Rural Energy in Bangladesh

by Fiona McDowell

Narmada. Chixoy. Bujagali. In recent years, the melodic names of these massive hydropower projects have become synonymous with the worst that Western-led development has to offer – environmental destruction, social upheaval, bloated bureaucracy, corruption and broken promises of prosperity and energy access for the world’s poorest. They have also become battle cries of the anti-globalization movement, not only in the streets of cities like Seattle, Genoa and Washington, but also in the rural villages of India, Guatemala, Uganda and elsewhere.

Because the overwhelming majority of people in the developing world are not connect to grid electricity, no number of dams or coal plants will solve their energy needs in the present or near future. Most will continue to depend on rapidly diminishing resources like fuel wood for their energy needs. In Bangladesh, for example, the rural poor often burn cow dung to fuel their kitchen fires and kerosene to light their homes. Besides the obvious fire danger and pollution, these fuel sources create an unhealthy indoor environment and can lead to asthma and other health problems. Even those privileged few that have access to grid electricity do not have a dependable supply and must content with frequent blackouts.

Reliable, Sustainable Power
The challenge is to find a way to bring electricity to the poorest of the developing world in the most reliable and sustainable way possible. Grameen Shakti, a nonprofit organization in Bangladesh, has embraced this challenge with exciting results. Founded in 1996, Grameen Shakti is an offshoot of Grameen Bank, a pioneering micro-finance institution. Grameen Bank was established in 1976 as an experiment to see how a small amount of credit could affect the lives of the rural poor. It has since loaned over $3.7 billion, providing 2.4 million clients with access to financial services including loans, savings and insurance. Grameen borrowers, the majority of whom are women and make less than US$1 per day when they begin borrowing, use their loans to start small businesses that generate additional family income. Over time, most will emerge permanently from poverty. This simple, grassroots anti-poverty strategy has proven successful around the world.

As it has grown, Grameen Bank has spawned a family of companies that includes Grameen Shakti (GS), a rural power company. Grameen Shakti, which means “rural energy” in Bangla, seeks to supply renewable energy to un-electrified villages in Bangladesh, as well as to create employment and income-generation opportunities in rural areas.

The cornerstone project is the marketing of photovoltaic (PV) systems. Since its inception, GS has installed over 11,000 PV sytems in homes, schools and businesses. The total capacity of these systems is 600 kilowatts peak (kWp). GS anticipates reaching the one-megawatt milestone in 2003. Operating out of 56 offices around the country, GS installs more than 450 PV systems a month.

GS has gained the recognition and support of institutions like USAID, which committed roughly $4 million in local currency in 2000 to help expand its outreach. Building on the successful methodology of Grameen Bank, GS has developed several financing options that allow even the very poor to afford a PV system. Customers make a down payment of 15 or 25 percent and then pay the remainder and service charge within one or two years.

Changing Lives
It would be difficult to overestimate the profound effect that access to electricity has on the lives of those who haven’t had this luxury. Electric lights allow families to take advantage of simple pleasures people in the developed world take for granted. They can prepare and eat evening meals in a well-lit room, read or watch television before retiring for the night or enjoy a respite from stifling heat under the breeze of an electric fan. Businesses can extend operating hours and schoolchildren reap the benefits of computers and Internet access and complete their homework at night. Medical clinics operate a variety of life-saving machines, preserve medication that requires refrigeration and extend their services beyond daylight hours.

Perhaps most valuable is the wealth of entrepreneurial opportunities that energy access can create. With an electric sewing machine, a woman in rural Bangladesh can develop a lucrative business producing or tailoring clothes. Carpenters can use power tools to increase productivity and grocery stores can stock perishables and frozen items.

For example, TV and radio repair shop owner Manik Mia purchased a solar system through GS to power one lamp and a soldering iron. The lamp allows him to extend the operating hours of his shop. The extra income amounts to an additional $20 a month. Given that the average monthly income in Bangladesh is $20, this is not a trivial amount.

Other solar-powered businesses include barbershops, rice mills, saw mills and restaurants – the possibilities are endless. Some GS customers operate solar-charged cell phones for a fee. Cell phones provide significant income for the owner – as much as $100 a month. Some GS clients have used PV systems to create a “micro-utility” – selling power or renting electrical equipment to nearby shop owners. Umor Ali is a prime example of the ways that GS is stimulating creative methods of energy distribution in Bangladesh. Ali purchased a PV system and five lights for $470. Retaining one lamp to light his own shop, Ali rents out the four others to neighboring shopkeepers, collecting a total of $12 a month in fees. That money, couple with the additional income from keeping his shop open longer hours has increased his standard of living significantly.

This arrangement suits the shopkeepers who rent from him as well, because they are able to reap the benefits of solar electricity without having to buy a system. The increased revenue they bring in from keeping their shops open longer makes the rental fee worthwhile.

Enhancing Services
To reach communities most in need, GS takes several factors in account when establishing new offices. First, they target villages with no access to the grid. The also evaluate the poverty level of residents and the range of potential applications for the PV systems.

Once they establish new branches, GS trains unemployed local youth to become PV system installers and maintenance technicians. This strategy not only creates jobs for and transfers technical skills to disadvantaged young people, but it also provides clients with a local source for post-purchase services and maintenance. GS also trains customers, teaching them to maintain their systems properly and to handle small repairs themselves. This, in addition to a 20-year guarantee on its solar panels, ensures that GS customers enjoy PV systems that will run smoothly for years to come.

Expanding Horizons
Nowhere are the community-wide benefits of the solar systems more evident than on the remote island of Kutubdia, in Southern Bangladesh. On this isolated island, home to 150,000 residents, GS has set up the country’s first solar-powered computer education center. Despite the complete lack of electricity on the island, residents can receive computer training and link to the Internet, gaining skills and accessing information that can enrich their lives and expand their job opportunities.

GS launched a similar center in the mainland city of Cox’s Bazar, the tourist capital of Bangladesh, as part of its Rural Information and Communication Technology program. This program aims to close the digital divide experienced by Bangladesh rural citizens by offe
ring a variety of internet and computer-based services at solar-powered computer centers. Tourist-based businesses like hotels benefit by publicizing on the internet and offering on-line reservations. Other services available to residents include IT training in software development and hardware maintenance, e-government applications (on-line driver’s license and passport renewal, for example), e-healthcare (connecting rural patients and medical practitioners to urban doctors who can provide diagnosis, consultation and treatment) and distance learning opportunities. GS has established five computer centers and hope to open 16 more.

GS is exploring other renewable energy sources and methods for marketing them. They have supported the installation of six wind turbines in coastal areas, four of which feature a back-up diesel engine. In the Northern Bengal province, GS installed 30 plants that use bio-digesters to produce biogas, a clean-burning replacement for the cow dung commonly used as cooking fuel. The residues from this process can be used as an alternative to chemical fertilizers for crops or farm-raised fish, furthering the economic and environmental gains of this system.

GS is becoming increasingly adept at bringing energy access to new or overlooked markets. Its ground-breaking work was recently acknowledged with the 2002 Energy Globe Award, awarded by the Austrian Federal Minister of Environment. This prestigious award recognizes the “Best 50” energy projects from a pool of more than 1000 entries from around the world.

Amidst the din of ongoing energy and development debate, Grameen Shakti is quietly demonstrating the impressive results that can be achieved by a grass-roots, poverty-focused energy company committed to serving the very poorest.

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Grameen Shakti: [sorry this link is no longer available]
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