Let there be light: In Sindh, a business works to improve villagers’ lives
EcoEnergyFinance runs an operation that helps improve rural living standards.
KARACHI:
Beyond the urban and suburban areas vying for scarce electricity in Pakistan, lie thousands of villages where, according to the International Energy Agency (IEA), 65 million Pakistanis live disconnected from the national electricity grid.
Although the average income level is lower in rural areas compared with urban areas, a typical household in rural Pakistan spends on average a significant sum of Rs1,354 a month solely to meet fuel and lighting needs, according to the Pakistan Bureau of Statistics (PBS).
The Household Integrated Economic Survey (HIES) 2010-11 conducted by the PBS says that more than 58% of Pakistan’s rural population in Pakistan depends on means other than electricity to light their homes. These include firewood, kerosene oil, charcoal, coal, dung cakes, gas, candles and agricultural waste.
While these people constitute well over a third of Pakistan’s total population, seldom do we hear about businesses that aim to bring their living standards close to what their fellow citizens in urban areas enjoy.
It is clear that conventional companies are unlikely to find this window of business opportunity lucrative enough to expand their operations to low-income rural areas, and the charity-based model of non-governmental organisations (NGOs) is also unsustainable. So, what is the solution?
In such cases, some believe the way forward is what economists describe as ‘social entrepreneurship’: businesses that seek opportunities to improve society by using sustainable, practical and innovative approaches.
“What we’re doing is social entrepreneurship. We do business, not charity: but our business model is such that it leaves a social impact on the community,” EcoEnergyFinance Director of Operations Jeremy Higgs recently told The Express Tribune.
EcoEnergyFinance is a social enterprise active in several districts of Sindh, offering a portfolio of solar energy products that are comparable in cost to what rural villagers currently pay for their energy needs.
For the time being, EcoEnergyFinance is focusing on selling solar lanterns in seven different locations in Sindh, including villages in and around Umerkot, Khairpur, Sujawal, Tharparkar and Tando Ilahyar.
The retail prices of the two products that the company sells are Rs3,000 and Rs4,500 each, which include sales commissions and transportation costs.
After being charged for eight hours, solar-powered lanterns can light up a room for at least six hours. The life of the solar panels used in these lanterns is 10 years, while the battery generally lasts anywhere from 18 months to two years. Once expired, it can be replaced for less than Rs200.
“Although nobody we spoke to revealed their actual income, but based on our surveys, we suspect that the average household income of the communities where we work should range between Rs4,000 and Rs5,000,” Higgs said.
Assuming that the average household income is indeed Rs5,000 in such communities, the HIES figure of Rs1,354 spent on fuel and lighting per family every month in rural areas of Pakistan is quite revealing: it indicates that over 27% of a household’s net monthly income is spent on meeting energy needs alone.
“They need alternative arrangements, such as solar products that are cost-effective,” Higgs says; while pointing out the considerable difference in the costs of solar and traditional sources of energy.
“People sometimes tell us that we should sell our products for, let’s say, Rs1,500 a unit. But we disagree. It’s not charity. If people value it, they’ll pay for it,” he says.
He relates that in some communities, people go to provision stores in nearby villages just to charge their mobile phones. “It costs them Rs10 a day,” he noted, adding that the lanterns sold by EcoEnergyFinance were also capable of charging mobile phones. “That can potentially save people another Rs300 a month.”
The business model is yet to become self-sustainable, as EcoEnergyFinance has run its operations in Sindh on a pilot basis for the last 10 months. Higgs expects that it will become self-sustainable by the first half of 2015 with an annual sale of 4,000 units.
“Cost-effective solar-powered lanterns enable people to have more productive hours every night in communities without electricity. It makes a huge difference in their lives” he said.
Published in The Express Tribune, November 16th, 2012.
Beyond the urban and suburban areas vying for scarce electricity in Pakistan, lie thousands of villages where, according to the International Energy Agency (IEA), 65 million Pakistanis live disconnected from the national electricity grid.
Although the average income level is lower in rural areas compared with urban areas, a typical household in rural Pakistan spends on average a significant sum of Rs1,354 a month solely to meet fuel and lighting needs, according to the Pakistan Bureau of Statistics (PBS).
The Household Integrated Economic Survey (HIES) 2010-11 conducted by the PBS says that more than 58% of Pakistan’s rural population in Pakistan depends on means other than electricity to light their homes. These include firewood, kerosene oil, charcoal, coal, dung cakes, gas, candles and agricultural waste.
While these people constitute well over a third of Pakistan’s total population, seldom do we hear about businesses that aim to bring their living standards close to what their fellow citizens in urban areas enjoy.
It is clear that conventional companies are unlikely to find this window of business opportunity lucrative enough to expand their operations to low-income rural areas, and the charity-based model of non-governmental organisations (NGOs) is also unsustainable. So, what is the solution?
In such cases, some believe the way forward is what economists describe as ‘social entrepreneurship’: businesses that seek opportunities to improve society by using sustainable, practical and innovative approaches.
“What we’re doing is social entrepreneurship. We do business, not charity: but our business model is such that it leaves a social impact on the community,” EcoEnergyFinance Director of Operations Jeremy Higgs recently told The Express Tribune.
EcoEnergyFinance is a social enterprise active in several districts of Sindh, offering a portfolio of solar energy products that are comparable in cost to what rural villagers currently pay for their energy needs.
For the time being, EcoEnergyFinance is focusing on selling solar lanterns in seven different locations in Sindh, including villages in and around Umerkot, Khairpur, Sujawal, Tharparkar and Tando Ilahyar.
The retail prices of the two products that the company sells are Rs3,000 and Rs4,500 each, which include sales commissions and transportation costs.
After being charged for eight hours, solar-powered lanterns can light up a room for at least six hours. The life of the solar panels used in these lanterns is 10 years, while the battery generally lasts anywhere from 18 months to two years. Once expired, it can be replaced for less than Rs200.
“Although nobody we spoke to revealed their actual income, but based on our surveys, we suspect that the average household income of the communities where we work should range between Rs4,000 and Rs5,000,” Higgs said.
Assuming that the average household income is indeed Rs5,000 in such communities, the HIES figure of Rs1,354 spent on fuel and lighting per family every month in rural areas of Pakistan is quite revealing: it indicates that over 27% of a household’s net monthly income is spent on meeting energy needs alone.
“They need alternative arrangements, such as solar products that are cost-effective,” Higgs says; while pointing out the considerable difference in the costs of solar and traditional sources of energy.
“People sometimes tell us that we should sell our products for, let’s say, Rs1,500 a unit. But we disagree. It’s not charity. If people value it, they’ll pay for it,” he says.
He relates that in some communities, people go to provision stores in nearby villages just to charge their mobile phones. “It costs them Rs10 a day,” he noted, adding that the lanterns sold by EcoEnergyFinance were also capable of charging mobile phones. “That can potentially save people another Rs300 a month.”
The business model is yet to become self-sustainable, as EcoEnergyFinance has run its operations in Sindh on a pilot basis for the last 10 months. Higgs expects that it will become self-sustainable by the first half of 2015 with an annual sale of 4,000 units.
“Cost-effective solar-powered lanterns enable people to have more productive hours every night in communities without electricity. It makes a huge difference in their lives” he said.
Published in The Express Tribune, November 16th, 2012.