News 2009

Innovative Approach for Rural Electrification Project Financing

First collaboration between Sunlabob and a small private investor

A small private investor from Germany, Mr. Rainer Hiller, has recently stepped forward to contribute to the expansion of Sunlabob’s solar lantern rental system (SLRS) project. Sunlabob has extensive experience of working with development banks or non-governmental organisations for rural electrification project financing, but this is the first time Sunlabob engages in such partnership with a small private investor. It is an innovative approach, which matches our existing partnership with small entrepreneurs in off-grid areas who provide renewable energy solutions in their communities. In essence, Sunlabob’s projects have the potential to match small investors with small local entrepreneurs, who are all working towards the same aim: alleviating poverty through rural electrification.

The SLRS appealed to Mr Hiller because it is a pro-poor solution and it substitutes the use of kerosene for lighting purposes in rural households. Mr. Hiller’s investment covered the cost of a charging station with lanterns, the system’s installation, and villager training, in a Lao village called Ban Phonlek. The village is situated in central Laos (Khammuane Province) and was chosen because it is located in a district identified as poor (Mahaxai District) by the NGPES (National Growth and Poverty Eradication Strategy), and because it is too remote for the electricity grid to reach the village in the foreseeable future.

Following the recent installation of the system and initial training, further monitoring activities and coaching visits will take place regularly in order to ensure that the system is adopted and used properly.

A return on investment is expected within 5 years, making this private-private partnership a reasonably profitable venture from the small investor’s view point. From the village entrepreneur’s perspective, the system has been designed in such a way that it is profitable from day 1.

Mr Hiller will visit Laos at the end of December 2009, and we look forward to showing him the SLRS in operation in Ban Phonlek. We hope that this experience will pave the way for the future involvement of more small private investors with an interest in development and renewable energy technologies.

For more information about Sunlabob’s SLRS, please consult the webpage of the SLRS.