The project Energy Links (three-year pilot by the Centre for Financial Inclusion at ACCION International, financed by USAID) began in Africa in 2007 and primarily focused on investigating whether a broker among microfinance providers, clean energy providers and distributors, and people needing financial services could accelerate the access of rural households to modern energy. It had to change its course of action from approaching traditional microfinance institutions to local ground based NGOs and Saving Groups (SGs), who had a deeper root reach within the targeted village level communities.
Energy Links did not focus on solar home systems as it’s product and instead decided to address the basic lighting needs of households which had access to nothing other than kerosene. They started their lighting work with solar lanterns and a small foray into cooking with clean cookstoves. Their objective was to leave behind a self-sustainable fully-functional value chain. What they realised eventually was that it wasn’t possible to have one kind of a financial product for all regions, and that energy needs of regions, and hence the variety of financing options required thus would have to be diverse in accordance. For example, in Uganda it worked with portable solar lighting through both MFIs and savings groups, in Mali it focused on portable solar lighting in partnership with savings groups and In Tanzania it investigated the broader base of the pyramid (BOP) energy market and worked with an MFI to develop energy finance products.
Their approach is two tiered, one, working with SMEs on their financing was looked into, and two, working with the consumers to understand their assorted demands.
For India, where the use of kerosene subsidies still runs deep at the most farthest flung village, the study still holds relevant because of the proven willingness of people to adopt solar off-grid options in several parts of India.
This study focuses of working out the best way to finance the acquisition of lighting through solar lamps for the energy deprived in Africa. Read it here.