developing bop energy markets through private sector ... · developing bop energy markets through...
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Developing BOP Energy Markets Through Private Sector Engagement
Mehreen Shoaib & Hira Wajahat
Stimulus
June 21, 2018
144 MILLION people have no reliable access to electricity
Of these,
69 MILLION people live in off-grid rural areas
Only
7.7 MILLION people tap in to solar power in the rural off-grid
To be serviced:
61.3 MILLION potential users
The Pakistan Context
Source: IFC Lighting Pakistan Off-Grid Lighting Consumer Perceptions Study 2015
Opportunity
Infrastructure challenges at the Bottom of the Pyramid (BOP) present opportunities for the private sector to open up new markets.
Population Pyramid Access to Electricity
What BOP Markets Mean for the Private Sector
Pri
vate
Se
cto
r
Employees
Non-Management
Office Staff
Labor
(Drivers, Loaders, Security)
Suppliers
Food Products: Farming Communities
Textile: Cotton Growers
Customers
Fertilizer: Farming Communities
FMCG: Off-Grid Rural Communities
FMCG: Urban / Peri-Urban Communities
Telco Subscribers
For the private sector, various stakeholder groups represent BOP markets. Some of these groups are indicated in the diagram. As indicated, BOP stakeholders represent not only crucial human resources for an organization but also suppliers that form the backbone of business operations and customers without whom business would cease to exist.
Why Solar?
From Thar Desert (South of Pakistan) to K2 (the highest point in the North of Pakistan) we find brands such as the following easily available:
Thus, BOP solutions uncover vantage points for the business community that serve as primary economic engines.
But we do not find basic lighting, provision of energy, clean drinking water, basic health facilities, sanitation.
Innovation Models
Private Sector
Engagement
Business sustainability
initiatives
CSR
Village entrepreneur
model
Last mile distribution
Fertilizer
Financial Institution
Health Care; Food &
Nutrition
FMCG
Business Sustainability Initiatives
•2000 solar lamps sponsored by an agri-business company as reward & incentive for high performing distributors and farmers purchasing significant quantities of agri-product
• 300 solar home systems provided by a beverage company to small retailers in off-grid locations enabling increase of 3 – 5 productive hours for entrepreneurs
• Value Chain Development - Dairy farmers provided with solar milk chillers to preserve daily milk yields – less spoilt milk results in increased income for dairy farmers
•Brand initiative as part of national health and hygiene campaign implemented by FMCG companies
CSR Campaigns
• 3,500 solar lamps distributed by a financial institution as part of its CSR campaign
• 10,000 solar lamps provided to school children from off-grid communities attending schools established by a not-for-profit school network
• A financial institution sponsored the purchase and installation of a solar powered drinking water facility for an urban community comprising 2,000 families
Outcomes
Village Entrepreneur Model
• Micro-entrepreneurs, especially women, from off-grid rural communities trained and provided with starter kits of 10 – 15 solar lamps to sell in their communities
• Rural / peri-urban franchising through small entrepreneurs
Last Mile Distribution
• In partnership with a distribution and logistics company to carry solar lamps and home systems as part of their product portfolio for rural markets
• Coupled with existing distribution systems of FMCG companies like soft drinks, sweets, biscuits etc
Outcomes...cont’d
Private Sector’s Potential to Contribute
Stimulating economic growth
Creating jobs
Providing investment & finance
Sharing resources
Providing knowledge & innovation to solve the
worlds’ greatest challenges
What’s in it for the Private Sector
More advocates
More market penetration
More profitability
More consumers
About Stimulus
• Stimulus is an innovative consulting firm working across developed & developing countries with key focus on supporting emerging economies in two core domains: renewable energy and sustainable economic and social development. Stimulus offers innovative business solutions to its large international network including social enterprises, energy access companies, donors, I/NGOs, multilateral and bilateral agencies, and the public and private sector institutions and organizations.
• Our vision is to enhance global socio-economic sustainability by stimulating the business of development. Economic independence; women and gender; children and youth; entrepreneurship; impact evaluation; and sustainability serve as cross cutting themes for Stimulus. With over two decades of diverse consulting intellectual capital, private and public sector expertise, network, experience, credibility and authenticity; Stimulus was established to bring efficacy to existing, evolving and emerging socio-economic and public goods policy, planning, implementation and sustainability.
• Stimulus supports social enterprises and energy access companies by offering:
• Strategy planning & implementation
• Training & capacity building
• Market intelligence
• Business model innovation
• Scaling up impact
• Helping towards investment readiness
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