Green Energy & Green Jobs for Bangladeshi Villages

Dipal Chandra Barua
Managing Director
Grameen Shakti
Deputy Managing Director
Grameen Bank
e-mail : dipal@grameen.com

Grameen Shakti, has installed more than 2,30,000 Solar Home Systems (SHS) showing that solar energy applications can be scaled up massively and rapidly to provide an affordable and climate-friendly energy option for the rural people.

Grameen Shakti (GS) crossed a milestone in 2008.  We started in 1996 installing a few hundred such Solar Home Systems a year.  Now we are doing 10,000 plus a month. We had a target of a million systems by 2015, but we expect now to pass that in 2010.  This rapid demand has seen Grameen Shakti grow to an organization that employs 5000 staffs in 700 rural  offices,  with an annual budget of 100 million US dollars.  

We have set our own Millennium Development Goal to reach 50% of Bangladeshis by 2015. This is my dream.  If I were to succeed, Bangladesh will become the land of renewable energy technologies, as it is now the land of micro-credit – a source of inspiration for all. This would be a very positive demonstration of what renewable energy can do for the disadvantaged people around the whole world. 

This year has brought wonderful news for me, Grameen Shakti and Bangladesh. I have been honoured by the first ever Zayed Future Energy Prize for my visionary efforts and commitments to bring renewable energy technologies to the rural people of our country. This prize is a moral boost, which strengthens my resolve to make renewable energy technology a part of life of the common people especially the rural people.    

How did I develop Grameen Shakti? 

Grameen Shakti was created in 1996, under my leadership, to reach the rural people with clean, affordable energy through renewable energy technologies. 
I have devoted most of life to finding sustainable market based solutions to the social and economic problems faced by the rural people. While working with the rural people, I realized that access to efficient energy was one of the major obstacles to the social and economic development of the rural people.  More than 80% of the rural people have to depend on primitive energy sources, which limit their opportunities and also create health, environmental hazards.   
I felt it was my moral responsibility to create alternatives for the rural people.
Bangladesh is rich in sunshine that is why my first initiative was to popularize

Solar PV technology. By owning a SHS, a rural family can enjoy bright lights, televisions, radios and power their mobile phones. The upfront cost is high, but once this is paid off, there are no additional costs, load shedding, or ever-increasing electricity bills. This means a huge difference in quality of life,   and income generation.

I started our Biogas Program in 2005 and Improved Cooking Stove Program in 2006.  Both of these programs are thriving. More than 7000 biogas plants and 38000 Improved Cooking Stoves have been constructed.   I took up our Improved Cooking Stove Program in order to protect our mothers and sisters from indoor air pollution. We decided to promote biogas plants because most farmers own few livestock and poultry sector is an emerging business in Bangladesh.  Biogas technology is very appropriate for rural areas because it converts cow dung or poultry dropping into cooking gas, light and slurry, which is a very good organic fertilizer.  Larger biogas plants can also produce electricity.     

A  Business Model Suitable for Rural People     

My key achievement is that I have successfully demonstrated that renewable energy is a viable option for the rural people and they can be reached through a market-based model. Myth has been broken that renewable energy technologies are too expensive and high tech for the rural people.  However, the challenges were huge.  

First challenge was to build rural network to reach the rural people.  We worked with local, international engineering   institutions to, recruit, train engineers and develop our in-house capacity. Currently more than 50% of our staffs are engineers who are deployed all over Bangladesh. We trained our engineers to be Social Engineers who were able to create special rapport with our rural customers.     

We also trained local technicians and users. This meant local jobs, community support and efficient after sales service at reduced costs. We won the hearts and minds of the rural people by initiating scholarship programs for rural schoolchildren, training rural housewives on how to take of Solar Home Systems installed in their homes.   We also developed special programs for rural schoolchildren to develop the awareness of the next generation about renewable energy technologies.  

Second challenge was to develop a financial cum technical package suitable for the rural people.  I used my Grameen Bank experience to introduce installment-based payment, which reduced the upfront cost of a SHS and made it affordable at the same cost as kerosene. Rural homes and businesses could escape from kerosene fumes; reduce their monthly energy expenditure, while extending their business hours.      

Our engineers made monthly visits to check on the systems for 2 to 3 years and were ready to offer their services for a small fee, afterwards.

Increased sales meant decreased overhead costs, which helped GS to provide further credit options to the rural people.  Local production of solar accessories further reduced cost.  GS reached economies of scale and break-even in 2002.  This  success  drew the attention of  World Bank including other  Funding Institutions  and GS was able to source soft loans through the Infrastructure Development Company limited ( IDCOL) .   

We have also successfully laid the foundation for expanding Biogas and Improved Cooking Stove Programs in the rural areas. 

Quality control during the construction of biogas plants and after sales service after the construction of the plants are very important.  That is why we focused on strict quality control, onsite technical assistance and free after sales service after wards. We also trained local masons and the biogas plant owners. In this way, we have successfully created huge demand for biogas plants among livestock and poultry owners.  
The key challenge to spreading Improved Cooking Stove  is creating  a large crop of efficient technicians at the rural level who can make, repair improved stoves while GS staffs maintains standard quality control.  We have trained 2000 technicians and set up 36 rural manufacturing units. 

Customer Focused Innovative Financing :    

Grameen Shakti has an in-built listening culture and has developed  close rapport with the local communities.  This has helped Grameen Shakti develop innovative financial models for its Solar,  Biogas  and other programs :  

• Financing  Solar  Home Systems  : Taking into account the financial ability of its rural customers,  Grameen Shakti has developed four  different pay schemes for its customers   such as  :

2. Down payment   25% of the total price and  the remaining 75% of the cost is to be repaid within 24 months with 4%  service charge
3.   4%  discount on cash purchase .

This has helped to reduce upfront costs and make Solar Home Systems available at  the same cost as kerosene i.e  monthly installment payment is equal to monthly kerosene cost of an average rural family .   Not only that,  Grameen Shakti has tied  consumer friendly  options with its financial models to make Solar Home Systems attractive for the rural customers .  Buy back  method allows rural clients to return their  systems ,   if their area is connected with the grid . Very few people exercises this option because of perennial load shedding.   Grameen Shakti arranges  ownership  transfer certificate programs for the clients who have paid all their dues  and also presents them with umbrellas .  There are places where umbrellas with Grameen Shakti logos  can be seen in the streets ,  market places  , schools and nearly every where.          

• Financing Biogas Plants :  Grameen Shakti has introduced two attractive options to make biogas plants affordable to  livestock  and poultry owners  :  

• The buyer pays 25% of the total cost as down payment. The remaining 75% of the cost is to be repaid through 24 monthly installments with 8% service charge (flat rate) within 2 years 
• The buyer can construct his plant with his own funds under the supervision of GS engineers. In this case, half of the technical and supervision fees will be paid as advance and the rest will be paid after the commissioning of the plant.

This financing has helped to reduce upfront costs,  increased  rate of return, reduced payback period within  two years,   as biogas plant owners decrease energy costs, increase  agriculture production with the help of slurry  and especially large size biogas plants sell extra gas,  slurry to others .      

• Micro-utility model: Many rural people cannot afford Solar Home Systems individually.  GS has developed an innovative package for them.  Under this package, a group of people can share a solar home system.  Micro-utility model has become very popular in market places where shop keepers are installing solar systems and renting their lights to others, thus reducing costs and increasing income. Similarly, biogas plant owners are renting their biogas to their neighbours.  By doing this there are reducing the cost of owning a biogas plant as well as the energy cost of their neigbours.       

• Special program for low income households:  GS has initiated a special program to promote biogas plants among low income households.   Low income households in seasonal famine affected northern districts of Bangladesh are provided with livestock along with biogas plants. The owners of these plants can pay back GS their installments either through cash, livestock or slurry.  Instead of providing subsidies,  GS is creating opportunities  through income generation .

• Other Initiatives : GS is promoting LED, CFL and Small Solar Home Systems  to low income households. At the same time, GS is considering feed in tariff power plants  and other options such as electricity or gas generation from municipal wastes  to reach the urban people who also suffer from lack of modern energy facilities .    

  Light, Energy and Income for the Rural People:

“The customers love coming to my shop, now that I have bright light. They can see what they are buying and what I have in stock. And they can watch television and use mobile phones too. My Solar home system helps to power mobile phone, which clients can use to make calls.  My sales have gone up by at least Tk.300 a day,” says one satisfied Owner of Solar Home System.

Biogas technology is paving the way to a Green Economy and transforming Waste into Wealth for the rural people. This technology is helping rural farmers with few livestock to reduce their fuel cost, enjoy bright hazak light as well as have organic fertilizers from slurry.  Larger sized biogas plant owners are also making extra income through giving connection to neighbours – many are also producing electricity.  Biogas plants are especially boons for poultry owners who can rid of poultry wastes especially the bad smell and at the same time sell biogas and slurry to others. Neighbours, who used to complain about the bad smell, now become their clients, buying biogas from them. For instance, the owners of a 2000 bird  poultry farm bought  a  9m3  biogas plant costing Tk. 39,000  through a Tk. 10, 000 deposit and  monthly payments of Tk.  1300 for two years.  The biogas supplies the owners with cooking fuel and also an electric generator for three hours per day. In addition,  biogas is sold to ten neighbouring families giving an income of Tk. 3900 per month  which is three times the monthly payments.   The owners of this farm also estimated that their improved vegetable production from the slurry increased their income by Tk.  7000 per month  with reduced fertilizer costs too .  This way,  biogas technology is boosting livestock and agro businesses and helping to increase food security in Bangladesh. 

Improved Cooking Stoves are one of the cheapest means to protect women and children from in-door air pollution, which is a major killer in developing countries.  The improved stoves reduce wood use by about 50% saving time and money. Improved Cooking Stoves is helping rural families to increase savings and capital,   protect their health and save the environment at the same time. It is no wonder that   rural women who are the managers of their homes and household finance are showing growing interest in improved stoves. We are constructing  per month  double of the number of stoves, we constructed last year.    Within last six months ,   Improved stoves construction has grown more than 171%.

Green Jobs for Women: The Story of Ambia
“Grameen Shakti has given me the opportunity to earn an income by working from my home; I can now work and live with dignity and can offer my children a better future. I used to earn only Tk 1000 per month, now; I can earn more than Tk 7000 a month”

We are creating green jobs for women. We have created for our rural sisters, mother’s respectable, skilled jobs right in their villages, protecting them from poverty, dowry, illegal immigration etc. 

We have a model in place, which is creating green jobs and green businesses in the rural areas, creating new opportunities for rural women . Solar  Home Systems have facilitated  many women to run cottage industries in their homes after dusk,  other  women are running successful  mobile phone businesses with solar powered mobile phones in off-grid areas .  We plan to create 100000 green jobs by 2015.  We plan to create renewable energy entrepreneurs who will promote and install renewable energy technologies while we provide the financial and technical support.  

Grameen Shakti  has also trained more than 50, 000 women from user families on taking care of the systems installed at their homes. By doing this GS is not only ensuring that systems are taken care off, but also ensuring the participation of women in its  program . This mean these trained women will teach their children and motivate other women to install renewable energy technologies .  Women are powerful decision makers in a community, no program can succeed  without their support.  Grameen Shakti  has also run exposure program  for more than 10,  000  school children mostly girls from rural schools to built awareness about renewable energy technologies in the next generation.  

New Initiatives :

Grameen Shakti is considering  pilot testing a number of new  initiatives to provide more benefits to rural people and extend this benefit to the urban people .  For the rural people ,  these new initiatives include pilot testing solar pumps ,  constructing large sized biogas plants and   putting the gas into cylinders .  This will help  to extend biogas facilities to those who have no  biogas plants , not only that these gas would be able to run vehicles ,   pumps and other appliances .   For the urban people ,   Grameen Shakti plans to construct  large sized biogas plants for converting municipality wastes in to  gas , electricity .  This will help to get rid of wastes and at the same time meet the  needs of    gas and electricity of the urban dwellers .  Grameen Shakti is  discussing with different municipality authorities in this regard.   Grameen Shakti is  also actively thinking of  installing  solar panels on rooftops of  urban building  and transmitting  the extra electricity to  the grid.  Grameen Shakti engineers  are already designing different  packages which will help to meet the basic needs  (  fans ,  lights etc )  of  urban dwellers during  load shading , while the   extra electricity would be transmitted to the grid  during other times .  Grameen Shakti is also in the process of  taking up a  project to power mobile phone base stations with solar technology .   Another  new initiative of  Grameen Shakti is to  promote   solar heaters in  hospitals and clinics in both rural and urban  areas.  
 

My Vision for 2015:    

I want to transform Bangladesh, make it a Positive Example on what a developing country can do in response to threat of Climate Change,  through the application of renewable energy technologies .   I want to create a Green Economy for millions of Bangladeshis who will be affected by climate change in the next decade.

 I dream of empowering 75 million people through renewable energy technologies. My very own millennium development goals include:        

• 7.5  million  Solar Home Systems installed,
• 2 million Biogas Plants constructed,
• 20 million Improved Cooking stoves,
• 100, 000  Green Jobs created   

We have already in place one of the most successful models to fight the challenges climate change through renewable energy technologies. Our  Programs seek triple bottom lines of sustainability social, economical and environmental.  They seek solutions that empower women, the disadvantaged,  create jobs, facilitate rural development and especially protect the environment. 

In the rural areas, we are replacing kerosene, reducing cutting down of trees, boosting agriculture, livestock, promoting organic fertilizers and especially creating green jobs and income for women .Solar Home Systems installed by us are reducing presently 100,000 tons of carbon annually in Bangladesh.  This is the success of Grameen Shakti and the pioneering spirit of Bangladeshi People .
We facilitate rural communities to own and use renewable energy technologies to become eventual partners in bringing and expanding  renewable energy technologies within  their communities, with  a  focus on the following key areas :    

• Innovate  financial  mechanism to make   renewable energy technologies affordable,
• Developing awareness ,  creating environment for forging community partnership,
• Focusing  on consumer needs instead of subsidies through innovative consumer friendly product development etc,
• Strong after sales service at the local level through .technology transfer and l capacity development, such as local technician training
• Tapping into  local market forces through entrepreneur development  , job creation, creation of new business opportunities  and linking these to renewable energy technologies,
• Focus  on  women  as main actors  and entrepreneur  of change,
• A de-centralized bottom up approach instead of centralized top down approach
• Creating a Strong network of proactive branches staffed with Social engineers
• Strong Internal Audit  Department for quality checking of different programs  at customer level     

Through the commitment of my people, my staff and other renewable energy entrepreneurs in Bangladesh,   even if we achieve 50% of this dream, then we will become a source of hope for others who are fighting the same fight, all over the world. 

Bangladesh Government is becoming more and more positive about renewable energy technologies .  Renewable Energy  Policy was passed in 2008 . It is likely  that Government would give  fiscal incentives such as removal of  vat,  tax , provision of  feed in  tariff  facilities etc .  We are also urging the government to create special   funds at very low interest rate for RET .               
I dream of   a Healthier and Greener Bangladesh .    

Mr Dipal  Barua with the first batch of  women renewable energy technicians who received Zayed Future Energy Scholarship in 2009  .  Mr .  Barua has opened a  Scholarship fund with the  award money, he received as the First Zayed Future Prize Recipient. With the help of this scholarship, he dreams to create 100000 Women Renewable Energy Technicians and Entrepreneurs by 2015 .