Solar Home Systems in Bangladesh - Global Delivery Initiative · Solar Home Systems in ......
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1 Overview is case study examines a program of rural electrification in Bangladesh by means of solar home systems (SHS). Bangladesh ranks among the lowest in the world for population with access to electricity. In 2003, the Infrastructure Development Company Limited (IDCOL) launched the SHS program to provide cost-effective electricity to the rural population of Bangladesh. Using an ownership model, customers financed the purchase of SHS from partner organizations (POs). e POs install and maintain the systems, collect the loan payments, and recycle used batteries. e quality and installation of the SHS were monitored, as was the financial performance of the POs. e program has increased the rate of rural electrification to 40 percent. Issues remain for quality and proper installation of SHS systems and unauthorized recycling of used batteries. Key contextual conditions: Access to electricity in Bangladesh ranks among the lowest in the world. e government’s energy policy had previously focused on extension of the energy grid, but in remote rural areas with low population density, electrification through grid extension is not a financially viable option. Expanding access to electricity through solar power needed financing and technical expertise. Key stakeholders: Government of Bangladesh, the Infrastructure Development Company Limited, partner organizations, international donors, citizens of rural Bangladesh. Lessons Learned ■ Combining the installation, maintenance, and financing and collection of loans through local POs, which maintained a continuing relationship with customers, enabled IDCOL to coordinate all aspects of the SHS program. ■ High-quality equipment and installation and maintenance by qualified technicians are necessary for the successful implementation of SHS. ■ Users must be trained in the use of the SHS. ■ e ownership model is more successful than the fee-for-service model. Ownership creates a feeling of responsibility that leads to improved caretaking of the systems. ■ Installation of SHS must be coordinated with plans for grid extension. Installing SHS in areas that will shortly be connected to the electrical grid is a poor use of resources. Solar Home Systems in Bangladesh PROJECT DATA PARTNER ORGANIZATION: German Development Cooperation: GIZ/BMZ ORGANIZATION TYPE: Government DELIVERY CHALLENGES: Social, environment, and geographical context; Government coordination DEVELOPMENT CHALLENGE: Access to energy SECTOR: Energy and extractives COUNTRY: Bangladesh REGION: Asia PROJECT DURATION: 2007–15 PROJECT TOTAL COST: a32.1 million ORGANIZATION COMMITMENT: a14.1 million CONTACTS CASE AUTHOR: Tim-Patrick Meyer PROJECT EXPERT: Matthias Schmidt-Rosen QUICK CASE September 2015 BANGLADESH
Transcript of Solar Home Systems in Bangladesh - Global Delivery Initiative · Solar Home Systems in ......
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OverviewTh is case study examines a program of rural electrifi cation in Bangladesh by means of solar home systems (SHS). Bangladesh ranks among the lowest in the world for population with access to electricity. In 2003, the Infrastructure Development Company Limited (IDCOL) launched the SHS program to provide cost-eff ective electricity to the rural population of Bangladesh. Using an ownership model, customers fi nanced the purchase of SHS from partner organizations (POs). Th e POs install and maintain the systems, collect the loan payments, and recycle used batteries. Th e quality and installation of the SHS were monitored, as was the fi nancial performance of the POs. Th e program has increased the rate of rural electrifi cation to 40 percent. Issues remain for quality and proper installation of SHS systems and unauthorized recycling of used batteries.
Key contextual conditions: Access to electricity in Bangladesh ranks among the lowest in the world. Th e government’s energy policy had previously focused on extension of the energy grid, but in remote rural areas with low population density, electrifi cation through grid extension is not a fi nancially viable option. Expanding access to electricity through solar power needed fi nancing and technical expertise.
Key stakeholders: Government of Bangladesh, the Infrastructure Development Company Limited, partner organizations, international donors, citizens of rural Bangladesh.
Lessons Learned■ Combining the installation, maintenance, and fi nancing and collection of
loans through local POs, which maintained a continuing relationship with customers, enabled IDCOL to coordinate all aspects of the SHS program.
■ High-quality equipment and installation and maintenance by qualifi ed technicians are necessary for the successful implementation of SHS.
■ Users must be trained in the use of the SHS.■ Th e ownership model is more successful than the fee-for-service model. Ownership creates a feeling of responsibility
that leads to improved caretaking of the systems.■ Installation of SHS must be coordinated with plans for grid extension. Installing SHS in areas that will shortly be
connected to the electrical grid is a poor use of resources.
Solar Home Systems in Bangladesh
PROJECT DATA
PARTNER ORGANIZATION:German Development Cooperation: GIZ/BMZ
ORGANIZATION TYPE:Government
DELIVERY CHALLENGES:Social, environment, and geographical context; Government coordination
DEVELOPMENT CHALLENGE: Access to energy
SECTOR:Energy and extractives
COUNTRY:Bangladesh
REGION:Asia
PROJECT DURATION:2007–15
PROJECT TOTAL COST: a32.1 million
ORGANIZATION COMMITMENT: a14.1 million
CONTACTS
CASE AUTHOR:Tim-Patrick Meyer
PROJECT EXPERT:Matthias Schmidt-Rosen
QUICK CASESeptember 2015
INDONESIA
CHINA
KENYA
REPUBLICOF KOREA
ARGENTINA
NIGERIA
DOMINICANREPUBLIC
BOLIVIA
JORDAN
BANGLADESH
WEST BANKAND GAZA
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■ Battery recycling must be addressed when the program is launched. Incentives for proper recycling of batteries can reduce the number of batteries that are recycled improperly, causing harm to the environment and public health.
■ A strong market for SHS can reduce the need for subsidies but may also lead to the sale of unregulated systems that can be manufactured more cheaply but are of lesser quality.
Development Challenges■ Generating income and improving access to education and health services are diffi cult without electricity.■ Access to electricity in Bangladesh ranks among the lowest in the world.■ An increase in electrifi cation was urgently needed to contribute to economic development and combat poverty,
especially in rural areas, which rely on traditional subsistence farming.
Delivery Challenges■ Lack of fi nancing. Funds were needed for the initial purchase and installation of SHS, and credit fi nancing would
have to be arranged to make loans to customers to purchase the systems.■ Limited technical knowledge. Specifi cations for SHS would have to be written and sources of supply found.
Companies and their employees would have to be trained in the installation and maintenance of SHS.■ Institutional limitations.■ Existing energy policy. Bangladesh’s energy policy (together with the fi nancial and technical support of donor
institutions) was focused primarily on grid extension. However, the very rural population living far from the national grid cannot be electrifi ed through grid extension at a reasonable cost. Under existing policy, they would be left out. Th erefore, a program for off -grid electrifi cation was required.
© 2015 Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ). GIZ implemented this project on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ). All rights reserved. Th e fi ndings, interpretations, and conclusions expressed in this work do not necessarily refl ect the views of GIZ. GIZ does not guarantee the accuracy of the data included in this work.
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