Grameen Shakti

Renewable energy at affordable prices

Grameen Shakti (shakti meaning “energy” in Bengali) was created in 1996 as a not-for-profit company under the Grameen Bank. The goal of Grameen Shakti is to promote and supply renewable energy technology at an affordable rate to rural households of Bangladesh. Thus, their work not only focuses on the technical and capacity-building sides of renewable energy promotion. They have also adopted Grameen Bank’s experience in microfinancing to make renewable energy applications affordable for poor rural people.

In 2007, Grameen Shakti employed 1,500 field staff and trained 1,000 engineers and 1,000 local technicians in renewable energy technology, who either work for Grameen Shakti or have started their own renewable energy businesses. The Founding Director of Grameen Shakti was Dipal Barua. Barua worked closely with Muhammad Yunus since 1976, and was a co-founder of the Grameen Bank (Yunus and the Grameen Bank received the Nobel Peace Prize in 2006). After having served as Managing Director of Grameen Shakti and Deputy Managing Director of Grameen Bank for many years, Barua left Grameen Shakti and set up the Bright Green Energy Foundation in 2010. The CEO of Grameen Shakti as of 2011 was Abser Kamal.

Installing renewable energy technologies in rural villages

By 2012, Grameen Shakti had built up a network of 1,500 offices spread out across all of Bangladesh’s 64 districts, reaching out to the rural areas where 70 per cent of the country’s 135 million inhabitants live. There are no electricity grids in these areas. The population, therefore, often has no access to electricity. Through its village unit offices, Grameen Shakti promotes renewable energy technologies – especially solar home systems, which typically consist of a small 30-100 W photovoltaic panel connected to a battery for storage. By June 2007, Grameen Shakti had installed more than 110,000 solar home systems, with a capacity of about 5 MW peak, covering 30,000 villages. The installation rate is growing exponentially. On November 30, 2012, Grameen Shakti reached the first milestone of 1 million installations, which was in fact planned to be achieved in 2015. In 2007, more than 4,000 solar home systems were being installed per month. In addition, four wind energy plants and three solar thermal projects had been installed, and nine solar-powered computer training centres had been created. Apart from this, a huge number of improved cooking stoves (560,000) and biogas plants (24,000) have been installed to serve the rural people who need renewable energy support most. The biogas programme is linked to the emerging poultry and livestock industry in Bangladesh, focusing on marketing slurry as a replacement for chemical fertiliser.

Involving the local community

Grameen Shakti has always sought to involve the local community in the planning, implementation and maintenance of solar home systems and has started a network of technology centres, especially women.

Women are the main victims of the energy crisis. They are the ones who suffer most from indoor air pollution, drudgery and other negative impacts of the energy crisis most rural communities face around the world. Grameen Shakti believes that women should be transformed from passive victims into active forces of good to bring changes in their lives and communities.

That is why Grameen Technology Centres (GTCs) came about – with the concept of transferring technology and knowledge to rural communities through their women. These GTCs are managed mainly by women engineers. They then train rural women to be technicians who would promote, install and repair Solar Home Systems and other renewable energy technologies on behalf of Grameen Shakti. In this way, rural women would develop their self-confidence and at the same time get income-generating opportunities to show their communities a way to solve the energy and environmental crisis they are facing.

The benefits of solar home systems

Solar home systems are replacing kerosene lamps, avoiding the fumes and fire-risk of such lamps. Each solar home system saves about 375 kilogrammes of CO2 per year. Owners of a solar home system also save about Tk 400 to Tk 500 (USD 6 to 7.5) per month on kerosene, which in many cases covers their loan repayment. Kerosene costs have risen by up to 60 per cent in recent years and are continuing to increase due to rising world oil prices and higher transport costs. They will increase further when the government reduces its subsidy of kerosene. Therefore the economic benefits of owning a solar home system will continue to increase.

Solar home systems also bring significant social benefits. Many clinics use them to provide lighting during check-ups or operations. Schools also use them for lighting, and children also have a better environment for studying at home in the evening. The availability of power for mobile phone chargers has made it possible for more people to use such phones and maintain contact with family members throughout Bangladesh and abroad. Women gain particular benefits from owning a solar home system. They feel more secure after dusk and can be more mobile. Since they usually spend more time in the home, they benefit most from the elimination of kerosene smoke. Many women have used the increased working time provided by the solar home system to start small-scale businesses such as poultry and handicrafts.

Solar home systems have significant income-generating potential. Many businesses can remain open for longer, including tailors, restaurants and grocery shops. Solar home systems have also led to increased production in areas such as fishing, rice processing, poultry farming and handicraft. New jobs have been created for solar technicians, electronic repairers and those running community TV stations. New business opportunities have also been made possible, such as renting mobile phone time. Grameen Shakti set up the micro-utility model to help shopkeepers get access to photovoltaic lights and extend their business hours. There were more than 10,000 micro-utility lights operating in rural market places in 2007.

The financing

Grameen Shakti has developed four different credit schemes to make solar home systems affordable. Customers pay different proportions of down-payment and monthly instalment according to their circumstances, supported by low-interest loans that Grameen Shakti receives from the Dutch Stichting Gilles Foundation and from the World Bank through the Bangladesh Ministry of Finance’s Infrastructure Development Company Limited (IDCOL). Grameen Shakti has also received grants from USAID to cover their overhead costs, which has made it possible for them to deliver less expensive services. The company is widely recognised to comprise a strong business model based on vertical integration of solar home system technology and micro-finance. Grameen Shakti got its initial funds from the Grameen Trust and Grameen Fund. However, the 2007 massive scale-up was part of a World Bank and Global Environment Facility (GEF)-supported government programme, which had been launched in 2003.

A role model for rural electrification

Grameen Shakti received the European Solar Award in 2003 and the Ashden Award for Sustainable Energy in the UK in 2006. Hermann Scheer, President of Eurosolar and a 1999 Recipient of the Right Livelihood Award, has said, “Grameen Shakti has pioneered ways to create awareness for solar energy, brought significant changes to the quality of life of rural people, and is achieving its overall goal to alleviate poverty in Bangladesh. In the future, the promotion of renewable energy in developing countries will depend on the development of rural renewable energy service companies (RESCOs). Grameen Shakti has created a sustainable business model, which could lead the way to start up other RESCOs and to promote rural electrification in developing countries.”