Micro-financing - Webinar - Financing for Solar Offgrid Businesses

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Micro-financing - Webinar - Financing for Solar Offgrid Businesses

  1. 1. How To Leverage Carbon Financing Towards Scaling Up Solar Off-Grid Clean Energy ProgramsPresented by:Aimthy Thoumoung, Regional Director – South Asia, MicroEnergy Credits
  2. 2. Discussion Agenda 2 Overview of MicroEnergy Credits Problems Faces By SMEs in Scaling Up Clean Energy Programs The Solutions Enabled by Carbon Financing Case Study: MEC Partner in North India The Investment Cycle for Carbon Financing Conclusion 2
  3. 3. We provide carbon funds to Rural Banks and MFIs sothat clients are empowered to have clean energy foreducation, light, health, warmth, and wealth creation. 3
  4. 4. The MEC Business Model $ $ Carbon Markets MicroEnergy Rural Banks and Credits Micro Finance Institutions CO2 CO2  Buys Carbon  Provides  Lends for Clean Credits  Training Energy  Carbon Purchase  Credit Tracker ProductsMEC has 18 rural banking and microfinance partners in 11 countries.• 13 partners in Asia include Aryavart Gramin Bank, Prathama Bank, Gurgaon Gramin Bank,Allahabad UP Gramin Bank, Purvanchal Gramin Bank, Andhra Pragati Gramin Bank, HaryanaGramin Bank, Bank Of India, Grameen Koota, ESAF, SKDRDP, VERC and XacBank. 4
  5. 5. Who is MicroEnergy Credits?Key Stats Been in operation since 2008 $11 million in CO2 offset sales contracts signed to date 18 MFI partners representing 15 Million clients Over 200,000 households currently receiving energy services ~$500,000 carbon revenues in 2011 Received commitment of $10 Million funds from Overseas Private Investment Corporation (OPIC) to scale up our program to millions of households around the world. 5
  6. 6. The Problems Faced by SMEs inScaling Up Clean Energy Programs  Making the product affordable to low-income / BOP consumers  Investing in marketing and awareness generation activities  Investing in after-sales customer service programs 6
  7. 7. The Solutions Enabled By CarbonFinancing and MEC  Making the product affordable to low-income / BOP consumers o Solution: Access To Finance through loans from Rural Banks and MFIs  Carbon Funds ensure that the lending program is sustainable and profitable even for the low ticket-size loans Table: Sensitivity Analysis of upfront payments on the addressable market (millions of HHs) Source: IFC Analysis, Universal Modern Energy 7 Case presented by IEA in 2010
  8. 8. The Solutions Enabled By CarbonFinancing and MEC  Investing in marketing and awareness generation activities o At 1 MEC Partner in South India:  2 years without investments in marketing and awareness generation activities: 500 products sold  After a structured marketing and awareness generation program was implemented: 3,500+ products sold in 4 months o Solution: Utilization of carbon funds  Investing in after-sales customer service programs o At 1 MEC Partner in South India:  After reasonable scaling up of program, sales came to a halt with customer opinions of product nose-diving and spreading quickly with poor after-sales service of complaints o Solution: Utilization of carbon funds 8
  9. 9. Case Study:MEC Partner in North India  Products: Solar Home Lighting Systems  Impact: Over 50,000 households have purchased the Solar Home Lighting Systems  MEC Partner has received >$120 K carbon funding over the past 2 years from MEC. Carbon funding is recurring each year.  Usage of Carbon Funds: MEC Partner has utilized the funds towards establishing customer service centers, training of after- sales service staff, training of bank staff, and marketing activities. 9
  10. 10. How the investment cycle works $ Investors Rural banks and CO2 MFIs 2.5 BILLION Carbon People Purchasers Empowered CO2 $ $Invests: Uses Funds for: Repays from OPIC $10M Training at MFIs Carbon DOEN Carbon Project Dev. Deutsche Bank Credit Tracker Revenue Foundation 10
  11. 11. Conclusions Simple clean energy products such as solar off-grid lighting systems can improve the quality of life of BOP clients Renewable energy is affordable; spending is close to what rural clients already spend on kerosene, fuel wood and charcoal Carbon revenues are available to help SMEs in partnership with rural banks and MFIs bring these products to their clients MEC has built a strong track record and expertise in implementing and scaling up clean energy programs with the help of carbon financing. 11
  12. 12. Contact:Aimthy Thoumoung,Regional Director – South AsiaMicroEnergy CreditsEmail: aimthy.thoumoung@microenergycredits.com

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