Story 2.5

Cows and Kilowatts

Electricity to Create New Opportunities

Every morning at 4 a.m., women in the communities of Prado 1 and 2 in Ecuador’s Pichincha Province wrap themselves in shawls, put on their bowler hats, and head out to lead their cows to pasture lands in the mountains.

The cows are milked twice a day, a difficult and tiring task, and until recently the work was hardly profitable because the communities did not have the equipment necessary to refrigerate and store the milk. As a result, instead of enjoying the benefits of their hard work, the families had to throw away some of the milk that was produced. To make matters worse, a large portion of the small profits went to intermediaries who owned the storage and refrigeration tanks needed to keep the milk fresh until it reached processing plants.

This began to change in May 2012, when the IDB extended a US$40 million sovereign guaranteed (SG) loan to the government of Ecuador, aimed at funding a project that aimed to provide quality electricity service to rural communities and marginal urban areas by installing 3,871 kilometers of power lines. As a result, the project helped communities modernize their production. The new power connections facilitated the development of a number of initiatives ranging from grist mills to sheep shearing, washing and drying of wool, milk collection facilities, sewing workshops, and artisanal microenterprises – all of which created new income-generating opportunities.

For milk producers in Pichincha Province, most of whom are women, the project has brought about a marked change in their day-to-day activities. Thanks to having electricity in their community, along with financing and technical assistance provided through the project, the producers now have a certified milk collection facility that allows 3,000 liters of milk to be refrigerated. The facility also has a small laboratory to evaluate the quality of the milk.

More than 200 families in these communities have also benefited from training courses on milking cows using hygienic practices that comply with standards established by the community milk collection facility. This training has been key to increasing incomes for the beneficiary families, who affirm that they no longer depend on intermediaries to sell their milk. Instead, their cooperative negotiates the price and sells their milk directly to processing plants. This has not only increased their incomes by 21.5 percent, but has also opened the door to start additional marketing initiatives with new dairy products.

Story by:
Jesús Tejeda, energy senior specialist in the Energy Division at the IDB.

This results story is based on the Project Completion Report for the SG operation EC-L1087, which closed in December 2014.

Continue reading Chapter 2 - Infrastructure for Competitiveness and Social Welfare