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Energy-Microfinance Intervention For Low Income Households in
India -Sharath Chandra Rao P Senior Research Scientist, CSTEP
Sharath Chandra Rao P
Senior Research Scientist, CSTEP
Abstract:
In India, limited energy access and energy inequity hamper the lives of low income households. Traditional fuels such as firewood and dung cake account for 84 percent and 32 percent of the rural and urban household cooking energy (NSSO, 2007). With 412 million people without access to electricity in 2005, India hosts the world’s largest such population (IEA, 2007). But, low income households still spend 9 - 11.7 percent of their incomes on inefficient forms of energy while wealthy households spend less than 5 percent on better energy products (Saghir, 2005). Renewable energy technologies coupled with innovative financial products can address the energy access problem facing the low income households in India (MacLean & Siegel, 2007; REEEP, 2009). Nevertheless, the low income households continue to face low access to mainstream finance for purchasing renewable energy technology at terms that meet their monthly energy related expenditure (ESMAP, 2004a; SEEP, 2008a) and low or no access to energy services (Ailawadi & Bhattacharyya, 2006; Modi et. al., 2006). The lack of energy-finance options has left the marginalized population with little means to break the dependence on traditional fuels. This dissertation proposes an energy microfinance intervention to address the present situation. It designed a loan product dedicated to the purchase of renewable energy technologies while taking into account the low and irregular cash flows of the low income households. The arguments presented in this dissertation are based on a six-month pilot project using this product designed and developed by the author in conjunction with a microfinance institution and its low income clients and Energy Service Companies in the Finding the right stakeholders and establishing a joint agreement, obtaining grant money for conducting the technology dissemination workshops and forming a clear procedure for commissioning the project, are the Bibliography
Ailawadi, V. S., & Bhattacharyya, S. C. (2006). Access to energy services by the poor in India: Current situation and need for alternative strategies. Natural Resources Forum, 30(1), 2-14. ESMAP. (2004a, May 19-21). Proceedings for the Global Energy Village Partnership workshop on consumer lending and microfinance to expand access to energy services. Manila, Philippines. IEA. (2007). World Energy Outlook 2007. Paris, France: International Energy Agency. MacLean, J. C., & Siegel, J. M. (2007). Financing mechanisms and public/private risk sharing instruments for financing small scale renewable energy equipment and projects. Paris, France: United Nations Environment Program. Retrieved June 13, 2010, from NSSO. (2007). Energy sources of Indian households for cooking and lighting, 2004-05 NSSO 61st round (July 2004 – June 2005) (Report No. 511(61/1.0/4)). New Delhi, India: National Sample REEEP. (2009). Access to sustainable energy services via innovative financing – Seven case studies. Vienna, Austria: Renewable Energy and Energy Efficiency Partnership, Retrieved May 9, 2010, Saghir, J. (2005). Energy and Poverty: Myths, Links, and Policy Issues. Energy Working Notes, 4. SEEP. (2008a). Summary of Findings: Using Microfinance to Expand Access to Energy Services. Washington, DC: The Small Enterprise Education and Promotion Network. About the Speaker:
Sharath Rao has a PhD degree in Energy and Environmental Policy from Center for Energy and Environmental Policy, University of Delaware. He also holds Bachelors and Master’s degrees in Mechanical engineering. He has consulted with the Energy and Environment departments at the World Bank and interned with the Energy division of the Asian Development Bank. In addition, he has worked as a fuels analyst evaluating spreadsheet models and conducting econometric analysis for Exelon Corporation – a power company owning the largest fleet of nuclear assets in United States. He has published three peer reviewed articles, two reports and has provided assistance for a World Bank publication. During his PhD degree, he was actively involved with two organizations; ‘Engineers without Borders’ and ‘Asha for Education’. Engineers without Borders-USA are an organization of dedicated, enthusiastic students and professionals who share a vision of a world where everyone has adequate sanitation, safe drinking water and resources to meet their basic needs. Asha for Education is a secular organization dedicated to basic education in India. He is an avid runner and during his spare time is involved in outdoor activities esp. travelling and camping.s

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