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ADB invests in Simpa Networks to Provide Rural India with Energy

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By 2015, Simpa Networks’ pay-as-you-go solar energy solution is bound to provide more than 60,000 household in rural India with better access to electricity. Supported by a $2 million equity investment by the Asian Development Bank (ADB), the company will offer an affordable clean energy solution to the underserved and underprivileged consumers in India.

Simpa Networks

The company’s mission is “to make modern energy simple, affordable, and accessible for everyone.” In order to achieve this goal, the company introduced a business model that will make sustainable energy choices affordable to the poor.

How it Works

Simpa’s pricing model is highly innovative and called Progressive Purchase. Customers make a small initial down payment for the solar system and then pre-pay for their future energy service. They can conveniently top up their systems in small user-defined increments via a m obile phone. Each of these payments also adds towards their final purchase price. Once the purchase price has fully been paid, the system unlocks permanently and continues to produce electricity without the need of any further payments.

The Importance of Energy Access

Today, there are approximately 1.6 billion people with no access to electricity and another 1 billion with only very unreliable access. Without this access, the poor depend on battery powered flashlights or kerosene lanterns for light and are unable to break the cycle of poverty as they are unable to take advantage of the numerous productive uses of energy. In addition, kerosene light comes with high operating costs, poor light quality and dangers to health and home.

Access to energy is therefore essential for every family’s economic livelihood, safety, health, educational achievement, and overall quality of life.

ADB’s Motivation to Invest

ADB hopes that the success of Simpa Networks could lead to increased venture capital funding for sustainable business models that deliver goods and services to those at the bottom of the economic pyramid.

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SELCO India – Providing Sustainable Energy to the Poor

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Image: SELCO Website

 

I am a huge fan of SELCO India which is why I want to use my blog to introduce them. SELCO India is a social enterprise with the mission “to enhance the quality of life of underserved households and livelihoods through sustainable energy solutions and services”.

SELCO currently employs about 170 employees in Karnataka and Gujarat, spread across 25 energy service centers. Since their foundation in 1995, they have sold, serviced and financed over 115,000 solar systems to their customers!

The social enterprise was established with the aim to dispel three myths associated with sustainable technology and the rural sector as targeted customers:

1)      Poor people cannot afford sustainable technologies

2)      Poor people cannot maintain sustainable technologies

3)      Social ventures cannot be run as commercial entities.

They were able to prove those myths to be wrong! SELCO aims to and succeeds in empowering its customers by providing a complete bundle of product, service and consumer financing.

 

SELCO’s key characteristics are:

1)      Products based on end-user needs – going beyond just being a technology supplier but rather customising products based on the customers’ needs

SELCO’s systems utilise solar photovoltaic modules that generate electricity for water pumping, lighting, communications, entertainment, computing and small business appliances. These products can be purchased by both businesses and private individuals and do not need to be connected to a larger network.

 

2)      Installation and after sales service – dedicated regional energy service centers to ensure timely service and maintenance

SELCO offers high quality service for its customers and was able to build long term relationships with over 100,000 satisfied customers so far. Each of their systems is designed to meet their customers’ specific needs. The services offered include:

  • Custom system design
  • Installation
  • Training on proper system use
  • After-sales maintenance and support

 

3)      Standardised financing packages –  create attractive channels for end users to be able to afford systems based on their individual cash flow

SELCO benefits from the potential of the country’s significant rural banking system which allows them to finance sustainable energy solutions for poor rural households. So far, the company has developed partnerships with nine regional rural banks, NGOs, commercial banks and rural farmer cooperatives. These partnerships make it possible for SELCO to enable their customers to obtain the necessary credit to purchase their products.

 

Prizes won

2005: Accenture Economic Development Award

2005: Ashden Award for Sustainable Energy

2007: Ashden Award for Outstanding Achievement

2009: FT ArcelorMittal Boldness in Business Award in Corporate Responsibility

 

To learn more about SELCO, please visit their website >>

 

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Acumen Fund Expands its Education Porfolio and Invests in Edubridge Learning

Photo: Acumen Fund

The Acumen Fund, a pioneering non-profit global venture fund addressing poverty across South Asia and Africa, recently announced a new investment. In July, it invested INR 1.5 Crore ($300,000) in Edubridge Learning Private Limited.

Acumen Fund – Expanding its Education Portfolio

This equity investment is another initiative of the Acumen Fund’s recently launched Education Portfolio, which aims to support private sector innovations that have the potential to increase access to low-cost, high-quality learning and employability services for the poor. This latest investment seeks to support the development of early stage companies that focus on meeting the need of low-income market segments.

With India’s education system struggling to meet the needs of a growing population, Acumen Fund mad it one of its goals to fight unemployment and increase employability. It recently invested in Hippocampus Learning Centres, which provide pre-school and primary education coaching in rural India. Acumen’s latest investment in the Education Portfolio brings it one step closer to its goal of impacting the lives of 150 million people by 2015. Ankur Shah, Interim Director of Acumen Fund India explains the focus on education as follows “It is clear that education offers one of the most viable pathways out of poverty, but there is room for much more innovation in how we ensure learning remains effective and relevant to employment”.

Edubridge – Company Profile

Based in Mumbai, Edubridge is still an early stage company and provides vocational skills training for low income youth across Maharashtra, Tamil Nadu, Karnataka, and Chhattisgarh. It is considered to possess great potential to significantly alter the landscape of opportunities for rural youth in India. The company seeks to address the lack of opportunity and simultaneous need for skilled labour in India by training rural youth and placing them in entry-level positions in different corporate sectors. So far, Edubridge has trained over 1,500 students and plans to further scale its services from currently 12 to 30 centres over the next 2 years.

Edubridge Founder Girish Singhania sais about the company “Edubridge’s goal is to fundamentally address the employability gap within India…By training these rural youth we are enabling them and their families to have a better future, while simultaneously improving the labour pool within India.”

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Challenging the Distribution Issue in the Developing World

As mentioned in a previous post, technology can empower the poor economically and create a system of checks and balances. However, creating technologies for the developing world is not enough if there is no distribution infrastructure in place to get products to the people in need. An innovative India based company called Essmart Global is addressing exactly this issue and is trying to revolutionise distribution and supply chains.

Essmart Global

In January, the Essmart Global team launched a pilot project in India and will be starting up full-time operations in August. Instead of focusing on very rural areas straight away, they will first distribute products to the outskirts of cities. The first products will be LED lights or water filters, because they are cheap enough to be purchased while still being an investment, costing between $10 and $30. The company will demonstrate the products to local shop owners and cooperate with school teachers and local children to spread the word about the availability of those technologies.

Essmart Global chooses products that have a warranty and educate the shop owners on how to get parts or send products away for repair instead of throwing them away if they don’t work anymore. The company also incentivises shop owners to stock their catalogue and demonstration products. Deliveries are made on a scheduled basis or show owners can pick up technologies at Essmart’s warehouse in person.

Outlook

The Essmart Global team believes that India is a perfect place to launch because of the country’s vast population and the fact that many products they endorse are already available there but not widely distributed. Once they have the Indian market covered, they can go elsewhere, leveraging the existing retail-shop network around the world, with products tailored to specific regions. At the same time the company is making a pitch for improving the system, not just the technologies. They want to bring the distribution challenge into the spotlight and help to overcome it. For its effort to help underprivileged communities around the world, Essmart Global has recently won the grand prize in Dell’s Social Innovation Competition.

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Jaipur Food – One of the most technologically advanced social enterprises in the world

The Indian company Jaipur Foot provides world-class artificial limbs, rehabilitation aids and other appliances to physically challenged individuals living in poverty and don’t charge the beneficiary even a single rupee for it. Social entrepreneurship at its best!

About Jaipur Foot

Jaipur Foot is a non-profit social enterprise with 20 staff across India and services 65,000 patients each year, 20,000 of whom require new leg and feet replacements. The remaining 45,000 require crutches, wheelchairs, hand-peddled tricycles and other aids. This makes Jaipur Foot a global leader in prosthetic science, production and manufacturing as well as surgical in its fiscal discipline. In addition, they distribute their products to another 25 countries.

The company was founded in 1975 with less than US$10,000 budget and is now operating with an annual budget of US$3.5mio. It is funded by government support (30%), donations (60%) and earned income (10%). The whole marketing of Jaipur Foot is closely tied to their culture of accountability and the high quality of their products. Both donors and governments want to know whether their money is being used for intended purposes and in the most efficient and effective way possible. Therefore, the organization’s steady growth is rooted in rigid expenditure policies and cent-by-cent accounting coupled with a suite of incredibly cheap, world-renown prosthetics, aids and appliances.

The Product

Jaipur Foot’s $45 ultramodern prosthetic is simply unmatched when compared to a similar $12,000 limb produced in the United States. The Jaipur Knee is made of self-lubricating, oil-filled nylon and is both stable and flexible. Comparable devices produced in other countries generally include a titanium replacement which can cost $10,000 or more. What sets Jaipur Foot’s products apart is their lightness and mobility and those that wear the limbs can even run, climb trees and ride bicycles. The new knee replacement was developed in cooperation with Stanford University and costs a mere $20. For this great achievement, the Times Magazine named it one of the 50 best inventions in the world. Devendra Raj Mehta, head of the Jaipur Foot team, believes that “Too often the NGO sector relies solely on sentiment. We need to marry sentiment with science.” – and they are definitely very successful in doing exaclty this!

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Villgro to provide Indian social entrepreneurs with a second chance

he Indian social enterprise Villgro, engaged in the incubation and funding of rural social innovations, is about to launch a new project. The company is planning to offer a unique one-year program for social entrepreneurs, who were not successful in their first attempt to launch a social enterprise. Villgro aims at encouraging them not to give up but to give it another shot.

Villgro’s CEO, Paul Basin, explains that “this is not just for people who have ideas. It is for people who have tested their ideas and failed, and who have sufficient learning so that they won’t fail again the second time.”

The new program is called SEED and about launch in September. Until now, Villgro’s business model was to incubate rural-oriented ideas and its financial supporters include the Rockefeller Foundation, le Lemenson Foundation, Sir Dorabji Tata Trust and the Technology Development Board.

Villgro is currently in the process of selecting 10 promising social entrepreneurs to support. They will go through three models under the one-year program, which will include training in the fields of offering, pitching to investors and customer insights. To support the entrepreneurs further, they will have three mentors from the business world. These three mentors are PR Ganapathy, Mukesh Sharma and Thomas Pullenkav. PR Ganapathy used to work with India’s leading IT company Infosys Technologies, Mukesh Sharma founded an early stage investment banking firm called Vija Capital and Thomas Pullenkav is a successful sustainable energy consultant.

The goal of SEED is to get the social entrepreneurs ready to raise angel funding by the end of the training. By the end of the one-year program, Villgro also hopes to receive a total funding of $10 million from foundations and investors in the US.

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PlanetRead – Fighting illiteracy in India

India’s literacy ranks 147 out of 177 countries surveyed by the UNESCO. Many of the hundreds of millions of illiterate people are even neo-literates, which means that they only possess rudimentary literacy skills despite having attended several years of primary school education. This phenomenon exists because many primary school students do not grow up in environments that are conductive to increasing their literacy. The result of this is that every year, an estimated 27 million Indian children complete primary school with non-functional literacy levels.

In order to fight this, social entrepreneur Kothari Brij launched PlanetRead, which won the World Bank Development Marketplace Award in 2002 and was honoured at the 2009 Clinton Global Initiative meeting. PlanetRead believes that literacy skills must be constantly reinforced in order to avoid regression toward illiteracy. In order to do that, the organization found Same Language subtitling (SLS) an effective tool.

The effectiveness of SLS is further supported by research studies conducted by the Indian Institute of Management Ahmedabad and the Nielsen-ORG Center for Social Research. They found that when exposed to 30 mins SLS per week, the functional literacy rate among students who had at least five years of Hindi in their schooling history grew from 25% to 56%.

Currently the organization applies SLS to eight major programmes in a major Indian language. The programmes have a weekly airtime of 30 minutes and reach 200 million neo-literate viewers. The organization was also able to convince Indian policy-makers of the value of SLS, which will hopefully accelerate the adoption of SLS within India, with the vision to expand efforts internationally.

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