Arc Finance was established in 2008 to help provide access to energy finance for the “energy poor,” and has subsequently expanded its scope to include essential services such as clean water. Of the two billion people who don’t have access to finance, approximately 1.7 billion have no access to electricity, 2.4 billion use traditional biomass for energy in their homes and places of work, nearly 800 million lack access to clean water, 2.5 billion lack access to sanitation, and almost all live on less than US$10/day – many on less than $2/day.
Poor people pay significant amounts of their household income – US$37 billion per year worldwide – on dirty and unsafe fuels, the prices of which are as volatile as the fuels themselves. Kerosene causes respiratory disease, blindness and house fires around the world. Women, in particular, spend hours of potentially income-generating time per day collecting water or traveling to purchase kerosene, biomass, diesel, charcoal and wood. Hundreds of millions of children cannot study after dark. Women are unable to walk safely in the dark to outside toilet facilities. These problems can be solved. New energy products, payment platforms, and distribution models mean that access to renewable energy and the finance necessary to acquire it, are available for everyone.
Microfinance, asset finance, remittances, layaways, and employer loans are just some of the affordability mechanisms which can finance a range of innovative clean energy products. Crowdfunding is connecting a new, socially motivated donor and investor base to the burgeoning sector. New distribution models are bringing marketing and after-sales support to remote, off-grid areas. Microfinance institutions are piloting energy lending programs to offer clean energy access to existing micro-enterprise clients. Cloud-based Management Information Systems (MIS) bring top-shelf logistics and monitoring capacity to even the smallest organizations. M-banking platforms make regular micro-payments for energy products and services feasible. Significant advances in battery and photovoltaic technology are improving the quality of solar products while costs are plummeting. With the sharing of information, stories, quantitative data and pilot innovations allows a growing worldwide sector with many stakeholders to learn and evolve together.
Building the small-scale energy finance sector requires partnerships between many organizations that share the same objectives. We partner with organizations to test new products, provide technical assistance, disseminate knowledge, provide sector linkages, create funding opportunities, and shine a light on the under-reported successes. In doing so, we seek to promote and expand access to finance for energy and water, building the assets and incomes of the energy poor.