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  1. REEEP Annual Report 2022
  2. Empowerment through a women’s clean energy co-operative in India

Project

EMPOWERMENT THROUGH A WOMEN’S CLEAN ENERGY CO-OPERATIVE IN INDIA

Establishing a women’s energy co-operative as an independent energy service provider to thousands of off-grid households in the state of Bihar

  • Location: India
  • Status: completed

The challenge

In 2005, Indian government data showed that almost 90% of households in the state of Bihar were not connected to the conventional grid. Bihar is also the state with one of the greatest numbers of people below the poverty line, where populations in both rural and urban centres were forced to spend a large part of their income on alternative sources of energy like kerosene and diesel generators.

Since then, there has been extensive focus on rural electrification in India. As per the India Residential Energy Consumption Survey (IRES) 2020, as many as 97% of Indian households are electrified, with 96.7% now connected to the grid and another 0.33% relying on off-grid electricity sources. However, 2.4% of Indian households still remain unelectrified. The majority of the unelectrified households are concentrated in rural areas, including Bihar, where 2.2% of households are without electricity (Agrawal, et al., 2020).

As a driving force in this energy transition, SELCO – supported by REEEP in our 5th, 6th, 7th and 9th programmatic cycles between 2006 – 2015 – has become one of India’s best-known social enterprises, seeking to eradicate poverty by promoting sustainable technologies in rural India.

Where Are They Now?

SOLAR LIGHTING SOLUTIONS

A man installing SELCO solar panels.

Credit: SELCO India

In its last REEEP-funded project – part of REEEP’s 9th Call in 2013 – SELCO began replicating its successful solar lighting model in the Munger district of Bihar in partnership with SEWA Bharat, a local organisation working with rural women. Its aim was to establish a women’s energy co-operative in Bihar which would become the energy service provider. The co-operative incubated the resulting partnership into an actual cooperative that systematically takes up the energy services business, with a long-term plan for servicing the local communities.

Under this project, SELCO installed 400 home systems financed by Bihar Kshetriya Gramin Bank (BKGB) and other banks/microfinance institutions in the area, for end-user financing through some 40 women’s self-help groups (SHG).

SELCO solar panel on a roof top.

Credit: SELCO India

With a large off-grid population and widespread women SHG networks, India has a huge potential to implement the proposed energy co-operative idea in many areas. This programme not only provided energy service to end-users with a local service guarantee but also created income for the participating households.

At the beginning of the project, energy-poor states – including Bihar, Uttar Pradesh, Rajasthan, Odisha, Chhattisgarh, Jharkhand and Madhya Pradesh – were far from being able to provide reliable energy access to their people due to their poor infrastructure and remote hilly areas. However, the presence of regional/rural banks and strong women SHG networks in these states provided great potential for replication, particularly with the appropriate capacity building. This acted as a base for implementing the proposed model of an energy co-operative providing need-based renewable energy services while generating income for women.

Long-lasting impact

This project catalysed increased deployment of renewable energy solutions, and it was a first step towards addressing the lack of energy service providers with rural networks. It demonstrated the social and commercial angles to the service providers and bankers, encouraging them to participate in creating a powerful energy service network.

This project established a strong value chain of renewable energy service which includes connecting the equipment supply chain, end-user financing, creating man-power required for service maintenance and processes to use various Government schemes including the off-grid component of the National Solar Mission, through the banking network and in partnership with agencies like the National Bank for Agriculture and Rural Development (NABARD).

The programme has now expanded to many energy-poor states across India, including Odisha, Jharkhand and parts of Karnataka. “The small programme that we started with REEEP has led to a snowball effect. “Today, more than 4500 women entrepreneurs and innovators use solar energy, and that is the result of the replication of the programme we started years ago”, says Harish Hande, CEO of SELCO Foundation.

 

A woman’s house with a SELCO solar panel

Credit: SELCO India

Our Support

REEEP worked together with SELCO to develop innovative financing mechanisms and technologies that better met the needs of the very poor, and in the process, represented potential models for projects in other countries. By 2018, SELCO served more than half a million household and business customers through its network of 45 energy service centres in India. With the funding REEEP proovided, the project was replicated in many states across India. “REEEP has helped SELCO and its affiliates to prove that once you use women as a catalyst, the scaling up and replication can happen faster”, says Harish. “It has led to replication in more than 7 to 8 states, including two states in the South, which would not have happened if that risk-taking resources were not available”.

One of the main challenges SELCO encountered was establishing financing between local bank managers and very poor clients. “Trust needs to be built with each head of a local bank, and that trust emerges when a bank has started to loan to very poor people on recommendation of SELCO, and they really pay back regularly,” says Harish. The risk capital from REEEP has helped SELCO overcome those barriers with the local financial institutions as they were more confident that poor women were going to pay back the loan.

“The hesitations from the bank were removed after we put up guarantees in the banks and used the philanthropic capital of the REEEP programme”, he continued. This has now led to numerous banks across the country, especially in the poorer parts, to finance women, even for less than USD 1000. All in all, Harish explained that the “overall objectives [of the project] were met, and the flexibility of resources enabled us to change some of the programme deliverables over the period of the project timeline”.

“Using the success of this programme, which got replicated in other states [in India], our next goal is to have more than 10,000 women entrepreneurs and innovators by 2026 and 15,000 women and girls, champions of sustainability”, Harish shares.

Two boys sitting under a SELCO solar panel

Credit: SELCO India

REEEP HAS HELPED SELCO AND ITS AFFILIATES TO PROVE THAT ONCE YOU USE WOMEN AS A CATALYST, THE SCALING UP AND REPLICATION CAN HAPPEN FASTER.”

Harish Hande
CO-FOUNDER & CEO OF SELCO

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