How To Leverage Carbon Financing Towards Scaling Up Solar Off-Grid Clean Energy

Programs Presented by: Aimthy Thoumoung, Regional Director – South Asia, MicroEnergy Credits

Discussion Agenda

Overview of MicroEnergy Credits

Problems Faces By SMEs in Scaling Up Clean Energy Programs

The Solutions Enabled by Carbon Financing

Case Study: MEC Partner in North India

The Investment Cycle for Carbon Financing

Conclusion

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We provide carbon funds to Rural Banks and MFIs so that clients are empowered to have clean energy for education, light, health, warmth, and wealth creation.

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The MEC Business Model

Carbon Markets Rural Banks and Micro Finance Institutions

MicroEnergy Credits

CO2 CO2

$ $

Buys Carbon Credits

Provides Training Carbon Purchase Credit Tracker

Lends for Clean Energy Products

MEC has 18 rural banking and microfinance partners in 11 countries. • 13 partners in Asia include Aryavart Gramin Bank, Prathama Bank, Gurgaon Gramin Bank, Allahabad UP Gramin Bank, Purvanchal Gramin Bank, Andhra Pragati Gramin Bank, Haryana Gramin Bank, Bank Of India, Grameen Koota, ESAF, SKDRDP, VERC and XacBank.

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Who is MicroEnergy Credits?

Been in operation since 2008

$11 million in CO2 offset sales contracts signed to date

18 MFI partners representing 15 Million clients

Over 200,000 households currently receiving energy services

~$500,000 carbon revenues in 2011

Received commitment of $10 Million funds from Overseas Private Investment Corporation (OPIC) to scale up our program to millions of households around the world.

Key Stats

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Making the product affordable to low-income / BOP consumers

Investing in marketing and awareness generation activities

Investing in after-sales customer service programs

The Problems Faced by SMEs in Scaling Up Clean Energy Programs

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Making the product affordable to low-income / BOP consumers

The Solutions Enabled By Carbon Financing and MEC

Table: Sensitivity Analysis of upfront payments on the addressable market (millions of HHs)

Source: IFC Analysis, Universal Modern Energy

Case presented by IEA in 2010

o Solution: Access To Finance through loans from Rural Banks and MFIs Carbon Funds ensure that the lending

program is sustainable and profitable even for the low ticket-size loans

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Investing in marketing and awareness generation activities o At 1 MEC Partner in South India: 2 years without investments in marketing and awareness generation

activities: 500 products sold After a structured marketing and awareness generation program was

implemented: 3,500+ products sold in 4 months

o Solution: Utilization of carbon funds

Investing in after-sales customer service programs o At 1 MEC Partner in South India: After reasonable scaling up of program, sales came to a halt with

customer opinions of product nose-diving and spreading quickly with poor after-sales service of complaints

o Solution: Utilization of carbon funds

The Solutions Enabled By Carbon Financing and MEC

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Products: Solar Home Lighting Systems

Impact: Over 50,000 households have purchased the Solar Home Lighting Systems

MEC Partner has received > $120 K carbon funding over the past 2 years from MEC. Carbon funding is recurring each year.

Usage of Carbon Funds: MEC Partner has utilized the funds towards establishing customer service centers, training of after-sales service staff, training of bank staff, and marketing activities.

Case Study: MEC Partner in North India

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How the investment cycle works

Investors

$

$

Invests: OPIC $10M DOEN Deutsche Bank

Foundation

Uses Funds for: Training at MFIs Carbon Project Dev. Credit Tracker

Repays from Carbon Revenue

$

Rural banks and MFIs

Carbon Purchasers

CO2

CO2

2.5 BILLION People Empowered

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Conclusions Simple clean energy products such as

solar off-grid lighting systems can improve the quality of life of BOP clients Renewable energy is affordable;

spending is close to what rural clients already spend on kerosene, fuel wood and charcoal Carbon revenues are available to help

SMEs in partnership with rural banks and MFIs bring these products to their clients MEC has built a strong track record and

expertise in implementing and scaling up clean energy programs with the help of carbon financing. 11

Contact: Aimthy Thoumoung, Regional Director – South Asia MicroEnergy Credits Email: aimthy.thoumoung@microenergycredits.com