USAID’s Renewable Energy Microfinance and Microenterprise Program (REMMP) is designed to improve access to modern energy services in underserved communities, while at the same time helping USAID partners reduce carbon emissions. A key goal of REMMP is to increase the availability of consumer financing for clean energy services and products to enable low-income populations gain access to technologies that can improve their livelihoods and quality of life while mitigating climate change. The program focuses on household and community-scale technologies such as solar home systems, cookstoves and microgrids.
Most energy enterprises remain small, and they cite two main obstacles: lack of end-user finance and challenges with distribution. Solutions that successfully scale share important attributes: an understanding of the interrelationship between finance, distribution, and technology; a tailored approach that takes into account market conditions and constraints; and the ability to leverage existing financing and distribution channels for easier and quicker growth. All REMMP activities incorporate these ideas to ensure that the program achieves its objectives.
REMMP is improving access to modern energy services in underserved communities by:
- Demonstrating the commercial viability of a range of consumer payment models
- Facilitating investment for clean energy financing
- Improving the capacity of the private sector to finance clean energy
- Documenting and disseminating knowledge generated through REMMP
Under REMMP, Arc Finance provides the following services to project partners:
- Technical Assistance for project partners (including microfinance institutions (MFIs), asset finance companies, money transfer companies and energy enterprises) with a focus on business model and product development, facilitation of public sector partnerships, impact evaluation, and investor engagement.
- Catalytic Grants that target specific project-critical capacity and capital requirements that are necessary to advance core project objectives. These grants are tailored to the specific need and stage of development of the partner.
- Knowledge Building through monitoring, documenting and promoting key lessons and best practices. The aim is to cultivate interest in rural energy finance among a broader audience of practitioners, investors and donors. REMMP makes expertise and information available on the latest developments in these quickly growing fields through publications as well as events such as Arc’s Innovations in Financing conferences. (See arcfinance.org/ knowledge)
Through REMMP, Arc Finance is demonstrating the commercial viability of a range of consumer payment models and financing channels:
- Remittances: Financing for energy products is provided by family members in the diaspora via cross-border money transfers.
- Microfinance: A microfinance institution (MFI), bank, credit cooperative or other financial institution provides energy-related financial products to low-income consumers.
- Asset Finance: An energy enterprise provides an in-house credit facility for its products.
- Pay-As-You-Go: Financing is provided through a metering system that allows the end user to pay in advance for energy access in small and regular installments.
- Mobile Phone Networks: Bill payment and financing for clean energy is possible over a mobile phone/m-banking infrastructure.
- Crowdfunding: Funds from individuals are aggregated on an Internet site to support specific projects or organizations.