endeva energize the bop 2011 new

8/6/2019 Endeva Energize the BoP 2011 New

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Eegiee BoP!

Cisia Gadl ad Claudia Kobloc

Eegy Busiess Model Geeao

o Low-Icome Makes


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E n E r G I z E t h E B o P !

Ackowledgemes

te auos would like o ak

eveyoe wo coibued o

is publicaio.

Partners

We would like o exed a special aks o ou paes:

The German Federal Ministry or Economic Cooperation and

Development (BMz, Budesmiiseium wiscalice

zusammeabei ud Ewicklug) ad E.ON Energie AG po-vided ei expeise ad acig o is publicaio.

MicroEnergy International, ogee wi Edeva, boug is

pojec o lie ad ougou e pocess as coibued ei

exesive kow-ow i povidig eegy sevices o low-icome

people.

te Wittenberg Center or Global Ethics ad e Vattenall-

Europe Endowment Chair Energy Management and Sustain-

ability coibued advice i seig up is pojec.

Academic panelSeveal academic expes coibued ei ime ad expeise o

e developme o is publicaio. We ae gaeul o:

Rahul Barua, VU Uivesiy Amsedam

Christoph Birkholz, Uivesiy S. Galle

Nicola Ursina Blum, Eth zuic

Noara Kebir, Uivesiy o Luxemboug

Dr. Malte Schneider, Eth zuic

Ronald Venn, Uivesiy o hambug

Research supportWe ae also idebed o ou aleed Edeva eseac associaes

wo ave made possible e collecio ad evaluaio o e

massive amou o eseac iomig is epo.

Katharina Kaesehage

Judith Mayer

Alyssa Rivera

Experts

Expes o iclusive eegy issues om cosulacies, academia

ad ogaisaios acive i e eld coibued o is publica-

io wi ei eedback ad by saig ei expeiece i ie-

views. We ae gaeul o:

Delphine Bazalgette, Plane Fiace Deusclad e.V.

Barbara Brner, Caopus Foudaio

Dr. Anil Cabraal, Cosula

Dr. Nicolas Chevrollier, BoP Iovaio Cee

Shantanu Dixit, Payas Eegy Goup

Mauro Fadda, E.On Climae & reewables

Lisa Feldmann, GIz Povey-Oieed Basic Eegy Sevices

Pogamme (hErA)

Christian Friebe, Euopea Busiess Scool

Jennye Greene, E + Co

Mark Hankins, Aica Sola Desigs (K) Ld.

Lars Holstenkamp, Leupaa Uivesiy o Lebug

Oliver Karius, LGt Veue PilaopyJim L. Koch, PD, Saa Claa Uivesiy

Stean Koch, E.On Eegie AG

Guido Konijnendijk, Cosula

Diana Krat, GIz

Saurabh Lall, Wold resouces Isiue

Laurent Liautaud, hysa

Matthew Lynch, WBCSD

Matthew McDermott, GIz

Jonas Naguib, GIz

Filippo Veglio, WBCSD

Suppoed by:


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Eegiee BoP!Eegy Busiess Model Geeao

fo Low-Icome Makes

Cisia Gadl ad

Claudia Kobloc


4/52


WHY VENTURE INTO THELOW-INCOME MARKET?

HOW DO WE DO BUSINESS WITHLOW-INCOME CUSTOMERS?

WHAT RESOURCES ARE REQUIRED

TO DEVELOP A BUSINESS?

WHERE DO WE FIND

SUPPORT?

18

42

8

30


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Coe

Business CaseWhY VEntUrE IntO thE LOW-InCOME MArKEt? ........................................ 8

Use eeds .............................................................................................................................. 10

Make developme ........................................................................................................ 11

Make sie ............................................................................................................................. 12

Coecio ypes ad ecologies ...................................................................... 13

te saes ole ..................................................................................................................... 14

Paes .................................................................................................................................... 15

Busiess model .................................................................................................................... 16

Customer InteracehOW DO WE DO BUSInESS WIth LOW-InCOME CUStOMErS? .......... 18

how i woks ......................................................................................................................... 19

Geeal calleges ad soluios ........................................................................... 20

Sales ............................................................................................................................................ 22

Payme ................................................................................................................................... 24

Sevice ....................................................................................................................................... 26

Ed o poduc use ............................................................................................................ 28

Development ProcessWhAt rESOUrCES ArE rEQUIrED tO DEVELOP A BUSInESS? .......... 30

how i woks ......................................................................................................................... 31Poduc ..................................................................................................................................... 32

Make isig ...................................................................................................................... 34

huma esouces ............................................................................................................... 36

Fiace ..................................................................................................................................... 38

Support DirectoryWhErE DO WE FInD SUPPOrt? .............................................................................. 42

Poduc desig ..................................................................................................................... 44

Make isig ...................................................................................................................... 44

Fiacig ................................................................................................................................. 44

Cabo make ..................................................................................................................... 45

Plaoms ................................................................................................................................. 45Fue eadig ................................................................................................................... 46

Acoyms ................................................................................................................................. 47

Edoes .................................................................................................................................. 47

Appoac ................................................................................................................................. 48

Abou Edeva ........................................................................................................................ 50

Abou e Eegie e BoP aiig .................................................................. 50

Publicaio iomaio ................................................................................................ 51

LISt OF CASE StUDIES

SKG Saga, Idia

page 23

La Elecicidad de Caacas (EDC), Veeuela

page 25

temasol, Mooccopage 27

Sulabob, Laos

page 29

Bosc ud Siemes hausgee Gmbh

(BSh), Pilippies

page 33

d.lig desig, Aica & Asia

page 35

lecici de Face SA (EDF), Malipage 37

Selco, Idia

page 39

SPOtLIGht

Accessig e cabo make

page 40

develoPPP.de Developme

paesips wi e pivae seco

page 41


6/52


A leas 250 busiesses ave aleady bee esablised o povide

eegy sevices o cosumes a e base o e global icome

pyamid (o BoP). I ac, may moe pobably exis, as ese

ae simply e documeed cases we ave oud i e couse o

ou Eegie e BoP eseac. Bu i is is ue, ow is i pos-

sible a 1.4 billio people sill lack access o eleciciy? Wy

ave so ew o ese busiesses gow o a lage scale?

te easo, ad e impeus o is guide, is a mos busiess-

es ageig e BoP do o ave a susaiable busiess model.We see e same misakes beig made ove ad ove agai. too

may o ese veues se o o ee e make wi used,

lile o eve o make eseac ad ail o coside ow sales

ad sevice pocesses ca suppo ei ecology. too may

also ail o coside e kid o uma esouces eeded o gow

ei busiess i local coexs. neveeless, we absoluely be-

lieve i e powe o busiess o eegie e BoP. tis guide is i-

eded o sege is powe by suppoig eepeeus i

akig e ig seps owad doig susaiable busiess i e

BoP. I is coceived as a busiess model geeao o ose ad-

dessig e BoPs eegy make i paicula. Dawig upo e

documeed expeieces o 250 busiesses, 35 o wic we aveaalysed i dep, e geeao is divided io ou capes:

Business Case peses e aioale o veuig io e

low-icome make.

Customer Interace sows ow o ieac wi low-icome

cusomes.

Development Process povides advice o saig, impleme-

ig ad gowig a busiess.

Support Directory collecs useul coacs ad liks.

We ae o aloe i ou passio o eablig eegy busiesses.

As soo as we esablised is pojec, eseaces ad ogaisa-

ios bega appoacig us, askig o be pa o i. Oes joied

a ou eques. te log lis o ackowledgemes impessively

illusaes is eusiasm. We ak evey oe o ese paes

o coibuig ei expeiece, acial esouces ad ime.

te poduc o ese combied eos is a vey pacical guide.

I is aimed a paciioes wo age low-icome cosumes o-

day, o wo pla o move i is diecio. te coe souldpove useul o compaies o all sies ad backgouds, om

e sa-up o e lage uiliy, om compaies oeig gid co-

ecios o mii-gids o ose sellig o-gid appliaces suc as

lamps o soves.

Like ay eliable guide, e geeao coves e mos impoa

acos o coside. howeve, because e BoP eegy make

is a emegig make, is guide is ecessaily icomplee. As

compaies coiue o iovae ad expeime, we coiue

o lea. We eeoe ecouage all eades o add o e kow-

ledge peseed ee by saig you expeieces wi us via

email. You aaives will o oly be iegaed io ou aiigpogamme, bu will elp sape e uue o eegy busiess a

e BoP.

Sincerely,

Christina Gradl and Claudia Knobloch

[email protected] [email protected]

Poo:SusaeUlleric

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Foewods

Dea Eepeeus,

As you ca ell om is ame, e Fedeal Miisy o Ecoomic

Coopeaio ad Developme (BMz) cosides ecoomic co-op-

eaio a iegal compoe o developme policy.

tee ca be o susaiable developme wiou susaiable

ecoomic developme. We eeoe ecogise e busiess

seco as a esseial pae. Compaies develop poducs ad

sevices a eace e qualiy o lie o millios o people

evey day. howeve, low-icome populaios i developig ademegig ecoomies oe ave o access o ese poducs ad

sevices. We i comes o eegy, 1.4 billio people woldwide

lack access o eleciciy ad a eve lage umbe ely o a-

diioal biomass o cook ad ea ei omes. Iclusive busi-

ess models ca poduce iovaive soluios a povide low-

icome ouseolds wi access o eegy i cos-ecie, sae

ad susaiable ways, wile ceaig oppouiies o scale-up

value cais i ou pae couies. Fo eepeeus doig

busiess i demadig eviomes, e calleges ae gea,

bu o isumouable.

tis publicaio guides you oug e busiess model devel-opme pocess ad oes pacical advice. Ceaive soluios

aleady ude way by compaies successully sevig base o

e pyamid cusomes ae sowcased ee. We ope a ese

examples ad e iomaio povided ee will suppo ad

ispie you o ceae ad impleme iclusive eegy busiess

models a bee you ad you cusomes.

Hans-Jrgen Beereltz

Sae SeceayFedeal Miisy o Ecoomic Coopeaio ad Developme (BMz)

Eegy makes aoud e wold ace eomous calleges.

Povidig climae-iedly ad aodable eegy ae e calls o

acio. te eegy idusy beas a paicula esposibiliy o

iclude wii ese makes e millios o people woldwide

livig a e base o e pyamid (BoP).

te eegy seco ca pomoe susaiable developme i

ese makes by applyig sma ecologies ad bee busi-

ess models. We ca also deepe ou kow-ow by leaig om

e eeds ad cosais o people livig a e BoP. tis divesiovaio i developig poducs ad sevices aued o ese

makes.

As a ieaioal povide o eegy soluios, E.On daws upo

a boad age o expeiece ad ecical expeise i e aeas

o eegy geeaio ad supply. tis sudy addesses ue

impoa issues egadig makes i developig ad emegig

ecoomies. A e same ime, i povides E.On wi valuable i-

sigs ad pacical ecommedaios. As a paciioes guide,

is publicaio elps us evaluae e ioducio o ou compe-

ecies io ew makes esposibly ad susaiably.

E.On is commied o povidig cleae ad bee eegy o all

makes ow ad i uue. te goal is o pomoe viable busi-

esses a ceae a wi-wi siuaio. Soud eegy soluios

sould expad e scope o oppouiies o e people a e

base o e pyamid as well as e compaies ivolved.

Eegiig e BoP also meas eegiig e uue. tis is a u-

ue we aim o sape susaiably.

Pro. Dr. Klaus-Dieter Maubach

Membe o e Boad o Maageme E.On AG

reseac & Developme, new Build & tecology,

Copoae resposibiliy, heal/Saey & Eviome

Poo:BMz

Poo:

AdreasPolma/E.O

n


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BusiessCase

Poo: Pilips

Wi is lamp om Pilips Ligig, isyoug sude ca do is omewok aesuse wiou exposig imsel o e

polluas geeaed by keosee lamps.

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WhY VEntUrEIntO thE LOW-InCOME MArKEt?

1.4 billion people around the world lack access to electricity, while 2.7 billion people cook with traditional biomass.

This energy poverty hinders economic and social development.

The 4 billion people living on less than $3,000 per year spend $433 billion per year on energy.

Technical solutions providing clean, aordable and reliable energy services to this target group already exist.

Leaprogging is possible.

Developing sustainable business models is the key to entering low-income markets.

ESTABLISHEDMARKETS

LOW-INCOMEMARKETS

2.7 billio people cook ad ea wi

adiioal biomass

1.4 billio people do o ave access o

eleciciy


10/52

B U S I n E S S C A S E

Access o clea, aodable ad eliable eegy is a udameal

dive o ecoomic gow, eviomeal susaiabiliy ad

social developme. Jus as ames eed pumps o iigae ei

elds, ad woksops eed eegy o powe macies, sevicepovides equie compues ad elecommuicaio devices i

ode o povide mode sevices. hospials, oo, eed eegy o

keep vaccies cool ad u mode opeaig ooms. Eegy also

uels e uue by allowig sudes o sudy io e ig wi

pope ligig. tVs ad adios iom ad eeai, wile mod-

e domesic devices suc as eigeaos ad soves educe

womes budes ad elp aise sadads o livig.

neveeless, billios o people lack access o clea, aodable

ad eliable eegy: 1.4 billio ave o access o eleciciy ad

mus ely o cadles o keosee o lig ad diesel o poduc-

ive uses. te lowes elecicaio ae is oud i sub-Saaa

Aica, wee oly 31% o e populaio as access o elecic-iy. Aoud 76 millio people i nigeia ad 68 millio i Eiopia

lack coecio o eegy supplies. Aoud e wold, 2.7 billio

people cook o adiioal ee-soe es usig wood o dug.

Mos live i ual egios o emegig ad developig couies.2

Use eeds: 1.4 billio wiou access o eleciciy

te adiioal use o biomass ad peoleum-based uels caies

a umbe o seious disadvaages:

Fumes om idoo es cause eal poblems. te Woldheal Ogaisaio esimaes a evey yea ealy 2 millio

people die om diseases elaed o idoo smoke maily

cilde ad woma wo pepae meals.3

I addiio o eal poblems, collecig wood cosumes

ime a could be used poducively o o educaioal pu-

poses. Gils ad wome all ove e developig wold sped

ous eac day collecig ewood.

Ususaiable avesig o wood ad oe biomass accele-

aes deoesaio, causig a loss o biodivesiy ad absop-

ive capaciy o CO2. Black cabo om icomplee combus-

io o ossil uels o biomass also coibues o climaecage.4

Eegy om keosee o cadles is muc moe expesive a

eleciciy om e gid; e disadvaaged pay expesive

aes o low-qualiy sevices. te ig cos ides ecoomic

poduciviy.

I may couies, e public seco is uable o povide eegy

sevices o low-icome ouseolds. te exesio o powe gids

o emoe aeas ca be acially ueable due o low popu-

laio desiy ad low cosumpio levels. Pivae compaies

eeoe play a impoa ole oe i collaboaio wioe sakeoldes suc as nGOs ad govemes i sevig

e eeds o e ucoeced.

Figure 1

People without access to electricity

(i millios, 2009)

Souce: IEA/OECD (2010) Eegy Povey Souce: IEA/OECD (2010) Eegy Povey

Figure 2

People relying on the traditional use o biomass or cooking

(i millios, 2009)

Latin America 31

Arica 587

China 8

Other Asian

countries387

India 404

Latin America 85

Arica 657

China 423

Other Asiancountries

659

India 855

Total1.4 billio

Total2.7 billio

1110 |


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te global eegy make a e base o e ecoomic pyamid is

aleady vas, ad will gow ue i e decades o come.

te global populaio is iceasig a a ig ae. Fom odaysalmos 7 billio people (2011), i will ise o moe a 9 billio i

2050, e Un esimaes. Viually all o is gow will ake place

i emegig ad developig couies, ouside e OECD.5 te

global uba populaio will double as ciies expeiece a dis-

popoioae sae o is populaio icease.6

Accodig o e new Policies Sceaio o e Ieaioal E-

egy Agecy, 1.2 billio people i 2030 will sill lack access o elec-

iciy.7 te global elecicaio ae will ise om 79% i 2009 o

85% by 2030 bu wi pooud egioal dieeces. Weeas

Cia will eac uivesal elecicaio, oly 50% o people liv-

ig i sub-Saaa Aica will ave access o eleciciy. I abso-

lue umbes, aoud 650 millio Aicas will be wiou accesso eleciciy.8 Iovaive appoaces will be equied o close

is gap. take ogee, ese gues sow ee is a uge ad

gowig poeial make o compaies a supply clea, a-

odable ad eliable eegy sevices o low-icome ouseolds.

Govemes i developig couies ae wakig o e poe-

ial o pivae eegy sevices o is age goup. te Idia

goveme, o example, esablised a aioal goal o uive-

sal access o eegy wi is rual Elecicaio Policy i 2006.I ode o acieve is aim, i ceaed a umbe o ew acig

aagemes, icludig subsidies o e isallaio o eew-

able eegy plas.

Small ad lage compaies ae espodig o e demad. how-

eve, mos o e busiess-dive eegy pojecs a e base o

e global icome pyamid ave ye o gai sigica scale.

te ladscape o playes is divese, agig om muliaioal

compaies ad lage uiliies o small ad medium-sied eew-

able eegy compaies, o social eepeeus om developig

couies, o spi-os om desig cees a uivesiies.

Make developme: isig populaios, gowig poliical suppo

Figure 3

Population growth, 19502050

(i millios)

Figure 4

World population without access to energy,

2009 and 2030

(i millios)

Souce: IEA/OECD (2010) Eegy PoveySouce: Un Populaio Divisio (2008) Wold Populaio Pospecs: te 2008 revisio

LATIN AMERICA

2009 2030

274 8

2

SUB-SAHARANAFRICA

2009 2030

465

120

544108

INDIA

2009 2030

38123

28112

CHINA

2009 2030

0

800

OTHERDEVELOPING

ASIA

2009 2030

32859

21240

rualUba

1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050

10,000

9,000

8,000

7,000

6,000

5,000

4,000

3,000

2,000

1,000

Uba less developed

rual less developed

Uba moe developed

rual moe developed


12/52


Mos people wiou access o eleciciy live i poo pas o

emegig ad developig couies, i slums ad ual aeas. te

4 billio people a live o less a $8 pe day (adjused o lo-

cal pucasig powe paiy) sped a esimaed $433 billio oeegy pe yea, accodig o IFC ad WrI esimaes. tese nex

4 Billio make up e base o e global icome pyamid, o e

BoP. te lages egioal make is Asia (icludig e Middle

Eas), wi aual spedig esimaed a $351 billio amog a

oal o 2.9 billio people.

nex o ood ad ousig, eegy is e bigges expese o low-

icome ouseolds. A aveage 9% o e oveall BoP ouseold

expediue is spe o eegy. houseolds wi a aual i-

come o up o $500 sped a aveage o $148 pe yea o eegy,

equivale o aoud $0.40 a day. tose eaig bewee $1,000

ad $1,500 pe yea sped ealy $1 a day. tese pe-cusome

amous ae compaaively small, bu i sum ey epese amake o sigica sie.9

Make sie: almos al a illio dollas

I some couies, e BoP compises e lages sae o e e-

egy make. I accous o 90% o spedig o o-commecial

eegy i couies suc as Idoesia ad nigeia, ad moe a

50% i couies suc as Bail, Idia ad Ugada.

10

A commo peomeo i low-icome makes is e povey

pealy. tis ees o e ac a poo people ave o sped

moe a wealie oes o e same poduc o sevice. A

sudy peomed by MicoEegy Ieaioal sowed a 1

kW coss $2.30 i ual Baglades, compaed o abou $0.30 i

Wese Euope.11 te cos o ligig ca also be muc ige,

as sow i a epo om Guaemala o 2000. I a yea, 1 kW

o lig cos $0.08 om e gid, $5.87 om keosee ad $13.00

om cadles.12 People i ese coexs ae eeoe well pe-

paed o pay aodable sums o clea, eliable eegy sevices.

Mos eegy-elaed expediue is ocused o cookig, eaigad ligig. Wile eegy o cookig ad eaig is oe po-

vided oug e adiioal use o biomass, suc as wood o

cacoal, low-icome ouseolds geeally use paa cadles

ad keosee lamps o lig. Spedig is vey fexible o all o

ese uels, as poducs ad sevices may be pucased i mico-

amous. As BoP icomes ae o oly low, bu ypically also i-

egula, low-icome cosumes ed o value is fexibiliy. tis

compeiive advaage is wo cosideig we developig

picig models o iclusive eegy busiesses.

Figure 5

Energy expenditures o those withannual incomes below $3,000

(i billio $ PPP, 2006)

Figure 6

Cost o 1 kWh electricity

(i $)

Souce: WrI/IFC (2007) te nex 4 Billio. Souce: MicoEegy Ieaioal

BANGLADESH

GERMANY

0.30 $

2.30 $

Arica 26.6

Eastern Europe 25.4

Latin America 30.5

Asia 350.9 Total$433 billio

1312 |


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Compaies use a vaiey o ecologies o povide low-icome

ouseolds wi clea ad aodable eegy. Wi egad o e

busiess model, e coecio ype is moe impoa a e

way e eegy is poduced, as i dees ow e compay willieac wi e cusome.

Grid connection: Fo ouseolds, public commuiy acili-

ies o local small busiess a ae easoably close o exis-

ig asmissio ad disibuio lies, geig coeced o

e gid may be e bes ad mos ecoomical opio. Uses

ypically pay a oe-o ee o e iiial gid coecio, ad

eeae a moly sevice ee based o e eleciciy ey

use. Povides o suc sevices ave geeally bee exisig

uiliies i developig couies. I Sou Aica o example,

ESKOM as coeced 3.8 millio ouseolds o e gid sice

1991.13 tese eleciciy povides oe d iovaive ways

o collec payme, ioducig iems suc as pe-paid cadso collecive mees o a eie eigbouood. May uilise

social ewoks o icease e acial susaiabiliy o ei

eos, o example by paeig wi exisig co-opeaives

o commuiy ogaisaios o ogaise coecios o a lo-

cal level.

Mini-grids: remoe villages ca be elecied by seig up

small powe plas a povide eoug eegy o e vil-

lages ouseold ad poducive eeds. Mii-gids ae usually

u eie by a local eepeeu o a village co-opeaive, bu

lage compaies ca also d a busiess case ee. Fec

eegy povide EDF developed wo mii-gids i Mali i pa-esip wi a leadig Duc eegy compay, nUOn. te

ecologies used o geeae e powe age om biomass/

biogas o ydo o sola eegy, o i some cases, a combia-

io o diee souces o e applicaio o ybid sysems (a

combiaio o ecologies). reewable eegy souces ae

oe backed up by a diesel geeao i ode o esue a 24/7

eegy supply.

O-grid systems and appliances: I some cases, mii-gids

cao be opeaed poably i ual aeas due o e small

umbe o poeial cusomes, geogapical cosais

o e icome sucue o e commuiy. O-gid sysemsca play a key ole i ese coexs. Suc sysems (o appli-

aces) povide a sigle ouseold wi eegy. Fo example,

sola ome sysems isalled o u ooops ca povide

eoug eegy o lamps ad o cagig mobile poes. I

oe cases, sola-poweed lamps ca povide ligig, ad

impoved cooksoves poweed by gas o oil ca make smoke-

ee meals possible. tese poducs ae equely poduced

locally ad sold by e poduces emselves, o oug sales

ages o local eailes a oe also povide pos-pucase

sevice ad esue e collecio o paymes. te make o

o-gid sysems ad appliaces is quie divese, aacig a-

eio om esablised muliaioal copoaios (MnCs)

suc as Pilips ad Sell ad iomal eepeeus alike.

Aloug e coecio ypes peseed ee equie vey di-

ee busiess models ad cusome appoaces, iclusive e-

egy eepises ecoue may simila issues ad soluios

alog e way. te isigs colleced i e capes Cusome

Ieace ad Developme Pocess ca eeoe iom e

aciviies o a boad age o iclusive eegy povides.

Coecio ypes ad ecologies: o e gid, o e gid ad mii-gids


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Eegy is eavily egulaed ad subsidised aoud e wold.

Govemes ave a vial iees i secuig uivesal eegy

povisio, because i is a peequisie o ecoomic gow, so-

cial developme ad equaliy. Fo is easo, eegy geea-io ad disibuio was o may yeas moopolised by pub-

lic compaies. Ideed, may o odays eegy uiliies ae sill

public compaies o ave oly bee ecely pivaised. Gove-

mes ad aioal egulaios coiue o play a cucial ole i

e seig up o a eegy busiess.

Paiculaly i developig couies, wee access o eegy is

o uivesal, govemes oe se up policies a povide i-

ceives o e pivae seco o ives i elecicaio o ual

aeas ad slums. Fo example, Idias rual Elecicaio Policy

o 2006 esablised a aioal goal o uivesal access, assiged

esposibiliies o implemeaio ad ceaed ew acig

aagemes a beeed e pivae seco.

Aoe dive o egulaio is e eed o comply wi iea-

ioal limis o CO2

emissios. tis is a impoa moivaio

i emegig ecoomies suc as Cia o Idia, wose ecoomic

gow as led o a as-iceasig demad o eegy. I ese

cases, acoies ad e middle class ae e lages coibuos

o emissios ad ca eeoe ave e lages impac i mii-

misig emissios. howeve, people a ae o ye coeced o

e gid ca leapog o e use o eviomeally iedly e-

egy souces. tis idea is suppoed by may o e ieaioal

public ogaisaios ad doos a suppo govemes i

developig couies i ceaig a eviome suppoive oeewable eegy use.

tee ae seveal useul ools i exisece a elp compaies

d ei way oug e muliude o policies. Fo example, e

global policy ewok rEn21 oes a oveview o eegy poli-

cies, wi a ocus o eewable eegy all aoud e globe.14

te saes ole: povidig access, secuiy ad iceives

Goveme acio suppos pivae ivesme i eegy po-

visio i ee diee ways: by povidig make access, i-

ceasig ivesme secuiy ad oeig diec iceives o

ivesme. Pivae compaies will oly develop busiess o alage scale i ese acos collecively coibue o ceaig a

welcomig, busiess-iedly eviome. Eac is examied i

moe deail below.

Market access: Uideed access o eegy makes is a

peequisie o all compaies i e eegy seco, o oly

o ose sevig low-icome makes. tis is ue bo o

domesic ad oeig compaies. Govemes eed o ope

up eegy makes o pivae ivesos i ode o allow com-

peiio ad aac oeig diec ivesme. Public pivae

paesips (PPPs), wee e sae coacs e povisio o

sevices ou o pivae compaies, ave bee equely used

as a mode o make access.

Security: Pivae compaies eed o be able o calculae ad

maage isks. Ivesos seek poliical sabiliy ad eliable,

log-em egulaio o issues suc as eed-i ais. te se-

cuiy o ei ivesmes wi espec o eves suc as e

aioalisaio o compaies is also a cucial coce.

Incentives: Subsidies i e om o gas, iees-ee loas

o ax olidays o ual elecicaio ad clea eegy po-

visio suppo busiess models a mig o oewise be

poable om e sa, especially wee ey equie lage

levels o ivesme. te pomoio o climae-iedly eegysoluios is suppoed oug aioal, egioal ad global

cabo makes suc as e Clea Developme Mecaism

(CDM) ude e Un Kyoo Poocol.

I addiio o ioducig policies addessig eegy povisio

diecly, govemes ca impove e geeal busiess evi-

ome o compaies by eacig iasucue, culivaig

kowledge ad skills amog e populaio, ad aciliaig ac-

cess o omal makes o low-icome people.

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to eac low-icome commuiies, busiesses ypically wok

wi paes. Oe eoug, eve domesic compaies om de-

velopig couies do o ave exesive expeiece doig busi-

ess wi people i povey i a eviome a lacks basiciasucue, acial sevices ad cosume lieacy. nGOs,

micoace isiuios (MFIs) o co-opeaives ae usually e

paes o coice because ey equely maiai opeaios

o e goud ad ave sog local ewoks a eac ou o

people i povey.

Non-governmental organisation (NGOs): nGOs ae missio-

dive ogaisaios aimig o acieve social o ecological

objecives. May umaiaia ad eviomeal nGOs i

developig couies ae ivolved i e eegy busiess be-

cause i is so ieliked wi opics suc as eal, educaio

ad climae cage.

By paeig wi compaies, nGOs may pusue log-em

viabiliy ad gai a muc lage scale a would be possible

wiou e ecoomic powe o e compaies. tey ca po-

vide ei age goups wi susaiable eegy soluios a

solve addiioal poblems suc as e pevalece o smoke-e-

laed diseases, o wic ga people access o mode meas

o commuicaio.

Compaies bee om suc collaboaio because nGOs ca

elp cay ou make eseac, o aise awaeess o e be-

es o mode eegy soluios, assis wi e disibuio o

poducs, ad ai sales pesoel.15

Paes: combiig capabiliies, magiyig success

Micronance institutions (MFIs): MFIs oe loas agig

om $10 o $1,000, wiou askig o collaeal i e mae

o a coveioal bak. Oe o e classic models is e goup

loa, wee a goup o boowes beas collecive esposibil-iy o e cedi. Idividual ledig models also exis. Boow-

es iclude wome wo ideally ives e moey i saig a

small busiess o i impovig e poduciviy o ei am.

MFIs play a impoa ole i acig all kids o ives-

mes i slums ad ual aeas.

Some MFIs ave discoveed eegy soluios as a ew seam

o eveues, ad as a way o suppo ei ow cusomes ge-

eaio o icome. MFIs ca ioduce soves, laes o sola

ome sysems as complemeay poducs io ei poolio,

us divesiyig ei busiess eveues.

Eegy busiesses oe coose o pae wi MFIs i odeo povide ei cusomes wi easy access o cedi o ace

ig up-o ivesmes suc as a o-gid sola pael o a

gid coecio. Someimes, MFIs ake o oe oles suc as

sellig eegy sysems o povidig ae-sales sevice diecly.

Co-operatives: Co-opeaives ae ogaisaios i wic mem-

bes ave come ogee o a commo pupose suc as e

pucase o sale o goods ad sevices. Fames co-opeaives

ae a widely used model i developig couies a aciliae

access o makes. Co-opeaives usually esue ig ad eli-

able poduc qualiy by povidig aiig ad ceicaio o

ei membes. tese bodies ae eeoe oe ieesed ipovidig ei membes wi ways o impove poduciviy.

Co-opeaives play a ieesig ole i e eegy seco i

wo ways. O e oe ad, ey ca be used as a pae o

e disibuio ad sale o sola ome sysems o appliaces

suc as laes. O e oe ad, co-opeaives ca also be

omed o opeae a mii-gid, o eve o ogaise disibuio

ad paymes o gid coecios.


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A busiess model descibes ow a busiess ceaes value. I de-

pics ow e m ieacs wi e acos i is ecosysem,

icludig is cusomes, supplies ad busiess paes. Moe

pecisely, i dees e value poposiio o e busiess o eaco ese acos ad ow asacios wi em ae ogaised i

ode o alig iceives.

te ea o ay successul busiess is a value poposiio a

uly mees e eeds ad was o is cusomes. Eepeeus

oe build ei busiess idea o a specic ecology wiou

ciically assessig i ad ow is ecology ca ceae value

o cusomes, wa ei aleaives ae, ad by wic cie-

ia ey assess ei aleaives. Fo example, may busiesses

ave ecoueed elucace amog cusomes o pucase

clea cooksoves because o culual peeeces ad adiios.

Sola cookes also ave o value o uses wo wa o cook i

e eveig we i is dak. A deep udesadig o e pee-eces o oes cusomes mus eeoe be e saig poi o

ay busiess developme.

Busiess model: a clea value poposiio o all sakeoldes

tasacios wi cusomes epese e mos uusual cal-

lege associaed wi buildig a ew busiess model i low-i-

come makes. Cusomes ae ypically embedded i make e-

viomes a ae o oly ew o may busiesses, bu alsodicul by may sadads. te slums ad villages i developig

couies oe lack e codiios a make busiess i moe

developed makes smoo, ecie ad ecoomically viable. I

developig couies, make iomaio is scace, pysical i-

asucue suc as oads ae oe poo, ad legal amewoks

ad eoceme mecaisms ae udedeveloped ad ueli-

able. Fuemoe, low-icome cusomes i ese aeas lack i-

omaio, ad sevice povides able o ogaise ayig om

acial asacios o logisics ad eail may simply o ex-

is. I so, e cos o doig busiess i low-icome makes is

ypically ig. A e same ime, low-icome ouseolds ave a

vey limied budge o spedig o eegy, ad d i dicul

o make ig up-o ivesmes due o e ig cos o adlimied access o cedi.

A successul busiess model a e BoP mus d iovaive

ways o ieac wi is cusomes wiou spedig moe a

wa e deal is wo. teeoe, e desig ad ogaisaio

o e cusome ieace is e ocus o e secod cape.

Fou ypes o ieacios ae ciical: sales, paymes, sevice,

ad ed o poduc use. te eegy busiesses aalysed i is

eseac ave developed a umbe o pomisig soluios o

ypical issues ad ca seve as a ispiaio o oe busiess

models.

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A busiess evolves ove ime. Eve oug e basic value pop-

osiio may emai e same, pocesses eed o be adaped as

e busiess gows i ode o eable geae eciecy. I is o

always easy o ave all e ecessay esouces o gow iplace a ay oe ime, amely acig, uma esouces, ma-

ke isig ad poduc. te id cape eeoe summaises

pomisig appoaces o developig ese esouces om e

desig pase o e implemeaio ad gow pase. te

ou cape seves as a eeece guide o e boad age o

ogaisaios ad paciioes wi expeise i aeas agig

om ace o capaciy buildig o desigig busiess sae-

gies ailoed o low-icome makes.

Figure 7 :

Schematic overview o the business model generator

SALES

PAYMENT

PRODUCTHUMAN

RESOURCES

MARKETINSIGHT

FINANCE

COSTUMERINTERFACE

Cape 2

DEVELOPMENTPROCESS

Cape 3

VALUE PROPOSITION

SUSTAINABLE BUSINESS MODEL

SERVICE

END OFPRODUCT USE


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CusomeIeace

Photo: The Ashden Awards

d.light sales representatives demonstratingthe solar lamp Nova D.Light at a stall inChamieyani, India. They explain the advan-tages o the lamp to convince potentialcustomers o the products benets.

1918 |


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how i woks

Wa mos dieeiaes busiess i low-icome makes om

busiess i moe upscale makes is e ieacio wi e cus-

ome. Limied iasucue, iomal makes, a lack o acial

sevices ad oe cosais icease asacio coss ad

limi e applicabiliy o sadad busiess models. te geeao

eeoe coceaes o busiesses ieaces wi ei cus-

omes. how ca you covice e cusome o you poducsvalue i ey ave eve ead o eewable eegy? how ca you

esue paymes we you cusomes lack access o a bak ac-

cou ad ave limied cas fow? how ca you povide eliable

sevice we ee is o cusome suppo i place? Ad wa

appes wi you poduc a e ed o is lieime? Is i eused,

ecycled o jus ow away?

tis cape ideies e mai cosais busiesses ace i

eac o e ou key cusome ieace aeas sales, payme, se-

vice ad ed o poduc use. I also liss saegies ad cocee

soluios a ave poved successul. Paciioes ca apply

ese ideas o ei ow veues ad use em o ceae a ew

busiess model o impove o a exisig model. te ex wo

pages summaise e geeal pae o calleges ad soluios,

wic is lae applied o eac eleme i moe deail.

Fo eac eleme o ei busiess model, eades o e geea-

o sould ask emselves:

Wa cosais do we ace wi ou busiess?

Wic o e soluios ca we apply o ou busiess, ad wic

soluios addess e cosais mos eecively?

Sep by sep, uses ca desig a cusome ieace able o deal

wi ypical issues i low-icome makes. te ou seps evolve

aoud e ollowig mai quesios:

hOW DO WE DO BUSInESS WIthLOW-InCOME CUStOMErS?

Interactions with customers are ocused on our main areas:

sales, payments, services and dealing with products at the end o their use.

Companies oten struggle with challenges in the market environment, in particular with regard to inormation about the market,

regulatory burdens or complications, shortcomings in physical inrastructure, gaps in customers knowledge and skills, and the

limited access to nancial services.

The generic strategies to address these problems include engaging in market research, providing customer service, ensuring local

representation, educating stakeholders and nding innovative nancing solutions.

Figure 8

Elements o the customer interace

Souce: Edeva

SALES

PAYMENT

how ca we commuicae e value o ou

poduc o e cusome?

Wo sells ou poduc, wee ad ow?

how ca ou cusomes aod e poduc?

how ca ou cusomes bes pay o

e poduc?

how ca we povide eliable sevice

a low cos?

how ca we avoid wase ad polluio?

how ca we eace e

value o used poducs?

SERVICE

END OFPRODUCT USE


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C U S t O M E r I n t E r F A C E

Geeal Busiesses ace udameal calleges i low-icome makes ad adop boad

saegies i acklig ese poblems. tese geeal calleges ad soluios ae

evisied ougou e secios o eac o e ou ieace elemes sales,

paymes, sevice ad e ed o poduc use. Udesadig is pae ca elp

paciioes develop ei ow iovaive soluios.16

Market inrmatin

Cusome pole iomaio is limied (om e pespecive o peeeces,

cicumsaces ad spedig paes, o example).

Eegy makes ae igly egulaed. Make eviomes ad egulaoy

pocesses oe lack aspaecy, especially o oeig eas.

Reulatry envirnment

People lack legal lad iles, leadig o coac ad cedi issues.

Due o pevious bad expeieces ad a lack o omal poecio,

cusomes oe lack us i ewcomes.Coacs wi cusomes o coiuous sevice ae dicul o eoce

oug omal pocesses.

A lack o secuiy iceases e isk o e ad damage o equipme.

Gaiig ocial appoval o isallaios (seig up small gid sysems,

o example) ca ake cosideable amous o ime.

Physical inrastructure

People i emoe aeas ae ad o eac, wic iceases e cos o isallig

ad maiaiig equipme (due o e lack o oads o poe coecios,

o example).has aual eviomes ca cause damage o equipme.

Skills and knwlede

Compaies d i dicul o ecui ad eai skilled sa.

Cosumes lack awaeess o poducs ad sevices ad ei bees.

Cusomes lack e skills o isall, maiai o epai equipme.

Access t fnancial services

Cusomes d i dicul o obai cedi o ace ig up-o coss.

Cusomes do o ave access o bak accous oug wic o

make paymes.

Cha

llen

g

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Cnduct market research

Coduc make eseac wi sadad ad specialised meods a di-

ee imes o e day ad yea (usig ools suc as ome says,

eld ips, ec.).

tes e poduc wi cusomes.

Build pocesses eablig coiuous eedback om cusomes ad sa.

Prvide custmer service

regulaly visi cusomes o maieace.

Povide waaies (ad be sue a you ae able o ull e ems).

Ogaise payme collecio so a i is coveie o cusomes.

Ensure lcal representatin

Esue local epeseaio oug exisig local soes, e compays

ow subsidiaies o acisees.

Povide a local supply o spae pas ad uels.

Divide sevice esposibiliies bewee epeseaives ad e com-

pays ow sa.

Educate stakehlders

Educae ad ai cusomes, e compays ow sa ad

local epeseaives.

raise public awaeess.

Ivolve ad collaboae wi local auoiies.

Find innvative fnancin slutins

Adjus payme soluios o cusomes acial siuaios.

Povide cusomes wi access o micocedi.Faciliae icome geeaio.

Apply o goveme subsidies.

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SalesI ode o sell eegy poducs o low-icome ouseolds, sales sa mus be ad-

ep a udesadig cusome eeds ad cosais, ad able o explai e use

ad bees o e poduc. Busiesses mus ave e capaciy o eac ou ad

coac wi cusomes, wic ivolves buildig cusome kowledge ad sales

caels. teeoe, ey oe wok wi local commuiies ad ei auoiies

as well as ogaisaios a ave used elaiosips wi e age goup.

Limited understandin custmer preerencesI e ealy pases o low-icome make ey, busiesses oe lack kowledge

abou e age goup. Iomaio abou issues suc as cusome peeeces,

use poles ad payme baies ae o eadily available oug coveio-

al esouces. reseac isiuios ad cosulacies able o delive is kid o

iomaio o low-icome makes ae ae. Poducs ae likely o ail i ey ae

o waed, eeded o cosideed appopiae.

Lack leal title

People wi low icomes i developig couies oe do o ave e legal ile

o ei omes. Fo povides, e absece o a omal ceicaio o owesip

makes i dicul o sig coacs, especially o gid coecios. A e same

ime, low-icome people ae esia o ives cosideably i ei omes o

plo o lad i e duaio o ei eacy is uclea. As a esul, eie egios

may be excluded om e gid, wic is oe e case o slum aeas i ciies.

Inefcient delivery channels

reail ad logisics sevices ae limied i low-icome makes, paiculaly ual

aeas. Some villages may o ave a ceal sop, equiig esides o avel o

e ex village o supplies o sevice. Fo busiesses, poo oad codiios ca

icu coss by makig emoe villages dicul o eac. Buildig disibuio e-

woks is also expesive, bu may also povide oppouiies o collaboaio.

Limited skills amn lcal sta

Local sa mus ave good commuicaio ad egoiaio skills i ode o sell

e poduc eecively. howeve, e available pesoel oe lack e equisie

educaio ad aiig o sell eegy soluios. Lieacy skills may be limied ad

compue o bookkeepig skills eiely abse.

Limited knwlede prducts and use

tage cusomes, wose expeiece is oe limied o adiioal oms o e-

egy supply, ae aely awae o e ucioaliy ad compaaive bees o a

sola lamp, impoved cooksove o o-gid sysem. tey may also o udesad

e advaages o a legal gid coecio, especially i ey ave bee appig

e gid illegally. I some cases, egaive expeieces wi simila poducs i e

pas mig ave geeaed disus.

Ch

allen

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Cnduct market research

Use standard and specialised methods. Make eseac mus be de-

siged wi e age goup i mid.

Test product with customers. Pooype esig ca be coduced duig

makes, ais, commuiy meeigs o diecly a a cusomes ome. A

es sale o aucio o e poduc ca yield iomaio abou e pice

cusomes ae willig o pay.Find specialised support. Bo local ad oeig cambes o commece

ca elp wi iiial make eseac ad esablisig coacs. Expo

agecies ca ogaise busiess ips ad povide advice. Developme

agecies suc as GIz povide udig o easibiliy sudies ad ca acili-

ae excage wi local expes.

Cllabrate with lcal authrities

Engage community leaders. We developig commuiy-level iasuc-

ue suc as mii-gids, wokig wi commuiy leades is a mus. tey ca

ave cosideable impac o e decisios ake by commuiy membes.

Establish alternative contracting processes. tis mig iclude, o ex-

ample, elyig o social pessue mecaisms by aseig esposi-

biliy o payme o e commuiy as a wole. Suc aagemes mus

ave e cose o e appopiae legal auoiies.

Create lcal representatin

Build own representation. Busiesses ca ope ei ow soes o e-

cui local epeseaives. havig diec cool pemis eecive moi-

oig o sa peomace ad sevice qualiy. tis elps build us

wii e commuiy ad esablis a sog bad.

Establish micro-ranchises. By oeig a sadadised busiess model,busiesses ca esablis a ewok o local eepeeus.

Use existing networks. Busiesses ca pae wi exisig local eail

soes, used local nGOs, MFIs o co-opeaives o sell ei poducs.

Train sta and lcal representatives

Develop training programmes. Busiesses develop ei ow sa-

dadised aiig pocesses ad maeial ocused o ecuig asks ad

eque calleges. tese sould be ailoed o local coexs.

Organise on-the-job training. Busiesses also povide pacical aiig

o ew epeseaives i coos o aiees o by avig em ac-compay meos.

Train via partners. taiig sessios ca also be coduced by local im-

plemeaio paes suc as nGOs o local compaies.

Educate taret rup

Use local communication channels. Poses, adio ad eeaime

eves ca povide eecive meas o commuicaio i low-icome e-

viomes.

Educate customers. Local epeseaives ae well-placed o explai co-

acs, e poduc, is use ad maieace o cusomes. Simple ioma-

ioal maeial i e local laguage, wi illusaios, ca guide cusomes.

Organise and train communities. We sevices ae povided o a wole

commuiy, as i e case o mii-gids ad gid coecios, busiesses

oe ogaise e commuiy io use goups ad impleme goup

pocesses.

C ASE STUDY

SKG Sangha, IndiaUsing biogas to oer rural indian

households clean energy alternatives

SKG Saga povides impoved cookig

ecology maily impoved wood

soves ad amily-sied biogas plas

o ual ouseolds i Idia.

Saga sesses eavy commuiy i-

volveme i all sages o ei imple-

meaio ad sales pocess. Awae-

ess o e biogas pogamme is aised

oug couses, eld visis ad adio

boadcass. Bees o is ecol-

ogy ae publicised oug co-odia-

io wi pae nGOs, wo also elp

ideiy poeial uses. SKG Saga

membes iom villages o meeigs,

wic ae eld i e local laguage.

SKG Saga as gow apidly, povid-

ig 92,000 domesic biogas plas i I-

dia ad pilo scemes i Keya, Gaa,

Mali ad Ugada. Is cusome base cu-

ely sads a 1 millio wi a pojec-

ed 5-yea gow o 40,000 ew amilies

beig added eac yea.

SOURCES

www.asdeawads.og

www.skgsaga.og

an

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PaymeLow-icome people ypically coduc may o ei asacios i e iomal

cas ecoomy. tei icomes ae o oly low, bu also iegula ad uceai.

tey oe lack access o bak accous o cedi. tis ceaes calleges i collec-

ig paymes, especially i e case o egula ees ad big up-o ivesmes.

Busiesses ca ease cusomes payme diculies by collecig ees locally, al-

lowig fexibiliy ad coecig o uisig cusomes wi micocedi. help-

ig membes o e age goup geeae icome also elps em mee payme

obligaios. Busiesses ca also geeae eveues om oe souces.

Ardability

Access o eegy ca icease peoples poduciviy. Bu ealiig is poeial

equies a oe codiios also be me, suc as e availabiliy o maciey

o access o makes o oes poducs. Wee ese codiios ae o i place,

e eu o ivesme associaed wi bee eegy access may simply be

oo small, makig e poduc uaodable o simply uaacive o e cus-

ome. I e pomise o iceased icome ails o maeialise, people may be

uwillig ad uable o pay.

Calculaios o wa people sould be able o aod ae oe based o ei

cue eegy coss ad wa ey would be able o save by swicig o e

ew eegy souce. I ealiy, e ew eegy souces coveiece oe leads

people o cosume moe eegy, ad may coiue o buy uel i addiio.

Liquidity

Up-o expeses o equipme ivesmes, as o a sola ome sysem, ca

be ig. Eve i e eu o ivesme jusies e ivesmes cos (plus

some iees), low-icome cusomes oe lack sucie savigs o access o

cedi a a easoable cos.

Enrcement payment

te slums ad villages wee mos low-icome people live ypically lack access

o e saes omal eoceme mecaisms. Eocig a coac by eso-

ig o legal mecaisms suc as cous mig ake yeas, could icease e isk

o bibey ad would i ay case be uaodable. I addiio, bak accous

a aciliae paymes via auomaic deducios ae aely available i ese

coexs. Isead, people ely o iomal mecaisms buil o pesoal ela-

iosips ad social ewoks o ogaise coac eoceme ad paymes.

tese may o be easily accessible o oeig eas.

Lack understandin

Cusomes oe d i dicul o udesad cos sucues, especially wi e-

gad o payme plas. Wee cusomes ave peviously apped e gid illegally,

wiou payig, ey oe ail o see wy ey sould pay o a legal coecio.

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Cllect payments lcally

Task local representatives with collecting payments. regula visis by

epeseaives o e cusomes ouse make payme moe cove-

ie, ad eables equipme o be maiaied.

Build on existing social structures. Micocedi goups, ame co-ope-

aives, egula makes, o oe social sucues ad pocesses wee

acial asacios ae ogaised povide coveie payme occa-sios o bo e cusome ad e compay.

Make the community responsible or the collection o payments. Gid o

mii-gid coecios ae oe isalled wi a collecive mee. A local

epeseaive is esposible o collecig e paymes ad o disco-

ecig people wo do o pay.

Custmise payment methds

Enable fexible payment schedules. Adjusig e payme scedule

o cusomes cas fows ca make i cosideably easie o pay. Fo ex-

ample, ames mig pee o pay e majoiy o wa ey owe ae

e aves. Povidig fexibiliy i payme scedules ad allowig odelays ca also elp.

Oer pre-paid cards or grid connections. Pe-paid cads eable fex-

ibiliy o e cusome, wile elimiaig acial isk o e busiess.

Small amous make pucasig cedi aodable eve o pooe cus-

omes. I addiio, pe-paid cads ca be easily combied wi subsidies.

Fo example, cusomes wii ceai icome segmes ca eceive a ba-

sic amou o eleciciy pe mo oug a sae subsidy ad pucase

e es as equied.

Cnnect custmers t micrcredit

Forge links to local MFIs. Mos eegy compaies wok wi exisig mi-

coace povides i wa as bee called e wo-aded model:

te eegy compay adles e ecical aspecs ad e MFI e a-

cial aspecs o e coac.

Provide micronance services. I e oe-aded appoac, e eegy

povide also acs as a micocedi lede. Aleaively, exisig MFIs ca

add eegy sevices o ei ow poolio.

Establish additinal revenue streams

Seek subsidies. Subsidies ae a egula eaue i eegy makes. Fo

eegy povisio, wo mai ypes ae used. Subsidies o isallaio payo eac device isalled o eac ouseold coeced o e gid, us

educig e ig up-o coss o gaiig access o eegy. Subsidies

o use ae mosly see i e case o gid coecios, deayig e cos

o eac ui o eegy disibued.

Register or carbon credits. te cabo make oes oppouiies o e-

ewable eegy ad eegy eciecy pojecs o bee om e sale o ca-

bo cedis. te egisaio pocess ca be legy ad cosly, oweve, so

coss ad bees sould be weiged ciically beoe eeig e pocess.

Intrduce incme-eneratin slutins

Provide productive inputs suc as maciey o local cas, seeds ad live-

sock, o iigaio sysems as pa o e busiess poduc oeig.

Create new market opportunities by iiiaig ew local aciviies suc

as sewig o ood pocessig, o eablig access o makes o agicul-

ual poducs o abicaed goods.

C ASE STUDY

La Electricidad de Caracas (EDC),Venezuela

Transorming electricity pirates into

legitimate customersEDC povides omal, sae eleciciy

sevices o low-icome secos i Ve-

euela, wee slum esides pevi-

ously apped lies o access eleciciy

illegally.

EDC uses wo kids o payme e-

oceme sysems. Cusomes wo

ca aod a idividual coecio use

pepaid powe cads a ae simila o

ose used o mobile poe sevices.

Lowe-icome cusomes may make use

o collecive mees. Goups o peopleae made esposible o ese, allow-

ig esides o co-odiae payme

ad discoec ose wo do o pay.

Payme delays o e pooes cusom-

es wi iegula icomes ae pemi-

ed beoe sevice is discoeced.

te pojec was implemeed i 2000.

Fom 2004 o 2006, omal elecic se-

vice use coveage iceased om

110,000 o 460,000. Elecical losses due

o e also deceased om 18% o 15%

o oal use i is ime ame. EDC assice isalled udeds o mees a

bee ousads o cusomes.

SOURCES

WBCSD (2008)

Connecting Low-Income Consumers: AES in Venezuela

www.laedc.com.ve

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SeviceBo e isallaio o equipme ad e ogoig povisio o eegy eed o

be eliable. We equipme beaks o e coecio ails, immediae suppo is

equied. howeve, povidig as ad ig-qualiy sevice ca be cosly, especially

i ual aeas. Wee sevice ails em o is oo expesive, cusomes oe y o

x poblems o ei ow, someimes doig moe am a good. to esue eli-

able sevice, busiesses povide egula maieace visis. to make ese visis e-

ecive, ey ai local epeseaives, supply spae pas locally, deskill poduc

isallaio ad maieace, ad educae cusomes.

Hih cst service prvisin

Paiculaly i ual aeas, poo oads ad aspoaio sysems make cus-

ome visis expesive. A ip wi a o-oad veicle o x a boke appliace

may ake a wole day ad be cosly i ems o sa ime ad uel. I addiio,

maiaiig skilled sa ca be expesive.

Availability spare parts

Keepig spae pas a cusome pemises o a a eaby sie ca be expesive.

havig lage amous o maeial soed wiou use ceaes dead capial.

Deliveig ese pas ca also be cosly, especially i ual aeas, due o poo

logisics iasucue.

Envirnmental damae

Poducs ae oe exposed o as eviomeal codiios, icludig ex-

eme weae codiios ad e icusio o aimals. tis iceases e e-

quecy o damage. Sola paels ca beak i a som, biodigeses may sue

om exeme empeaue fucuaios ad wies ae oe eae away by o-des. Poducs ae subjec o damage idoos as well, as slum ad village ous-

ig is oe iadequae, wiou pope isulaio o poecio om vemi.

Lack custmer skills

Cusomes someimes y o avoid e coss o isallaio o sevice by isall-

ig, maiaiig ad epaiig e poduc emselves. Wiou pope aiig

ad iomaio, ey oe damage e poduc i e pocess.

Unskilled lcal representatives

te coe o ay sevice is e people povidig i. Bu local epeseaives oe

lack e ecical capabiliies o povide maieace ad epai sevices. I

cases wee busiesses ely o sel-employed ages o e sa o oe o-

gaisaios, esuig adequae skills ca be a callege.

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Prvide reular maintenance visits

Visit customers at dened intervals. Cusomes wa o kow we o

expec a maieace visi ad will ely o i. regula visis aciliae ac-

cess o spae pas, educe addiioal sevice coss ad ceae us i evalue o e poduc. Sa ca esue e pope adlig ad ucio-

ig o equipme.

Provide warranties including service. te cos o sevice povisio du-

ig waay ime (o eve beyod) sould be icluded i e egula

poduc o sevice pice i ode o simpliy e cos sucue o cusom-

es ad o avoid uiomed epais by uses.

Train lcal representatives t perrm cmmn service tasks

Provide training directly. taiig a goup o aies wo ca e pass

o ei skills ca elp ceae e equied capaciies.Train through partners suc as acisees, nGOs, o MFIs, i cases wee

ese paes ae esposible o local epeseaives. howeve, ai-

ig sessios sould sill be sadadised ad ely o aiig maeial.

Divide responsibilities i a cascade o sevice asks. Simple asks ca

be caied ou by e cusomes emselves, moe complex oes by local

sa, ad uusual oes by specialiss.

Supply spare parts lcally

Provide basic spare parts in advance. Basic spae pas sould be i sock

wi all local epeseaives o o pas a eed o be equely

eplaced soed diecly wi e cusomes so a commo poblems

ca be xed quickly.

Use a limited variety o parts. Usig ew ad sadadised pas i pod-

ucs weeve possible makes i easie o maiai a supply o spae

pas.

Deskill prduct installatin and maintenance

Deskill processes. Cusomes ad local epeseaives oe lack eci-

cal skills. Makig poducs simple o adle allows moe asks o be pe-

omed locally ad avoids damage. Descipios o sadad soluios o

e mos commo poblems sould be povided.Adjust products. Poducs sould be desiged i a way a is sae o as-

sembly by cusomes o sa wi lile aiig. to avoid damage, pod-

ucs sould be desiged o wisad commo eviomeal wea ad

ea. Ideally, e mos commo issues i poduc maieace ca eve-

ually be avoided by updaig e poduc o efec pas expeieces.

Educate custmers

Train customers ow o use ad maiai e equipme we ey e-

ceive i. We cusomes kow ow o adle e equipme popely,

damage ca be avoided, sevice coss educed ad e eliabiliy o e

equipme impoved.

Provide customers with reerence material a explais adlig ad

maieace ad oulies commo issues ad soluios. Guidelies

sould be simple, ad i e local laguage, ad make use o illusaios.

C ASE STUDY

Temasol, Morocco

For Moroccans living in rural areas,

good service has a positive impact

temasol povides poovolaic kis o

emoe ual ouseolds i Moocco.

Cusomes eceive key sevices. regio-al baces ave ee o seve ages

eac: a supeviso ad wo o six ec-

icias, wo make use o cas o collec

ees ad aswe quesios a weekly

makes. tese ecicias also ull

coacual obligaios suc as xig

ecical poblems wii 48 ous ad

visiig cusomes a leas oce a yea.

Cusomes sig a sevice ageeme

ad pay a oe-ime coecio ee

beoe isallaio ad a moly ee

eeae. Fees ae depede o e

level o sevice seleced. Upo isal-

laio, cusomes ae give ads-o

aiig o ow o use e equipme.

Local baces eceive spae pas e-

quied by cusomes o esue pope

maieace. temasol povides a ull

guaaee o sevice o 10 yeas.

temasol coeced 26,000 ew cusom-

es (182,000 people) bewee 2002 ad

2008. te compay also scoes well i

saisacio suveys, wi cusomes

sayig e sevice povided as ad a

posiive eec o ei qualiy o lie.

SOURCES

Baim Allall (2011)

TEMASOL: Providing Energy Access to Remote Rural

Households in Morocco.

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I ode o ceae a susaiable poduc ad avoid coibuig o eviomeal

degadaio, busiesses mus coside wa appes we ei poducs useul

lie comes o a ed, as well as ow cusomes deal wi i aewads. May slums

ad ual villages wee low-icome people live lack mode wase maageme

sysems, wic meas a o-degadable wase quickly becomes a poblem. Ba-

eies, e oxic coes o wic ca cause eal issues, ae a paicula co-

ce. Busiesses ca avoid damagig esides eal ad e eviome, ad

ca eve ceae ecoomic value, by usig local uels ad eviomeally iedly

maeials, maiaiig ad eusig equipme, ad oeig ecyclig sevices.

Additinal waste assciated with uel

Buyig uel (e.g., keosee, coal) ca lead o addiioal wase om packagig.

Plasic packagig does o degade ad us subjecs e sees ad evio-

me aoud low-icome commuiies o log-em polluio i o disposed

o popely.

Dispsal prducts

Poducs ae disposed o we ey ae boke ad cao be xed, o we

ey ae eplaced i a sysem upgade. Fo example, we a commuiy gescoeced o e elecical gid, all o-gid soluios ca become supefuous.

Poduc disposal ca ceae addiioal wase.

Lack waste manaement systems

Due o a lack o pope wase maageme sysems, poducs ae oe dis-

posed o usaely, leadig o eal issues ad eviomeal polluio. Ba-

eies ae a paicula coce because ei oxic coes ca coamiae

goudwae, leadig i u o eal poblems o aimals ad umas. Bo-

ke bulbs o poovolaic (PV) modules also eed o be adled wi cae.

Ed o

poduc use

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Use lcal uels

Use local waste as biomass, suc as saw ad usk om ceeal poduc-

io, o ouseold wase o biodigeses. tis also ca save coss o e

cusome. I addiio, biodigesig avoids cabo emissios.

Produce uel locally, om souces suc as jaopa, palm o oe olei-

eous plas, o om cookig a. Fiewood ad cacoal o impoved

cooksoves ca also be poduced locally. Local poducio ceaes a ew

icome seam o commuiies. I also avoids cabo emissios associ-

aed wi packagig ad aspoaio. Esue a local uel poduc-

io does cofic wi ood poducio ad avoid agiculual moo-coppig.

Use envirnmentally riendly materials

Replace harmul material. hamul, polluig, esouce- ad eegy-i-

esive maeials ca be eplaced by moe eviomeally iedly oes.

te cos o is maeial is someimes ige. Bu ig-qualiy maeial

ca also exed e lieime o e poduc, makig e ige up-o

ivesme wowile o cusomes.

Maintain and reuse equipment

Prolong product lietime by povidig waaies ad egula maie-

ace sevice, ad esuig e availabiliy o spae pas.

Reuse broken or unused equipment. I low-icome makes, igs o

value ae eused as a mae o couse. tis ca be aciliaed by eablig

e simple ad sae disassembly o poducs. Usig a small vaiey o

pas ad sadadised compoes wee possible makes e excage

ad ade o pas easie. tis also iceases e local availabiliy o

spae pas. I addiio, busiesses ca ogaise a make o used pas

oug ei local sevice povides o oe meas.

Provide training on reuse. I ode o eable local sevice povides o

euse, dismale ad epai pas, aiig may be equied.

Recyclin

Establish a recycling service. Local sevice povides ca collec boke

equipme o pas, especially baeies, a local collecio pois o du-

ig egula maieace visis.

Collaborate with external recycling services. Compaies ca co-opeae

wi oe ogaisaios a collec expied baeies o oe valuable

maeial. tese will oe pay cusomes o e busiess o e scap

value.

C ASE STUDY

Sunlabob, Laos

Clean energy or Laos

Sulabob is a commecial compay

based i Laos a povides eegy se-

vices o emoe aeas o coeced o

e public gid. A combiaio o eegy

souces biouels, ydo ubies ad

sola paels is used o povide ese

sevices. Sulabob pays special ae-

io o e susaiabiliy o is sevice.

Oe suc example is e eabiliaioo boke ydopowe plas io uc-

ioig ybid gids.

Maieace o sola paels is also im-

poa. I ode o polog e equip-

mes lie ad impove eciecy, ese

mus be kep clea ad ee o sadow.

I a cicui is boke a ay poi, e

eie ui ceases o ucio. Sula-

bob addessed is issue oug e

aiig o local ecicias. I a piece

is oo dicul o epai i e eld, e

local acisee will aemp o x i oeplace e boke compoe. te cus-

ome is o caged o e ime ey

sped wiou powe, ad i e aul

was caused oug misuse, e pob-

lem is clealy explaied o e cusome

o avoid uue issues.

Sulabobs devices make use o e-

cageable baeies. A cage cool-

le is uilised o esue a e baey

is o ovecaged. te sevice ewok

maages empy baeies, wic ae e-

ued o ecyclig.SOURCES

Ady Scoee (2007)

Rental o PV Systems Provides Quality Lighting in Remote

Laos Villages

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DevelopmePocess

Poo: te Asde Awads

te rual Eegy Foudaio ais pospec-ive Sola now-eailes i Mooo, Ugada,esuig a ei pesoel ave e skillseeded o sell sola eegy soluios.

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how i woks

te developme pocess cecklis is a ool o pla i advace

e developme o you busiess. Ay busiess mus esue e

availabiliy o ou key esouces a eac sage o is developme:

Product. te poduc be i a sola ome sysem o a gid co-

ecio wi ogoig sevice povisio is a e ea o e

busiess. Poducs sould do moe a simply ull cusom-es cue expecaios egadig qualiy, bees ad pice.

tey mus also allow o busiess gow, so a poducio

ca keep up wi demad.

Market insight. A ooug gasp o cusomes peeeces,

budges, cosais ad poduc use is esseial o e suc-

cessul developme o a busiess, as is udesadig e

compeiio ad udelyig make codiios, icludig po-

eial poliical iceives.

Human resources. People execue busiess pocesses. tey

eed e ig skills ad aiig, bu also e moivaio, o beeecive ad ecie. tis elaes bo o e busiess ow

sa ad o busiess paes.

Finance. Fuds sucie o ace ivesmes ad opeaig

expeses mus be available. Wile opeaig expeses sould

be coveed by eveues, a leas ae e sa-up pase, ives-

mes oe equie ouside udig.

te developme o a busiess ca be divided io ee eleme-

ay pases: desig, implemeaio ad gow. te ca below

depics e mai aciviies i eac pase. Fo eac pase, a di-

ee se o esouces will be equied. Fo example, a busiess

mig equie a pooype o e poduc duig e desig pase,

bu egage i mass poducio duig e gow pase. tee-

oe, e calleges will also die i eac sage.

noe a ee ae oly a ew busiesses a ave maaged

o ee e gow pase ad gai sigica scale. hece, e

obsevaios om e case sudies icluded i is epo, wic

wee suppoed by expe ieviews, ae soge i aalysig

e desig ad implemeaio pases. Fue eseac ad

above all a lage umbe o successul busiesses will be e-

quied o lea moe abou e gow pase.

As a use o is cecklis, i may be elpul o go oug eac

esouce ad ideiy e calleges you ae likely o ace i eac

sage. You ca also exploe e appoaces a seem mos po-misig o you busiess. Wokig oug e vaious esouces

ad sages will elp you oesee calleges ad pla o eecive

soluios!

WhAt rESOUrCES ArE rEQUIrEDtO DEVELOP A BUSInESS?

A business needs to continually develop its resource base, rom the design phase through implementation to growth.

Four basic types o resources are essential or any energy business: the product itsel, market insight,

human resources and nance.

Promising approaches can help companies manage these resources successully.

DESIGN GROWTHIMPLEMENTATION

Expad e busiess model

sysemaically

replicae i moe locaios

Impleme e busiess

model i oe locaio

Acieve acial susaiabliliy

Udesad e make

Dee e busiess model,

icludig poduc ad pocesses

Figure 9

Stages o business development


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D E V E L O P M E n t P r O C E S S

PoducI ode o oe a aacive poduc, busiesses mus udesad cusome eeds

ad peeeces. A e same ime, ey eed o develop poducio pocesses a

guaaee good qualiy wile coiuously bigig cos pe ui dow ove ime.

Coiuous impoveme o e poducio side eables busiesses o keep pi-

ces low ad icease eveues. A umbe o specialised isiuios ca elp wi

poduc desig.

Descriptin

Desig poducs a mee cusome peeeces, wi good qualiy ad a a

aodable pice.

Challenes

Poducs ae oe developed pimaily om a ecical pespecive, wiou

sucie cosideaio o culual paes ad cosume peeeces.

Buildig pooypes is expesive. Pooype esig ca equie may iea-

ios, us iceasig e cos.

Prmisin appraches

Desig e poduc o esue low coss wile efecig local peeeces ad

e local eviome. Base poduc developme eavily o make eseac.

Ivolve e age goup i e poduc desig, oug meas suc as idea

compeiios o ocus goups i wic uses ca desig ei ow models.

Ivolve sudes om desig scools o elp wi e iiial cocep ad po-

oype developme.

tes pooypes wi e age goup. Sow e poduc a makes. Aucio i

o ouseolds o elp udesad cosumes willigess o pay.

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Descriptin

Sadadise poducs ad pocesses o mass

poducio.

Challenes

Capuig ecoomies o scale.

hig qualiy sadads mus be maiaied eve

wi lage poducio us.

Prmisin appraches

Sadadise e poduc o mass poducio.

reduce e vaiey o pas o aciliae poduc

upgades ad spae pas maageme.

Mauacue aboad. Wokig wi ig-qualiy

poduces i oe developig couies ca keepcoss low ad avoid poibiive ime ivesmes

i buildig poducio ad qualiy maageme

capaciies wee ey do ye exis. Maiai a

posiive oopi by makig sue poduces adee

o uma igs ad good labou sadads, ad

poduce i a eviomeally susaiable way.

Descriptin

Adjus poducs accodig o expeiece ad

eedback.

Souce locally o eaced impac.

Challenes

Poducig a compaaively small umbe o uis

a a low pice ca be dicul.

Cagig esablised poducio pocedues is

always cosly.

Prmisin appraches

Poduce locally, wokig wi local woksops

o small poduces wee local poducio coss,

qualiy ad impo ais allow. Someimes,allowig local poduces o adap e poduc is

e bes meas o poduc developme ad

make success.

Impove poducs based o cusome eedback.

C ASE STUDY

Bosch und Siemens HausgerteGmbH (BSH), Philippines

Getting it right: improving products

through redesign

BSh is oe o e wolds oemos mau-

acues o ome appliaces. te compa-

y s ioduced is susaiable, ecie

pla-oil-based cooksove i e Pilip-

pies. Fom 2004 o 2006, BSh coduced

eld ess o e poduc ivolvig ove

100 amilies i uba ad ual aeas, us-

ig cocou oil as uel. BSh is cosaly

seekig o impove e use-iedliess,

cos ad eciecy o is cooke, ad used

eld esig as e basis o seveal modi-

caios a eveually icluded wo com-

plee desig oveauls. Fo isace, es-

ig i Idoesia evealed a palm oil was

igly poblemaic due o is ig melig

poi ad viscosiy, so BSh sudied die-

e bleds o oils o impove usabiliy. Cas-

o oil ad jaopa, a o-edible seed a

gows o magial lad, wee ulimaely

deemied ideal o use i e cookes.

BSh poducs ae well acceped amogs

ial goups. A ew, impoved vesio o e

poduc desiged o mass poducio was

lauced i May 2010 i Idoesia. tis

iiiaive, wic as pojecs i Idoesia,

Idia, Eiopia ad Cosa rica, as sold ap-

poximaely 1,500 uis o dae.

SOURCES

http://stoves.bioenergylists.org/bshprotosupdate

implementation growth

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Descriptin

Impleme coiuous impoveme pocesses o

suppo e gow o e busiess.

Ideiy ew makes o eplicae ealie successes.

Challenes

Feedback pocesses ca be quie ime cosumig.

As e busiess gows, sysemaic iomaio-

gaeig pocesses become iceasigly eleva.

Busiesses may jump oo asily om success i

oe make o eplicaio i aoe. Evey couy

is diee ad equies is ow caeul make

eseac.

Prmisin appraches

Coduc egula suveys ad collec peomace

daa. tese suveys ca be caied ou by local pa-

es suc as nGOs, acisees, local govemes

o eseac isiuios.

Coduc make sudies i ew makes. Local ui-

vesiies ad eseac cees, ieaioal nGOs

ad oudaios ca suppo make eseac ad

easibiliy sudies.

Descriptin

Lea om opeaioal expeieces ad eedback

pocesses i ode o impove appoaces o

implemeaio.

Challenes

Ae e pilo, busiesses ed o ocus o imple-

meig wa as woked. As a esul, sysemaic

iomaio gaeig someimes loses is pioiy.

Oce a cocep as bee poved, i becomes ade

o callege oes ow assumpios.

Cages i e eviome ca udameally

ale e oudaios o e busiess.

Prmisin appraches

Gae ad icopoae eedback om cusomes,

sa ad paes o a sysemaic ad ogoig

basis. Local epeseaives ca be aied o ask

o eedback duig egula maieace visis, o

aalyse e iomaio obaied ad o povide

is daa o e makeig depame. nGOs ad

oudaios ca suppo make eseac ad

easibiliy sudies.

Use exisig ewoks o gai iside kowledge

o cages i e busiess eviome. Busiess

associaios ad ei eves ae good oppoui-

ies o lea abou cages i e poliical evi-

ome. Ieaioal coeeces may eveal

oppouiies ad eas based o acos suc as

doo developme policies.

C ASE STUDY

d.light design, Arica & Asia

Enlightened product design based on

customer knowledge

d.lig sives o eplace keosee la-

es wi sola lamps, povidig ual

ad poo ouseolds wi clea, sae ad

big lig.

I is ealy sages o poduc developme,

d.lig addessed e callege o ude-

sadig ei cusomes peeeces

by coducig eld eseac i villages

ougou Sou ad Sou-Eas Asia, ad

lae also i Eas ad Wes Aica. te pod-

uc desig eam spe udeds o ous

i villages speakig o cusomes ad ob-

sevig ei lives, deemied o povide

e cusomes wi wa ey eeded

ad waed wiou beig ifueced by

pevious assumpios. tis eseac ide-

ied obvious eeds, suc as a lig big

eoug o sudyig ad ig-ime i-

come geeaig aciviies, as well as less

obvious eeds. Fo isace, cusomes

like avig muliple lig seigs, as is

allows em o opimise ei eegy us-

age based o ei eeds. A mobile poe

cagig eaue was also i ig demad.

d.lig esed evolvig pooypes o so-

la-poweed LED lamps, wic eceived

posiive eedback ae mos o desig

eeme. d.lig lauced is s sola

laes i 2008, ad coiued o coduc

eld eseac i villages i Aica ad Asia

seekig coiual impoveme o ei

poducs. Sice a ime, d.lig as e-

leased ew, moe aodable models wi

addiioal eaues suc as mobile poe

cagig.

d.lig as gow quickly: tey ave sold

ove 600,000 sola lamps, ad ave allowed

ouseolds a moe cosise lig ad e-

egy supply.

SOURCES

www.dlightdesign.com,

www.extreme.stanord.edu/success_stories/dlight_design.

html


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ig


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huma esoucesEmployee skills ad moivaed people ogee om e basis o ay successul

busiess. I low-icome makes, skills ae oe i so supply. Busiesses ave

o povide aiig ad d ways o eai aied sa, eve wee codiios

may be as ad uaacive o skilled people. People also eed o be moivaed

o coibue o busiess objecives, bo iisically by esuig ey ude-

sad ad believe i e ogaisaios missio, ad exisically oug acial

ad oe bees.

Descriptin

We desigig e busiess pocesses, busiesses eed o ake io accou

e skills available om locally ied sa.

Duig e busiess developme pase, ouside expes ca povide ciical

ideas ad quesios.

Challenes

Skilled sa membes ae oe ad o d, especially i ual aeas.

Oce skilled sa membes ae locaed, ey ca be expesive o ie

ad eai.

Prmisin appraches

Ciically assess e availabiliy o poeial local sa i e age commui-

ies. Lea abou uma esouce issues om oe busiesses.

Desig pocesses ad ouies based o e availabiliy o local capaciies.

Compaies eed o base ei job descipios ad aiig plas o e skillsad aiig poeial aleady possessed by poeial local employees.

Dee eal ad saey sadads wic ae i lie wi e compays sa-

dads i oe makes wiou limiig busiess developme oppouiies.

Develop a aiig pla om e sa.

Wok wi uivesiy sudes o ellows om pogammes suc as Acume o

IDEO.

Aac suppo om expeieced maages lookig o ew expeieces ad a

way o coibue o social objecives, peaps duig a sabbaical om oe

employme.

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Descriptin

Sadadise ad ousouce compay aciviies.

Challeneste qualiy o ousouced sevices ca be dicul

o cool.

Sa wi valuable expeiece is impoa ad

ad o eai.

Prmisin appraches

Oe moe subsaial moeay ad o-moe-

ay bees (kidegaes, eal isuace) as

iducemes o eai sa.

Povide coacig o sa membes, eablig eacpeso o gow oug pesoal caee develop-

me plaig.

Sadadise uma esouces pocesses ad e-

able suc depames o coiuously lea ad

impove.

Develop mico-acisig models o eable col-

laboaio wi small-scale eepeeus. Sel-

employed sa as a clea moivaio o coibue

o a busiess commecial success wile wokig

idepedely.

take o addiioal paes (e.g., i oe couies)

o eplicae e busiess elsewee. Selec us-woy paes ad moio ei qualiy.

Ioduce success idicaos ad cool em

pesoally. Measue employee peomace o e

basis o peviously deed milesoes.

Descriptin

nuue ad develop e skills o e compays

sa ad oe local epeseaives.

ChallenesEecive aiig pocesses mus be desiged ad

ogaised.

Employig qualied sa a aodable aes ca be

dicul.

Prmisin appraches

Develop sadadised aiig pocedues. tis

ivolves e omal deiio o aiig coes

ad e ceaio o documeaio i e om o

ceckliss ad oe aiig maeial. taiig cabe povided diecly by you ow ogaisaio, by

ouside aies o oug pae ogaisaios.

Ceck e eeciveess o aiig oug eed-

back pocesses ad qualiy evaluaios.

Povide clea job descipios ad caee pas.

Make you missio, visio ad values explici o

sa ad local compay epeseaives.

Selec people a sae you values. I ieviews,

udesad peoples moivaio o wok wi you

busiess, suc as by cosideig ei pevious

caee coices.

Empowe local pesoel. Usig maageme sa

daw om e aioal make bes esues a

amiliaiy wi local coexs ad makes.

C ASE STUDY

lectricit de France SA (EDF), Mali

Not just clients: engaging locals as

employees and managers

I 1999 ad 2001, Faces EDF ad is pa-

es toal ad nuo ceaed wo ual e-

egy sevices compaies (rESCOs) i ode

o povide eleciciy based o sola ome

sysems o small low-volage village mico-

ewoks o aeas i ual Mali (ea Kayes

ad Kouiala).

te rESCOs wee desiged o avou local

owesip. All employees ae Malia, ad

aioal ad local auoiies ae ivolved.

I ode o guaaee local owesip, EDF

gadually aseed is saes o Malia

compaies. EDF also oeed sog sup-

po i e om o aiig pogammes

ad maageme assisace.

te s rESCO employs 51 Malias (i-

cludig e dieco) ad povides eegy

o 53,400 people i 14 villages. te secod

is compised o 15 decealised oces

ad 34 employees; i supplies eegy o

49,500 people. Maageme is i e ads

o a Malia dieco, wo is suppoed by

wo vice diecos.

SOURCES

Cisope n. Suo (2007)

The Role o the Utilities Sector in Expanding Economic Op-

portunity. Ecoomic Oppouiy Seies, vol. 24. Cambidge:

havad Uivesiy.


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FiaceFiacig e sa-up ad expasio o a eegy busiess is callegig. howev-

e, a umbe o ogaisaios ae oday suppoig eepise-based appoaces

o eegy povisio o low-icome ouseolds. Iclusive eegy busiesses ca

access uds i e om o gas, pies, equiy ad deb udig, ad bee

om peeeial codiios.

Descriptin

Fudig o e developme o e cocep ad e pooype, as well as o

pilo esig ad poo o cocep.

Challenes

Because ew busiesses do o ave a poo o cocep, uceaiy abou

model viabiliy ad eu o ivesme is ig.risk capial o busiesses a opeae ude e callegig codiios o

low-icome makes is scace. Eepises a aim o solve a social issue bu

cao pomise compeiive eus d i ad o covice ivesos.

Loas ae expesive ad ad o obai o a commecial basis we e isk o

ailue is ig, especially o sa-up compaies.

Prmisin appraches

For start-ups and SMEs:

Paicipae i busiess pla compeiios o ge exposue o ad eedback

om ivesos, gai cedibiliy ad poeially wi sa-up moey.

Wi a sa-up ga. Some ogaisaios povide ull gas, wile oes po-

vide oly paial udig o wa a poio o e moey back.

Aac seed udig om social ad pivae ivesos.

Joi a icubaio space. tese spaces o oly povide ee o aodable wok

space, bu i may cases also oe ewokig ad coacig oppouiies.

For large corporations:

Sa pojecs i e copoae social esposibiliy (CSr) o eseac ad devel-

opme (r&D) depames, i ode o ceae e acial ad ogaisaioal

fexibiliy o ial ad eo.

Build a ybid busiess case a ceaes bees o vaious depamessuc as uma esouces, makeig ad r&D, ad ask o moeay o i-kid

coibuios. Fo example, e uma esouces depame ca use ew

busiess developme iiiaives o leadesip aiig.

Pae wi local busiesses able o soulde some o e isk i

implemeaio.

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Descriptin

Aac ivesme o expasio ad eplicaio.

Challenes

I may cases, e (acial) eu o ivesme

o busiesses i low-icome makes cao com-pee wi a o busiesses i moe esablised

makes.

Poliical uceaiy i some developig couies

limis e availabiliy o lage ivesmes due o

e ig isks o losig a ivesme compleely.

Prmisin appraches

Use ivesme capial povided by developme

baks, suc as ADB, IADB o IFC.

Ideiy local pivae equiy ivesos.Use ogoig subsidies om govemes o elec-

iciy povisio.

Descriptin

Fiace ivesmes o implemeaio ad

ollou.

Challenes

Fudig eeds o be fexible o espod o cages

i e busiess pla, suc as slowed ollou o pod-uc adapaios.

Admiisaive budes associaed wi public

udig, subsidies o social iveso moey ca be

ig.

Local commecial baks ae oe way o po-

jeced eus om eegy busiesses ageig

low-icome cusomes.

Prmisin appraches

Aac addiioal equiy ivesme om spe-cialised ivesos.

Wok i paesip wi ieaioal develop-

me ogaisaios.

regise o cabo cedis ude e compulsoy

o e voluay cabo make.

Use subsidies povided by e goveme o

isallaio o equipme ad gid coecios.

C ASE STUDY

Selco, India

Financial backing turns ideas into reality

or SELCO India

SELCO uses sola poovolaic modules o

povide eleciciy o ual aeas i Idia.

Sice 1995, SELCO as opeaed 25 eegy

sevice cees, isalled ove 115,000 sola

ome ligig sysems as well as e lag-

es sola wae eaig sysem o a sigle

clie i Idia, ad as suppoed ume-

ous sola eepeeus.

SELCO bega wi o acial backig.

te oude, hais hade, me neville

Williams wile i Si Laka. Williams would

become SELCOs co-oude ad ode is

s commissio, a 100-ome sola pojec.

te wo ouded e compay wi Inr

15,000 (e equivale o abou $430). I

1996, acial backig was assued wi a

$150,000 loa om Wiock Ieaioal

oug USAID, wi e codiio a a

ceai umbe o sysems be isalled.

By 2000, SELCO ad paid back is loa.

SELCOs s iveso was E+Co, a ives-

o a makes clea eegy ivesmes

i developig couies. tei iiial ives-

me oalled $107,500. Oe majo ives-

os oday iclude e Lemelso Fouda-

io ad Good Eegies.

SOURCES

www.selco-india.com


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D E V E L O P M E n t P r O C E S S S P o T L I g H T

Accessig

e cabo make

te level o cabo emissios as seadily iceased

sice e age o idusialisaio, a ac a oday

is apidly cagig e global climae. Suc cages

may seveely impac umaiys well-beig, oug

isig empeaues ad sea levels ad a lage umbe o

exeme weae eves suc as soms ad foods. to mii-

gae climae cage, compaies ad couies ave se

emissios-educio goals. tese goals ca be legally bid-

ig, as we ey ae se ude cap-ad-ade scemes suc

as e Kyoo Poocol o e Euopea Uio Emissios tad-

ig Sysem, o ca be ully voluay, as we pa o a com-pays coe missio o slae o CSr iiiaives.

Apa om cubig emissios esulig om ei ow op-

eaios, compaies ca also pucase cabo cedis o

e global make. tese cedis ae poduced by pojec o

compay aciviies a would o ake place wiou e

eveues geeaed by e sales o ose cedis, ad ae ac-

cedied, moioed ad egiseed ude sic sysems o

cool. te Clea Developme Mecaism (CDM), a pa o

e Kyoo Poocol, egises cabo cedis a ca be used

o obligaoy (legally bidig) emissios educios, wile

e Voluay Cabo Make (VCM) geeaes cedis o vol-uay educios.

te volume o cabo emissios adig as bee seadily

iceasig i ece yeas. te base ui o ade is ypically

oe meic o o CO2-equivale, deoed as CO

2e. Despie

a dicul yea o e make due o e global ecoomic e-

cessio, oal volumes i 2009 gew o 8.7 billio CO2e, epe-

seig a make sie o $144 billio.17

Pices o CO2e uis vay gealy. tee ae a umbe o

sadads available o cabo emissio educios poj-

ecs. I e compliace make, a Ceied Emissios reduc-

io (CEr) o oe CO2

issued ude e CDM is wo aoud

$17.5. A Voluay Emissios reducio (VEr), wic ca be

ceied ude a umbe o diee voluay make sa-

dads, ca big bewee $2 ad $7.

te Gold Sadad is a ceicaio body ocusig o pojecs

a specically ceae susaiabiliy co-bees o e com-

muiies ey seve, o example by poecig biodivesiy

o ceaig icome geeaig oppouiies o low-icome

endeva energize the bop 2011 new

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