rainfall supports a diverse range of agricultural activities, the lack of access to grid electricity makes life a daily struggle for survival and severely restricts economic development of the region. As a result a high proportion of the population leave the area in search of better opportunities.

The usual strategy adopted to address the lack of access to essential electricity is to extend the national grid. However with over five million people living without access to electricity in the Andean areas of Peru where grid extension is an unrealistic option, there is an urgent need to find effective alternatives.

Practical Action has been at the forefront of searching for and investing in an alternative that provides access to essential electricity as well as addressing the high levels of poverty in the region. Since 1992, through their Renewable Energy Promotion Fund, Practical Action has been actively promoting micro hydro-power as the most effective source of electricity for the region, given the high rainfall and the extensive network of rivers and streams. To date the scheme has installed 47 micro-hydro stations producing a combined capacity of 1568 kW of electricity. This provides metered electricity to an estimated 5,044 families (30,000 people). Practical Action hopes to extend the scheme to eventually include parts of Bolivia, Ecuador and Colombia where lack of access to essential electricity is a daily reality for many.

The results of the scheme have been overwhelming. People who previously left their villages in search of better opportunities are now returning and others are migrating there from other villages. Some villages, such as Tamborapa, have doubled in size and surveys suggest that about 25% of households have started or expanded businesses as a direct result of access to electricity. Earnings have also increased for 60% of those targeted by the scheme. A manager of the electricity enterprise in Tamborapa commented: "With electricity the community is growing fast. We have good schools, a good health centre with a dentist and laboratory. And a church is being built."

The educational and health benefits are myriad. Schools can use computers, photo-copiers and audio-visual equipment. Children can study at home in the evenings and, crucially, teachers are more likely to live in communities where there is access to electricity. As one teacher said: "If there was no electricity here, I would go to the coast and work there."

Health centres can now operate vaccine refrigerators, maintain computer records and use radio links for vital communication. People, especially women and children, are no longer exposed to the toxic fumes produced by kerosene lighting that cause breathing problems and eye irritations. In their homes people can also enjoy the benefit of TV, radio and DVD players.

The micro-hydro projects are installed only with the full involvement of the community who pay for 40% of the capital cost as well as deciding on the best payment structures for the electricity supplied. A village micro-enterprise is also set up and technicians are trained to take responsibility for the day to day running of the micro-hydro plants. As one teacher put it: "Electricity has made everyone in the village an engineer."

Professor Homero Miranda comments on Practical Action's success: "Good management is more important than good financial resources. Practical Action, Peru is able to get close to the people and understand their real needs in a way that universities and politicians cannot do."

Ashden Award money will be used to strengthen and broaden the scope of the Renewable Energy Promotion Fund to include other types of renewable energy such as wind and solar. The scheme will also be extended to include other regions.