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There is often a two-way relationship between the lack of access to adequate and affordable energy services and poverty. The relationship is, in many respects, a vicious cycle in which people who lack access to cleaner and affordable energy are often trapped in a re-enforcing cycle of deprivation, lower incomes and the means to improve their living conditions while at the same time using significant amounts of their very limited income on expensive and unhealthy forms of energy that provide poor and/or unsafe services.
Access to cleaner and affordable energy options is essential for improving the livelihoods of the poor in developing countries. The link between energy and poverty is demonstrated by the fact that the poor in developing countries constitute the bulk of an estimated 2.7 billion people relying on traditional biomass for cooking and the overwhelming majority of the 1.4 billion without access to grid electricity. Most of the people still reliant on traditional biomass live in Africa and South Asia.
Limited access to modern and affordable energy services is an important contributor to the poverty levels in developing countries, particularly in sub-Saharan Africa and some parts of Asia. Access to modern forms of energy is essential to overcome poverty, promote economic growth and employment opportunities, support the provision of social services, and, in general, promote sustainable human development. It is also an essential input for achieving most Millennium Development Goals (MDGs) – a useful reference of progress against poverty by 2015 and a benchmark for possible progress much beyond that.