GreenMicrofinancing

Over the winter break, my family traveled to Guatemala, a lush, beautiful country, recovering from a 35-year civil war which of course hampered its development.  Guatemala's biggest sources of dollars are remittances from Guatemalan emigres (20,000 of whom have recently been deported from the US back to Guatemala, thank you President Bush) and tourism.

Mindful of what I've learned about the lack of energy infrastructure in the developing world, and the impacts of energy poverty, I looked for things that typical travelers don't pay attention to - like electric outlets and light bulbs.

The most dramatic leg of our trip was flying north to Flores and continuing on another hour's drive to the Tikal National Park, home of the ancient Maya city of Tikal which is in the middle of a subtropical rainforest. Tourists get a double treat - a nature preserve with koatis, spider monkeys, and countless birds, along with one of the world's great archeological sites. This ancient city which once housed over 100,000 residents collapsed around 900.  Its downfall is described in a chapter in Jared Diamond's Collapse. Diamond elaborates on research which suggests the city was abandoned after extensive droughts rendered its fragile agriculture unsustainable.  Tikal has an elaborate water system, now excavated and working perfectly after 1200 years with just a coating of limestone to seal it, which contained an 18 month water supply.  So two years of drought did it in. A contributing factor to the drought was deforestation for agriculture -  a lesson to be heeded in our time.

We stayed at the lovely Jungle Lodge, one of 3 lodges in the National Park. The park is off-grid.  During the day, one doesn't really notice, since they provide their own power by diesel generator. However, when we tried to order ice cream, our server shrugged and explained, "In Tikal we have no freezers."  This of course is because freezers require a huge amount of energy, 24/7, something we take for granted in North America.  For dinner we walked to another lodge a few hundred feet away - in total darkness.  The lodges have their own electrical generators, but there are no overhead lights - just guards with flashlights.  arker than any of us had ever experienced.  Another reminder of how hard it is for us all to appreciate and understand how precious electric lighting is!

Evan Mills heads up The Lumina Project, studying the relative quality and cost of third world lighting options.  The goal, of course, is to find the most energy-efficient bulbs for the lowest price and spread them across the planet.  Here is a letter from Evan in today's inbox.   His work does not presume one source of financing over another, just investigating general practicality and affordability.

Keep up the great work, Dr. Mills! 

 ED lighting at home in Accra, Ghana: Photo by The World Bank, International Finance Corporation and Lighting Africa

Dear Colleagues,

The Lumina Project focuses on cultivating technologies and markets for affordable low-carbon off-grid lighting in the developing world.  Today we are pleased to release a new report entitled “Solid-State Lighting on a Shoestring Budget: The Economics of Off-Grid Lighting for Small Businesses in Kenya” [http://light.lbl.gov/pubs/tr/Lumina-TR3.pdf] . This work represents an ongoing collaboration among researchers from Humboldt State University and Lawrence Berkeley National Laboratory, sponsored by the Blum Center for Developing Economies at U.C. Berkeley.

Solid-state lighting based on commercially available light emitting diode (LED) technology has the potential to provide superior lighting services to low-income people in off-grid areas of developing countries, many of whom currently rely on fuel-based lighting sources such as kerosene.  If this potential is to be achieved in the near term, however, manufacturers must produce off-grid lighting products that are inexpensive, perform well, and meet the needs of potential end users.  At present, relatively few products meet all three of these goals.

The new report presents results from a detailed study of lighting use by micro-enterprises in two small towns in Kenya’s Rift Valley Province.  The work included a survey about lighting use by 50 small businesses, careful measurements of kerosene lighting use patterns and associated costs for 23 of these businesses, and a subsequent field trial in which 14 of the 23 businesses purchased LED lamps at market prices (or financed them with short-term credit) and used them over a number of months. 

A central goal of this work is to increase awareness on the part of manufacturers, policy makers, and other interested groups about the lighting needs, economics, and preferences of micro-enterprises in places like Kenya, as this group has potential to act as early adopters of off-grid lighting products based on LED technology.  The findings are also intended to inform manufacturers about key linkages between product design choices and the affordability of these products for small businesses in places like Kenya.

Key findings include the following:

1)    Kerosene for lighting is a modest but important operating expense for many micro-enterprises that operate at night, with costs ranging from approximately $1 to $13 per month for the 23 businesses for which we made careful measurements.

2)    The micro-enterprises that we studied had a strong interest in rechargeable LED lamps for both business and home lighting applications, and could afford them (without subsidy) at retail prices below $15.

3)    The off-grid business owners expressed a preference for off-grid LED lighting products that were charged using AC grid electricity (e.g. at cell-phone charging shops, common in the area) over products that included solar chargers, due to the higher initial purchase price of the latter type of lamp.
 
4)    The businesses indicated a preference for lamps that had a relatively large battery that could be charged less often, provided that this did not increase in the purchase price of the lamps substantially.  This was true because the price to charge a battery in a shop is based on a flat rate that is relatively independent of the ampere-hour capacity of the battery.

5)    Finally, we found that business owners were interested in LED lighting even if the operating costs of the lamps were slightly higher than the cost of operating a kerosene lamp, presumably where LED lamps performed well and delivered superior lighting services relative to the kerosene lamps that they were using.

Data collection is ongoing and more results will be reported in 2009.

Download the report here: http://light.lbl.gov/pubs/tr/Lumina-TR3.pdf
Learn more about the Lumina Project here: http://light.lbl.gov

Our road to the NetImpact conference was very fortuitous.  Listening to WHYY (our local NPR radio) on a roadtrip in July, I heard a great interview with Muhammad Yunus.  One of the call-in questioners was Emily Schiller, a Wharton student who mentioned that she is the chair of NetImpact's national conference entitled "The Sustainable Advantage: Creating Social and Environmental Value".  Since GreenMicrofinance is based in the Philly area, not far from Wharton, I scribbled Emily's name down and tracked her down to meet.  Over coffee I realized that the July broadcast was actually a replay of Yunus' January visit to Philadelphia - he spoke at the Free Library, and I was there.  Fortunately it was not too late for us to be included in the NetImpact program, since our missions match so perfectly.

My session, a Friday lunch RoundTable, is titled " Microfinance Meets Climate Change: How OffsettingYour Ipod Can Provide Clean Energy for the Bottom of the Pyramid".  When I began to learn how big a difference just a minuscule amount of locally generated clean renewable electricity can make in the life of microfinance clients, by lowering their overhead and expanding their use of lights and light appliances like cellphones or radios,  I was astonished.  Wouldn't it be great if we could somehow share some of our electricity, which we take for granted and use quite wastefully?   Kind of like when your mom scolded you about wasting food, when children were starving in Armenia....

Microfinance can actually make this possible.  We'll kick around the numbers at the session, seeing how to balance an average American household's electrical consumption (about 11,040 kWh a year) with an entry level solar system for a microfinance client's 74 kWh a year.  Small as that sounds, it  is enough  to power four hours of lights, charge a cellular, and play a radio or energy-efficient computer! 

After a fair amount of research, we can say with confidence that the amount of energy used in charging an Ipod for four hours daily for a year - get this - would power a third world family for 3 1/2 weeks!

Stay tuned!  

Photo from AME SUD.

The GreenMicrofinance team, based in Phoenixville, PA, but international in reach, is excited to invite you to our first public Greater Delaware Valley event.  Our mission is at the sweet spot of environmental concern and poverty alleviation: bringing clean, affordable, renewable, local energy to the 1.8 billion people lacking access to grid-distributed energy.  It is a gargantuan task with the potential for equally spectacular benefits – helping hardworking families out of poverty while furthering climate change solutions and environmental stewardship.

In 2002 when we began our mission of bringing environmental responsibility to microfinance, eco-issues were considered a luxury.  Now there is a global consensus that clean energy is THE CENTRAL ISSUE of the 21^st century, for rich and poor countries alike.  In Thomas Friedman’s recent book, Hot, Flat, and Crowded, he states that the “task of creating the tools, systems, energy sources, and ethics that will allow our planet to grow in cleaner, more sustainable ways is going to be the greatest challenge of our lifetime.”

Through both our non-profit GreenMicrofinance Center and our GMf business side, we are launching many complementary initiatives which we are eager to share with like-minded friends, donors, and potential Socially Responsible Investors.  You can already access our vast, open-source online library, right here at our website.

On Saturday, November 15, 2008, at 7:30 PM we invite you to join us to learn more about our pioneering initiatives.  We really feel that after six years of groundwork laid by many cutting edge microfinance and environmental experts  and now joined by an expanded team (many of whom you will meet),  our time has come!

We are delighted to feature our Indian colleague, the esteemed Vidya Sagar, winner of many international awards for his work in bringing biomass energy to scale.  We are honored that Mr. Sagar is making a special stop on his American tour to meet with GreenMicrofinance in Philadelphia.  While GMf advocates for all clean energy technologies – solar, hydro, wind as well as biomass – we are especially wowed by Mr. Sagar’s accomplishments and vision and are sure you will be, too.

The event, while graciously hosted at St. Peter’s Episcopal Church in Phoenixville, is open to the public and is completely non-denominational.  There will be no solicitation of funds.

Please come meet the GMf team, Mr. Sagar, and learn more about our audacious goals, as well as impressive track record!

Thomas Israel, Board Chair                                          
Betsy Teutsch, Director of Special Projects

 GreenMicrofinance's Clean Technology expert, Kathleen Robbins, is known to many of you from her GMf blog posts about her work with jatropha in Haiti, as well as her reports from Bali, Vietnam and other locations her important work takes her.  Her passion has not gone unnoticed!  She is one of the recipient's of ConcernUSA's Brigid Award, which she will receive at their annual event this winter in Chicago.  Concern USA is part of Concern International, founded in Ireland in response to Biafra's famine in the 70's.  (For baby boomer like myself, this was a terrible, longterm crisis which motivated many young people to political action,  like Darfur is today. )  Concern International's mission is "targeting extreme poverty through effective programs" and they now operate in 28 countries around the world, both delivering help in the many global disasters which disproportionately effective the world's poorest, as well as providing programs to address the root causes of extreme poverty.

The award is presented annually to three outstanding women, honoring them for demonstrating justice, generosity and compassion in their lives and work.  " Brigid, a fifth century Irish woman, dedicated her life to helping the poor and the sick. She was a protector of the environment, a promoter of peace and reconciliation, a defender of equality, and an advocate of the less fortunate."  Kathleen (are you of Irish descent, Kathleen?) is being honored for her work in environmental issues and rural poverty.  Truly, her Jatropha project can address both ecology and poverty simultaneously.  We are so proud of you, Kathleen!

Wish we could all be there to see you receive this much deserved honor.

Photo by Pamoj - women extracting jatropha oil

For those who live in the industrialized world, our experience of a non-electrified existence is very limited.  For many of us, the normalcy of turning on light switches and plugging in appliances to do our work goes back 3 or 4 generations.  Electrical access is so ubiquitous as to be virtually invisible.  So extensive is our lack of attention to electricity that when we lose it in, say, a storm-related black-out, we are surprised at how many of our systems stop working.  Landlines, boilers, hot water, in addition to the obvious refrigeration/freezer system, garage doors, and traffic lights – you name it.  Without electricity modern life quickly is dismantled.  Candles, flashlights, crank radios, and neighbors suddenly appear.  But such outages are temporary; in a worst-case dismal scenario, maybe a few days.

In the developing world, the absence of electrification forces 1.8 billion people to make do without the blessings so many of us take for granted, because we have never known life without them.  It means long, hard hours of physical labor, performing tasks that take us moments.  It means lugging firewood or dung to burn and living with smoky air.  Or using kerosene lamps and buying and transporting the fuel for them in small, expensive amounts.  It means going to bed when it’s dark.  It means using precious fuel to boil water, just to purify it, since if there isn’t electricity, there’s likely not running water either.  It means doing chores during daylight, instead of attending school.  It means dependence on generators or expensive, single-use batteries, since it’s not possible to recharge batteries without electricity. 

The overall term for this grossly inequitable distribution of the world’s power sources is energy poverty.  It is one of many ways that the world’s poorest remain so, in a discouraging cycle of hard work not yielding any way out of marginal existence.  It is both an ethical issue as well as a win-win opportunity for entrepreneurial solutions.  In a world which is meeting its maximum carbon load as well as peak oil, the future for the 1.8 billion without access to energy is undeniably through alternative, renewable, clean energy technologies, jumpstarted by infusions of capital.  Since third world families consume such modest amounts of energy relative to the West, small inputs of micro-hydro, solar, biofuel, or micro-wind generated energy have the potential to provide a crucial toehold on the ladder up out of subsistence, bringing enhanced health and literacy along, too!

Let us join together to not just solve these problems, but thrive together, on a greener, more just earth.

Since learning about GreenMicrofinance’s mission, connecting the world’s poorest to clean, renewable energy, I’ve been reading about village life with no electricity.  Activities which for us are so insignificant here in the first world – plugging in an appliance, turning on the light – are still dreams for many in the world.  One of the articles I read spoke of “rural electrification” and a light – sorry about the pun – went off in my head.

I heard this term last when I was a little girl.  I was born in Fargo, North Dakota, in 1952.  North Dakota is a vast prairie state, predominantly agricultural, sparsely populated. 

 Rural electrification programs were launched during the Depression, and in the 1950’s, the state was still actively proud of the electric coop movement which supplied power to farms.  (We learned all about North Dakota’s lignite coal reserves in grade school.  Electricity in North Dakota was generated by burning it, creating very dirty energy, but of course we didn’t see the implications of that in the 1950’s.)   I remember one election when I was a little girl – it took three days for the last precincts to report in.  Imagine how much technology we’ve transversed in 55 years in the United States.  Now Off-Gridders are eco-pioneers who want to generate their own clean energy to avoid fossil fuel energy generation and its polluting emissions, intentionally unplugging from the grid.

GreenMicrofinance gives us an opportunity to extend the benefits of clean energy to those who do not take these activities for granted, for whom they would be a giant step forward.  Even the presence of a recharging flashlight is a giant upgrade in quality of life – so imagine what an overhead light, refrigerator, and a stove could do?  And greenmicrofinancing means delivering sustainable energy, so it adds nothing to the world’s climate change/global warming challenges.  It is a golden opportunity for us to help the world’s poorest enjoy the benefits of electricity without the environmental detriments – leapfrogging right to the clean energy options of the future! 

 You can read more of the specifics at our very loaded website – www.GreenMicrofinance.org
Betsy Teutsch, Director of Special Projects @ GreenMicrofinance