Success of Grameen Shakti in the Field of Renewable Energy Sector

in Bangladesh

Dipal Barua, Managing Director, Grameen

Shakti, Bangladesh

Success of Grameen Shakti in the Field of Renewable Energy Sector in Bangladesh

Dipal C BaruaManaging Director, Grameen Shakti

Grameen Bank BhabanMirpur-2, Dhaka-1216

Bangladeshdipal@grameen.com

www.gshakti.com

Paper Presented in Plenary Session “Best Practices and Success Stories” ofInternational Conference for Renewable Energies, Bonn, Germany June 1-4, 2004

Best PracticesAffordable and innovative financing policySelection of appropriate technologyTechnology dissemination for awareness buildup Cost effective solution through adaptive researchStrong and committed backup serviceMotivation for productive use of the technologyLocal capacity build upMicro utility package to reach the poor

Background

135 Million People live in Bangladesh30% People are accessing the grid electricity70% People are deprived of itIn response to energy crisis Grameen Shakti established in 1996

Energy Scenario

30%70%

Non Electrified AreaElectrified Area

Grameen Shakti at a Glance:Incorporated 1996program coverage by Grameen ShaktiNumber of District 42 out of 64Number of Upazial 150 upazila out of 464Number of Villages 2100Number of Island 8Total beneficiaries more than 150,000 people Unit office 100Field staff 350Total installation 23,500 SHS (till April 2004)Installed power capacity 1.12 MW pInstallation rate 1050 SHS/monthFinancing mechanism Four financing methodFuture Plan by 2008 100,000 SHS

To promote and popularize Solar Home System (SHS) in rural and remote off grid areas of Bangladesh.Improving the quality of rural livelihood through renewable energy resources.

Objectives of Grameen Shakti

228 373 1,202 1,7603,196

4,704

7,800

4000

02000400060008000

100001200014000

No. o

f Sys

tem

s

Upto1997

1998 1999 2000 2001 2002 2003 Jan-Apr

2004

Year wise Progress of Solar Home System

Target

Monthly Progress 1100 SHS

Kutubdia

BangladeshGrameen Shakti’s Working Area

Activities Area

Monpura

HatiaSandwip

100 unit offices of Grameen Shakti covers all island of Bangladesh and unserved region by power grid authority.

Innovative & affordable financing model of GS are as follows:Mode-1:

Customer pays only 15% of the total price during installation and remaining 85% of the cost is paid by monthly installment within 36 months including 12% service charge.Mode-2:Customer pays 25% of the total price as down payment and remaining 75% of the cost is paid by monthly installment within 24 months with 8% service charge. Mode-3:Customer pays 15% of the total price during installation, and remaining 85% of the cost including 10% service charge is paid by 36 post dated cheques.Mode-44% discount is allowed for cash purchase.

PV program of GS

Grameen Shakti has installed 23,500 Solar Home Systems till April 2004

Installation capacity in terms of power is 1.12 MW p.

Current promotional rate is over 1000 SHS per month which is increasing day by day.

Selection of appropriate technologyGS has selected the PV technology, due to availability of high solar insulation in BangladeshGS prefers stand alone Solar Home System for rural electrificationGS has introduced ownership model which ensures that the system will be used with more carefully

Technology dissemination for awareness buildup

GS approaches for technology disseminationDemonstration, Seminar, workshopPoster, leaflet, banner & brochure Training

Cost effective solution through adaptive researchGS performs adaptive research for the development of accessories of SHS. It reduces the product cost of Solar Home System It builds the capacity of the practitioner

Backup service: Users get free warranty for three years from the date of installation. GS engineer visits at least once in a month during collection of monthly installment and the engineer checks the system and keeps the data on the logbook for the system. If it is found any problem, they take the necessary steps.

Strong and committed backup service

Post warranty:GS has introduced post warranty service for its valuable clients.This post warranty service charge is about US$ 5 per annual. To encourage the customer, GS has introduced gift item for the post warranty maintenance agreement.Major replacement cost is borne by the user with reasonable price.

Ensuring the technical backup against each system

Motivation for productive use of the technologyUser name : Mr. Hanif Type of use : For lighting up a diesel operated saw mill.Project location : Village-Baromedor, District-TangailSystem description : One 25 W solar module

Two 6 W fluorescent lampTotal system cost : US$ 195Daily hours of use : 4 hours Impact of solar system : Direct impact

- Extending working hour(4 hours/day)- 20 US$ income per day (100 cft/day

@ 0.20 US$/cft)- Better quality of work- Better working environment: Indirect impact- Increasing income of the workers-Increasing employment opportunity- Increasing social awareness

Productive Use:GB & GS integrated approach

This is an unique combination of Grameen Bank and Grameen Shakti’sintegrated effort for poverty reduction. SHS is being used for mobile phone charging.Telephone lady earns US$100 per month from this pay phone.The system also help her children for their education

Productive use of SHS for women welfare

Empowering women through utilizing their idle time for productive use at night due to bright light of SHS

Women welfareWomen are enjoying the hazardless and hassle free lighting system in their daily life. They are getting opportunities to earn extra money by utilizing their time after dusk by sewing or poultry farming.

Micro utility package to reach the poor

Micro Utility at Dacope, Khulna

Model 1: Entrepreneur install one solar home system and shares the load with some other neighbors shop. In this model owner of the system pays monthly installment to GS and collects load charge (daily or weekly) from the users. This micro-utility system has no service charge rather down payment is only 10%.

Model-2: In this model GS install the SHS in a market and appoints one potential entrepreneur to collect the bill from all user including his/her own (generally operator pay 50% less) and deposits it to GS account. After a certain period the operator become the owner of the system.

Micro Utility to reach the poor

Local capacity build up- Training Program on Installation and Maintenance

Technician TrainingGS trains the local young men and women on operation, installation and maintenance of PV systemsSo far GS has trained 655 local techniciansCustomer TrainingGS trains its customers for better maintenance and use of the systemsThe trained customers can easily take care of minor problems of their systems

Future Plan:GS has planned to install 100,000 SHS within 2008, its current progress indicates the success. GS is taking initiative for replicating its program in other countries (request arising from different countries) GS is also trying to explore other renewable resource like wind, hydro and bio-mass.

Energy Globe Award 2002

Grameen Shakti has already achieved an International recognition, which is “Energy Globe Award 2002” from Austria for it’s outstanding performance in the field of PV program.

Grameen Shakti has achieved the “European Solar Prize 2003” award in 2003

Managing Director of Grameen Shakti Mr. Dipal C Barua is receiving the award “European Soar Prize 2003” on December 2003 in Germany

Issues behind the success:Grameen Shakti realized that the following facts and issues are the keys of success:

Appropriate designing of the program Commitment and dedication Motivational program for awareness build upCommunity involvement and social acceptanceUnderstanding of market demandInnovative financing modelRealistic targetConstant monitoring and evaluationAward for outstanding performanceQuality productReliable backup serviceMinimum overhead cost

Thanks for Your kind Attention

Success of Grameen Shakti in the Field of Renewable Energy Sector

in Bangladesh

Dipal Barua, Managing Director, Grameen

Shakti, Bangladesh