More from: energy finance

Closing the Financing Gap: Upcoming Solutions and Challenges for the Rural Poor, October 2017

On Tuesday, October 25, 2017, Bicycles Against Poverty and the Bucknell Alumni Club of DC will host an event in Washington, D.C. centered around social enterprises and financial inclusion, with a focus on Sub Saharan Africa.

Arc’s Managing Director Niki Armacost discusses financial innovations in securing consumer financing for clean energy products and services for energy poor communities around the world.

Register for this event here.

 


ESAF Small Finance Bank: Pioneering a Retail Distribution Network Through Financing Clean Energy, Webinar, October 2017

In India, energy access is a huge challenge; 80 million households have little or no access to grid electricity due to the limits of grid penetration and the geographies in which they live. Providing quality, safe and reliable alternatives to kerosene and other traditional fuels means addressing two main challenges: distribution and affordability.

This webinar is based on the recently published case study on the energy lending program of ESAF Small Finance Bank, one of the seven MFI partners receiving TA from the PACE-D TA Program. The webinar will share the insights and knowledge gained under the Program for a broader audience in India and beyond including MFIs, renewable energy companies, donors and investors.

ESAF began as the Evangelical Social Action Forum, which expanded to include ESAF Microfinance and, in 2017, it became ESAF Small Finance Bank. Working in states where solar penetration across rural and peri-urban markets is growing due to the inconvenience of the inconsistent grid, ESAF is a genuine pioneer in the Indian clean energy finance sector. It has an extraordinarily broad retail offering that ranges from solar home systems and water purifiers to washing machines, offered with a loan model and cross-selling strategy that makes the company as much an asset financer as a microfinance institution.

In this way, ESAF is one of the most important players in the distributed renewable energy sector – an early mover, with its clean energy business operated through the broad ESAF retail distribution network, and now with a Small Finance Bank licence, which means reaching a wider network of new customers.

Please join us on October 25, 2017 to hear about ESAF’s energy finance program, how the PACE-D TA Program has worked to scale it up, the outcomes and lessons learned from this initiative, and ESAF’s future plans.

This webinar is free to all. Register for this webinar here.









Solar Microgrids in Odisha: Arc Partner Mahashakti Foundation Electrifying Off-Grid Villages

Mahashakti Foundation (MSF) is one of Arc Finance’s partner organizations under the Renewable Energy Microfinance and Microenterprise Program (REMMP) funded by USAID. An NGO-MFI based in the Indian state of Odisha, MSF has, with Arc’s support, provided loans for efficient cookstoves and solar portable lighting under REMMP. In recent months, MSF has taken on a more ambitious program: connecting rural, off-grid villages to solar microgrids. Durmusi and Totaguda are two examples of how a partnership between the financial institution, investors, developers and the villages can connect households to reliable, clean and affordable lighting – providing significant and positive economic, social and environmental impact to these communities.

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Durmusi village is situated in the Gopinathpur Gram Panchayat of Thuamul Rampur block of the Kalahandi district in Odisha. A largely tribal block, Thuamul Rampur is the poorest block in the district and lacks even the basic infrastructure of roads, water, communication and electricity. Illiteracy rates are high – 95% for men and 97% for women. Socio-economic and gender disparity rates are also among the highest in the country. Durmusi consists of 47 households, with 230 people. Most are small-scale farmers, people scavenging in the forest for produce to sell, and some daily wage workers. MSF is one of the few financial institutions or NGOs working in what is one of the least developed parts of India.

After promising results with sales on credit of efficient cookstoves and small-scale portable solar lighting, MSF with Arc’s support conducted a needs assessment of the area, concluding there was scope for installation of a solar microgrid. TERI New Delhi and Utkal Alumina Kashipnded supported the installation, and the microgrid is now operating in the center of Durmusi, with solar modular units allowing generation capacity to scale up easily to meet demand.

Demand has been considerable. Out of 47 households, 40 are connected through fixed wiring with two LED lights per house. Operation and maintenance costs are only INR 30 (USD $0.50) per month per household. Power is generated during the day, charging four battery banks, and consumed during the night. The whole system is controlled by a main switch, installed in one household – that of a designated Village Level Entrepreneur (VLE). The two LED lights were selected to provide superior lighting quality to kerosene – the previously dominant lighting source. A Users’ Committee has been formed, involving all active households, and a President and Secretary appointed to ensure smooth management of the grid.

When the grid was installed, the villagers requested that one grid node be used for a street light in the center of the village, which is the social focal point of Durmusi. This allowed villagers to meet in the evenings, and will enable them to celebrate local festivals all year round. As Sri Bagi Majhi, one of the village leaders, says: “The light brings our village together now.”

Totaguda is close to the block headquarter Kolanara, in Odisha’s Rayagada district, and includes 33 households with around 150 people. The Government of Odisha has launched a program called Biju Grama Jyoti, with the objective of supplying grid electricity to each household. However, Totaguda’s remoteness means there is no grid connection at all. Like the villagers in Durmusi, most residents depend upon income from agro-forestry, or have small plots of land, and rely on rainwater for irrigation. Infrastructure is virtually non-existent. There is no school, health center, nursing or veterinary facilities in the village. Totaguda villagers are entirely dependent on the villages of Khamasing and Kolnora for any medical, educational or other support. The only infrastructure or services of any kind is, again, MSF.

Totaguda was therefore a clear choice for a microgrid pilot project, because of the immense impact that regular, clean and inexpensive electricity would have on its residents. It was during a village borrowers’ meeting that one of MSF’s solar sales officers identified the issue of grid inaccessibility in the region, and raised the issue of switching Totaguda to a microgrid. Interest and enthusiasm only continued to increase after educational sessions informed the residents of the benefits and responsibilities involved.

After a needs assessment study by MSF, TERI New Delhi supported MSF with a CSR fund of from SBI in Mumbai. Out of 33 households, 32 are now connected to the microgrid, which is similar in design and capacity to the slightly larger one in Durmusi. As in Durmusi, there is a Villagers’ Committee, with a President and Secretary. A joint savings bank account has been opened in Mahashakti Primary cooperative in Rayagada in the name of the President and Secretary. The usage fees, (again, INR 30/month per household) are tied to previous monthly expenditure on kerosene.

Besides the intangible community benefits of having lighting at night, several villagers have expressed plans to use the after-dark lighting for income-generating activities, extending their potential working hours, as well as encouraging children who are in school to do homework after dark.

Roji Madangi, 29, is a typical Totagudan. As darkness falls, she scampers to wind up her daily evening chores. Like most other women in her village, she heads to her kitchen to prepare dinner long before dinnertime, because preparation and cleaning under the light of kerosene is almost impossible. Roji’s husband is a farmer and the sole breadwinner for the family, earning about INR 3,500 (US$56) per month, which isn’t enough to provide even two meals per day for everyone in the family. This is a typical story, but one which has dramatically changed since the installation of the microgrid. The microgrid lights the village for more than seven hours per night, meaning villagers can prepare food and eat after dark, spend less on kerosene, and work longer productive hours. At night, the women are now able to earn income for the household by stitching sal leaves together to form Kholi, a plate made out of leaves. Roji herself now earns more than INR 2,000 (US$33) per month – adding half again to her husband’s monthly household earnings.

“Before, we could not even imagine this freedom in our families,” she tells the Arc team. “Our rice production was barely enough to support us, yet now I feel more empowered because I contribute to the household by not only making food for us, but by earning too.” Roji adds, “I make 100 to 150 Kholi each day, which we sell at one rupee each, and we get enough money from our hard work to afford both plenty of food and to save.”

A village ward member, Sri Naria Mandangi, says that she has been encouraging her neighbors to start new income-generating activities and make use of the additional productive hours at night. With access to modern electricity, each household in this small settlement will have an inspirational story to share. At Arc Finance, we’re proud to see the results that our partner organization MSF is achieving, and look forward to sharing more of these stories in the months and years to come.


Innovations in Financing Event, NYC 2014

Introductory remarks by Nicola Armacost of Arc Finance and Pam Baldinger of USAID to a full-day 2014 workshop entitled “Innovations in Financing: The Nexus Between Energy, Distribution And Finance.” Organized by Arc Finance in conjunction with USAID, the day featured stakeholders from across the sector discussing the latest innovations in consumer and institutional finance for providing small-scale clean energy access to the poor.



Financing Small Scale Off-Grid Clean Energy: Opportunities and Challenges for Arc’s REMMP Partners in India

Arc’s REMMP India Partners meet for a full day of strategy building and knowledge sharing in Delhi

Financing Small Scale Off-Grid Clean Energy: Opportunities and Challenges for Arc’s Partners, a workshop in Delhi, India organized by Arc Finance in conjunction with USAID, brought together microfinance institutions (MFIs), energy enterprises, a crowdfunding platform, and an MFI apex funder for a day-long strategy session.

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How can MFIs best work with energy companies to bring renewable energy (and finance for it) to remote communities? How can these organizations make sense of the growing market of renewable energy products available? How can the sector access the long-term, low-cost debt required to reach scale in a working capital-intensive industry? And how can Arc Finance continue to help its partner organizations and other institutional friends to move from idea to business model to pilot to scale? These were among the questions discussed in a workshop round-table format with twenty CEOs and managers from Arc’s REMMP partner organizations in India (representing almost a dozen organizations across several states in India) and the Arc Finance team.

Funding challenges and opportunities were arguably the key issue of the day, with Arc partners FWWB and Milaap.org leading the discussion about the challenges of accessing low-cost and longer-term debt finance. Over the past several months, Arc Finance has been undertaking stakeholder research on debt finance needs by MFIs specifically for energy lending. The findings show strong demand and interest for an energy specific debt facility for MFIs, and this was reinforced by Arc’s partners at the Delhi Meeting. All present agreed that the market is ready for innovative new financing initiatives to scale the sector.

Results-driven business model experimentation was also a particular theme of the day. The partners discussed their experiences and lessons-learned from experimenting with different business models. The willingness to experiment and adapt when things aren’t working is a characteristic of successful organizations in any sector; energy finance is no different, as Utkarsh, WSDS, Mahashakti Foundation and Grameen Koota demonstrated when sharing their experiences.

The partners then took a deeper look at different sales models, which are central to any organization’s energy finance business model. Should an organization retain mobile agents such as Village Level Entrepreneurs (VLEs) to carry and demonstrate products to potential customers? If so, should the VLE’s offer informal credit to customers who cannot afford to buy in cash? How does the institution get the products into the hands of agents – through micro-consignment, for example? With whom lies the responsibility for timely after sales service in the case of a defective product?

Several of Arc’s partners in India and other countries are exploring these options, identifying and adapting the right model for energy lending. DCBS (a small MFI in West Bengal) and Simpa Networks (a developer of proprietary metering technology for solar home systems which now uses a direct sales model) have both shown innovations in sales models – particular through agents. And while anecdotes are not evidence, sometimes one deserves a moment’s spotlight: the son of a DCBS client who received a loan for a solar lantern recently placed 44th out of more than a million candidates nationwide in tertiary entrance exams, something he attributes in large part to being able to study in the evenings thanks to his solar lamp.

How to transition from “push” products (supply-led) to “pull” products (demand-driven) was a dominant theme as well. The primary market barrier for energy products is lack of trust – particularly when government initiatives in the past have introduced poor quality products, hindering their reputation and making energy programs all the more difficult down the track. But as so many stakeholders know, energy clients very often become repeat energy clients – who increasingly “pull” new products as their trust and energy needs and appetites grow.

The final session of the day was interactive and more open. The participants were asked to articulate their visions and dreams for the small-scale renewable energy finance sector in the years to come. Beyond sales targets, what do they want the future to look like? Arc’s wide range of partner organizations had various aspirations, from product expansion to unlocking new sources of financing. But one common thread was the recognition that this sector is not just about providing lighting to off-grid communities. Rather, it’s about understanding and supporting the so-called “energy ladder,” or “escalator.” Partners are committed to providing broad solutions to help clients climb this ladder while increasing household economic productivity along the way.

The willingness of Arc’s partners to share information so freely is clear evidence that they see themselves all heading in the same direction and that ending “energy poverty” is a shared goal. This partners’ meeting built upon an Arc-workshop held in Manila last October in conjunction with the Microcredit Summit, and there is strong enthusiasm for this group to morph into a de facto network. Arc Finance provides a range of services to stakeholders, from Technical Assistance (which includes product identification, marketing, human resources, business model and sales support) to loan guarantees, catalytic grant funding and training. But core to its mission is being a “conduit” of sorts, a hub to develop new partnerships in small-scale energy finance. To this end, this partners’ meeting in Delhi was an exciting platform that Arc Finance was proud to organize, and from which the Indian sector can continue to grow.


Arc Finance Partners Milaap.org and DCBS profiled at Paris Crowdfunding Event

Yara Akkari of Arc Finance tells an expert audience how Indian crowdfunder and Arc partner Milaap.org is bringing new financial channels to small-scale renewable energy sector

Arc Finance’s Remittance Specialist and East Africa Manager Yara Akkari was in Paris on June 17th to speak on a crowdfunding panel at the CrowdTuesday event – a regular platform that brings together various stakeholders in the crowdfunding industry at the local and regional level. CrowdTuesday is run by the European Crowdfunding Network (ECN), and organized by Alex Raguet, ECN’s French Ambassador.

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Presenting in a panel discussion entitled Crowdfunding as Financing Mechanisms for Clean Energy, Yara demonstrated to her high-level audience how tapping the “crowd” provides much-needed capital opportunities for MFIs that aim for social benefits – namely, clean water, clean energy, education and sanitation.

“Crowdfunding enables MFIs to tap into new sources of funding: it fills the gap for essential-service lending by using financial resources sourced from large numbers of lenders – a form of ‘unconventional lending,’” she said, and then put its role in the context of financial services to the poor as they stand. Microfinance Institutions (MFIs) – several of which Arc partners with – “can play an important role in the removing the barriers to affordability in adopting new sustainable energy products.”

However, she argued, “The Indian microfinance sector has been slow to embrace energy lending as a mainstream practice. While a number of factors contribute to this situation, lack of access to affordable capital from conventional sources of debt and investment is a significant one. Milaap’s crowdfunding platform was developed to close this gap.”

Milaap.org is one of Arc’s partners under the USAID-supported Renewable Energy Microfinance and Microenterprise Program (REMMP), the goal of which is to “increase access of underserved populations to clean energy products in order to improve livelihoods and quality of life among these target recipients while minimizing climate-damaging emissions.”

With the support of USAID, Arc Finance launched REMMP in 2012 to test a range of business models that are designed to increase financial access to clean energy for poor people around the world. REMMP partner organizations include FWWB-I (an “apex” microfinance organization); Bandhan (by some measures the world’s largest MFI); Basix-IGS (within which Arc is “greenfielding” an energy-lending enterprise); Simpa Networks, which is pioneering metering technology for solar home systems; SolarNow, which provides an innovative in-house credit facility for solar systems to rural farmers in Uganda; Sogexpress, a money transfer organization in Haiti that, with Arc’s support, is using remittance channels to enable the diaspora to remit clean energy technology; and Milaap – a crowdfunding platform with a focus on using MFIs as a means to help people get clean energy products for their homes and businesses.

Crowdfunders that partner with MFIs to lend to microentrepreneurs are not new. Kiva.org was the first to reach scale doing this, and has lent over US$500 million dollars since 2005. Milaap is newer and much smaller, but is differentiated in its specific focus on water, energy, and education. Put another way, and as Milaap’s founders have put it at various Arc Finance events, microfinance is “a means to an end, not an end in itself.” Lenders coming to the platform are not lending to small businesses; they’re lending to help people access clean water, energy or education, and the livelihood and income development that comes with each.

Milaap (“connecting people” in Hindi and Urdu) was initiated in June 2010 by three young MBA graduate entrepreneurs who wanted to change people’s concept of giving by making it a personal, transparent and sustainable process. The end-borrowers on this platform are the deserving, working poor of India – students, small businesses, families – for whom a small amount of capital will significantly change their lives for the better.

One hundred percent of a lender’s funds go to the end-borrower for energy, water, sanitation or education purposes. Milaap charges its field partners a 5 percent fee on the funds raised, which currently covers a fraction of Milaap’s costs while it works towards achieving financial self-sufficiency. The shortfall until it reaches scale and when the fee is enough to break even is covered by investment from individual and institutional investors and donors.

It’s been a rapid learning curve, said Yara. By mid-2014, Milaap has raised and channeled nearly over US$1.5 million into a diverse portfolio of nearly 10,000 loans, impacting the lives of 50,000 people, while maintaining a 100 percent repayment rate from field partners. Funds are raised from an increasingly global crowd of lenders and disbursed to borrowers across ten Indian states through a network of 15 different current field partners. The company’s energy portfolio continues to advance through its active partnerships with three Arc-partnered MFIs based, respectively, in the states of Orissa, West Bengal and Manipur. Due to the comparatively small size of loans for clean energy products such as solar portable lanterns and improved cook stoves, energy represents only ten percent of Milaap’s total portfolio – but is increasing.

After taking the audience through the Milaap.org website, the loan-disbursal and repayment cycle (see figure), selected client profiles, and the filters that lenders can apply to direct their loans to specific regions, sectors or purposes, Yara gave a short profile of DCBS – a small MFI in Eastern India which is a sub-partner of Arc Finance under REMMP, and a beneficiary of Milaap’s crowdfunders.

DCBS is a small, community-based MFI that operates in 200 village communities in West Bengal. It has an active client base of 8,000 women borrowers. In December 2012, DCBS began promoting a new solar lantern loan product to existing clients (through a line of credit provided by Milaap, funded by the crowd), which is now expanding to non-clients.

As of mid-2014, DCBS’ solar lending program has a 100 percent repayment rate, has seen rapid portfolio growth and high penetration in the target communities, a consistent validation of this type of energy-lending as sustainable and commercially attractive, and early but positive social impact results. Other MFIs supported by Milaap and Arc Finance are also providing finance for a range of products, from clean cookstoves to multi-light and multi-appliance solar home systems.

Not everything has worked perfectly, of course. As Yara told the audience, there is always an element of trial and error in piloting new and innovative channels in order to demonstrate the commercial viability of a model for scale. Learning lessons along the way is important, and inevitable. Not all MFI partners have had the same success. Due diligence conducted by the crowdfunding platform to determine the capability (and, crucially, the dedication) of the MFI to introduce energy lending, is paramount. Finding the right field MFI partner is a necessary criterion for success.

What’s more, just providing MFI clients with access to credit for energy products isn’t enough either. Providing marketing support, client education, after-sales service, quality and appropriate products that are demand-driven, efficient “last mile” distribution, and appropriate pricing and financing options are all crucial. It is the role of the crowdfunder to assess – and where appropriate, assist – with these variables for success. It is this type of specialized technical assistance that Arc Finance has been providing to DCBS and other Milaap partners under REMMP.

Finally, Arc’s experience has been that training and awareness-raising are crucial elements which should be included as part of the clean energy program. Whether funding comes from donors, funds or in small increments from a crowdfunding platform like Milaap, and whatever the business and distribution model the MFI uses, a highly-engaged and informed staff, capable of talking to clients about their energy usage, costs and needs, is indispensable.

Yara finished with Q&A from the audience (which was particularly interested in product selection and warrantee challenges in remote communities). Arc looks forward to being invited back to further ECN events as it works with crowdfunding platforms to fill the working capital “gap” in pioneering small-scale, clean-energy finance.


The 2014 Ashden International Award Winners: Bringing Clean Energy Access and Finance to Billions through Innovation and Vision

The Ashden Conference and Awards gives organizations in the renewable energy space a chance to showcase and share innovations in sustainability with practitioners, investors, academics and the press. As in previous summers, Arc Finance participated in this year’s conference, alongside current and potential partners working on ways to bring affordable, clean energy to the BoP. The 2014 Ashden International Award finalists were winners in five categories: Financial Innovation; Avoided Deforestation; Clean Energy for Women and Girls; Energy for Agriculture; and Sustainable Buildings. Each of the winning organizations is working on a solution to the problems that are part of Arc Finance’s core mission, which includes helping scale the clean energy finance sector by shining a light on enterprises that are leading the way through innovation.

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Infosys wins the Sustainable Buildings Award

One of India’s largest IT companies, with campuses at ten locations across the country and offices around the world, Infosys has been designing new, low-energy buildings and retrofitting existing buildings with the technology applied in new construction – decreasing electricity consumption per staff member by 44% across its Indian business campuses in the last five years.

Infosys has realized annual savings of US$200 per employee, and 39 percent of the company’s electricity is now generated or purchased from renewable sources. GHG emissions have been cut by 57 percent (or 210,000 tons per year), three quarters of which is from efficiency measures alone.

For true sustainability, improved efficiency has to make a “single bottom line” case – it can’t be just for environmental and social reasons. To this end, Infosys invested with the goal that the cost of retrofits would be paid back in energy savings within three years.

The company seizes every opportunity to reduce energy consumption, from reducing the size of chiller plants for air conditioning, to painting roofs white to reflect the heat. Cutting-edge design for new buildings also helps keep offices cooler and maximizes natural light. With US$80 million cut from its energy bills and targets of halving electricity use per employee and all electricity coming from renewables by 2018, Infosys has made the bottom-line case for large companies to invest in energy efficiency.

The Financial Innovation Award goes to Off.Grid:Electric

Off.Grid:Electric is a Tanzanian company that has emerged as a leader in the field of using mobile money to sell affordable pay-as-you-go solar power – of particular interest to Arc Finance, which works with different partners with various approaches to the affordability challenges of solar.

East Africa – countries like Kenya, Tanzania and Uganda (where Arc’s partner SolarNow is based, and is using a hire-purchase credit facility to provide a different affordability mechanism) – is an exciting “petri dish” of experiments in clean energy innovation. Mobile Money, through M-PESA, first reached scale in Kenya, and the model is now being replicated across several sub-Saharan countries. Leveraging mobile money infrastructure to allow poor customers to pay for clean energy in regular, small amounts is an opportunity that Off.Grid:Electric (among others) is capitalizing upon.

Off.Grid:Electric considers itself a service, more than a solar, company. The founders wanted to make solar electricity a mass-market option by focusing on exceptional customer service, including an all-day customer-care telephone line and ongoing support from a local agent. With more than 15,000 homes taking up Off.Grid’s service so far, benefitting 70,000 people, customers are being connected as fast as systems can be manufactured and distributed, thanks in part to a cloud-based customer registration process and product-tracking system app.

Off.Grid:Electric provides an agreed-upon level of electricity service through a five or ten Wp Solar Home System (SHS), including mobile phone charging, which is rented by the customer and installed after payment of a deposit of US$6 or $9. The entry-level model costs roughly US$0.20 per day (the top-end system costs about 63 cents per day) paid over a mobile money platform – with a minimum of one day’s purchase per transaction.

A network of local agents is used to find customers, install systems, and provide ongoing after-sales support. Custom smartphone apps keep customer data, usage, system and payment information integrated and accessible to agents. For the very few customers without a mobile phone, agents can take cash payments.

Crucially, the company prioritizes flexibility of payment for the customer, recognizing the cash-flow limitations typical of poor customers. Service level can be changed, and payment history builds a credit rating for the customer that can be used for other purchases. Off.Grid:Electric currently has about 90 staff – half of which are female – and a network of several hundred local agents. It is financed mainly through equity investment, supplemented by debt and grant funding.

Sustainable Green Fuel Enterprise wins Ashden’s Avoided Deforestation Award

Deforestation and its dire environmental consequences – air pollution, soil erosion and desertification – remain a critical problem in certain countries. Sustainable Green Fuel Enterprise, a Cambodian business turning leftover coconut shells and other bio waste into clean-burning char-briquettes for use as cooking fuel, was the winner of Ashden’s Avoided Deforestation Award.

Most Cambodians cook on wood charcoal, resulting in the world’s worst case of deforestation: the country lost 2.9 million hectares (14 percent of its total land area) in two decades (1990-2010). In addition, the negative health effects of burning wood charcoal, particularly indoors, are well known, and include eye and respiratory disease.

To reduce wood charcoal use, French NGO GERES had already introduced efficient charcoal stoves to the markets, and wanted to expand to tackle charcoal supply as well. In 2009, it partnered with a children’s charity to launch Sustainable Green Fuel Enterprise (SGFE).

Led by Carlo Figa Talamanca, SGFE can scarcely keep up with demand. SGFE produces the char from waste coconut shells (widely discarded and accessible) using low-emission TLUD kilns, and it also buys wood-char from electricity generators. The char is mixed with water and a binder and extruded into briquettes, which are then dried using the waste heat from the kilns.

To date, over 650 tons of char-briquettes have been produced, and production is accelerating. The 47 tons produced in March 2014 alone equals the cooking needs of 1,250 households. Each ton saves ten mature trees, so the equivalent of over 6,500 mature trees have been saved to date. GHG emissions have been cut on the order of 4,500 tons equivalent in 2013, all while introducing a superior product to the market at a cost – 34c/kg – similar to wood charcoal, and cheaper to use due to its reduced waste and uniformity of heating.

A more expensive product – the “diamond briquette,” made from 100 percent coconut shell char – costs double the regular briquette, but its slow and sustained burn has made it particularly popular with food vendors.

Production will double in 2014 thanks to a recent grant from the Global Alliance for Clean Cookstoves (GACC), and further private investment will allow yet another doubling of production, according to SGFE’s team.

Greenway Grameen: winner of the Clean Energy for Women and Girls Award

The Clean Energy for Women and Girls Award was won by Indian cookstoves business 
Greenway Grameen, co-founded by two Indian women two years after completing their MBAs. Greenway’s mission is to provide an affordable, desirable cookstove to improve quality of life for Indian women – who along with their daughters in a male-dominated nation typically bear the lion’s share of household duties, with crippling repercussions on the health and education of the next generation of girls. Despite this, most rural households in India have mobile phones and televisions – so aspiration for consumer goods is alive and well; it’s just a man’s preserve. “The biggest women’s issue in India is men,” argued CEO Neha Juneja, to wide applause.

Collecting and cooking with wood and dung, as hundreds of millions of women are still forced to do, is time-consuming and horrifyingly harmful – indoor air pollution kills more people than diarrhea, malaria and HIV combined – and the majority of victims are women.

To address this, Greenway Grameen’s simple and stylish stoves dramatically reduce kitchen smoke, cook more quickly, and stay cleaner longer. Perhaps most significantly, their design was demand-led from the start; extensive market testing led to an iterative design process focused on women’s needs and aspirations. Marketed as the essential part of a modern kitchen, more than 120,000 stoves have been sold so far, benefitting over 600,000 people in Karnataka, Kerala and Maharashtra states. Two-thirds of the stoves, which retail for US$23, are financed through partnerships with MFIs.

Besides the obvious health benefits of reducing indoor air pollution and the reduction of GHG emissions (over 200,000 tons/year CO2e), considerable time is saved (on average, more than 30 minutes per meal), improving the lives of women and allowing daughters more time to study. But the economic argument is the “clincher”: a stove can pay itself back in 14 weeks through reduced expenditure on wood.

Greenway plans to continue its rapid expansion into other Indian states and then beyond into other markets, as well as introducing a broader range of products.

Proximity Designs wins the Energy for Agriculture Award

Finally, the Energy for Agriculture Award went to a fascinating and inspiring company in Myanmar, Proximity Designs, which is introducingtreadle pumps, solar irrigation systems and other sustainable agriculture technologies to this recently-opened nation for the first time.

For rural farmers, lifting water from wells and carrying it across fields is backbreaking and time-consuming work. Until the 1990s, farmers in Myanmar had no access to energy for irrigation in the 20,000 villages that need 3,000 liters per day per small plot. To address this, Debbie Aung Din and husband Jim Taylor traveled to the country in 2004 to head the national program for international NGO iDE. In 2008, their program to introduce access to energy for irrigation morphed into Proximity Designs. Proximity Designs has introduced foot-operated treadle pumps that draw up water from wells and combined them with water-saving drip irrigation technology. Together, these can dramatically increase agricultural yields and incomes.

The results have been transformative. As of this year, 90,000 treadle pumps are in use in 5,000 villages, benefitting almost half a million people. The pumps were designed and manufactured locally, supporting the burgeoning economy, and two further models were introduced, capable of lifting water to raised storage units. The drip irrigation kits were also locally developed and manufactured, and their introduction allows the cultivation of higher-value crops such as eggplant, which require more water. These products are marketed and sold by a growing network of agents, as well as agro-dealers. Pumps range from $25-38, drip irrigation kits are $38, and tanks $25. Some customers pay cash, but many have availed themselves of the low-cash credit facility Proximity has offered in the absence of a mature microfinance market.

The return on these investments by farmers is considerable – with farm incomes increasing by an average of $250 per year. And Proximity Designs – which the Ashden panel described as “the first to bring energy to agriculture in Myanmar…adapting fast to the needs of the rapidly changing country,” is already working on a solar-powered pump, to be introduced in the near future.

Each of the Ashden International Award finalists addresses key challenges to bringing affordable clean energy to the mass market in poor countries. From leveraging technology such as mobile money, to helping farmers increase their yield, to working towards making tragic indoor air pollution deaths a thing of the past, or demonstrating that a global company with a vision can dramatically cut its energy costs and greenhouse gas emissions with some effort and investment, these companies are true pioneers. Arc Finance is proud to know them, and looks forward to continued partnerships with trailblazers in the sector.


Going “All in” on Solar Finance: How IDCOL Incubates a Growing Industry in Bangladesh

IDCOL and Solar Home Systems in Bangladesh

While demand for small-scale renewable energy is virtually infinite, a small microfinance institution or energy enterprise needs capital to meet that demand with supply. The Infrastructure Development Company Limited (IDCOL) addresses this barrier to scale in a unique and exciting way. With massive infusion of government capital, management from the private sector and a unique asset finance model using creative partnerships, IDCOL has produced a stunningly successful program.

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M-KOPA Solar: Combining Asset Finance with M-Banking to Drive Affordability in Kenya

In sub-Saharan Africa, nearly 590 million people lack access to electricity, including eighty-five per cent of rural populations. M-KOPA Solar is seeking to change this. Based in Kenya, M-KOPA Solar (www.m-kopa.com) is an innovative asset financing company that sells small-scale solar home systems (SHSs) to off-grid households on an affordable, 12-month mobile money payment plan via hire purchase. As of February 2014, M-KOPA actively provided affordable solar power to over 50,000 Kenyan households – and is adding a thousand more households per week. M-KOPA has ambitious plans: it has just raised US$20 million to fund expansion of its customer base from fifty thousand to one million households by 2018.

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Innovative Consumer Finance Mechanisms for Small Scale Off-Grid Energy

Efforts to provide energy access on a commercial basis to rural populations in developing countries face a range of challenges, including access to finance. Off-grid customers from lower income communities currently pay a high price for purchasing kerosene for basic lighting services and switching to renewable energy based systems would not only save them fuel-costs but also improve their overall quality of life. However, the high upfront cost of the renewable energy based systems (handheld devices and stand-alone systems) restricts them from making this switch. This is identified as a major barrier by all stakeholders committed to the delivery of energy access solutions in a commercially viable manner and at scale. Over the past decade, microfinance institutions, supported by the international development community, have played an important role in providing direct consumer finance for purchase of handheld devices and single home solutions. In addition to microfinance, a number of other innovative end-user finance schemes have emerged in recent years. Building on the findings from USAID’s Renewable Energy Microfinance and Microenterprise Program (REMMP), and specifically the experience of Arc Finance, this 3 weeks long e-discussion featured and discussed a number of mechanisms for downstream end-user finance and their integration into innovative energy access business models including pay-as-you go technologies, crowd funding, microfinance, remittances, and asset finance. See summaries of the discussions and recordings of the webinar ►


ASCOA Seventh Microfinance Panel: Financing Solutions for Clean Energy in Latin America

Niki Armacost discusses Financing Solutions for Clean Energy in Latin America at the Americas Society/Council of the America’s 7th Microfinance Panel in New York City, January 30, 2014. She is joined by panelists Gregory Watson, Head, Strategic Planning and Team Leader, Clean Energy, Multilateral Investment Fund, Inter-American Development Bank and Amy Wang, Investment Officer, Global Social Investment Funds, Deutsche Bank Trust Company Americas. Moderated by Christian Gómez, Jr., Director of Energy, Council of the Americas.


Utkarsh Pilot Kicks Off Amidst Great Expectations

Arc/REMMP’s five-branch energy finance pilot program begins in Uttar Pradesh

As one of India’s most successful and dynamic microfinance institutions (MFIs), Utkarsh is one of Arc’s most exciting partner organizations under its USAID-funded Renewable Energy Microfinance and Microenterprise Program (REMMP). The partnership offers a fantastic opportunity to “piggyback” Utkarsh’s nascent energy lending program on top of its underlying vigorous growth. Following a multi-month process, Arc Finance’s pilot program with Utkarsh has just begun renewable energy finance operations in Uttar Pradesh.

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WSDS and Arc Finance: Financing and Disbursing Renewable Energy Technology to Remote Communities in Manipur

The Weaker Section Development Society (WSDS) is one of seven microfinance institutions (MFIs) that Arc Finance currently assists under its USAID-funded Renewable Energy Microfinance and Microenterprise Program (REMMP). A small but fast-growing, community-based MFI, WSDS operates in the central and southern districts of India’s northeastern state of Manipur and has recently begun finance and disbursals of solar home system components to underserved communities.

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Innovations in Financing Event, NYC 2013

Innovations in Financing Small Scale Clean Energy, a full-day 2013 workshop organized by Arc Finance in conjunction with USAID and the Sustainable Energy for All Energy Access Practitioner Network, brought together a range of stakeholders to discuss the innovations in financing now being deployed in the small-scale, clean energy space. These sessions were made possible with generous support from USAID.


Microcredit Summit

October 8, 2013, Manila, The Philippines

The Microcredit Summit Campaign brings together a range of organizations to promote best practices in the microfinance field. Facilitating the interchanging of knowledge, the summit, a 4-day conference held in 2013 in the Philippines, aimed to support the sector in reaching its goals. As a leading organization of its type in the renewable energy finance sector, Arc Finance was invited to organize and host a day-long pre-event workshop at this year’s summit, and for this purpose brought together high-level representatives from MFIs, energy enterprises, government entities and funding platforms to help engage MFIs on the renewable energy finance landscape. Arc’s event was entitled “Pioneering Small Scale Energy Finance Through Innovative Partnership Models.”

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Innovations in Financing Small-Scale Clean Energy I

September 20, 2013, New York, USA

Innovations in Financing Small Scale Clean Energy, a full-day workshop organized by Arc Finance in conjunction with USAID and Sustainable Energy for All, the Energy Access Practitioner Network, brought together practitioners, investors, academics, support organizations, technology manufacturers, and journalists for a series of sessions to discuss the innovations in financing now being deployed in the growing energy access economy. View videos from the event ►


Arc Finance at the 2013 Ashden Awards: Partnerships and Innovation in Practice

Solving the “last mile” problem – or providing renewable energy and suitable finance for it to the Bottom of the Pyramid – is far more collaborative than competitive. You can see this clearly in the network of partnerships we at Arc Finance have developed for our current portfolio of projects: we link energy companies, MFIs, technology providers, remittance companies and other distribution organizations to facilitate access to finance for renewable energy for the un(der)electrified billions whose lives can be improved.

Collaboration and partnership were among the key themes of the 2013 Ashden Awards held in London last week. We are proud to be a supporting partner of Ashden and were thrilled to attend the awards, which are among the most prestigious for sustainable energy solutions. Projects awarded ranged from partnerships at the local level (UK-based initiatives such as encouraging cycling or recycling in cities, or developing green spaces) to global projects that try to leverage new technologies, financial innovations and the brightest of ideas in order to scale access to affordable renewable energy to those who need it most: the poor. The conference was a great opportunity to share ideas, contacts and build further partnerships. Collaboration might be a tedious and overused bit of management-speak, but in this space, it is the sine qua non of progress.

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Breaking the Cost Barrier with Pay-As-You-Go Technology to Make Clean Energy Affordable

Big surprises sometimes come in small packages and Angaza Design embodies this maxim. Led by CEO Lesley Silverthorn Marincola, the three-person team had already launched in five countries with its innovative SoLite solar lamp when it encountered the affordability barrier. Unfazed, the team pivoted and turned its engineering skills to developing and testing a new concept in pay-as-you-go solar energy. Lesley spoke to Arc Finance about how the human-centered design and can-do approach of companies such as Amazon – where she worked on the early generations of the Kindle e-reader – can be applied to seemingly intractable renewable energy problems with impressive results.

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How Pre-Payment and Microfinance Can Build “Micro-Power Economies”

INENSUS is a young, off-grid energy company based in Germany that develops solar/wind-hybrid microgrids for developing countries’ remote rural regions. The company’s “Micro-Power Economy” model, currently being employed in Senegal, centers on supporting both income-generating as well as household energy activities to truly catalyze local village economies.

Arc Finance recently caught up with Jakob Schmidt-Reindahl, managing director of INENSUS’ Senegal operations, to discuss the company’s clients, pre-payment approach, and role that microfinance plays in helping to realize the micro-energy economy.

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Using Energy Products and Other Initiatives to Spur Growth at a Philippine MFI

Since its founding in 1984, the Negros Women for Tomorrow Foundation (NWTF) has explored a range of ways to live up to its mission of helping poor Filipino women achieve self-sufficiency and self-reliance. NWTF offers an impressive array of products, including micro-loans to assist micro-entrepreneurs, insurance and student loans, and continues to look for innovative products and services to meet the needs of its clients and grow the organization.

Arc Finance talks with Raymond Serios, Director of Research at NWFT, about how the MFI embraced energy lending as a way to expand its mission and find new ways to grow and attract customers. In 2009, Arc Finance helped the organization launch its energy loan portfolio, and since that time the program has changed in a number of ways as NWTF has learned more about client demands, and as energy products have continued to diversify and evolve. In this extract from a wide-ranging interview, Raymond reveals how NWTF’s business strategy and operational approach to energy has transformed over time, moving from a narrow focus on consumer credit to a model in which members are trained and financed as energy product sales agents.

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Crowd-Sourcing Low Cost Capital Helps MFIs Make the Leap to Energy Lending

Founded in June 2010, Milaap is a Indian start-up based in Bangalore that crowd-sources low-cost capital for microfinance institutions through its online platform as well as social funds, high net worth individuals (HNIs) and corporate partnerships. Funds are not donations, but rather micro-loans between a growing global network of contributors and low-income Indian borrowers. Milaap sources capital exclusively for non-traditional, value-added product portfolios, supporting investments in water and sanitation, vocational training, and SME capital.

In 2011, Milaap added energy lending to its portfolio when it established a partnership with DCBS, a small MFI based in West Bengal (India), and Onergy, a leading solar integrator in the region. Milaap has also made plans to partner with Karnataka-based Grameen Koota, one of India’s largest MFIs, to co-fund its growing energy lending program.

Arc Finance recently caught up with Milaap co-founder Anoj Vishwanathan to discuss the company’s origins, its growing focus on energy, and the core value proposition that it offers its MFI partners in the challenging environment of the post “microfinance crisis.”

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An Inside Perspective on Change and Evolution In the Micro Solar Sector: A Conversation with Ned Tozun, d.light Design

Product R&D and design, high volume manufacturing, global distribution, sales and marketing – this is the range of one of the world’s best known micro solar companies, d.light. Since 2006, the company has been developing and distributing high-quality, solar portable lighting products to low-income, off-grid customers worldwide. Ned Tozun, d.light’s President and Co-Founder, recently took some time to speak with Arc Finance about the company’s growth, its approach to distribution and marketing, and the role he sees for microfinance in making improved energy affordable for d.light’s target customers.

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