Solar Energy + Microfinance = SunPower Afrique
SunPower Afrique’s mission is to connect microfinance institutions (MFIs) and their clients, as well as other infrastructure in West Africa, to solar electricity. To facilitate its programs, SunPower Afrique also connects these institutions and individuals to training and financing options, creating jobs and opportunities for economic development throughout a new supply chain, workforce and “green economy.”
SunPower Afrique’s projects offer a solution to the problem of insufficient and inconsistent electricity for West African MFIs and their clients’ businesses, one of the largest obstacles to their operational self-sufficiency and constraining both development and impact in the region.
Most importantly, SunPower Afrique’s objective is to create a successful and tangible example of how a solar industry can be established in countries such as Togo – reducing poverty, raising the quality of life and boosting local and regional development.
Power outages at MFIs’ headquarters and branch offices generate countless manpower hours lost, high overhead costs, low employee morale, a short shelf-life for office equipment and other low efficiencies in daily operations. Additionally, many MFIs’ local branches are completely void of any power source.
With reliable electricity, Microfinance Institutions can:
• Streamline banking functions to better manage loans and reduce overhead.
• Maintain consistent access to financial software programs to ensure reliability and organization of information.
• Implement a centralized and efficient information management system.
• Communicate with microfinance communities worldwide.
Additionally, working directly with MFI partners and clients, SunPower Afrique will develop a ‘Solar Loan Program’ that provides access to loans and trained local workers to install small-scale solar energy systems to increase the capacity of small businesses.
An MFI client selling pagnes (West Africa cloths). With a solar panel, she can power a telephone booth and earn more income from her business, such as this MFI client:
Energy Crisis in Togo
and the West African Region
To meet demand, Togo produces nearly 80% of its energy from biomass (charcoal and wood burning that destroys forests and arable land as well as induces desertification) and only 4% from electricity (the remaining 16% is produced from petroleum products). All electricity in Togo is provided through the state’s electrical distribution company, Compagnie Energie Electrique du Togo (CEET). Currently, the production and distribution of electricity are unable to meet the needs of residential and commercial operations, causing frequent rolling blackouts and interrupted service. Existing fuel shortages and underdeveloped infrastructure make solar power a competitive alternative to gasoline-powered generators, offering a reliable solution to Togo’s energy crisis that also reduces environmental degradation.
Togo’s Energy Usage in 2008.
Generators like this one are used to power homes and businesses during blackouts.
Microfinance
Togo hosts a dynamic and well-organized microfinance community. Microfinance, the provision of very small loans and other financial services to the poorest of the poor, is a proven strategy that empowers the world’s poorest people to pull themselves from poverty by starting, expanding or sustaining very small businesses.(1)
SunPower Afrique will partner with individual Microfinance Institutions (MFIs) and the National Association of Microfinance Institutions to provide solar power to MFIs’ rural branches and to educate populations about renewable energy. Working together with MFIs, SunPower Afrique will work to display the benefits of solar energy through their existing outreach networks, distributing knowledge of solar energy throughout the country and providing the financial services to install it.
One of the largest obstacles to the use of solar energy is its high startup cost. Microcredit represents an opportunity for all people to be able to afford and use solar energy. An inherent connection exists between the microfinance sector and solar energy. Both rest on ideals of long-term growth and self-sufficient development, and can mutually benefit from the products and concepts that each other offer.
SunPower Afrique’s goal is to bring solar energy to Togo in a way that will make it affordable for MFIs. SunPower Afrique will implement a payment schedule based on the model used by microfinance institutions. This system will reinforce existing MFI loan management systems and ensure successful repayment.
Eventually, microfinance clients will be able to take small loans directly from their MFIs to install solar modules that would help supply electricity to their own homes and businesses. Microfinance clients in West Africa are generally poor women or men, looking to start or increase the capacity of privately-owned, small businesses. With the income generated by their enterprises, microfinance clients boost local economies and increase the quality of life of their families and communities.
