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renewable energy > features > power for the people 1: bangladesh

Power for the people 1: Bangladesh
Bringing light to the village

Posted: 02 Nov 2000

by Lou Werner

A new micro-credit scheme in Bangladesh is bring solar-powered energy and fresh hope to the four out of five villages which remain beyond the national grid. Lou Werner reports.

The brick path leads toward the darkened hamlet over an earthen berm, skirting fish ponds and rice paddies. Just as night is falling, a visitor passes under mango trees and close by the well worn backyards that children share with chickens, ducks, and water buffalo. Straw lies scattered across the way, left to dry under the baking pre-monsoon sun that tomorrow will surely bring.

Despite its timeless appearance, Shagur Dhigi Bazaar is unlike all but a few of Bangladesh's other 85,000 rural settlements. The fact that no cable runs in from the main road shows that it is among the four in five villages without a link to the national power grid. But, lying half a day's journey over back roads from Dhaka, that is not what makes Shagur Dhigi any different from its neighbouring villages in Tangail district.

Suddenly an electric light blinks to life in a market stall, and then another light comes on in the barbershop, and then a third in the pharmacy all powered by electricity generated and distributed by a micro-utility. Since shopkeeper Shuntush Kumar Shaha installed his 75 watt photo-voltaic system, he has been renting out three bulbs to businessmen next-door.

This is what sets Shuntush apart from the 100 million other Bangladeshis still waiting for the national power company to come to them. With the help of Grameen Bank, he went out and started his own utility.

Grameen is a pioneer institution in the field of micro-enterprise financing for the poor. Originally focused on agricultural, craft-making, and housing loans, it has lately started financing investments in solar, wind, and biogas power generation. In the next four years it hopes to have 4,000 systems in place.

The bank is unafraid of big challenges. Over the past two decades, it has extended loans, each averaging about $100 but amounting cumulatively to $2.4 billion, to some 2.3 million rural Bangladeshis. More than 90 per cent of borrowers are women, whom the loans help to empower through self-employment.
Muhammad Yunus
Muhammad Yunus
� Harun/Grameen Foundation, USA

Grameen was founded in 1976 by Muhammad Yunus, then a Chittagong University economics professor who one day happened to meet a market vendor unable to buy 25 cents worth of cane needed to make sale items. When asked why she didn�t apply for a bank loan, she laughed, and Yunus saw her point. Small loans could not turn a profit, went the conventional thinking, and very small loans were not even considered.

Yunus made the loan out of his pocket and then did a quick survey of her village. He found more than 40 small business people vendors, farmers, and artisans who could benefit from loans averaging less than a dollar. From this was born the idea of microcredit, and the ensuing belief that access to bankcredit should be recognised as basic human right.

While experts agree that the dynamism of entrepreneurship and self-employment is most easily tapped in traditional rural enterprises such as crafts and agriculture, Yunus is always thinking several steps ahead. "Why not go high-tech in the villages," he asks. "Telecom, the Internet, data processing. We�re ready for it all. But first we need power." "Technology today is different from what it was yesterday," he continues. "It's no longer the same inert hardware it was for first generation users. Now it's more like malleable clay, ready to be shaped at will. PCs have been trickling into South Asia for a decade, and many people still see them as toys. But photovoltaic cells are put to serious use overnight. And they are just the tip of the high-tech iceberg."

Not a charity

Yunus is such a believer in rural Bangladesh's capacity for high-tech ventures that in 1996 he founded a non-profit company named Grameen Shakti shakti means energy in Sanskrit to bring renewable energy to the countryside. Like Grameen's other speciality lines of business such as fish farming and handloom textiles, this new start-up relies on private sector banking principles: loan-making at financial rates of interest, full repayment, and professional service.

As Grameen Bank stakeholders, borrowers gain self-confidence and a broader world view. Being a full paying customer endows one with the right to good service and client responsiveness, things common in developed countries but often quite foreign elsewhere. "We are a bank," insists Yunus, "not a development project. We give loans, not charity."

Sawmill owner Muhammad Abu Hanif knows all about Grameen's strict accounting, as well as his own accountability to the bank. His loan for a one bulb 17 watt system came to more than $300 and required a 25 per cent downpayment, the balance to be repaid in two years at 8 per cent interest. But by operating at night, he has increased profits by 500 taka a day (US $10) and pays his four workers an additional 100 taka each.

Dipal Chandra Barua, head of Grameen Shakti and a chief executive of bank operations, sees magic in an illuminated light bulb. "People can do with electricity what they could never do with candle wax or kerosene," says Barua. "Study, work, make market sales all things that sooner or later will bring them out of poverty."

The fact that most of Bangladesh is dark and idle at night certainly does not help its national development. The country annually consumes only 17 litres of fuel oil per capita, one of the world's lowest rates, and meets 60 per cent of its domestic energy needs by burning cow dung.

There is no need to praise the benefit of electricity to the people of Dhalapara village, not far from Shagur Dhigi Bazaar. Grameen Shakti sales manager Abdu Salam Khan sold 30 solar energy systems in just four months, and their demonstration effect is widening demand by the day. "To light a kerosene lamp for just a few hours costs 25 cents for fuel," he says. "Why not pay half that for electric light all night long?"

Khan is referring to the kinds of micro-utilities operated by Shuntush and others like him. In Dhalapara village, Dibon Krishna Shahah rents three bulbs from a neighbour's 75 watt system. "My wife keeps up her tailoring business and my son stays at his school books a few extra hours each night," he says.

Grameen-designed systems consist of locally made components charge controllers, florescent lamps, and 8 watt tubes except for the imported solar cells themselves, which cost about $290 for a 17 watt panel and $750 for a 75 watt panel. If Grameen gets the right for local assembly, costs will come down $25 each. On the drawing board is a one lamp system for under $150.

Even though Grameen Bank will finance these sales, the required down payment puts even the smallest solar system beyond the reach of the very poor. Some, like the employees of sawmill owner Abu Hanif, benefit from higher income possibilities, however.

Wider world

The availability of electricity has also improved the quality of certain kinds of work. Maneeq Mia owns an electronics repair shop in Dhalapara. His new 35 watt system allowed him to rig up a small fan to blow dust out of open casings and to exchange his kerosene heated soldering iron for an electric one. Now he takes on the more delicate jobs he once had to turn away.

Other things just cannot be done at all without an electric light. "My customers were afraid to let me shave them by the shadow of a kerosene lamp," says Shagur Dhigi's barber. "The razor is risky work. But with the bulb, I have 10 or 12 extra customers every night. Business is up 30 per cent."

And with electricity comes access to the wider world. After buying a 48 watt system, general store owner Ashis Kumar Shahah put in the village's only phone, which he rents out to the public at 20 taka/ minute. The lack of electricity previously precluded a link up with the Bangladesh Rural Telephone Service.

The economic benefit of renewable energy is clear-cut even to teenage Alam Hussein, who keeps shop for his mother in Petcherata Bazaar. The family used to pay 300 taka a month for kerosene to light the store until 10 at night. The new 17 watt system now powers two 6 watt bulbs and a cassette player. Their 13,000 taka investment will pay for itself in kerosene savings in just three years.

Alam shakes his head sadly when a customer steps up to buy a pair of 'D' cell batteries for 26 taka. "He will have to throw them away in just a week or two," he says, "while our system will be working for another 20 years."

The residents of Polashpur village in Keranigani thana are perhaps the ideal target market for the kinds of technology Grameen can deliver to the countryside. Although just across the Buriganga River from Dhaka, Polashpur has hope neither of a link to the power grid or to a telephone line. But now, for just over $1,000, an enterprising villager could buy himself a cellular telephone and household solar system with which to charge it, both sold and financed by Grameen.

"I've never used a telephone," says Polashpur widow Zahir Begum, "and I have to buy a lot of batteries to record the cassettes I send my brother in Kuwait. But if I had electricity, I wouldn't care so much about calling Kuwait or playing music. No, I'd rather have light in my house to work at night, and call Dhaka for the latest price of rice. Now we have to accept whatever the middleman offers, because here we are always in the dark."

Lou Werner is a New York-based documentary film-maker and health education media consultant.

Lessons from Africa

There are many lessons to be learnt from the 150,000 households in Kenya and the 80,000 in Zimbabwe that already purchased a solar system.

With market penetration rates of 3 per cent or more, and with each at least 2-3 MW solar capacity installed, both Kenya and Zimbabwe stand out in the state of the art of solar market development. This was mainly driven by private sector initiatives and, above all, by demand from rural and peri-urban households.

The illustration below shows the solar market characteristics, based on a survey of 410 households with a solar system in Kenya and preliminary data of a 6,000 household survey in Zimbabwe carried out last year. It clearly shows that the main solar market is for small systems of 10-15 Watt. In 1998 Kenya imported about 0.5 MW, of which at least 60 per cent consisted of these small amorphous modules. The contribution of systems larger than 50 Watt in Zimbabwe (lacking in Kenya) is probably the result of the multiyear, subsidised effort by GEF/UNDP in that country.

Solar market composition::Source: The World Bank
Solar market composition
Source: The World Bank

Many households construct a solar system in small components over several years. Although this might seem sub-optimal, it does allow for households to have faster access to the amenities of modern life than when they have to wait for a project to help them acquire a full solar home kit. Before moving up to a solar system, about half of the households in Zimbabwe used to take a car battery to a charging station once a week (this is very common in Kenya also). Households can add a solar module to their battery system once they have saved enough cash. With their solar system, half the users in Zimbabwe still need a battery boost, but less than once a month.

The private sector market development in both countries is driven by the desire to be part of modern life using television, electric lights, and radio. A TV was used by respectively 71 per cent and 89 per cent, and a radio by 92 per cent and 70 per cent in Zimbabwe and in Kenya. It is seems that for many to be connected to the larger world by television is an important incentive to own a solar system.

Robert van der Plas

Robert van der Plas is an Energy Planner with the World Bank's Energy, Mining, and Telecommunications Department. This article reflects the views and opinions of the author, and not necessarily the views of the World Bank Group.

© People & the Planet 2000 - 2007
Solar panels provide homes with electricity, In Cacimbas, Ceara, Brazil. Photo: Roger Taylor/NREL
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