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Since 2000, the IEA estimates that more than 700 million people in India gained access to electricity, on both a large and small scale. Yet millions more remain unconnected to reliable and affordable power. Through our partnership with SELCO, we are applying market-based approaches to accelerate progress.
With the world’s second largest population, India has one of the fastest growing economies globally. But meeting the energy needs of some 1.4 billion people is no easy task, particularly in low-income rural areas. As many as 13% of Indian homes, or about 182 million people, do not have grid-connected electricity, and many of those that do may only get power for a few hours a day.
While policy and large-scale investment are necessary, carbon finance fulfills a need to immediately turn the light on for communities who would otherwise would not have access to such a basic need as affordable energy.
Natural Capital Partners is part of a joint initiative with the SELCO Solar Energy Access project to provide tailored financial support and solar products to underserved rural communities in Western India. The project creates financing opportunities for small businesses, schools, and households to provide affordable access to solar lighting, solar water heating, and solar PV.
A recent assessment of the project identified significant milestones in the project by:
- Enabling access to microfinance: To date, the project has improved energy access for 945,000 households. These households obtain loans to buy SELCO’s solar products and access clean, sustainable energy. As many live below the poverty line, they are likely unable to receive loans otherwise. In these areas, many people do not have experience with financial institutions, so SELCO guides individuals through the process of interacting with regional rural banks and microfinancing institutions, where they can get financial assessments and financing.
- Powering businesses with affordable energy: In 2020, 362 micro-entrepreneurs, many of whom are women, gained access to solar power. Because access to energy is limited and often unreliable, micro-enterprises in rural villages are restricted to working during daylight hours and often struggle to fulfil orders on time. With a reliable source of energy, the additional hours of light can boost income by 20-30%. Fruit, vegetable, and roti stalls; cricket-bat makers; hairdressers; laundry services; blacksmiths; turmeric powderies and more all benefit from customised, energy efficient solar powered appliances.
- Providing local jobs and training opportunities: SELCO employs 534 people in Bangalore and across the state of Karantaka in technician, installation and sales roles. In addition, SELCO launched a new programme to enable more than 260 entrepreneurial women to become Seva Bandhus (service associates) to service solar products and handle technical queries, with an aim to have 500 Seva Bandhus working by March 2021. As a result of the global pandemic, SELCO has provided contingency financial support beyond salaries to 90% of its employees and raised the wages at the lowest salary level by a minimum of 4%.
- A brighter future for the next generation: More than 23,800 students in 475 schools across Karnataka State have benefitted from the project’s offshoot programme, “Light for Education,” which distributes solar lamps to students. The lights can be recharged in school, encouraging attendance, and then taken home in the evening for further study. The programme also supports access to digital education resources in rural classrooms. Advancing quality education opens up more opportunities for the students’ futures.
The state of Karnataka is one of the richest states in India and yet millions of people are left behind. For nearly 2 decades, Natural Capital Partners has worked with SELCO to bring reliable and affordable energy access to about 1 million households and businesses in the region. As we seek a more inclusive economy, SELCO’s innovative approach to microfinance applies sustainable economic incentives to bridge the gap.
Images copyright SELCO India