Session Title:
Innovative Solutions
Innovative Solutions
Date of talk or publication:
2005
2005
Speaker Name / Title:
David Jhirad & Annie Woollam
David Jhirad & Annie Woollam
Organization:
World Resources Institute
World Resources Institute
Description:
An assessment of the role of business and markets in accelerating the path out of poverty for the approximately 1.6 billion people living largely in South Asia and sub-Saharan Africa who lack electricity services reveals that successful business models for delivering electricity services to poor populations in developing nations are operating on a limited scale and that significant replication will require major innovations in policy, governance, financing, and institutional delivery mechanisms. Such replication is vital to the development of such base-of-the-pyramid enterprises as connectivity, communications, media, healthcare, and financial services.
Four enterprises that provide modern distributed energy services to poor communities—a large multinational that serves the household sector via an individual systems ownership model, two local entrepreneurial enterprises that serve income-generating end uses via fee for service and village ownership models, and a non-governmental organization (NGO) that couples seed capital with business mentoring—have demonstrated that there is a viable market for energy and electricity services in poor communities. These enterprises are entering the market at the top of the base-of-the-pyramid using successful business models with the following common key characteristics:
• In-depth understanding of the local market, community, and specific customer needs
• Low-interest loans and initial government or donor grants to meet financing challenges
• Parallel development of productive, entrepreneurial enterprises that require electricity
Two of the enterprises are addressing the challenges of scaling their operations by driving down to markets at lower levels of the pyramid. These enterprises are implementing innovative projects that build consumers’ capacity to pay for services by expanding income through productive end-uses. Grid extension and grid connected networks have major potential in underserved areas, but the role of the grid in extending access to electricity requires a different albeit complementary approach to technology, policy, installations, and investment.
An assessment of the role of business and markets in accelerating the path out of poverty for the approximately 1.6 billion people living largely in South Asia and sub-Saharan Africa who lack electricity services reveals that successful business models for delivering electricity services to poor populations in developing nations are operating on a limited scale and that significant replication will require major innovations in policy, governance, financing, and institutional delivery mechanisms. Such replication is vital to the development of such base-of-the-pyramid enterprises as connectivity, communications, media, healthcare, and financial services.
Four enterprises that provide modern distributed energy services to poor communities—a large multinational that serves the household sector via an individual systems ownership model, two local entrepreneurial enterprises that serve income-generating end uses via fee for service and village ownership models, and a non-governmental organization (NGO) that couples seed capital with business mentoring—have demonstrated that there is a viable market for energy and electricity services in poor communities. These enterprises are entering the market at the top of the base-of-the-pyramid using successful business models with the following common key characteristics:
• In-depth understanding of the local market, community, and specific customer needs
• Low-interest loans and initial government or donor grants to meet financing challenges
• Parallel development of productive, entrepreneurial enterprises that require electricity
Two of the enterprises are addressing the challenges of scaling their operations by driving down to markets at lower levels of the pyramid. These enterprises are implementing innovative projects that build consumers’ capacity to pay for services by expanding income through productive end-uses. Grid extension and grid connected networks have major potential in underserved areas, but the role of the grid in extending access to electricity requires a different albeit complementary approach to technology, policy, installations, and investment.