Main activities
Financial model design
Dates: Jan to April 2009
Building up adapted financial products and local skills and infrastructure linking microfinance services to solar energy is a vital part of ensuring the long-term success of rural electrification and development programmes. The business model will take into consideration the necessity to meet product delivery services and the different developments in the solar energy market. Using microfinance as a way to access to renewable energy will have additional benefits beyond end-user finance. This translates to making funds available to help stimulate the market for renewable energy technologies and hence creates:
Financial model feasibility
The financial feasibility will make the most of the market surveys in Bangladesh and Indonesia where people in rural communities spend on average $3 to $20/month on kerosene, candles, or other energy products (an extremely high energy cost both for them and the environment in comparison to the low quality service received).
Institutional Feasibility
Building up local communities and policymakers’ skills is a crucial part of ensuring the long-term success of rural electrification and development programmes, both in Bangladesh and Indonesia. This study will classify the many institutional arrangements that work with microfinance practices and entities to enable microentrepreneurs to access renewable energy resources.
Sustainability
The project's sustainability is being ensured through the partner organizations that remain involved in pursuing the Millennium Development Goals (MDG) objectives. Institutions like renewable energy boards, NGOs, MFIs, local communities, public authorities, believe in long term planning and commitment to rural development and have a good record of implementing and sustaining development efforts. The strong rural credit culture and willingness to pay for services, which is manifest in high loan recovery rates by MFIs and electricity bill collections, will ensure that the project outcomes will be sustainable.