By David South, Development Challenges, South-South Solutions
SOUTH-SOUTH CASE STUDY
Meeting the South’s energy needs will be crucial to achieving radical improvements in quality of life and human development. It is estimated that 1.7 billion people around the world lack electricity (World Bank), of whom more than 500 million live in sub-Saharan Africa.
Africa’s greater global engagement and economic growth in the past few years has started to draw attention back to the continent’s dearth of reliable power sources and inadequate power infrastructure. With demand for electricity growing fast, it is people running small enterprises and organizations – especially in rural areas – who often get cut out.
Being able to see at night unleashes a vast range of possibilities, but for the very poor, lighting is often the most expensive household expense, soaking up 10 to 15 percent of income.
There’s a direct link between lighting and economic development. Each 1 per cent increase in available power will increase GDP by an estimated 2 to 3 per cent.
A reliable power supply helps people to work longer, important for small businesses, and this increases the amount of wealth that can be created. Lit streets are safer at night, and lure people outside to do business and seek entertainment. It makes it easier for students to study into the night, and in consequence improve their grades.
To take up this challenge, entrepreneurs are using different approaches across the South, to make solar power affordable and able to reach millions of poor people.
Marrying new lighting technology such as compact fluorescent light bulbs (CFLs) and light emitting diodes (LEDs) with solar power generation, opens up the possibility to bring clean, portable, durable, low cost, high quality lighting to Africa’s poor. These new lighting systems also come with huge health and safety benefits, compared to gas alternatives.
In Kenya, more than 80 percent of people lack access to the national grid and depend primarily on fossil fuels for their lighting needs, leading to respiratory diseases and environmental hazards associated with indoor air pollution.
Kenyan solar entrepreneur Charles Rioba of Kodesha Mwangaza – Rent a Light is impressed by the interest in solar power solutions. An expert in renewable technologies with 15 years’ experience teaching in universities, he “realized that to reach the lower end of the market, one had to design an affordable solution.”
“The biggest challenges faced are still affordability, and very little disposable income from the potential end users,” he said. “We are currently discussing with a number of micro institutions who have expressed interest on coming on board on rolling out the project.”
Rioba’s business provides rental solar-charged Powerpacks designed to make electricity affordable for the majority of urban poor, rural households and slum dwellers. The rental system allows the consumer to rent a fully charged Powerpack from designated distributors in the neighbourhood, without having to invest in an off-grid power source, such as a solar panel. The project will set up 100 distribution agents and 10 service centers for the Powerpacks to reach approximately 8,000 households within 18 months. In addition the Powerpack will be used for mobile charging and powering radios, and hopes to create a new market concept for portable electrical energy distribution among the poor in Kenya.
“My model targets to reach the lower end of the market,” Rioba said. “We are doing this by using existing businesses and groupings without creating new ones. We are also sourcing directly from the suppliers and we are working our project on numbers. In this way the margins are very low but aimed at achieving high usage hence return on investment.”
Rioba has just been awarded funding by the World Bank’s Lighting Africa initiative, which aims to provide up to 250 million people in sub-Saharan Africa with access to non-fossil fuel based, low cost, safe, and reliable lighting products and associated basic energy services by the year 2030. It uses equipment that can weather long-term use in remote and difficult areas, trains people to service the equipment, and comes up with commercially viable business models to make all of this affordable to the rural poor.
Rioba says that “for solar to be more attractive in Africa, there are a number of challenges. On the technology side, to make products which are both durable and affordable to the masses. Such new products such as LED lighting may ultimately reduce the size of the solar system and hence the cost.”
In Laos, the rental mode is also proving effective. Only 48 percent of the country’s 5.7 million people have access to electricity, and most turn to firewood and kerosene for light and energy. Over 74 percent of people live on less than US $2 a day and could not afford to buy a solar-power system outright.
The company Sunlabob rents solar-powered lanterns for prices beginning at 35,000 kip (US $3.80) per month, lower than the 36,000 to 60,000 kip (US $4.00 to US $6.60) per months households typically pay for kerosene fuel. After 10 hours’ use, the lanterns are recharged for a small fee from the village’s central solar-power collection facility. All fees go towards maintaining the central solar recharging station. The equipment is rented to a village-appointed Village Energy Committee, which sub-leases it to households at prices it sets. Rent covers all costs, including replacements and operational servicing costs. In the event of breakdowns, rent payments are suspended until repairs are made.
Sunlabob has installed over 5,600 solar power systems since 2000 in over 450 villages and is also working in Cambodia and Indonesia.
“Sunlabob really works well with local people,” says Bouathep Malaykham, head of the Lao Government Rural Electrification Program. “Because they are a private company they can make things happen quickly.”
In Bangladesh, more than 230,000 households are now using solar power systems thanks to the government’s Infrastructure Development Company Ltd. (IDCOL), giving rise to opportunities for a whole new generation of entrepreneurs to make use of this new power supply for the poor. IDCOL is run by the Ministry of Finance, and is on course to install 1 million Solar Household Systems (SHS) using solar panels by 2012. The Bangladeshi government is hoping to bring electricity to all its citizens by 2020 – meaning this is now a prime time for entrepreneurs specializing in providing energy efficient products to the poor.
The Executive Director of IDCOL, Ehsanl Haque, told a recent press conference: “SHS system, containing photo voltaic panels, battery, charge controller, solar lamp and switch, is a convenient mode for supply of power for small electrical loads such as lights, radio, cassette players and black and white TV.”
It doesn’t provide electricity 24 hours a day, but Haque says even with a few hours of electricity available each day, the rural economy is being transformed. “Now they are using SHS for income-generating activities and working hours have been increased for small businessmen, weavers, tailors, hairdressers, and makers of handicraft items.”
Among the many benefits of the electricity has been the ability to listen to radio and watch TV: an activity women reported made them feel safer at night.
- Lighting Africa: this website run by the World Bank is a virtual business community and has forums, market intelligence, access to grants, network and partnership opportunities.
- D.light Design is dedicated to bringing modern lighting and power to over 1.6 billion people globally currently living without electricity. They aim to be the number one player in off-grid lighting and power solutions worldwide.
- Solar Power Answers is a one-stop-shop for everything to do with solar power. It has a design manual and guides to the complex world of solar power equipment.
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