Bangladesh has succeeded in developing the largest and most dynamic national off-grid electrification program in the world. Indeed, since its inception in 2003, Bangladesh’s solar home system (SHS) program has installed household electrification systems in 3 million rural households, two-thirds of them in the last three years (in the same time period, the country’s rural electricity cooperatives have extended access to the national electrical grid to about 1.3 million households). Currently, the SHS program is providing electricity to about 65,000 new households each month, making it the most dynamic off-grid electrification program in the world.
Bangladesh market now practically on commercial terms
The success of the Bangladeshi SHS program evolved from a small pilot introduced in 2002 by the World Bank’s Rural Electrification and Renewable Energy Development (RERED) project. RERED initially relied on subsidies, but these have been phased out over time as system prices declined thanks to economies of scale and technological advances. Today, the solar home systems are provided practically on commercial terms. A modest subsidy is available only for small systems designed for the poorest households.
Rahimafrooz Bangladesh LTD.
Rahimafrooz Bangladesh LTD. is the fore bearer of the solar movement in Bangladesh. Back in the mid 1980s, the company had already started R&D on this then revolutionary form of energy called solar energy. As a result, Rahimafrooz installed the first ever Solar Home System in Bangladesh in 1989 at Nijra, West Para, Gopalgonj. Rahimafrooz then started continuous demos on haat bazaars and awareness raising about solar and its advantages. The foresight of Rahimafrooz and its efforts were translated into awakening policy makers, and other interested parties, which at last resulted into the development & implementation of the most successful and at scale Solar Home System program of the world. As Industry demand for solar gradually became prominent, numerous opportunities for solar industry opened which lead in 2006 to the inception of Rural Service Foundation, a not for profit initiative by Rahimafrooz Group and Rahimafrooz Renewable Energy LTD.
Rahimafrooz (RSF) sells & installs SHS to households and small businesses in most cases on microcredit terms. RSF remains in contact with customers during the loan repayment period, collecting payments, providing maintenance, and training customers in both operation and maintenance. Once the loan is repaid, RSF offers service contracts for an annual fee to keep the contact with the clients and thus make sure that the customers will always have an SHS properly working. They also extend a buy-back guarantee that gives customers an option to sell their system back to IDCOL at a depreciated price if the household obtains a grid connection within a year of purchase. However most customers have preferred to keep their SHS, because grid electricity remains unreliable.
Regarding training, every Unit & Area managers are internally trained during 3 days by RSF Head Office staff. The training is conducted per batch of 30 people and they are trained on technical and management topics. Then, each and every field staff receives a one day training performed by RSF own trainers, previously trained and certified as IDCOL Trainers. Since 2013, RSF has delivered 30 000 hours of training and 100% of its staff is trained. Through its field staff, RSF provides training to end-users on how to use properly their SHS and thus increase the lifespan of the system. In 2013&2014, 70% of the RSF’s customers have received training. This program has been successful primarily because it has provided technical and financing solutions to users that matched their needs and because there was only one structure dealing with distribution, training, end-users financing and after sale services.
Since 2002, Rahimafrooz has been able to deploy successfully ~500 rural branches, and sold more than 500,000 SHS all over the country.
The study of Sevea shows exemplarily the development of the company in context of the Bangladeshi SHS program. Beyond this Sevea looked at financial viability and the program effectiveness in realizing its mission by measuring how it impacts the lives of its beneficiaries, the environment, and society as a whole. Social and Economical impact is assessed along 5 macro indicators:
- Health&Social Life
- Household Budget
- Rahimafrooz Employees Empowerment.
Sevea operationally supports, in developing countries, Corporations, Organizations, Projects & Social Entrepreneurs in the development of their Social Impact Strategies, mainly in the sectors of Energy & Water and BOP market. (More: www.seveaconsulting.com).
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