- Architecture&Design.com - Aug 22, 2014
- Fireside Science - October 18, 2013
- Anglican Overseas Aid - 2013
- Business for Millennium Development - 2013
- National Slum Dwellers Federation of Uganda - June 18, 2013
- Next Billion 2.0 - May 27, 2013
- Smart Company - July 19,2012
- Australian Anthill - July 27, 2012
- REnew Economy - July 20, 2012
- REnew Economy - August 1, 2012
- Ethical Investors - June 04, 2012
- Antinuclear - June 01, 2012
- ProBono Australia - June 5, 2012
- REnew Economy - May 17, 2012
- Lighting Africa - June 05, 2012
- SciDev.Net - June 13, 2012
- Bloomberg - June 13, 2012
- The Times of India - June 1, 2012
- Next Billion 2.0 - June 26, 2012
- Next Billion 2.0 - May 31, 2012
- Alternative Energy Africa - May 31, 2012
- United Nations Development Programme - May 23, 2012
- EcoSeed - May 25, 2012
- NewNet - May 24, 2012
- PR WIRE - 2012
- WhaTech - 2012
- Lighting Africa - May 15,2012
- Mercy Corps - March 20, 2012
- TIME - December 08, 2011
This is just one of the acerbic opinions that Victor Papanek wrote in his seminal book “Design for the Real World.” How is it that a book so scathing of designers has been in continuous publication for the past 43 years, and translated into 23 languages?
How did an author so forthright in his negative view of the design profession end up as Professor of Architecture and Design at the University of Kansas? (After all the first sentence of his book reads, “There are professions more harmful than industrial design, but only a few of them.”)
Might it be that Papanek, who once studied architecture under Frank Lloyd Wright, had touched a raw nerve. That he articulated what many designers and architects knew to be true. “Man knows so much and does so little,” was how one of Papanek’s contemporaries, Buckminster Fuller expressed it.
We can certainly ‘do’. That is not up for dispute. But can we ‘do more’? It is relatively easy to design bright and shiny artefacts, grand pieces of ‘art-itecture'. So much harder to ‘design for the real world’, to create buildings and products that improve the lives for the majority of humanity.
Let’s look at some sobering statistics. Even after a concerted effort “748 million people – mostly the poor and marginalized – still lack access to an improved drinking water source,” according to the 2014 report of the World Health Organization United Nations Children’s Fund (UNICEF) Joint Monitoring Program for Water Supply and Sanitation.
The same report noted that 14 per cent of humankind still don’t have access to toilets -— “Those one billion people with no sanitation facility whatsoever continue to defecate in gutters, behind bushes or in open water bodies, with no dignity or privacy.” A few years back he UN’s Habitat program published a report indicating that “the world slum population should reach 889 million by 2020.”
Such data highlights the scope available for the design fraternity to apply its amazing talent in creativity and problem solving for the betterment of others, to counter Victor Papanek’s jibe that, “the genuine needs of man have often been neglected by the designer.”
However we can “Design Like You Give A Damn” as Cameron Sinclair and Kate Stohr titled their 2006 book about the many projects of Architecture for Humanity, an organization they founded in 1999. ”Architecture for Humanity was born with a simple idea: that designers could use their skills and passions to literally change the world.” Now fifteen years on, that simple idea has spawned 59 Chapters, spread over 16 countries including Australia, having contributed kindergartens, schools, community centers, housing markets, sports facilities and the like in about 50 countries. Sinclair and Stohr have received more awards than we have room to list here. In October 2012 the Australian branch of RedR celebrated 20 years of humanitarian action. Over those two decades, they’ve deployed over 700 people to 75 countries. Julien Temple, Manager – Humanitarian Partnerships, UNICEF, praised the organization for their “support in providing emergency surge staffing to critical humanitarian responses worldwide.” The Register of Engineers for Disaster Relief, as RedR was originally known, was founded in 1980 by British engineer, Peter Guthrie, who saw a pressing need for his fellow practitioners “who could be called upon at short notice to work with frontline relief agencies.” A few years on, in 1989, the not-for-profit Society for Responsible Design (SRD) was established in Sydney. And two years later, the EcoDesign Foundation came along. Both would eventually merge their activities under the SRD name. As the world’s oldest surviving eco-design organization, the SRD is still disseminating information on environmentally and socially responsible design. Other like-minded initiatives have sprouted up along the way. In 1995 Japanese architect Shigeru Ban established the Voluntary Architects’ Network to organize post-disaster aid in the field of construction. In 1999 Builders without Borders started up, as, “an international network of ecological builders who advocate the use of natural, local, and affordable materials in construction.” In the same year Architects Without Frontiers - Australia came to life, after Esther Charlesworth led a group of Melbourne University design students to post-conflict Bosnia-Hertzegovina. In 2001 Emergency Architects France (Architectes de l'Urgence) formed, with an Australian office of EA operating between 2005 and 2013. This year Emergency Architects was awarded the International Union Architects’ Vassilis Sgoutas Prize for “serving the most impoverished and for the conception of inventive solutions for reducing poverty and indigence.” (Australian architect Anna Rubbo, founder of Global Studio, received an honorable mention for her humanitarian work.) Habitat for Humanity is the “world’s number one not-for-profit provider of housing for low-income families living in poverty.” They've built almost 600,000 houses, sheltering more than three million people in over 3,000 communities. The volunteers and partners believe they don’t just provide a roof – they build communities. HfH is anchored by the conviction that safe, affordable housing provides a critical foundation for breaking the cycle of poverty. Supported families contribute 500 hours of ‘sweat equity’ becoming intimately involved in constructing their own home. Once they have paid off their interest-free loan it is transferred to another family in need. Whilst over 100 homes have been built locally, most of HfH Australia’s work is in the Asia Pacific region. The Housing for Health process aims to assess, repair or replace ‘health hardware’, so that houses are safe and the occupants have the ability to carry out healthy living practices. Initially developed in the 1980s in South Australia by Healthabitat in conjunction with local Aboriginal Health Service, they set out to maximize community health gains, particularly for children aged 0-5 years. The results speak for themselves; with a recent study by NSW Ministry of Health revealing the rate of hospital separations for infectious diseases reduced by 40 per cent for communities who received the Housing for Health program. Their comprehensive online guide,housingforhealth.com, provides solutions to achieving the Healthy Living Practices for all built environment professionals from specification and documentation through to quality control and maintenance. In 2012 Housing for Health exhibited for Australia at the World Architectural Biennale in Italy. The previous year the program won the Australian Institute of Architects’ Leadership in Sustainability Prize and the UN World Habitat Award.
In many developing countries kerosene is a common source of fuel. It’s been estimated that 500 million households use fuels for lighting, especially kerosene, and each household uses one to ten liters of kerosene a month. It’s commonly used for lighting, heating and cooking. But there are a lot of problems with using kerosene. Kerosene and solid fuels such as wood are often burned indoors without enough ventilation. The toxic fumes cause health problems, for example lung and eye infections. Kerosene is a non-renewable resource. It costs hundreds of times more to produce light from kerosene than it does to produce the same amount of light by electricity. These lamps are used by the world’s poorest people. It’s also dangerous. Nicholas Lam from the Department of Environmental Health Sciences at the University of California, Berkely, led two studies that were published last year, that focus on the harmful effects of kerosene. The well-known hazards of burning kerosene are fire, explosion and poisoning. But many other potential health risks have been identified – such as cancer, lung disease, cataracts, low birth weight, and a higher risk of getting an infectious disease. People often think of kerosene as a cleaner burning fuel than the alternatives. But burning kerosene can emit harmful chemicals like carbon monoxide, other poisonous gases, and fine particulate matter. The type of kerosene lamp with a wick that’s typically used in developing countries produces the most particulate matter (“soot”). The study showed that people who use these lamps have this soot in some of their lung cells. Because the light these lamps produce is weak, people using them tend to get close to the lamp, which increases the amount of exposure to these poisons. For example people – often children – studying by these lamps can be up close to them for hours. (Lam et al. 2012a) The wick kerosene lamp produces a lot of black carbon – Dr Lam found that it produces 20 times as much black carbon as was though. Black carbon is produced when the fuel is not completely burnt, and can absorb light, so it heats the atmosphere. Reducing black carbon emissions from burning kerosene could dramatically reduce the earth’s warming (Lam 2012b). Replacing kerosene lamps with solar lighting is something that can readily be done to potentially limit temperature increases. It will have many other immediate benefits including improved health and safety and saving money. Fiona Oates returned to Australia early this year after spending ten years in Iringa, Tanzania. One of her projects, started with the help of a grant from the Australian High Commission in Nairobi, was to help install solar lights in schools. Students in Tanzania take study very seriously because it creates opportunities for a better standard of living. With 12 hours of darkness a day, a light means that Tanzanian students can study more effectively. If a school has solar lighting students return to school at night to study. The Solar for Schools Program started after a 2010 fire in the dormitory of a girls’ school near Iringa killed twelve students when a candle was left unattended. When people saw the benefits of the solar lighting that was going into schools they asked if they could buy solar kits too. Fiona set up Watu na Nuru (Light for the People) to help bring solar lighting to the wider community. The project was set up with a loan which was paid back within the first year of operation. The loan paid for a container-load of solar lights. The project is now self-sustaining, and has four full-time employees. A mobile shop visits the rural markets, and entrepreneurs are helped to set up business selling lamps. Watu na Nuru also manages theSolar for Life program, which gives the top ten students at each primary school are given a solar lamp to help them realise their potential. These lamps are funded by donations. The top ten students in each school were given donated solar lamps to help them get the marks they need to go further in school. I had the opportunity to visit Fiona, her husband Ian and their daughter Sarah last year in Tanzania. I was privileged to visit a rural village and market with Fiona and Ian, where Fiona and her team sold solar lights to the villagers. It was sobering to see the bare bones existence, the grace and warmth of the people, and the difference a solar light can make. It was also amazing to see the reach of mobile phones into these remote parts of Tanzania. The region was in drought and life is basic and tough for these subsistence farmers. The gradual spread of solar technology will no doubt improve their lives. “The need for environmentally friendly, safe and affordable solar lighting continues. I have seen parents weep in gratitude and faces of students literally light up with the gift of a lamp. To be able to give a student the opportunity to study is potentially giving them a future – a life – which can in turn also help their family into the future”, Fiona said. “As well as providing a light in the home, lamps can help financially. After the cost of the lamp has been made up, a family can use the money that would otherwise be spent on fuel for other necessities.” Watu na Nuru sells solar lights made by Barefoot Power, an Australian company. The solar panels can also charge a mobile phone. In Tanzania mobile phone calls are very cheap, which means that mobile phones are now common even in remote rural villages. People who own a solar light can earn money charging phones, and save their customers a long trip to find electricity. Barefoot Power in Australia is one of over 50 companies whose solar lights are being introduced to developing countries. In 2010 inventors Sam and Harry Andrews won the People’s Choice award on the Australian Broadcasting Commission’s “The New Inventors” television program, for the compact “Firefly” desklamp. The lamps are robust, fully guaranteed, and have a detachable solar panel which can also charge a phone. Larger lights can charge a radio. I brought one of the Firefly lamps back from Tanzania. I love it, it’s very light and bright. Fiona now travels in the Asia-Pacific region promoting the benefits of these solar lamps. Barefoot Power itself is “on a mission to … help eradicate energy poverty.” Different organizations like the World Bank, the Lumina Project, Lighting Africa, and of course the companies that produce the lights, are helping to bring solar lighting technology to the developing world, from Mongolia to Fiji. Micro solar technology using the efficient light emitting diode (LED) is a safer, renewable, and ultimately cheaper alternative to kerosene, and it’s gradually finding its way into these communities. There’s an initial cost but the light soon pays for itself and frees up money for other essentials. Many of these lights are being distributed by encouraging entrepreneurship rather than by direct aid. Investors are gradually realizing there’s a huge market there. Solar lighting has a lot going for it in the developing world – reducing pollution, improving health and saving money. Not to mention an abundance of sunlight in most of these countries.
More than 80 per cent of the population of the Solomon Islands and Vanuatu live in rural areas scattered across multiple islands. This makes communications, transport and service delivery extremely challenging for governments already facing issues with governance and corruption. Many of these people are not connected to the electricity grid, which adds to the challenges faced by these communities. It is sometimes referred to as ‘energy poverty’. Opportunities for unskilled labourers to find ongoing and meaningful work, particularly in the outlying islands, are extremely limited, especially for women. While women contribute to growing and selling food, more needs to be done to help them to take control of their own income generation and how they use it.
Our united response
Anglican Overseas Aid has partnered with Australian company Barefoot Power to support the Anglican Church of Melanesia (ACOM) in its work with the Mothers Union and other church groups to set up small businesses. This work involves training men and women in business skills to enable them to establish solar lighting and communication technology businesses in a bag. The project uses a self-sustaining finance model that has been successfully implemented in other parts of the world and is based on selling solar lamps to households in surrounding villages. The solar desk lamps are simple devices that, once charged, can provide up to 30 hours of light, reducing a household’s reliance on kerosene entirely. Each of the solar “agents” is initially given lamps on credit to sell in designated areas at prices that are affordable in the local economy. When they have sold the lamps, they then pay back the value of the original loan, and use any profits to buy more lamps to sell. The training includes maintenance skills, technical information on the product, sales and marketing techniques, financial management, stock control, fundraising and entrepreneurship. As the entrepreneurship training is generic, these skills have been transferred to other products or business opportunities. The Anglican Church of Melanesia manages the project implementation. It oversees a microcapital fund that purchases the solar lamps and ensures stock is available for distribution to micro-entrepreneurs. ACOM and participants will also develop a strategy for increasing the micro-capital pool and eventually use it to purchase other marketable goods.
The level of interest and uptake of the solar lights has been huge. Its potential is widely accepted by the target communities who understand the importance of providing meaningful work opportunities for young people, particularly in the outer islands. Decreasing reliance on kerosene that is both expensive and dangerous is an obvious benefit. The aim is to scale up the project to include all six Anglican Church of Melanesia training institutions to reach communities across the whole of Solomon Islands. It is estimated that as many as 5000 remote households could access electricity through solar power over the next three years. The project is also popular because of the environmental benefits it offers. Solar energy is recognised as a climate-friendly technology because it does not produce greenhouse gas emissions. Across the Pacific, communities are concerned about the impacts of changing weather conditions given their high level of vulnerability to climate shocks such as cyclones, torrential downpours and tidal changes resulting in flooding. Using solar energy supports both long-term sustainability and improves quality of life for Solomon Islanders.
Solar Lights Change Lives
Our program has provided life-changing light that isolated families would otherwise not be able to afford. Since establishing our 'Business in a Bag' income generation component $10,000 in profit has been generated for Solomon Island communities.
Barefoot Power is a global, social for-profit enterprise that manufactures and distributes solar phone charging, lighting products and business development services to people at the base of the global economic pyramid. Barefoot Power has impacted the lives of 1 million people in over 20 countries by supplying solar powered lights, home lighting systems, and phone charging solutions. Through a diverse distribution strategy including global importers to micro franchises, Barefoot Power reaches the most remote communities.Over 1.5 billion people lack access to electricity and Barefoot Power is on a mission, to bring affordable renewable energy and efficient lighting to 5 million people by 2013 and 10 million people by 2015 and help eradicate energy poverty. How will they do that? By bringing electricity to millions of people that currently use kerosene lighting and walk far for phone and battery charging, they plan on reversing the traditional process of rural electrification while reducing the global carbon footprint. Barefoot Power is funded through a diverse group of investors and the European Union. Learn more about their products, distribution models and financing opportunities at www.barefootpower.com.
Solar energy is increasingly becoming popular in Uganda and when looked at critically, one can only ask why not? Solar energy has quite a number of benefits and is comparatively cheap when compared to other energy sources. Although solar power is an energy source that we have only recently tapped into, it may easily become the most important energy source of the future.According to a United Nations report, one quarter of the world’s population live without electricity. Those who cannot afford power at all spend a large part of their income on kerosene for lamps or go to town to charge their batteries several times a week.
Burning kerosene contributes to indoor air pollution, which is estimated to kill 1.6 million people each year. Kerosene lamps also lead to fires that lead to loss of property and death.Solar energy saves money, allows children to study in the night and gives families access to information through radio, television and mobile phones.Recently Angela Nakijooba, a federation member from Nakawa participated in a training workshop on solar energy organized by Barefoot Solar, a Ugandan social enterprise focused on distributing Firefly solar lighting systems to people at the base of the global economic pyramid. The workshop focused on equipping dedicated entrepreneurs with a training program and developing micro-franchises enabling them to earn a living distributing safe, affordable, healthy alternatives to lighting.
As narrated by Nakijooba AngelIa:
I am now a saleswoman with Barefoot solar and am very happy about that. I like doing business and I keep looking out for something that I can do to increase my daily income; solar products happened to be falling in that category when I made my small list and also after looking at what was happening in our settlements. I come from Kisenyi I settlement which is found in Nakawa division .Power supply has been a problem in this place for as long as I can remember and because of that there are many illegal connections here commonly known as ‘Kamyufu’. Many people use candles to light their homes at night and some use kerosene lamps. I happened to hear about Barefoot solar through our chairperson Kiberu Hassan, who contacted me to inform me that there would be an entrepreneurship training facilitated by Barefoot Solar officer’s .He wanted me to inform willing Nakawa federators who would have to pay UGX 30,000 for the training. The total cost for the training was UGX 100,000 but ACTogether /NSDFU was to facilitate the UGX 70,000.The cost attached was for purposes of ensuring those participating were willing parties who would take the training seriously and hence find it beneficial. When I heard that they had training opportunities on how to become a sales woman selling their products, I knew I could not miss out. I informed my members and we prepared for the training. The Barefoot solar training team was very good and through, they taught in both English and Luganda and kept using words to ensure all participants were at per. Among the items taught were entrepreneurship skills-how to be a good entrepreneur and business person, how to engage a customer and have a convincing tongue. We were also taken through a chart that showed the benefit of using solar energy vis a vis the candles and kerosene lamps. Our slums have had a history of fires which are usually caused by negligence in handling candles and kerosene lamps resulting into massive losses of property as well as people’s lives. Some of these fires are caused by electric malfunction which electric connections happen to be illegal.At the end of the two day training, we left with valuable knowledge on entrepreneurship, a start -up kit which consists of the firefly lamp, a Barefoot solar working apron and a signed certificate showing attendance of the training. It is now three weeks after the training and I am reaping from my new business. It is picking up and I am getting more and more requests of the fire-fly lamp every day. Most people with small businesses and shops that open up till around 9pm in my area have been asking for this lamp because it is reliable and cheap as compared to candles and kerosene lamps. Some women have also bought the lamp for their families especially those with school-going children who use it to study. I know am yet to see the full potential of this business but I know this is a good thing, it is a good source of income, that I can say.
Over 1.5 billion people globally ‐ 400 million of whom are in low‐income markets across India – lack access to clean and reliable energy because of limited connectivity to electricity grids. For those families living at the bottom of the economic pyramid – typically on less than $5.50 USD per day – the most common methods of energy are fossil fuels such as kerosene, coal, and diesel generator‐sets. Additionally, for many low‐income people today, mobile phones represent an important connection to markets and other income‐generating opportunities. However, traditional kerosene options are both harmful and expensive. They have been repeatedly proven to be the primary cause of indoor air pollution, which leads to an increased likelihood of burns and cancer. Moreover, due to limited connectivity to an electric grid, families are forced to walk miles daily for electric access to charge much‐ needed phones and batteries. Recognizing these challenges, Barefoot Power, a growing venture based in Australia, aims to address India’s growing energy issue at the source by leveraging solar power. Founded in 2005, Barefoot Power has created affordable lighting and phone charging products tailored for low‐ income markets – including 20 developing countries across Africa, America and, more recently, China. My company, Ennovent, which accelerates innovations for sustainability in low‐income markets, invested in Barefoot Power in 2011 to assist with the organization’s expansion into India.
Market opportunity and challenges
With approximately 75–80 million Indian households off the grid and less than 5 percent market penetration by existing providers, there is significant business potential for home products powered by solar energy. Even with conservative estimated average revenue of 200 rupees a month per household, the market opportunity is approximately $4 billion USD in India. However, even for an organization like Barefoot Power, whose business model has been successfully scaled in low‐ income markets across Africa, expanding into India has presented a unique set of challenges. When establishing operations in early 2012, Barefoot Power dealt with issues such as high custom duties, lack of consumer awareness about solar energy home products and long conversion times while working with the government to receive certification for various products. Additionally, with each Indian state being almost the size of a European country and equally diverse in culture and language, catering to multiple states simultaneously has proven complex. To realize success, multiple distribution strategies and customization levels have been required. Market opportunity and challenges A two‐pronged distribution approach
To ensure that Barefoot Power can rapidly expand within the focus states of Karnataka, Tamil Nadu, Gujarat, Bihar and Uttar Pradesh by mid‐2013 and make safe and affordable energy options more accessible, the company is focused on a two‐pronged distribution approach. Firstly, Barefoot Power is forming partnerships with rural distribution companies as well as various non‐profits, community groups, and faith‐based organizations to achieve distribution of their products at a grassroots level. Being a young and versatile company themselves and only just establishing operations in India, Barefoot Power also believes in the potential of micro‐entrepreneurs. “Across these states, the company will also partner with several micro‐entrepreneurs based in rural villages and small towns,” said Vernie Sannoo, Managing Director of Barefoot Power, India. “We envision empowering thousands of entrepreneurs by training them in product demonstration, sale and service of our entire range of products so that together we can faster reduce the impact of energy poverty in India.” Scaling up in India
Simply refining distribution strategies, however, is not enough to effectively scale in India; customization and adaptation of both products and financial models is required. For example, Sannoo said that in India, Barefoot Power will introduce brighter 1.5W lights to cater to local demand. The company also is creating an entirely new series called Barefoot Connect with advanced microprocessor‐based technology and superior aesthetics that will have longer run times and the ability to power devices such as radios, fans and televisions. Keeping in mind that developing communities in India have limited resources for what can be seen as capital expenditures, Barefoot Power also will be providing various financing options. By partnering with various district corporate banks, micro‐finance organizations such as Margdarshak and ESAF India, and leading private‐sector corporate banks, Barefoot Power will enable individuals to pay off the Barefoot Firefly Mobile light, for example, in as little as three months and begin saving for other necessities. India as a market represents both substantial opportunities as well as challenges. Barefoot Power has taken meaningful strides in adapting its business model and value proposition to effectively scale in India. Through Barefoot Power’s expansion in India, more homes in India will gain access to a cleaner and more efficient source of power. More importantly, micro‐entrepreneurs in villages will be able to extend shop hours and generate additional income, while more children will be able to do their homework at night, thereby considerably improving their education opportunities.
Social enterprise Barefoot Power has raised $5.8 million from investors, as it seeks to bring affordable renewable energy and efficient lighting to five million people by next year. Founded in 2005, Barefoot Power manufactures and distributes solar phone charging, lighting products and business development services to people in less developed countries. Barefoot Power wants to bring affordable renewable energy and efficient lighting to five million people by 2013 and 10 million people by 2015, in a bid to eradicate energy poverty. The Sydney-based business is funded through a group of investors and the European Union. Last year, Barefoot Power featured in the Global Cleantech 100, a list produced annually by the Cleantech Group, which ranks the world’s top 100 clean tech companies. It has now raised a $5.8 million Series B funding round from three social investment funds – the d.o.b foundation, ennovent, and the Insitor Fund. These investors join existing shareholders, including The Grace Foundation, Oikocredit and a number of private angel investors. Financial services firm Unitus Capital was the sole advisor to Barefoot Power for the transaction. While the terms of the deal are unknown, Barefoot Power chief executive Rick Hooper says the funds will be used to “continue the solid growth trajectory and potential” of the business. “We appreciate the commitment by new shareholders and the continuing support of existing shareholders,” Hooper says. “[The funding] solidly positions us to meet our target of impacting 10 million people by 2015.” Hedwig Siewertsen, director of the d.o.b foundation, complimented Barefoot Power on closing the equity round. “We chose to invest in Barefoot Power because it provides access to an affordable and environmentally friendly product for people that currently live without electricity,” Siewertsen said in a statement. “Bringing a product to [African cities] Mombasa or Accra is not so difficult.” “Getting it deep into the power grid-lacking markets through a network of dealers and micro-entrepreneurs who can offer a warranty for the product – that is the real challenge.” “Barefoot Power has been addressing [that challenge] successfully in the past few years.” John Altmann, founder and executive director of The Grace Foundation, based in Melbourne, said the benefits to society, combined with the potential financial returns, are “compelling”. “We are confident in the ability of the talented leadership team of Barefoot Power to grow the company,” Altmann said in a statement. “[We] look forward to the value the three new social investment funds will bring through their interaction with management and the board.” Last year, Barefoot Power founder Stewart Craine told StartupSmart Australia is still a long way behind with regard to social entrepreneurship. “It’s a shame. We’re an island – Africa is a distant concept and PNG is an uninvestable country,” he said. “Companies don’t have a strong enough imagination to change the world. If you have to battle with philosophies before getting the money, it’s very difficult.” “It’s very hard to find the funding in Australia. All the government programs are very expat-focused.” This article first appeared on StartupSmart.
Barefoot Power, a for-profit social enterprise, has won $5.8 million in Series B funding from three new investors and two existing ones, further strengthening its case for a new business model to solve global problems. The firm, which develops and sells low-cost, environmentally friendly lamps to the poorest of the poor, said it attracted the funds from three social investing funds – the Netherlands’ d.o.b Foundation, Austria’s ennovent and Cambodia’s Insitor Fund. Also pouring more money into the company are The Grace Foundation of Melbourne and the Netherlands’ Oikocredit Ecumenical Development Coop. “We appreciate the commitment by new shareholders and the continuing support of existing shareholders. The funds raised will be used to continue the solid growth trajectory and potential of Barefoot Power, as recently recognised by receipt of the Ashden Award, and solidly positions us to meet our target of impacting 10 million people by 2015,” said Barefoot Power CEO Rick Hooper. It is tempting to call Barefoot Power the next best business model since microfinance. But combining social purpose with capitalism’s animal spirits should sound frightening, given what has happened to for-profit microfinance, notably in India. Private sector greed, combined with regulatory hurdles, crushed microfinance, leading to near-collapse of several firms in India and setting back the originally non-profit initiative to empower the poor with small loans. This should remain a cautionary tale for enterprises like Barefoot Power that tap private investment to drive a social agenda. Having said that, Barefoot Power has covered a lot of ground since Stewart Craine, an engineer with a love for rumpled tees, village life and empower lives – not necessarily in that order – flew into China looking for low-cost lamps that could light up the lives of the world’s poor. It has touched the lives of two million people around the world, besides winning a host of awards, notably the Ashden Awards, or “Green Oscars.” Barefoot Power offers cheaper, safer and cleaner alternative to kerosene in developing countries through low-cost, rechargeable and solar-powered lamps. It distributes these lamps by tapping local entrepreneurial forces, especially ones that already provide microfinance services. The firm has initially targeted 20 countries including Uganda, Kenya, Indonesia and India. It seeks to reach 5 million people by next year and 10 million by 2015. Globally, Barefoot Power seeks to address a market that might be worth $10-30 billion a year. Barefoot Power is not the only company that is trying something like this. Another Australian firm called Illumination, headed by Shane Thatcher, builds low-cost solar lamps in China and sells them in poor countries such as Pakistan, mainly through international aid agencies. It has a distinctive model – it sells the lamps at below cost by claiming carbon credits.
The Australian social entrepreneurial and solar lighting group Barefoot Power has announced it as doubled the number of people it has brought affordable lighting to across the world to two million, and it has also landed a new round of funding. Barefoot Power, established by two former Hydro Tasmania employees Stewart Craine and Harry Andrews in 2005, set itself the goal of delivering affordable power to 10 million people in areas without electrification via its solar lighting and phone charging products. In 2011, it reached 1 million and it has now reached 2 million in 20 countries. It says it products displace more expensive, and highly polluting kerosene lighting. The group has also completed a $5.8 million “series B” fund raising from Australian and overseas groups. This includes existing shareholders, the Melbourne based Christian charity The Grace Foundation, and microfinance group Oikocredit. New investors included social investment funds d.o.b Foundation, ennovent and Insitor Fund, and some private angel investors. The funding was pulled together by Sydney-based Unitus Capital. Barefoot Power CEO Rick Hooper said the fund raising would enable Barefoot to continue its growth projectory and meet the 10 million target. D.o.b. director Hedwig Siewertsen said Barefoot Power provided access to an affordable and environmentally friendly product for people that currently live without electricity. “Bringing a product to Mombasa or Accra is not so difficult,” he said. Getting it deep into the power grid lacking markets through a network of dealers and micro-entrepreneurs who can offer a warranty for the product, that is the real challenge that Barefoot Power has been addressing successfully in the past few years.” Barefoot Power, which has won numerous international awards for its work, estimates more than 1.5 billion people lack access to electricity and aims to “reverse” the traditional process of rural electrification, and avoid the need to use kerosene lighting and to walk large distances for battery and phone charging. It says that more than $15 billion is spent around the world on kerosene each year, but its solar lamps costs half as much. Craine told RenewEconomy last year that Barefoot’s success demonstrates that the poor can afford to pay cash for renewable energy without the need for subsidies, and that there is a significantly bigger pool of money within the villages to be spent on electrification than is ever likely to come from international donor nations.
The EMPOWERWA team came across this great renewable energy enterprise using renewable energy to provide safe solutions to energy poverty. Barefoot Power is a social enterprise that manufactures and distributes solar phone charging, lighting, and energy products and business development services to people at the base of the global economic pyramid. Barefoot Power was founded by Harry Andrews and Stewart Craine and featured on the ABC's new inventors in 2010 with their firefly lamp. Barefoot Power has impacted the lives of 2 million people in over 20 countries. Over 1.5 billion people lack access to electricity and Barefoot Power is on a mission, to bring affordable renewable energy to 5 million people by 2013 and 10 million people by 2015 and help eradicate energy poverty. How will they do that? By making quality energy products accessible to communities through innovative financing, and various distribution channels - including income generating micro franchises, non-government organizations, telecommunication companies, local retail shops and wholesale distributors. By bringing electricity to millions of people that do not have access to the grid or have access to unreliable energy, currently use kerosene lighting and walk far for phone and battery charging or other energy needs. Barefoot will make quality energy solutions accessible and reverse the traditional process of rural electrification while reducing the global carbon footprint by 200,000 tonnes per year tonnes by 2015! Barefoot Power distributes in over 20 countries and is focused on diverse and supported distribution strategies, a range of quality product offerings, and a growing post sales customer service center program. Barefoot Power offers a range of products from the Firefly Light desklamp, the Firefly Mobile, desklamp and phone charging, up to a Powapack Village Kit – a home lighting, school or clinic lighting system. Communities can start by replacing kerosene and candle use with the Firefly Light or Mobile and save money to move up the product chain. Kerosene lighting is expensive and the poor lighting levels makes it difficult for children to study, affecting literacy and education, and minimizes the effective working hours for income generating activities. The open flame, smoke and soot from kerosene lamps endanger lives by reducing indoor air quality and increasing the likelihood of fire.
Social enterprise company Barefoot Power has won an £20,000 international green energy award and re-committed itself to putting its solar technology in front of 10 million low-income people by 2015. The commitment was made to Business Call to Action (BCtA), a global initiative encouraging the private sector to fight poverty. Barefoot Power aims to expand access to its solar-powered and affordable light-emitting diode (LED) lamps, home lighting systems and phone chargers, to more off-grid communities with expansion in Ghana, Senegal, Nigeria and India as a focus by 2015. The company has already captured the majority market share in East Africa. The Australian-based company estimates that the 10 million consumers will reduce kerosene consumption by 100 million liters and save up to US$600 million in fuel costs by 2015. By then, Barefoot Power expects to help reduce carbon emission by up to one million tonnes. The company has also won the £20,000 UK-based Ashden Award for Sustainable Enterprise. Its astonishing sales figures made it a fantastic example of a market-led solution to bringing renewable electricity to Africa's rural poor according to the judges. “Through its network of micro-entrepreneurs it is overcoming the barriers of how to access remote communities and how to make solar power affordable," they said. Rick Hooper, chief executive of Barefoot Power said he was honored to receive the prestigious award. “More than 1.5 billion people lack access to energy across the globe and with this award, we will be in a position to help eliminate energy poverty,” he said. "The Award will help us scale our business and make affordable, safe, healthy energy solutions available to all communities at the base of the pyramid, and help us attain our goal of reaching 10 million people by 2015."
Barefoot Power’s products are brightening up the lives of those with limited or no access to grid power. Products range from single desk lamps to complete kits for use by homes, clinics and schools. With good links to microfinance organisations and exceptional customer care, Barefoot has sold more than 400,000 lanterns and lighting kits to two million rural poor in Africa, Asia Pacific, India and the America. Solar power pioneer wins global green energy award, PR Wire 1 June 12, A company specialising in providing affordable solar power products to remote rural communities has won a coveted Ashden Award for its work in Africa. Barefoot Power was awarded some £20,000 in prize money at a prestigious ceremony in London this evening after joining other Award winners at a meeting with His Royal Highness the Prince of Wales at Clarence House in the morning. The Ashden judges said: “With its astonishing sales figures, Barefoot is a fantastic example of a market-led solution to bringing renewable electricity to Africa’s rural poor. Through its network of micro-entrepreneurs it is overcoming the barriers of how to access remote communities and how to make solar power affordable.” Rick Hooper, CEO of Barefoot Power said: “We are honored to receive the prestigious Ashden Award. More than 1.5 billion people lack access to energy across the globe and with this Award, we will be in a position to help eliminate energy poverty. “As a social enterprise we have reached two million people in vulnerable communities in more than 20 countries with solar lighting and phone charging solutions. The Award will help us scale our business and make affordable, safe, healthy energy solutions available to all communities at the base of the pyramid, and help us attain our goal of reaching 10 million people by 2015.” The Award was presented by Dr. Kandeh Yumkella, Director General of UNIDO and Chair of UN-Energy, who in his keynote speech urged governments around the world to use the opportunity of Rio+20 to increase their support for clean energy pioneers like Barefoot Power. Said Dr. Yumkella: “The decisions that will be taken at Rio will carry consequences for generations to come. Governments around the world must act urgently to agree the right policies and investment incentives that nurture these and other sustainable energy champions, before it’s too late.”Barefoot Power’s products are brightening up the lives of those with limited or no access to grid power. Products range from single desk lamps to complete kits for use by homes, clinics and schools. With good links to microfinance organisations and exceptional customer care, Barefoot has sold more than 400,000 lanterns and lighting kits to two million rural poor in Africa,Asia Pacific, India and the Americas.
A social enterprise based in Sydney that provides remote African communities with affordable solar power products has been honoured with an Ashden Award by the Prince of Wales. Aussie Social Enterprise "Barefoot Power" is replacing kerosene with solar power in Africa. “Barefoot Power” chief executive Rick Hooper said that more than 1.5 billion people lack access to energy across the globe. “As a social enterprise we have reached two million people in vulnerable communities in more than 20 countries with solar lighting and phone charging solutions. “The award will help us scale our business and make affordable, safe, healthy energy solutions available to all communities at the base of the pyramid, and help us attain our goal of reaching 10 million people by 2015," he said. The company believes that energy access is one of the key building blocks of economic development and the first step to alleviate energy poverty. It says their mission is to help low income families break their dependence on inefficient, expensive and harmful light sources by giving them cleaner and cheaper options. The Ashden judges said: “With its astonishing sales figures, Barefoot is a fantastic example of a market-led solution to bringing renewable electricity to Africa’s rural poor. Through its network of micro-entrepreneurs it is overcoming the barriers of how to access remote communities and how to make solar power affordable.” The Ashden Awards were founded in 2001 in the UK to encourage the greater use of local sustainable energy to address climate change and alleviate poverty. So far over 140 green energy organisations have improved the lives of 33 million people worldwide and saved over four million tonnes of CO2 each year, according to the event organisers. Award winners take home £20,000 (AU$ 31,850) in prize money. The United Nations has designated 2012 as the International Year for Sustainable Energy for All.
Barefoot and nominated
Barefoot Power – a Sydney-based company specialising in providing affordable solar power products for Africa’s poor – has been selected alongside seven other international organisations as a finalist for the 2012 Ashden Awards, the world’s leading green energy prize. The finalists are in the running for over £120,000 ($A192,500) prize money, with the winners to be announced at a ceremony in London on May 30. With the help of microfinance organisations, Barefoot Power has installed a range of solar power products across Africa, focusing on communities with limited or no access to grid power. Products range from desk lamps to complete kits for use by community homes, clinics and schools – including more than 300,000 lanterns and lighting kits to the rural poor in Kenya, Uganda and elsewhere. It is estimated that around 1.4 billion people around the world lack access to modern energy infrastructure, while three billion rely on ‘traditional biomass’ and coal as their main fuel sources. Closing call for Ignition acceleration
The May 27 closing date is looming for applications to enter Ignition Labs’ intensive three-month program, in which five high-potential cleantech businesses – based on software, low-cost hardware or materials – will be selected to receive hands-on mentoring, $25,000 in seed capital and participation in a roadshow in Australia and the US. ‘ Ignition Labs – Australia’s first clean technology seed accelerator program – is part of an emerging trend of niche accelerators, with Greenstart in San Francisco focusing on Digital Cleantech and SURGE in Houston focusing on Cleanweb. The program, which is scheduled to start on July 16, with the roadshow in late October, has the ultimate aim of securing initial customers and capital, and features mentors including the founders of Ausra, Chromasun, CIMTECH, Clarity, GoGet and the Republic of Everyone; as well as representatives from ATP Innovations, DLA Piper, Griffith Hack and Starfish Ventures, and early investors in Carbon Systems, PCTools, Posse, Seek and Startmate.
Barefoot Power, an Associate Company of the Lighting Africa program, is one of four international winners of the 2012 International Gold Ashden Award. The Ashden Award recognizes innovative green energy initiatives in the UK and in developing countries. The winners were announced last Wednesday in London. This year’s International Gold Ashden Award went to a project in South India whose ethically managed microfinance was applauded and recognized for delivering energy to the poor. Barefoot Power was recognized for its market-led approach to increasing access to clean lighting in Africa among off-grid or un-electrified communities. With its astonishing sales figures, Barefoot is a fantastic example of a market-led solution to bringing renewable electricity to Africa’s rural poor. Through its network of micro-entrepreneurs it is overcoming the barriers of how to access remote communities and how to make solar power affordable, said the judging panel. Rick Hooper, CEO of Barefoot Power said: "We are honored to receive the prestigious Ashden Award. More than 1.5 billion people lack access to energy across the globe and with this Award, we will be in a position to help eliminate energy poverty. As a social enterprise we have reached two million people in vulnerable communities in more than 20 countries with solar lighting and phone charging solutions. The Award will help us scale our business and make affordable, safe, healthy energy solutions available to all communities at the base of the pyramid, and help us attain our goal of reaching 10 million people by 2015." Its products range from single desk lamps to complete kits for use by community homes, clinics and schools. Barefoot has sold about 350,000 lanterns and lighting kits to the rural poor in over 20 countries in Africa, Asia Pacific, India and the Americas.
[NEW DELHI] The winning projects of this year's Ashden Awards for sustainable energy, which were announced last month (30 May), have particular benefits for women, organisers say. The projects demonstrate how improved access to clean energy can make women's routine tasks less onerous, and provide women with better opportunities, according to Ashden's communications officer, Carla Jones. The international gold award went to the Shri Kshethra Dharmasthala Rural Development Project (SKDRDP), in the southern Indian state of Karnataka. The charitable trust, established in 1982, has provided loans to thousands of families across the state. The loans help families adopt renewable energies, such as solar, biogas and small-scale water-driven ('pico-hydro') plants. These systems help liberate women from the burden of gathering fuel, or having to earn money to pay for it, leaving them more time to spend on other activities. SKDRDP beneficiaries also take part in local self-help groups, which meet to discuss and plan more effective household spending. L. H. Manjunath, SKDRP's executive director, told SciDev.Net: "Our renewable energy initiatives are very much a part of our overall goals, which are to help provide the poor with a better living environment." Other international awards included a joint award to the German development agency GIZ (the German Society for International Cooperation) and the engineering construction firm INTEGRATION, which have provided hydro-powered electricity plants to more than 7,000 households in rural Afghanistan. David Hancock, programme director at GIZ, and his INTEGRATION counterpart Oliver Haas, said the project's first plants were built in 2008, for a community in Sanghab village in Badakhshan province, Afghanistan, where, at the time, men traditionally collected firewood while women mostly managed households. Since then, they said, 70 per cent of Sanghab's households have reported improved health, and 17 per cent have reported rises in income. Hancock and Haas said access to cheaper electricity had reduced pressures on both men and women. "Women usually have a heavy daily workload. In winter, when days are even shorter, they often only have time for the most essential domestic duties. Activities with children, such as homework, were impossible," Hancock and Haas told SciDev.Net. "Energy provided them with more time." They said the programme also "provides dedicated training for women to strengthen their role as 'energy managers'". Two more of this year's Ashden award winners also focused on bringing off-grid electricity to families with little or no access to mains electricity. In Indonesia, the non-profit organisation IBEKA (the People Centered Economic and Business Institute) has established more than 60 hydro-power units, benefiting 54,000 people, in a country where a third of the population does not have grid electricity. The Australian non-profit organization Barefoot Power was also recognized for providing solar-powered lights to around 1.7 million people across the world, who previously had limited or no access to mains electricity, thus providing families with more time for leisure and work in the evenings.
Kiva Microfunds, which raises about $1.5 million a week to fund small projects in poor countries, wants to help farmers turn piles of manure into fuel and fertilizer. The main technology is called a biodigester, which is a treatment system that uses bacteria to break down livestock waste. "It's like a bouncy castle of excrement," said Michelle Kreger, Kiva's senior director of strategic initiatives, in a phone interview. "You have to mix up the sludge. Kids running around on it usually takes care of it." The biodigesters are part of a growing push by San Francisco-based Kiva to fund small-scale clean-energy projects, such as solar-powered lamps and modern cookstoves that don't produce hazardous soot. Over the last 14 months, Kiva helped raise more than $600,000 for clean-energy loans. Since 2005, hundreds of thousands of lenders have contributed hundreds of millions of dollars through Kiva so that farmers can buy tractors, designers can buy fabric and students can buy school supplies. The upfront cost of clean-energy projects is out of reach for many populations that lack access to traditional banking services. "People are worried about the planet, and as we move from 7 billion to 10 billion [people], we need to figure out a way that everyone can have a better quality of life,” said Premal Shah, president of Kiva. “This is a simple way anyone can get involved, anywhere." Kiva loans typically originate in wealthier countries, from a network of lenders that often give just $25 a person. The average loan is about $400. That model is expanding. Between May 15 and May 25, 1,034 lenders pitched in almost $50,000 for a single loan to be used on Barefoot Power solar lamps in Tanzania, where five out of six people have no access to electricity and are forced to burn kerosene for heat and light. Most people in Tanzania spend between $1 and $2 a week on kerosene and candles, whereas a solar lamp that provides four or five hours of illumination a night costs about $20 and typically lasts two or three years, according to Joyce DeMucci, a spokeswoman for Barefoot Power. The devices save money over time and are healthier and safer to run than kerosene. The loans are typically paid off in three to six months, and money saved on kerosene can go toward school fees, medical expenses and healthy food. "People have this perception of Kiva as just small loans, but we're looking to change that," Shah said. More loans ranging from $5,000 to $20,000 will soon be used to fund similar projects, he said. "When we think about these larger loans, we think about a larger explanation, not just of that person and that loan, but of the issue we're trying to solve. In this case: abolishing kerosene."
MANGALORE: Karnataka-based microfinance provider Shri Kshethra Dharmasthala Rural Development Project (SKDRDP) has been adjudged as the overall gold award winner by Ashden, which promotes universal access to sustainable energy. The award was given in recognition of SKDRDP's role in demonstrating how microfinance organizations can play a key role in meeting energy needs of the poor. The award, a world's leading green energy prize, was presented to Dharmasthala Dharmadhikari D Veerendra Heggade, promoter of SKDRDP, by Prince Charles in London on Wednesday. Of the five international winners, SKDRDP was the overall gold prize winner. The Ashden judges said, "SKDRDP is fantastic example of how ethically-managed microfinance can deliver sustainable energy to the poor. It has demonstrated that providing consumer loans for energy makes social, environmental and economic sense. SKDRDP has huge potential to expand its work even further, and to inspire many others to follow its lead.'' The five winners have been awarded a total of £120,000 to help them scale up their work. Other winners of the award are: IBEKA, a community-owned micro-hydro programme in Indonesia; GIZ/ Integration, a micro-hydro programme in remote Afghanistan, iDE/Hydrologic, an energy-saving water filter in Cambodia and Barefoot Power, an affordable solar power provider that's lighting up lives in East Africa. Kandeh Yumkella, director general of UNIDO (United Nations Industrial Development Organization) in his keynote speech at the ceremony urged governments around the world to increase their support for clean energy pioneers: "The Ashden 2012 winners are exposing the myth that poor countries cannot stimulate growth without degrading the environment. They are demonstrating that sustainable energy stimulates green growth and new jobs, lifts people out of poverty, improves health and opens up new educational opportunities.''
More than 1.3 billion people do not have access to electricity. And about double that number for people who do not have access to modern cooking fuel– 2.7 billion. These numbers are daunting, but as Bikash Pandey, director Clean Energy at Winrock International, pointed out at last month’s Asian Clean Energy Forum (ACEF), enterprises have had a lot of success in deploying de-centralized renewable energy solutions. In Bangladesh, Nazmul Haque, director and head of Investment at IDCOL informed that 50,000 solar home systems are sold every month. IDCOL, a Bangladesh government-owned organization, provides wholesale financing to organizations which in turn provide customers credit to purchase these systems. Govind Raj Pokharel, executive director at Alternative Energy Promotion Center in Nepal, was sitting next to Haque, and he quickly ran the numbers: 50,000 systems at about USD 400 per unit is about a USD 20 million a month market, or nearly a USD 250 million a year market. The fact that the poor are willing to pay for clean energy has been known for some time. The WRI-New Ventures Power to the People had estimated the Indian market for clean energy at about USD 2 billion a year. The IFC(W) report From Gap to Opportunity that estimates the total worldwide spend of the poor at about USD 37 billion on poor-quality energy solutions. Enterprise solutions are key to solving this market conundrum. The ADB Energy for All Investor Forum was held on the very first day of ACEF. New Ventures, a NextBillion managing partner, partnered with ADB Energy for All to host the Investor Forum. The Energy for All initiative is an action-oriented partnership of organizations with a goal to provide access to energy to 100 million people in Asia and the Pacific region by 2015. The Investor Forum showcased several enterprises, innovating around either technology or business models. Simpa Networks, which has developed smart hardware and cloud technology to allow rural users to purchase pre-paid amounts of energy. Simpa Networks has been partnering with solar product manufacturers and going forward will partner with both mini-grid and mobile players. Another company showcased at the event, T-Files of Indonesia has developed a marine turbine that can work at low speeds and can power remote island areas. In terms of business models, the key issue is of course marketing and distribution, costs, and service. GMN of Indonesia is an already existing player in setting up de-centralized renewable energy systems and sales of solar home products in remote areas of Indonesia. Frontier Markets, provides product developers professional marketing and product services. They have been working in the state of Rajasthan India. In some ways, Illumination Solar does exactly the opposite: focusing on making the products as inexpensive as possible by using carbon credits and centralising the manufacturing in China. They have tied up with distributors across the world. The early-stage investment ecosystem is forming. Hanna Ebeling, of LGT Venture Philanthropy, talked about their commitment to bring mentoring and talent to social entrepreneurs in order to close what she called the “human capital” cap. Karan Gupta of Insitor Fund discussed the interest to fund companies that create social impact at a stage before commercial VCs come in. Tao Ren, an investment officer at the Global Energy Efficency and Renewable Energy Fund, talked about his organization’s investment in both funds and technical assistance programs which include Barefoot Power and Solar for All among its recipients. Innovation is also strong in the area of end user financing of energy products. Chris Neidi of Arc Finance and Shahid Mustafa of Tameer Micro Finance Bank are attacking this problem. Arc Finance works with micro-finance organizations that work with clean energy access companies while Tameer is developing a direct portfolio in small clean energy loans. Jiwan Acharya, the senior climate change specialist with the Asian Development Bank, who himself grewn up in Nepal without electricity, spelled out ADB’s Energy For All strategy: support pioneers to develop incubation programs for other entrepreneurs, project development (in particular to help existing enterprises to expand to new countries), investor engagement and facilitation. He emphasised that ADB was committed to creating the market space for enterprises to thrive. The forum also highlighted three key market-creating initiatives aimed at building an effective market space for clean energy access enterprises. Robert Kraybill, managing director of IIX, Asia’s first Stock Exchange for social enterprises, talked about how his organization has engaged family offices and high net-worth individuals as investors. Representing New Ventures, I talked about my experience in investment facilitation with the larger companies such as Greenlight Planet, Husk Power (in India) and Helee and SBST (in China), which are now getting in a position to expand to other countries. SELCO Chief Operating Officer Ashis Sahu announced a new incubation center for South Asia with the target of recruiting and training 25 non-English speaking entrepreneurs (the initial technology focus would be solar). The main advantage for entrepreneurs going into this program would be an intensive introduction to the operational processes of SELCO. The pieces of the puzzles are clearly coming together. What is needed is an as an effective market place for companies to deploy various technological and business solutions and consumers to access credit to purchase these solutions. There is confidence among entrepreneurs and acknowledgement by investors that this is a real market place. The important thing is to involve practitioners and entrepreneurs as high level programs are designed. Action on the ground needs voices from the ground.
Barefoot Power, a firm that specialises in providing solar power solutions to the mass market across Africa, has been named this year’s winner of the Ashden Awards, bagging Sh2.7 million (£20,000) in prize money. The award was founded in 2001 to encourage the use of clean energy alternatives to address the challenges of climate change and alleviate poverty. The Australia-based company manufactures and distributes micro-solar products including lighting and phone charging products across the continent to regions that do not have access to electricity. It has sold about 350,000 lanterns and lighting kits. Judges’ citation “With its sales figures, Barefoot is a fantastic example of a market-led solution to bringing renewable electricity to Africa’s rural poor. "Through its network of micro-entrepreneurs it is overcoming the barriers to accessing remote communities and how to make solar power affordable,” the panel of judges said in their citation to the winning entry. The Award was presented by Dr Kandeh Yumkella, the director general of United Nations Industrial Development Organisation (Unido) and the Chair of UN-Energy. In his keynote speech, Dr Yumkella urged governments around the world to use the opportunity of Rio+20 conference to increase their support for clean energy pioneer. Barefoot’s solar devices are marketed locally through Smart Solar, its Kenyan subsidiary.
Barefoot Power won the Ashden Award and was awarded about £20,000 for its work in providing affordable solar power solutions to remote rural communities in Africa.The Ashden judges said: “With its astonishing sales figures, Barefoot is a fantastic example of a market-led solution to bringing renewable electricity to Africa’s rural poor. Through its network of micro-entrepreneurs it is overcoming the barriers of how to access remote communities and how to make solar power affordable.”Rick Hooper, CEO of Barefoot Power said: “As a social enterprise we have reached two million people in vulnerable communities in more than 20 countries with solar lighting and phone charging solutions. The Award will help us scale our business and make affordable, safe, healthy energy solutions available to all communities at the base of the pyramid, and help us attain our goal of reaching 10 million people by 2015."
New York – Ten million low-income people living in rural communities in Sub-Saharan Africa, Asia and the Pacific, Latin America and the Caribbean, will gain access to low-cost solar energy by 2015, in part due to a commitment made by solar energy provider Barefoot Power to the Business Call to Action (BCtA). The BCtA is a global initiative that encourages private sector efforts to fight poverty, supported by several international organizations including the UN Development Programme (UNDP). The Australia-based social enterprise Barefoot Power aims to expand access to its high-quality, energy efficient, affordable light-emitting diode (LED) lamps, home lighting systems and phone chargers, to more off-grid communities with expansion in Ghana, Senegal, Nigeria and India as a focus by 2015. The company has already captured the majority market share in East Africa. Through the commitment made to BCtA, the company estimates that the 10 million consumers will reduce kerosene consumption by 100 million liters and save up to US$600 million in fuel costs by 2015. By then, Barefoot Power expects to help reduce carbon emission by up to one million tonnes. “We at the BCtA recognize that Barefoot Power’s commercially viable business model enables access to affordable solar energy for low income communities, helping to light up Africa in an environmentally sustainable way,” said Business Call to Action Programme Manager Susan Chaffin. “These are precisely the types of inclusive business initiatives that serve as best practices as we approach the Rio+20 UN Sustainable Development Conference being held in Brazil in June.” More than 80 percent of low-income communities in rural sub-Saharan Africa lack access to electricity and depend on expensive, dirty and dangerous fuel sources such as kerosene, charcoal, animal waste or wood. According to the World Health Organization household air pollution from the use of biomass fuel annually causes 2 million premature deaths across the globe. Barefoot Power aims to reduce the lack of energy access for millions of people by bringing its durable solar-powered products directly to low-income consumers through a variety of distribution channels such as import companies and local micro entrepreneurs. The micro entrepreneur programme includes a “business in a bag” training, meaning that entrepreneurs are trained in business best practices, solar technology and how to develop sales channels in order to create income generating energy franchises. Innovative financing mechanisms are also offered to assist importers with up front capital requirements. “Barefoot Power’s award winning Trade Financing Fund has revolutionized the business. Importers have access to funding for ordering Barefoot Power products and can overcome the capital constraints in order to meet the increasing demand in the communities.” said Rick Hooper, CEO of Barefoot Power. Since its launch in 2005, Barefoot Power has helped to train over 2000 entrepreneurs and technicians in rural communities with financial support from the European Union. These entrepreneurs help make Barefoot Power’s products accessible to all communities, while the technicians help to uphold the Barefoot Power post sales product guarantee.
Barefoot Power, an enterprise working for low-income families, will be providing 10 million low-income residents in rural communities in Sub-Saharan Africa, Asia and the Pacific, Latin America and the Caribbean access to low-cost solar energy by 2015 as part of a United Nations-supported initiative. Barefoot Power is part of a United Nations Development Program-backed global initiative, the Business Call to Action, to reduce the kerosene consumption of the 10 million consumers by up to 100 million liters and save them up to $600 million in fuel costs in 2015. The company also expects to help reduce carbon emissions by up to 1 million metric tons. Solar power technology the company will provide will allow 80 percent of low-income communities in rural sub-Saharan Africa that lack access to electricity to reduce the usage of “dirty” and “dangerous” fuel sources like kerosene, charcoal, animal waste or wood. The household air pollution generated from these sources causes 2 million premature deaths across the globe, according to the World Health Organization. Barefoot Power is a micro-entrepreneur program that does “business in a bag” training where entrepreneurs are trained with business practices, solar technology and developing sales channels to generate income. The social enterprise based in Australia will be providing its low-voltage L.E.D. lamps, home lighting systems and phone chargers to off-grid communities, focusing on Ghana, Senegal, Nigeria and India. Since its inception in 2005, Barefoot has trained over 2,000 entrepreneurs and technicians in rural communities with financial support from the European Union.
Solar energy is set to benefit ten million low-income people living in rural communities in Sub-Saharan Africa, Asia and the Pacific, Latin America and the Caribbean from commitments made between Barefoot Power and the Business Call to Action (BCtA). The BCtA is a global initiative that encourages private sectors to fight poverty and is supported by several international organisations including the UN Development Programmes (UNDP). Australian solar lighting company Barefoot is looking to widen access to its energy efficient, affordable light-emitting diode (LED) lamps as well as more off-grid communities, with expansion in Ghana, Senegal, Nigeria and India in its sight by 2015. ‘We at the BCtA recognise that Barefoot Power’s commercially viable business model enables access to affordable solar energy for low income communities, helping to light up Africa in an environmentally sustainable way. BCtA programme manager, Susan Chaffin, said, ‘These are precisely the types of inclusive business initiatives that serve as best practices as we approach the Rio+20 UN Sustainable Development Conference being held in Brazil in June.’
A company specialising in providing affordable solar power products to remote rural communities has won a coveted Ashden Award for its work in Africa. Barefoot Power was awarded some 20,000 in prize money at a prestigious ceremony in London this evening after joining other Award winners at a meeting with His Royal Highness the Prince of Wales at Clarence House in the morning. The Ashden judges said: “With its astonishing sales figures, Barefoot is a fantastic example of a market-led solution to bringing renewable electricity to Africa’s rural poor. Through its network of micro-entrepreneurs it is overcoming the barriers of how to access remote communities and how to make solar power affordable.” Rick Hooper, CEO of Barefoot Power said: "We are honored to receive the prestigious Ashden Award. More than 1.5 billion people lack access to energy across the globe and with this Award, we will be in a position to help eliminate energy poverty. “As a social enterprise we have reached two million people in vulnerable communities in more than 20 countries with solar lighting and phone charging solutions. The Award will help us scale our business and make affordable, safe, healthy energy solutions available to all communities at the base of the pyramid, and help us attain our goal of reaching 10 million people by 2015." The Award was presented by Dr. Kandeh Yumkella, Director General of UNIDO and Chair of UN-Energy, who in his keynote speech urged governments around the world to use the opportunity of Rio+20 to increase their support for clean energy pioneers like Barefoot Power. Said Dr. Yumkella: “The decisions that will be taken at Rio will carry consequences for generations to come. Governments around the world must act urgently to agree the right policies and investment incentives that nurture these and other sustainable energy champions, before it’s too late.” Barefoot Power's products are brightening up the lives of those with limited or no access to grid power. Products range from single desk lamps to complete kits for use by homes, clinics and schools. With good links to microfinance organisations and exceptional customer care, Barefoot has sold more than 400,000 lanterns and lighting kits to two million rural poor in Africa,Asia Pacific, India and the Americas. From Thursday 1 June: Call for entries for 2013 Ashden Awards We’re now seeking entries for the 2013 Ashden Awards. Full details of the prize package, criteria and application forms are on the Ashden website: www.ashden.org/apply Additional quote Ronald Kabiswa, Barefoot Power Solar Entrepreneur said: “You can make yourself a good business as a Barefoot Power entrepreneur. I've earned enough to buy a car and start building a house. I have six sales agents who work for me, as well as selling myself”. Notes to editors 1. The Ashden Awards were founded in 2001 to encourage the greater use of local sustainable energy to address climate change and alleviate poverty. Since then they have rewarded over 140 green energy champions across the UK and the developing world and improved the lives of 33 million people worldwide, saving over 4 million tonnes of CO2 every year. Ashden’s Patron is HRH The Prince of Wales (www.ashden.org) 2. This year’s four international winners and a Gold Award winner were awarded a total of 120,000 in prize money to help them scale up their work. 3. Barefoot Power has been recognized with the Award for Sustainable Enterprise, supported by Zennstrm Philanthropies. 4. The UN has designated 2012 as the International Year for Sustainable Energy for All. In response, the UN Secretary-General Ban Ki-moon has launched a new global initiative – Sustainable Energy for All – which aims to achieve three major objectives by 2030: ensuring universal access to modern energy services; doubling the rate of improvement in energy efficiency; and doubling the share of renewable energy in the global energy mix. www.sustainablenergyforall.org 5. Dr. Kandeh K. Yumkella is the Director-General of the United Nations Industrial Development Organisation (UNIDO) as well as Chair of UN-Energy, a UN umbrella body dealing with energy-related issues. He plays a key international role in raising awareness of the need for universal access to energy, increased energy efficiency and enhanced deployment of renewable sources of energy – the three major goals of the UN Sustainable Energy For All campaign. 6. Some 1.4 billion people around the world lack access to modern energy, while 3 billion rely on ‘traditional biomass’ and coal as their main fuel sources.
A company specialising in providing affordable solar power products to remote rural communities has won a coveted Ashden Award for its work in Africa. Barefoot Power was awarded some £20,000 in prize money at a prestigious ceremony in London this evening after joining other Award winners at a meeting with His Royal Highness the Prince of Wales at Clarence House in the morning. The Ashden judges said: “With its astonishing sales figures, Barefoot is a fantastic example of a market-led solution to bringing renewable electricity to Africa’s rural poor. Through its network of micro-entrepreneurs it is overcoming the barriers of how to access remote communities and how to make solar power affordable.” Rick Hooper, CEO of Barefoot Power said: "We are honored to receive the prestigious Ashden Award. More than 1.5 billion people lack access to energy across the globe and with this Award, we will be in a position to help eliminate energy poverty. “As a social enterprise we have reached two million people in vulnerable communities in more than 20 countries with solar lighting and phone charging solutions. The Award will help us scale our business and make affordable, safe, healthy energy solutions available to all communities at the base of the pyramid, and help us attain our goal of reaching 10 million people by 2015." The Award was presented by Dr. Kandeh Yumkella, Director General of UNIDO and Chair of UN-Energy, who in his keynote speech urged governments around the world to use the opportunity of Rio+20 to increase their support for clean energy pioneers like Barefoot Power. Said Dr. Yumkella: “The decisions that will be taken at Rio will carry consequences for generations to come. Governments around the world must act urgently to agree the right policies and investment incentives that nurture these and other sustainable energy champions, before it’s too late.” Barefoot Power's products are brightening up the lives of those with limited or no access to grid power. Products range from single desk lamps to complete kits for use by homes, clinics and schools. With good links to microfinance organisations and exceptional customer care, Barefoot has sold more than 400,000 lanterns and lighting kits to two million rural poor in Africa, Asia Pacific, India and the Americas.
For rural communities without electricity, lighting the home can be costly and challenging. Although well priced solar products are available on the market, their cost is often beyond the reach of many rural consumers. The NGO Appropriate Rural Technology Institute of Tanzania (ARTI-TZ) has figured out how to provide credit to help rural consumers buy solar lamps. Using a system known as ‘Mali Kauli’ (Word of Honor, in Swahili), the NGO is providing village-level credit to enable families invest in solar lighting products using their word as security for loan repayment. The NGO encourages beneficiaries to repay their loans using the savings made from no longer having to buy kerosene. This credit system has been in use in Tanzania and has helped poor families buy bicycles, corrugated roofing iron sheets, cement, seeds and fertilizers. “The ‘Mali Kauli’ system is already in place and is well known to consumers. Customers are keen to pay back what they owe in order to get more credit to buy yet more products,” says Nachiket Potnis, CEO of ARTI-TZ. ARTI-TZ’s Mali Kauli solar lamps’ distribution strategy was piloted in Bagamoyo, but has since been rolled out to other parts of Tanzania. The NGO is supplying more than 13 dealers and wholesalers with Barefoot Power solar lighting products, as well as working with savings and credit cooperative societies and other microfinance institutions to ensure suppliers can access finance to meet consumer demands. ARTI-TZ is one of ten grant recipients of the Lighting Rural Tanzania (LRT). LRT is a grant competition organized by the Tanzania Rural Energy Agency, with support from the World Bank and Lighting Africa that promotes innovative business models for the provision of off-grid lighting to rural Tanzania.
This article is the second in a three-part series exploring the role Mercy Corps played in bringing solar power to rural Uganda.
In our first article, we explored how Mercy Corps conducted a comprehensive market analysis, which painted a picture of strong potential demand for solar lanterns from rural farming families.
How demand meets supply
Mercy Corps didn't give out a single solar lantern. They didn't give out any grants to buy solar panels. But, what the international nonprofit did do was bring solar to rural Uganda.How? Market facilitation. It's a mouthful, but it's kind of like matchmaking, and it’s a key role nonprofits can play to boost local economies. It involves figuring out who all the players are and what they each want: displaced families returning after fleeing war and ready to restart their lives, farmers with savings that fluctuate with the harvest seasons, solar companies based in urban centers wary of “customers” who live on a couple of dollars a day, entrepreneurial local shop keepers interested in boosting sales but with little business training, and microfinance institutions with smart payment plan options. With this lengthy list of players and armed with information from the comprehensive market analysis they conducted, Mercy Corps was ready to light the way for solar.
1. Have a product demo
Before buying an expensive product, no matter how amazing and life-changing it claims to be, most people want to touch it. They want to push its buttons, hold it, see a demonstration, hear others’ experiences with it. They want a product demo. To satiate this need and build up demand, Mercy Corps set up sessions under mango trees in major trading centers throughout the District. They explained how solar-powered lanterns work and demonstrated the mobile phone charging component. To help people conceptualize how much they’d save by switching from kerosene to solar, the team helped families add up how much they typically spend on fuel and phone charging over a week, a month, a year, a few years. When they saw how much their incremental spending added up to, people were shocked.
The shop owners who attended the mango tree sessions saw that people were interested in buying solar products. To boost the supply side of the chain, Mercy Corps hosted a ‘meet and greet’ under a tent in Pader District’s main commercial center for the shop owners to develop personal connections with the Kampala-based solar companies. The solar companies shared more details about their products. Financial institutions were on hand to talk about small loans for the upfront costs of buying inventory. And Mercy Corps shared results from its market analysis to estimate how many solar products a small business could expect to sell and how much profit they’d make.
2. Develop good partnerships
If anything turns off a consumer to a new type of product faster, it’s a product that doesn’t work. The results are called ‘market spoilage’ and it happens with products sold in stores everywhere, from Wal-Mart in Idaho to the corner shop in rural Uganda. Mercy Corps needed to ensure that if families were convinced to allocate their kerosene budget to solar, the solar products worked. If the products didn’t function well and support wasn’t available for maintenance, disillusionment would replace curiosity and solar didn’t stand a chance. Given this need, Mercy Corps identified two respected companies to work with on the pilot, which meant working with two different models of distribution.
Barefoot Power’s distribution model gives shop owners two options: become a distributor or a microfranchisee. Microfranchisees can buy fewer products upfront and enjoy a larger profit margin over the long term than distributors. In order to become a microfranchisee, however, Barefoot requires entrepreneurs to enroll in and to pay for a special five-day business training course as well as to cover transportation costs to get to it and food and lodging costs throughout attendance. The course, given by Barefoot, puts the company at ease knowing that their products are being sold by people with both basic business know-how and a more comprehensive understanding of their solar technology, resulting in stronger sales and better customer service. Significantly, all the shop owners that chose to sell Barefoot products also chose to invest to become microfranchisees. To make things a little easier on their new trainees, Barefoot moved its training course from the capital, Kampala, to Gulu, a northern town closer to most of the shop owners’ villages. Shop owners received training in basic accounting, general finances, creative sales and marketing, basic solar product function and maintenance, as well as details on how to order more inventory. “The community members who subscribed to Barefoot Power’s entrepreneurship training have grown into successful micro-franchises who employ other community members,” said Anne Kayiwa, Barefoot Power’s Uganda sales and marketing director. With the Mercy Corps partnership and promotional efforts, the number of Barefoot Power distributors in the area increased from two to 10. For us that meant more outreach, more sales, more customers and users, more market penetration, and more awareness of Barefoot Power solar products. It was a multiplier effect.
D.Light took a different approach to its distribution model. When a local savings and credit cooperative institution, Agaru SACCO, attended Mercy Corps’ meet and greet, they were so enthralled with the product and the idea that they decided to become D.Light’s “dedicated distributor.” Agaru pledged to exclusively sell D.Light’s products and to couple their sales with a microloan to families who needed a payment plan to purchase one.
3. Start marketing
Ok, now we’ve got shop owners trained to sell solar (along with some handy business skills, too), a microfinance institution at the ready, two solar company partners, and curious consumers. To put the final solar puzzle pieces together, Mercy Corps had one last chore: to build buzz around solar. Rather than get behind any one company, Mercy Corps made sure it promoted solar power itself as the brand. On the supply side, the team produced promotional materials like posters, created “how-to” pamphlets and hosted discussion groups about marketing, and developed special business cards indicating a shop is a solar distributor. On the demand side, the team gave presentations at schools, community organizations, and to government officials about the benefits of solar and the new availability of the products at local shops. The African Media Development Initiative found that almost 48 percent of Ugandans report the radio as their main source of news while only 1 percent report print media as their main source. Knowing radio’s extremely high penetration, the Mercy Corps team featured every shop that signed on to sell solar in a radio spot that gave listeners the shop’s address and phone number. And then Mercy Corps stopped. That was it. The team had played the role of the market facilitator, creating relationships on the supply side with marketing materials to push out, and pumping up interest on the demand side through education. Now they had to sit back and watch to see if it would work.
Capitalism has changed the world for the better in so many ways by creating jobs, encouraging invention and connecting people all over the world. But sadly, big business has lost its way. Driven by a short-term focus on profits, taking care of the planet and its people often falls to the bottom of the list of priorities. With a world population of 7 billion and increasing levels of demand for goods and services, we are on a rapid path to destroy the very natural resources that keep us alive; this will only perpetuate the growing inequity in the world. Since the Industrial Age, businesses have built their wealth off the use of natural resources. And unless businesses start to value and protect these resources, this cycle will have a devastating impact on the lives of our children and grandchildren. Many people are beginning to realize that business as usual is no longer an option. What is an option is to reinvent capitalism to truly be a force for good in the world. We at Virgin Unite, the non-profit arm of the Virgin Group, call this approach Capitalism 24902 because it’s focused on getting business leaders all over the world — all 24,902 miles of it — to look at how we can do what is right for people and the planet. This reinvention can come in all sorts of shapes and sizes, from transforming existing businesses to creating whole new business models. The Virgin Group itself isn’t perfect, but we’re learning every day from pioneers who we’ve met who have created new businesses to tackle social and environmental issues. Some of these are profit making, such as Participant Media, which makes movies. Participant’s 2006 documentary An Inconvenient Truth radically changed people’s views on the environmental crisis and got many to take action. Technology company Barefoot Power has brought solar electricity to one million people who never had access to it. The Big Issue, a socially conscious U.K. business, provides work for homeless people and the Khan Academy has radically transformed math education for young people all over the world. Existing businesses are also tackling social problems with great results for their bottom lines. For example, U.K. retailer Marks & Spencer launched Plan A in 2007 and now recycles 94% of the waste generated by their stores, has reduced carbon emissions by over 13% and saved over $110 million in 2010. General Electric launched Ecomagination to create new products and services that help solve energy, efficiency and water challenges. They invested $5 billion in research and development over five years and generated over $70 billion in revenues. One of the keys to success for all of these new approaches is ensuring that we build the right environment for these emerging “good” businesses to thrive and expand their reach. Getting capital to flow in innovative ways from financial institutions, foundations, corporations and other investors will be critical. Embracing unlikely marriages between business, government and the social sector will also be important.
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Myshkin Ingawale approaches life with perpetual delight and curiosity. It’s what helped him invent a bloodless anemia test, and other tools to turn smartphones into mobile medical labs. Now, he’s turning his brainpower to facilitating the idea that people from the developing world should be authors of their own solutions. There is no better time than now, he says, when the internet provides a breeding ground for collaboration and innovation. For Myshkin, the next big thing is about connecting the right people so that they can come up with the next big thing themselves. Imagine if the next James Watson is growing up in a slum in Kibera, and the next Francis Crick is a rickshaw driver in Calcutta? Would they ever meet to collaborate and seed the next big thing in health since the Human Genome Project? Collaboration has been the recipe for the modern technological progress that has led to improvements in the quality of human life. Vaccines, air conditioners, automobiles, vacuum cleaners and of course, the modern marvels of mobile‐based information and communication technologies, along with the world wide web, have all been possible due to some form of collaboration. As well as being born out of collaboration, invention also needs the right mixture of capital, entrepreneurship and government support ‐ or at the very least, lack of active suppression. But there are those who think that the way to make progress in the developing world is to give stuff away for free: free vaccines, free machines, free food, free band‐aids. This policy has little or no precedent of resulting in strong, independent economies that can stand on their own feet. Did the US become what it is today by being the recipient of large doses of well‐intentioned (or otherwise) foreign aid? Did western Europe? What has transformed both these places been, very simply, their human resources. People. People, who after finding other like‐ minded individuals, took it upon themselves to build the economic, social and political institutions that make the west what it is today. Today we have an amazing tool for people to collaborate: the mobile web. Half the world can access almost all the information ever made available in the palm of their hand. More importantly, they can access each other. If the next Watson, growing up in a slum in Kibera was able to team up with Crick in Calcutta, they might have a fighting chance of inventing the next big thing. And this next big thing could be a simple or complex innovation that changes things for the poorest 3 billion in the world. The people closest to global health or development problems – villagers in Africa, Asia or South America – cannot only generate ideas, but can also refine them with their peers, and self‐fund (or crowdfund) based on what users actually find useful. These inventions could get into the mainstream as manufactured, distributed, serviced, reliable products and services – all led by the users that need them in the first place. This is the thinking behind Biosense. Our products are developed by people who are closest to the problem – doctors with experience of serving patients in low resource settings, Asha workers (village‐level, semi‐skilled healthcare staff) as well as industrial designers. For example, uChek, a smartphone‐based blood and urine testing platform, was developed based on insight that small diagnostic centers in remote parts of India often do not have the right onsite equipment to conduct diabetes tests. A group of developers, hardware engineers and doctors came up with the core idea. In the future I hope the global north will no longer see developing countries as requiring aid in the traditional sense. I hope they’ll recognise that former aid recipients are the best authors of their own solutions. All they need is the right connection.
The sun has appeared in Delhi. The “fog” that clogs Delhi mornings in the winter, or as locals joke, less fog, more smog, has gone for a hiatus today. Perhaps in celebration of the “do‐gooders” who are gathering to discuss the challenges of investing in India. About 100 venture capitalists, entrepreneurs and want‐to‐be entrepreneurs have gathered on the lawns at Adianta School of Innovation in Chhatarpur, South Delhi. The dress code is Silicon Valley meets Nehru: jeans with smartly fitted, collared vests reminiscent of India’s first “architect.” The venture capitalists here are India’s new architects. Investments, not votes, is their tool to better healthcare, ease transportation, and produce alternative energy models for the country. Entrepreneurs, however, complain that India’s venture capital scene, particularly for “impact” investments, is limited. That is, investments which produce some social benefit to the society. Most of the capital for these investments comes from abroad: Omidyar, Acumen, DellFoundation, for instance, operate funds in India. Other US‐ based funds such as Gray Ghost Ventures invest heavily in Indian entrepreneurs. But, the capital trails back to the US. So where are the Indian investors for homegrown social entrepreneurs? In 2011, there were about eight impact investors in India. That list has grown to approximately 35 funds as of 2013, including more local investors. Note, the question of Indian investors is not merely nationalistic. Rather, the Indian government prohibits foreign investors from taking debt in a company, explains Arun Gore, managingdirector of Atlanta‐based Gray Ghost Ventures. Thus, financing options are limited to equity, leaving entrepreneurs with few choices. Consequently, can these entrepreneurs branch out beyond impact investors and still fundraise for a social venture? There’s a dynamic debate taking place, here. Does India even need “impact” investors? The telecomm industry, and the rise of companies such as Airtel, which enabled the rural market to connect via mobiles was not a “social” investment, argues Ashish Gupta, co‐founder and managing director of the Helion Venture Partners, a USD605‐million, India‐focused fund. “I wonder at the entire logic of impact investing,” says Mahesh Murthy, co‐founder of Seedfund, which focuses on early‐ stage tech‐loving companies. “Arguably the digital innovations that have had the most impact on our planet, including bringing down governments and saving lives, areGoogle , Twitter, and Facebook. But these are regular investments, and not “impact investments” by any yardstick.” Srikrishna Ramamoorthy of Unitus Seed Fund says, he has heard the comparisons to Airtel and other tech giants before. But he’s not sold. “There is no doubt Airtel is creating impact, but that wasn’t the explicit reason that they were setup for in the first place,” he says. “One could argue that had competition not come in and policies not forced call costs to drop, mobile penetration in low‐income India (urban and rural) might not have happened as quickly as it has. It might have stayed a luxury product.” He is, perhaps, the odd man out in this conversation, working at Unitus Seed Fund, a social impact fund that began last year with USD25 million, USD10 million of which comes from Indian investors. He says, jokingly, that the terminology matters in enticing investors: “Use ‘social’ less, ‘impact’ more.” To create some parameters on what constitutes an “impact investment,” last year, India established the Indian Impact Investor Council (IIIC), a self‐regulatory body. This was inspired by the blunders of the microfinance industry in 2009, in which the money‐driven philosophy of “doing well by doing good” got in the way of noble intentions. The council, compromising of 9 top funds, will help define impact investing in the country. For one, to be a part of the community, an impact fund’s portfolio needs to deal with low‐income populations only. Bombay‐based Ronnie Screwvala, Managing Director of Disney‐UTV, is a part of the IIIC. As the founder of a new $100 million fund, Unilazer, which includes a mix of impact and non‐impact investments, and a trustee of the Swades Foundation, a philanthropic program to provide clean water and health services, Screwvala has seen both ends: the commercial and the so‐called social. He rallies for smarter investments that are more concerned with scale and viability, less with just social good. “For real scale to happen in the impact sectors, you need a lot of funds turning their attention to these sectors and that will happen when the business and the innovation is looked at from a commercial point of view,” he says. One sector that straddles both social and commercial well is healthcare. Whether it’s impact funds or traditional venture capitalists, there’s a growing interest in healthcare companies to address the abysmal gap in India’s healthcare infrastructure. In fact, not too far from Chhatarpur, where all this chatter is taking place, is India’s new colony of medical startups. Stationed near the Indian Institute of Technology and the All Indian Institute of Medical Sciences, these startups, backed by impact investors such as Omidyar Network are developing new business models for affordable care hospitals, and remote diagnostic tools to reach rural communities. Seedfund, Helion, and Unitus may differ on their definition of an impact investment. But all three are putting money into affordable healthcare. Murthy of Seedfund, speaks of their investments in health, a low‐cost hospital network Vaatsalya, and a chain of dental clinics, MyDentist, as examples of how commercial viability crosses over into social good. “They [MyDentist and Vaatsalya] have made a measurable impact on people’s health and lives. But none of these were seen from a lens of ‘impact investment,’” he says. Vaatsalya’s tag line reads: “India’s First Hospital Network Focused on Tier II and Tier III cities.” It’s a for‐profit model with emphasis on affordability. The cost of delivering a newborn at Vaatsalya is a little over USD30. Given that the Indian government allocates less than 5 percent of its GDP to healthcare, private sector solutions are cropping up. Jeevanti Hospitals, another Seedfund company, is placing hospitals in Tier II cities of Maharashtra and Gujarat where current options are lacking, or dismal. Gupta of Helion Venture Partners agrees, pointing to EyeQ, an eye‐care company operating on a hub‐and‐spoke model. A cataract surgery in Tier II or III city is incrementally less than in Delhi or Gurgaon. Subsidized surgeries are available to those who cannot pay the full price. “However while we like that as individuals, that is not the basis of our investment decision. EyeQ is a very attractive business,” says Gupta. Helion is not the only investor; they’re accompanied by SONG, an investment and management company funded by Soros, Omidyar, and even Google. Unitus, too, is backing innovations in eye‐care. Their portfolio company, Welcare, is slashing eye examination prices by 50 percent. Diabetes is common in the country (given Indian indulgence for sugary sweet treats); with diabetes comes the risk of diabetic retinopathy, and the possibility of blindness. So, Welcare has developed a low‐cost retinal screening device that keeps clinical costs down and can serve more customers. Healthcare diagnostic tools have the tech‐focus that many of these investors are seeking. Rajesh Sawhney, CEO and founder of GSF, a Gurgaon‐based fund for early‐stage companies, is hosting this gathering in South Delhi. Sawhney began GSF in 2011 with a vision to take Indian entrepreneurship global. He, too, is putting his money into healthcare. His two portfolio companies, BioSense and Dhilcare, have produced diagnostic tools – for anemia and ECG heart screenings, respectively. He sees them as shrewd business options, he says. Do they require more patient capital than his more “traditional” tech investments? Not really, he says. “Venture capital by definition is patient and risky.” Given that he’s willing to wait a decade, like his colleagues at Seedfund and Helion, to see a company mature, it’s about as “patient” as the patient capital provided by impact investors.
Prevention is and has always been better than cure.
And that seemed to be the inspiration behind the latest launch of indigenous and affordable diabetes testing kit (Glucometer/screening meter) ‐ "Suchek" coupled with test strip 'QuickcheQ' by the Health Ministry.
Advantages • The detection kit will go a long way in making mass screening and detection easy and feasible in the country with an estimated 65 million diabetics. • Furthermore, it will also enable 77 million people at pre‐diabetes stage to fight it off by modifying their lifestyle. • As of now, diabetics have to buy expensive test strips to find out their sugar level • The cost will come down to mere 2‐4 Rupees down from 18‐35. • Likewise glucometer Suchek can be bought for anything between Rs. 500 and 1,000 as against earlier 1,000‐2,500.
Manufacturers • Both have been developed by the Indian Institute of Technology Mumbai and the Birla Institute of Technology, Hyderabad with funding from the Indian Council of Medical Research. • These will be manufactured by Biosense Technologies and will be available in the open market in the next six months.
Smartphones are a ubiquitous part of our lives used to check mails on the go, update twitter accounts and capture digital images. But a young team of doctors, designers and engineers in Mumbai are extending the utility of a lifestyle gadget into one that can help monitor a range of chronic illnesses. Their venture, Biosense Technologies has developed a urine analysis system that can diagnose a range of conditions from diabetes, urinary tract infection and hepatitis based on snapshots of urine samples. "Cellphones, everybody has them. And everybody pees," says Dr Myshkin Ingawale, 29, co-founder of Biosense, who unveiled the product last month - at the global TED conference in California, which brings together people in the technology, entertainment and design industries. The uChek app is designed to work with any urine-test dipstick that come with the familiar set of coloured boxes that change to indicate different components of urine. Once a user clicks pictures of the urine sample, the app analyses what it sees, and displays the levels and the trends. With just a smart phone and a dipstick kit patients can now have their urine samples analysed at home and transmitted to physicians. Equally it offers huge cost savings for laboratories that typically invest over Rs 50,000 to buy medical equipment for automated urine analysis; the Biosense app can reduce cost to just Rs 1000 for basic hardware. Due to be launched commercially in few countries , the uChek app will help diagnose and monitor several diseases like diabetes, urinary tract infection and hepatitis. "Users are also gaining the ability to diagnose and monitor a large number of conditions from the palm of their hands," says Rajesh Sawhney, founder of GSF Accelerator. This month GSF Accelerator and Insitor Fund, a social venture capital fund announced a funding round of $500,000 (Rs 2.7 crore) in the company. "The demand for affordable diagnostic healthcare devices which can be used at home is growing very fast globally," says Karan Gupta, India investments manager at Insitor. The investors are also bullish about another application that Biosense has developed to detect anaemia. The company has built a mobile phonesize device called ToucHb that measures the haemoglobin count without the prick of a needle, to help detect anaemia. The device uses a proprietary patent pending method to measures haemoglobin, oxygen, pulse rate in just 20 seconds by just attaching it to the finger of the patient. Biosense is now integrating the device with mobile platforms like Android to make the data accessible remotely. Anaemia is one of the major causes of maternal deaths in India. Globally Anaemia contributes to 20% of all maternal deaths, according to World Health Organisation. What also makes it difficult to detect anaemia in developing countries are the highly priced bulky laboratory machines which can cost upto 15 lakh. It is this gap that the group of five friends - Abhishek Sen, Yogesh Patil, Myshkin Ingawale, Aman Midha and Darshan Nayak- sought to bridge when they founded Biosense in 2008. Sen, 27, and Patil, 28, both medical doctors and alumni of IIT Bombay initially observed the problem of anaemia in a village called Parol in Thane district of Maharashtra, during a medical posting there. This triggered them to join hands with other friends to develop a low-cost portable device that the health worker would use to help screen and monitor anaemia , without needles. "Our technology is going to democratise healthcare," says Ingawale.
Imagine you live in a village deep in rural India. Since your village lacks health care facilities, if you need quality care, you’ll most likely have to trek a long way to the nearest primary health center. You may also have to go to a diagnostics laboratory, which means you’ll have to use up a whole workday for a doctor’s visit. So you end up waiting to visit the doctor until you deem your health problem serious enough to warrant it, by which time it could be too late to receive effective treatment. And you’re highly unlikely to journey to a health care center for lower-priority services like screenings and preventive care. Now imagine having access to a device that can be used to test urine – even by non-medical professionals, and even in areas without electricity and Internet access – allowing for the screening of about 25 medical conditions and helping to manage diabetes, pregnancy, kidney, liver, bladder problems and urinary infections. Suddenly, diagnostics and health screening and monitoring would become vastly more accessible to the rural patients common at the BoP. This is the scale of potential behind uChek, a mobile app that can carry out urine analysis using conventional dipsticks, converting a standard smartphone into a lab urinanalyzer. Created by Mumbai-based medical engineering firm Biosense Technologies, uChek is the firm’s second product after ToucHb – a non-invasive, portable and affordable anemia screening device adapted for poor communities. The uChek app was developed first for the iPhone, and gained over 1000 individual users in India and the US a month after its launch in April. Last week, the company launched an Android version, allowing health workers to use the app on any affordable smartphone. Biosense intends to offer, to any organization working on health access issues, a complete urinalysis solution consisting of the technology (smartphone app and kit), data management (backup software) and logistics (dipsticks supply). Laura Espiau of Villgro interviewed Abhishek Sen, doctor, biomedical engineer and CTO of Biosense, about the importance of preventive care and monitoring, and how uChek can impact patients at the BoP. Laura Espiau: What are the main consequences of lack of prevention and monitoring when it comes to health? Abhishek Sen: Diabetes has almost epidemic proportions in India, with more than 60 million diabetics in 2011 - and this number is predicted to nearly double by 2032. Detected on time, diabetes is treatable with relatively inexpensive medication, but the real burden of diabetes is its associated complications, which lead to increased morbidity and mortality. Without proper monitoring, it can evolve into life-threatening related diseases like nephropathy, which requires more sophisticated treatment, and renal replacement in the worst cases. Maternal health is also a concern, as the lack of medical monitoring in under-served areas increases the risk of complications in pregnancy, like preeclampsia. Again, if not detected on time, preeclampsia can cause life-long health problems in both mother and child. It also accounts for about 15 percent of maternal mortality in developing countries. Liver disorders and urinary tract infections are other health threats, especially in rural areas, because of a lack of prevention. We could go on with other examples, but at the end, the message is clear: They are all major diseases and could be treated effectively if detected on time and monitored, at the village level.
LE: What are the challenges of prevention at the village level?
AS: Today, the major noninvasive diagnostic tool available for clinicians is urinalysis. But villagers rarely visit doctors for screening or monitoring, and even if a health worker visits the villages, they won’t be able to carry accurate urinalysis equipment. So any screening tool needs to be portable, accurate, inexpensive and battery-operated. There are manual urinalysis tools consisting of visual strips that can be compared with a color chart reading for screening. This solution is portable, relatively inexpensive and needs no electricity, but it provides only a semi-quantitative analysis and is subject to human interpretation, which leads to a less accurate diagnosis. There are also laboratory urinalysis machines which provide a reliable result, but they depend on electricity and are expensive for the public system to adopt them. The challenge is to provide a tool uniting all the requirements, which is what we’ve been working on.
LE: Tell us about uChek.
AS: The uChek mobile app uses the smartphone’s camera to analyze conventional urine dipsticks. There’s also the uChek “cuboid,” a simple plastic contraption that acts as support for smartphone. Together, the smartphone, app, strips and cuboid perform the role of a lab urinalysis machine, at one-fourth the cost. It can screen more than 10 patients an hour, measure 10 parameters in urine (leukocytes, ketone, nitrite, urobilinogen, bilirubin, protein, glucose, specific gravity, blood and pH) and screen for up to 25 medical conditions. The results are stored automatically in the smartphone and can be sent like an SMS through uChek’s backup software for monitoring purposes. You don’t need Internet access to perform the tests. Also, it is easy to use, making it accessible even to less educated health workers. Another challenge in rural areas is that urinalysis strips are not always easily available, so we give the optional service of buying strips and sending them to any location where they are needed. The idea is to provide an end-to-end service as a sort of “urinalysis partner” to all NGOs and public or private organizations working to improve health access. We are providing the technology (uChek device), the data management through our backup software (if required, also providing our own servers), and the logistics to make sure that uChek can be used anytime, anywhere.
LE: Who are uChek Android customers and what is the payment model?
AS: We are selling uChek as a complete urinalysis solution (technology, data management and strips) for NGOs and public or private health care organizations. The customer can choose to buy the full system, which includes a Samsung Ace phone, for around $200 (Rs 10000), or the solution without the phone for $30 (Rs2000). It’s a one-time cost. For you to have an idea of costs, the commercial alternative for a urine test strip reader costs upwards of $800. In addition, we are selling either our own Biosense strips at Rs 11/unit, or Siemens strips, which are also compatible with our device, at Rs 15/unit (i.e. per test).
LE: How will you measure the impact of uChek?
AS: We provide our community health care customers a backup software for monitoring aggregate data. The data from the field is stored automatically, organized and analyzed to show logistical information (tests performed, strips remaining, etc), geographic locations and medical results (diseases identified, evolution of them). We will also add the option of including demographic information while performing the tests. This is going to be a powerful tool to measure the health and social impact of the organizations working to improve access to health care in underserved areas.
LE: What have you learned from working on uChek?
AS: First of all, surprisingly, that the urinalysis industry has practically not changed for the last 30 years. Second, that you can do almost everything with a smartphone. And the third point is more a hope than a learning, that people will learn how to monitor their health with urinalysis.
Los Angeles, le samedi 23 mars 2013 – Les patients qui utilisent dans le cadre d’une auto-surveillance des bandelettes urinaires peinent parfois à interpréter le « code couleur » suggéré par la notice. Entre deux nuances de blanc ou de vert, difficile de se faire une opinion précise, surtout lorsque la réponse, le diagnostic, nous concerne personnellement. Pourtant, l’auto-surveillance grâce aux bandelettes urinaires permet, d’autonomiser les malades et d’améliorer la prise en charge en accélérant les alertes éventuelles. Or, voici qu’une entreprise américaine Biosense Technologies vient de mettre au point une application qui pourrait faciliter la lecture de ces fameuses bandelettes.
Comme une machine classique de lecture de bandelettes… mais en beaucoup moins cher !
uCheck est un dispositif simple : le logiciel de cette application utilise l’appareil photo du smartphone sur lequel elle est installée pour décrypter les couleurs apparues sur la bandelette. Elle fonctionne donc schématiquement de la même manière que les machines d’analyse d’usine pour un coup évidemment moindre. Actuellement, uCheck est en cours d’approbation par Apple, tandis qu’une version Android doit être développée. Myshkin Ingawale, cofondateur de Biosense Technologies a également indiqué lors de la récente conférence TED (Technology, Education and Design) à Los Angeles que le dispositif était actuellement évalué dans un hôpital de Bombay. Si les résultats obtenus se révélaient comparables à ceux donnés par les appareils traditionnels on pourrait alors envisager d’utiliser uCheck dans les zones rurales des pays en voie de développement. « Les médecins pourront immédiatement effectuer des dépistages avec un outil nettement moins cher que les dispositifs actuels à 10 000 dollars » explique Myshkin Ingawale qui ne doute pas du succès de son application, car argumente-t-il avec simplicité : « Tout le monde fait pipi et tout le monde a un I-phone ». Un marché à réguler ?
La présentation de ce dispositif confirme le dynamisme du marché des applications médicales : on en compterait aujourd’hui « 40 000 (…) produites par des médecins, des développeurs de logiciels, des compagnies pharmaceutiques et des hôpitaux entre autres. Le marché de santé mobile devrait atteindre 392 millions de dollars en 2015, d’après le cabinet international de conseil et d’analyse de l’industrie Frost & Sullivan » décrivait récemment Brie Zeltner une experte de ce marché, citée par le portail Smart Planet. Cette explosion commence à poser la question de la régulation de ce marché : aux Etats-Unis certains s’interrogent ainsi sur l’opportunité d’adopter des normes plus strictes.
Según el último estudio Global Mobile Health Market Report, se prevé que 500 millones de personas utilizarán aplicaciones relacionadas con la salud en sus dispositivos móviles en 2015. Y ya es una realidad. España es el país de Europa a la cabeza de penetración de smartphones, con un 60%-65% sobre población total, y en el ámbito sanitario estos porcentajes aumentan hasta el 80%. En relación a las denominadas apps (su nombre en inglés), los usuarios las utilizan principalmente para hacer seguimiento o gestionar su salud. Respecto a los perfiles de los usuarios-pacientes, quienes más las utilizan son aquellas personas que han tenido cambios importantes y recientes en su salud, por lo que se sienten más implicados en la autogestión. Su utilidad va más allá del ámbito físico, ya que las apps alcanzan una dimensión global de la salud. Autismo, trastornos mentales o dificultades de comunicación con el entorno, estas aplicaciones también ayudan a familiares y cuidadores a mantener una atención más experta sobre el paciente. Con un futuro prometedor, y mucho presupuesto para su desarrollo, las apps parecen ser la solución para las barreras físicas y la mayor expresión de la tecnología aplicada a la medicina «a distancia» o telemedicina. ABC ha consultado a varios expertos cuáles son las mejores aplicaciones diseñadas específicamente para médicos y para pacientes. César Alonso Peña, profesor del módulo Health 2.0 del Máster en ComSalud 2.0; Ángel González, fundador y director general de Ideágoras; Maria José Hernández, directora de contenidos y producto en iDoctus, y Pablo Gómez, manager de marketing online de Sanitas. Estás son según, su criterio las Apps más útiles y fiables para profesionales y pacientes .
Su salud en el bolsillo
Desde algo tan sencillo como medir la frecuencia cardiaca cuando hacemos deporte, a poder hacer un análisis de orina en casa. Dentro de poco, el médico nos prescribirá aplicaciones para el móvil. Tome nota
Castellano. iPhone, iPad y Android. 0,79€ tiempo limitado Creada y desarrollada por un padre con dificultades para comunicarse con su hijo, Darío, de cuatro años, que padece autismo. Juan Carlos González, informático, autodidacta y vendedor ordenadores en la sección de electrónica de unos grandes almacenes en Marbella, se dio cuenta de que las terapias tradicionales, eran efectivas solo a medias para captar la atención de su hijo, y se puso a investigar. Es la primera App dedicada a personas autistas que puede utilizarse en español y en otros idiomas, así como la primera capaz de adaptarse a las necesidades de cada niño o adulto que hayan sufrido derrames cerebrales u otras dolencias similares. Ablah, además de aprovechar la tactibilidad de dispositivos como el iPhone o el iPad, es como un comunicador personal, una herramienta de apoyo para el terapeuta y los padres.
Disponible a finales de marzo. Unos 15 €, con tiras reactivas Aplicación capaz de hacer un análisis de orina con una simple fotografía. Como lo oye, ya no le criticarán por llevarse el móvil hasta al baño. Se acaba de presentar en la conferencia sobre Tecnología, Educación y diseño de Los Ángeles y según su artífice, Myshkin Ingawale, fundador de Biosense Technologies, en cuestión de segundos, puede detectar la presencia de 10 elementos en la orina, entre ellos, los niveles de glucosa, proteínas, nitritos, bilirrubina, sedimentos, acetonas, leucocitos, urobilinógeno y hematuria. Además, facilita la lectura de los resultados, ya que diferencia los niveles correctos de los que no lo son. En un futuro, el objetivo es que se pueda hacer uso del móvil para llevar a cabo esta prueba y enviarle los resultados a su médico vía e-mail. El Hospital King Edward Memorial de la India estudiará su precisión.
Une application en test dans un hôpital indien utilise l’appareil photo pour déchiffrer la couleur exacte à la place du matériel médical spécialisé. Un exemple du boom des applis médicales. Une société indienne de biotechnologie veut remplacer le matériel médical coûteux que les centres médicaux utilisent pour les analyses d’urine par une application pour smartphone et, selon toute probabilité, des kits de test à domicile, venant élargir et enrichir le marché de la santé mobile. Myshkin Ingawale, membre de TED (Technology, Education and Design) et cofondateur de Biosense Technologies, a récemment présenté une application baptisée uChek lors de la conférence TED de Los Angeles. Le concept de cette application est d’introduire une alternative à moindre coût au matériel médical spécialisé traditionnel en mettant à contribution les smartphones. uChek fonctionne de la même façon que les machines d’analyse d’urine: en comparant des bandelettes chimiques saturées à des codes couleur de référence pour obtenir les résultats des tests. L’une des grandes différences est que l’appareil photo du téléphone se charge de déchiffrer la couleur exacte à la place du matériel médical spécialisé qui ne fait que cela pour beaucoup plus cher. Tests possibles à domicile. Les machines d’analyse d’urine coûtent entre plusieurs centaines et des dizaines de milliers de dollars, tandis que l’application uChek sera bientôt disponible dans l’App Store d’Apple pour 99 dollars. Les bandelettes de test chimiques utilisées pour l’analyse d’urine coûteront 20 dollars, a précisé Michael Seo de TechCrunch dans son compte-rendu de l’événement. Il note également que l’application est en cours de test dans un hôpital de Bombay et doit encore être approuvée par Apple (une version Android arrivera plus tard). Si elle est approuvée, l’application uChek pourrait être utilisée pour des tests d’urine à domicile… si toutefois les bandelettes sont disponibles à la vente au détail. Une éventuelle pierre d’achoppement pourrait être des réglementations limitant ce que les applications de santé mobile peuvent faire. Des dizaines de milliers d’applications médicales disponibles Le cas ne s’est pas encore présenté; cependant, des organismes de réglementation, dont le gouvernement américain, pourraient bientôt mettre un frein au marché de la santé mobile pour établir des règles et des normes uniformes. De nombreuses applications sont notées exclusivement par les classements et, hormis le consensus, rien ou presque ne permet d’en déterminer la qualité ou l’utilité. Le marché fonctionne de la même manière que l’industrie des compléments alimentaires, majoritairement non réglementée, et est en plein essor. « On compte environ 40.000 applications médicales disponibles pour les smartphones ou tablettes, produites par des médecins, des développeurs de logiciels, des compagnies pharmaceutiques et des hôpitaux, entre autres. Le marché de la santé mobile devrait atteindre 392 millions de dollars en 2015, d’après le cabinet international de conseil et d’analyse de l’industrie Frost & Sullivan », a écrit Brie Zeltner de Cleveland Plain Dealer dans un récent article sur l’industrie. L’accès à des applications médicales telles que uChek est à ce jour relativement libre et devrait le rester pour un moment. Il existe déjà une application d’analyse d’urine en cours de développement pour iPhone, baptisée « Piddle » (signifiant justement « faire pipi »), et l’App Store regorge d’applications de mesure de la glycémie pour les diabétiques. L’analyse d’urine à domicile est pour bientôt… attention à ne pas laisser tomber votre iPhone dans les toilette!
Biosense is a startup project that is based on low cost medical devices segment and is created by one of the four socially driven founders from Mumbai. An announcement made today highlighted that Biosense has got funding of $500K from GSF India and Insitor Fund. The Insitor Fund is a social venture capital fund that offers dept, equity and mezzanine funding to early‐stage social enterprises in Asia. The first batch of the Global Super Angels Forum was the one of which Biosense was a part of. Biosense is created by Myshkin Ingawale, Dr. Abhishek Sen, Dr. Yogesh Patil and Aman Midha. They had first made ToucHb that is made ready for production and commercialization. In the last month, their latest product was debuted at the annual TED 2013 conference in California by Myshkin Ingawale. He said that everybody has cellphones and everybody pees too which is why their latest app uChek that will be launched in April 2013 offers urine analysis via smartphone. The uChek will provide autonomour healthcare that will let physicians as well as patients to analyze urine by measuring up to ten parameters such as glucose, ketones and leukocytes by using smartphones. The funding they have received will help the current 10 person team to consolidate their production plans and commercialize the inventions. Samir Sood of GSF, who is an Ex‐Googler, currently sits on the board of Biosense. Rajesh Sawhney, founder of GSF, said that they were interested in Biosense because of its regard for social impact as a pioneer in grassroots public healthcare. In the first month of operation itself, the GSF had invested $150K in Biosense.
More about the products:
This hand‐held device is needle‐free and is operated on the battery. The screening for anaemia and simplified and regular monitoring of treatment is provided by this device. This device not only empowers health workers with appropriate technology but also with actionable data that will help to democratize healthcare.
In order to be able to check the levels of parameters such as ketones and pH in the pee, this device has a familiar set of colored boxes that work with any urine‐test dipstick. This app works by dipping the stick in the pee and putting it next to a washable color mat and taking atleast two pictures of it at different time intervals. The mat will provide a reference color pattern which can be compared to the stick in any light. After this, the app will analyze the pictures and display the levels accordingly.
Biosense, a low‐cost medical equipment maker, has raised $500,000 from GSF India and Insitor Fund, states yourstory.in. The company was part of the first batch of the Global Super Angels Forum. Funds will be used to aggregate production plans and to market their inventions. Samir Sood of GSF holds a board seat of Biosense as GSF had invested $150,000 in the company during its first month of operation.
Biosense, a low‐cost medical equipment maker, has raised $500,000 from GSF India and Insitor Fund, states yourstory.in. The company was part of the first batch of the Global Super Angels Forum. Funds will be used to aggregate production plans and to market their inventions. Samir Sood of GSF holds a board seat of Biosense as GSF had invested $150,000 in the company during its first month of operation. So what are its inventions? Currently developed products are uCheck, an app that would allow physicians and patients globally to analyse urine using their smartphones, measuring up to ten parameters such as glucose, ketones and leukocytes. The uChek app works with any urine‐test dipstick, with the familiar set of colored boxes that change to indicate levels of things like ketones and pH in the pee. To use the app, one has to dip the stick in the pee and put it down next to a washable color mat, then take a picture of the two at certain time intervals. The point of the mat is to provide a reference color palette that can be compared to the stick in any light. Then the app locally analyzes what it sees, and displays the levels and the trends. Another is ToucHb, a hand‐held needle‐free battery operated device that enables screening for anaemia and simplifies monitoring of treatment on a regular basis. While the broadly classified medical devices segment has seen quite a few deals in the past couple of years, a technology‐enabled service in the space is an emerging area. Norwest Venture Partners recently invested $11 Mn in Perfint Healthcare in Series D round of funding. HSBC Global Investment Fund acquired 0.52% stake in Opto Circuits, increasing its holding to around 4%.
Mumbai‐based medical devices startup Biosense Technologies Pvt Ltd has secured $500,000 in funding from GSF India, a startup accelerator programme launched by former Reliance Entertainment president and GSF Superangels founder Rajesh Sawhney, and Insitor Fund, a social venture capital fund focused on early‐stage social enterprises in Asia. The funds will be primarily used to launch a series of products for the healthcare sector. "We were especially interested in Biosense for its regard for social impact as a pioneer in grassroots public healthcare," said Sawhney while commenting on the investment. An incubatee of Centre of Innovation, Incubation and Entrepreneurship (CIIE) at IIM‐Ahmedabad, Biosense was founded by the four‐member team of Myshkin Ingawale (CEO), Abhishek Sen, Yogesh Patil (COO) and Aman Midha. Ingawale was earlier working as a consultant at McKinsey & Company and holds a PhD in Management Information Systems from IIM‐Kolkata. Patil holds an MBBS degree in Internal Medicine from TN Hospital (Mumbai) and his role at Biosense includes co‐ordination of clinical research and patent strategy. Sen had earlier worked with Anaemedia Partners and holds an M.Tech in Bioengineering from IIT‐Bombay. An IIT‐Delhi alumnus, Midha was previously working as an industrial designer at Tata Technologies. Biosense currently has a team size of 10 and it has developed a portable gadget called ToucHb that measures the haemoglobin count without the prick of a needle, to help detect anaemia. The company is now looking to launch (in April 2013) its latest uChek app that will enable physicians and patients to analyse urine samples using their smartphones ‐ measuring up to 10 parameters such as glucose, ketones and leukocytes. The startup follows a B2B model and sells these devices to clinics/medical facilities, who in turn earn recurring revenues by charging patients for each test. Biosense belonged to the first batch of startups incubated by GSF India and Rajesh Sawhney‐promoted Global Super Angels Forum put in $150K in the company in March 2012. As part of that investment, Samir Sood, a member of the Global Super Angels, also joined the board of the company. Biosense had earlier secured seed funding from the Echoing Green Foundation and Chennai‐based Villgro, an organisation that invests in early‐stage social startups. GSF has got backing from 30 leading entrepreneurs including Naveen Tewari (CEO and founder of InMobi), Avnish Bajaj (founder of venture fund Matrix Partners and the Indian auction site Bazee.com, which was later acquired by eBay), Sharad Sanghi (founder of Netmagic) and Atsushi San of Softbank, among others, and five VC funds such as Kae Capital, Blume Venture, Dave McClure's 500 Startup and Seedcamp of Europe. In November 2012, the accelerator hosted a startup conference where 15 companies were presented; five of those received follow‐up funding and two went on to attend Seedcamp in London.
Medical devices start‐up, Biosense Technologies has raised $500,000 funding round from GSF India and Insitor Fund, a social venture capital fund that provides debt, equity and mezzanine funding to early‐stage social enterprises in Developing Asia. Based in Mumbai, the 10‐person Biosense team will be joined by GSF‐nominated board member and ex‐Googler Samir Sood. The company plans to use the funds in expanding their product portfolio and make significant positive impact in the health sector. “We were especially interested in Biosense for its regard for social impact as a pioneer in grassroots public healthcare,” said GSF founder Rajesh Sawhney, “Users are gaining the ability to diagnose and monitor a large number of conditions ‐ from the palm of his/her hand‐ due to the company's efforts.” The start‐up is an incubatee of Centre of Innovation, Incubation and Entrepreneurship (CIIE) at IIM‐Ahmedabad, Biosense was founded by the four‐member team of Myshkin Ingawale (CEO), Yogesh Patil (COO), Abhishek Sen, and Aman Midha. Myshkin has earlier worked at Mckinsey & Company as a business consultant. He has also been a researcher at MIT. Abhishek holds biomedical engineering degree from IIT Bombay and a MBBS in internal medicine. Yogesh also holds a MBBS in internal medicine and has a management background. He looks after co‐ordination of clinical research and patent strategy. An IIT‐Delhi alumnus, Midha has earlier worked as automotive industry at Tata Motors as an interior designer. Biosense latest offering is uChek app that the company will be launching in April 2013. The app will allow physicians and patients from around the world to analyze urine using their smartphones, measuring up to ten parameters such as glucose, ketones and leukocytes. One of its earlier products, ToucHB that is an anemia detector that doesn’t require a needle. As one of GSF’s first batch of startups (the accelerator invested $150K in Biosense during its first month of operation), the company has received significant mentorship from GSF’s global squad of angels and entrepreneurs. The start‐up plans to make revenue by selling their devices to clinics. The clinics earn recurring revenues via charging per test from patients. In terms of medical apps direct downloads, value added services from life sciences and pharma companies as well as specialist collaboration opportunities may present revenue streams, making UChek into a very valuable platform for Urine analysis products and services, the company said.
A startup in the low cost medical devices segment, Biosense is the brainchild of four socially driven founders from Mumbai. In an announcement today, Biosense has secured funding worth $500k from GSF India and Insitor Fund, a social venture capital fund that provides debt, equity and mezzanine funding to early‐stage social enterprises in Developing Asia. Biosense was a part of the first batch of the Global Super Angels Forum (which went on to take a larger role in the subsequent year). Myshkin Ingawale, Dr.Abhisek Sen, Dr. Ygesh Patil and Aman Midha are the people behind Biosense. Their first product was ToucHb which is now ready for production and commercialization. More recently, Myshkin Ingawale debuted their latest product at the annual TED 2013 conference in California last month. “Cellphones, everybody has them,” he said, engaging the audience with his ambitious plan to democratize health care. “And everybody pees. There has to be something interesting going on here.” This is the latest app‐ uChek, (urine analysis via smartphone) which will be launched in April 2013. uCheck will pioneer autonomous healthcare, allowing physicians and patients from around the world to analyze urine using their smartphones, measuring up to ten parameters such as glucose, ketones and leukocytes. A 10 person team now, the funding will be used to consolidate their production plans and commercialize the inventions. Ex‐Googler Samir Sood of GSF sits on the board of Biosense. “We were especially interested in Biosense for its regard for social impact as a pioneer in grassroots public healthcare,” said GSF founder Rajesh Sawhney. The accelerator invested $150K in Biosense during its first month of operation. More about the products: ToucHb: It is a hand‐held needle‐free battery operated device that enables screening for anaemia and simplifies monitoring of treatment on a regular basis. It democratizes healthcare by empowering health workers with appropriate technology and enables them with actionable data. uCheck: The uChek app works with any urine‐test dipstick, with the familiar set of colored boxes that change to indicate levels of things like ketones and pH in the pee. To use the app, one has to dip the stick in the pee and put it down next to a washable color mat, then take a picture of the two at certain time intervals. The point of the mat is to provide a reference color palette that can be compared to the stick in any light. Then the app locally analyzes what it sees, and displays the levels and the trends.
Mumbai‐based medical devices startup Biosense Technologies Pvt Ltd has secured $500,000 in funding from GSF India, a startup accelerator programme launched by former Reliance Entertainment president and GSF Superangels founder Rajesh Sawhney, and Insitor Fund, a social venture capital fund focused on early‐stage social enterprises in Asia. The funds will be primarily used to launch a series of products for the healthcare sector. “We were especially interested in Biosense for its regard for social impact as a pioneer in grassroots public healthcare,” said Sawhney while commenting on the investment. An incubatee of Centre of Innovation, Incubation and Entrepreneurship (CIIE) at IIM‐Ahmedabad, Biosense was founded by the four‐member team of Myshkin Ingawale (CEO), Abhishek Sen, Yogesh Patil (COO) and Aman Midha. Ingawale was earlier working as a consultant at McKinsey & Company and holds a PhD in Management Information Systems from IIM‐Kolkata. Patil holds an MBBS degree in Internal Medicine from TN Hospital (Mumbai) and his role at Biosense includes co‐ordination of clinical research and patent strategy. Sen had earlier worked with Anaemedia Partners and holds an M.Tech in Bioengineering from IIT‐Bombay. An IIT‐Delhi alumnus, Midha was previously working as an industrial designer at Tata Technologies. Biosense currently has a team size of 10 and it has developed a portable gadget called ToucHb that measures the haemoglobin count without the prick of a needle, to help detect anaemia. The company is now looking to launch (in April 2013) its latest uChek app that will enable physicians and patients to analyse urine samples using their smartphones – measuring up to 10 parameters such as glucose, ketones and leukocytes. The startup follows a B2B model and sells these devices to clinics/medical facilities, who in turn earn recurring revenues by charging patients for each test. Biosense belonged to the first batch of startups incubated by GSF India and Rajesh Sawhney‐promoted Global Super Angels Forum put in $150K in the company in March 2012. As part of that investment, Samir Sood, a member of the Global Super Angels, also joined the board of the company. Biosense had earlier secured seed funding from the Echoing Green Foundation and Chennai‐based Villgro, an organisation that invests in early‐stage social startups. GSF has got backing from 30 leading entrepreneurs including Naveen Tewari (CEO and founder of InMobi), Avnish Bajaj (founder of venture fund Matrix Partners and the Indian auction site Bazee.com, which was later acquired by eBay), Sharad Sanghi (founder of Netmagic) and Atsushi San of Softbank, among others, and five VC funds such as Kae Capital, Blume Venture, Dave McClure’s 500 Startup and Seedcamp of Europe. In November 2012, the accelerator hosted a startup conference where 15 companies were presented; five of those received follow‐up funding and two went on to attend Seedcamp in London.
LONG BEACH, California – For entrepreneur Myshkin Ingawale the logic was unassailable. Everybody pees. And everyone has a cellphone. “There has to be something going on there,” Ingawale told a chuckling crowd at the TED conference. For the 29-year-old Mumbai-based Ingawale, that something is using the increasingly powerful camera and processing muscle packed in smartphones to run cheap, accurate urinalysis tests. Don’t worry, it doesn’t involved soaking your precious handset, though it does involve peeing in a cup. Dubbed Uchek, what Ingawale has created is a seemingly simple app that analyzes chemical strips by first taking photos with your phone at predetermined times and comparing the results that appear on the pee-soaked strip to a color-coded map. With the color comparisons as a guide, the app analyzes the results, and comes back in seconds with a breakdown of the levels of glucose, bilirubin, proteins, specific gravity, ketones, leukocytes, nitrites, urobilinogen and hematuria present in the urine. The parameters the app measures are especially helpful for those people managing diabetes, and kidney, bladder and liver problems, or ferreting out the presence of a urinary tract infection. In use, the app delivers information that everyone can understand, returning either positive or negative results, numbers, or descriptors like “trace” or “large.” If you don’t know that the presence of leukocytes might indicate a urinary tract infection, you simply tap on the leukocytes tab for more information. “The idea is to get people closer to their own information,” Ingawale, 29, says. “I want people to better understand what is going on with their bodies.” While it’s being tested in a Mumbai hospital, the app is wending its way through the Apple approval process. Ingawale is optimistic it will be made available to iOS users soon. An Android version is also in the works, though because of all the different cameras in use on all the different Android-flavored phones it will take a bit more time to roll out, he says. As far as accuracy, Ingawale says after testing the app with 1,200 samples it did a better job than humans simply reading the color-coded strips. More sophisticated machines may do a better job, but they also cost $1,000 to $10,000 a pop and only read a specific type of test-strip. (There’s that recurring revenue model.) For $20, Ingawale will give you a packet of strips and the color-coded map to conduct your own tests. Add another 99 cents for the app and your own smartphone and your are ready to go. Ingawale stresses it is for informational purposes; this isn’t meant to diagnose disease, but make you, your doctor, even your family members better aware of health issues. Ingawale’s own father-in-law, who is diabetic, has been an early tester of the Uchek app and system. “My wife is the one who wants the information,” Ingawale says. “She wants to make sure he’s taking care of himself. He just takes the test and e-mails her the results.” Uchek is the second inexpensive test Ingawale, an MIT graduate, has devised. The first, in pilot programs now in India, checks hemoglobin levels without using a needle. Called TouchHb, the device uses LEDs and a photodiodes to analyze the absorption pattern of hemoglobin and thus determine volume. The point of all the smart tech is to help diagnose anemia, a treatable but potentially fatal condition if left untreated – especially in pregnant women. Obviously there is a pattern to what Ingawale is creating and bringing to market through his startup Biosense Technologies. “The medical device industry operates on proprietary, closed hardware and a recurring revenue business model,” Ingawale says. “I am trying to democratize healthcare.”
If you’re one of those health freaks that’s become hooked on all the heart monitor and calorie-burning apps around these days, then this one might just appeal to you. Uchek, which is soon to be available on both iPhone and Android, wants to help people like you check on their health regularly using an entirely novel approach (novel for a smartphone at least), by keeping a regular check on your pee. Surprisingly, your urine can tell an awful lot about the state of your health, says Uchek’s designer Myshkin Ingawale, co-founder of medical tech firm Biosense Technologies. What’s more, “everybody pees, and everybody carries a cellphone,” and so an app like Uchek that can take advantage of those two certainties makes perfect sense for those that want a heads up on any medical conditions they might be suffering from – or so Ingawale claims. The app isn’t entirely self-reliant. It needs the help of those urine test strips that you pee on in the bathrooms, taking snaps of them with your smartphone camera to analyze your bodily fluids. This is good because those strips are actually tricky to analyze with an untrained eye, even with the help of a urine-analysis machine that most hospitals use. This is where Uchek comes in, reading those urine strips much like regular smartphones read a QR code. Users are required to snap some photos of the strip at regular intervals shortly after dunking it into their pee, this allows it to read the chemical composition of your urine and monitor how it changes over time.
If you’re one of those health freaks that’s become hooked on all the heart monitor and calorie-burning apps around these days, then this one might just appeal to you. Uchek, which is soon to be available on both iPhone and Android, wants to help people like you check on their health regularly using an entirely novel approach (novel for a smartphone at least), by keeping a regular check on your pee. Surprisingly, your urine can tell an awful lot about the state of your health, says Uchek’s designer Myshkin Ingawale, co-founder of medical tech firm Biosense Technologies. What’s more, “everybody pees, and everybody carries a cellphone,” and so an app like Uchek that can take advantage of those two certainties makes perfect sense for those that want a heads up on any medical conditions they might be suffering from – or so Ingawale claims. The app isn’t entirely self-reliant. It needs the help of those urine test strips that you pee on in the bathrooms, taking snaps of them with your smartphone camera to analyze your bodily fluids. This is good because those strips are actually tricky to analyze with an untrained eye, even with the help of a urine-analysis machine that most hospitals use. This is where Uchek comes in, reading those urine strips much like regular smartphones read a QR code. Users are required to snap some photos of the strip at regular intervals shortly after dunking it into their pee, this allows it to read the chemical composition of your urine and monitor how it changes over time.
Myshkin Ingawale (watch his TED Talk) grew up observing his mother provide healthcare to people in need. Now, with his team at Biosense, he’s invented the ToucHb, a low-cost, needle-free portable device that tests pregnant women in remote rural areas for anemia — a preventable yet major cause of death in childbirth around the world. Why is anemia such a problem when it is such a preventable disease? More than 2 billion people worldwide suffer from anemia. The World Bank estimates that anemia causes up to $50 billion in productivity losses across the world. Most of the 2 billion cases of anemia are in the developing world (a problem closely linked to nutrition) — and not fatal! However, more than 1 million women and children die annually from undiagnosed anemia. Anemia is perfectly treatable and can be controlled by changes in diet, iron tablets and folic acid and, in extreme cases, blood transfusions. However, when it goes undiagnosed — and more importantly, if the treatment cycle goes unmonitored — then it can lead to severe problems. In developing nations like India, more than 50 percent of women are anemic — so every single pregnant women who reports to a government clinic is given free iron tablets. This is good, but not enough. India still has one of the highest infant and maternal mortality rates in the world. My friends Dr. Abhishek Sen and Dr. Yogesh Patil, who interned in different rural districts in Western and Central India, had seen and lived through this problem. The real problem, they told me, was not just the diagnosis or the treatment, but the lack of active monitoring, the absence of data, and of feedback to the patient or the caregiver on how well or badly they were responding to treatment. Compliance is shocking in most places. Is it just a question of access? Anemia’s symptoms of lethargy, nausea, tiredness are often mistaken as normal for pregnant women, and its negative impacts aren’t well understood among rural populations. And in many cases, pregnant women are expected to forsake a day’s wages and walk 30 to 40 miles across poor muddy roads to the nearest government healthcare center for a blood test. Why would she do this when there are so many reasons in her mind not to? She doesn’t feel sick, is afraid of needles and does not really trust the healthcare system. So she will likely wait for something to go wrong before seeking care. The idea is that with the ToucHb, a volunteer health worker — the sole face of healthcare for most Indian village women — can test for anemia in the field without having to draw blood, giving an immediate diagnosis, which could potentially save lives. How does the ToucHb work? The ToucHb measures blood hemoglobin, oxygen saturation, temperature and pulse rate. Total blood hemoglobin is used for anemia diagnosis. The WHO qualifies any pregnant woman with a Hb level of less than 11 grams per deciliter of blood as anemic. The ToucHb works by shining light of different wavelengths through the tissue of the patient’s finger. Hemoglobin has a characteristic absorbance. Understanding the spectrum, and understanding what signals to filter out, ToucHb is able to determine the concentration of hemoglobin present in tissue. The technique is similar to the one used in pulse oximeters, for the estimation of oxygen saturation. While a pulse oximeter isn’t able to measure total hemoglobin, the ToucHb does. You grew up around medicine in a unique and remote setting. What was your childhood experience like, and how did your interest in healthcare and technology develop? I was born in Pune, India, but spent my early childhood near the sea: first in a coastal village called Umbergaon in Western India, and then in Mauritius, an island off the coast of Africa. My mother worked as a pediatrician. Most of the villagers in Umbergaon were poor fishermen. My first experiences with healthcare were me “playing pharmacist” for my mother, who attended to patients. As a 5-year-old I’d happily run to the dispensary — the front room of our house — to fetch medicines for her. I remember my mother would often treat the poor for free, but they, not wanting to accept charity, would still come over and pay us in fish, freshly caught from the Arabian sea! Apart from fish, our house was filled with interesting things like microspopes and blood centrifuges, as my mother had to improvise and be doctor, pharmacist and pathology laboratory technician all-in-one in this low-resource setting. I always liked to play with technology: I still have my Lego collection, my prized possession! But I started learning about electronics in high school, and I loved to build small electronic gadgets for school projects — light dimmers, alarm clocks and so forth. Not surprisingly, I ended up at engineering school, at the National Institute of Technology in Bhopal, where I built interesting things like an escalator-accessible wheelchair, a touchscreen information kiosk (which was cool at the time; remember — 2004!) and a PC interface that could control a home’s electric system. I then started a PhD at the Indian Institute of Management (IIM), Calcutta, studying how article quality is formed in Wikipedia. I’ve always been fascinated by how Wikipedia — for all its critics — still manages to retain relatively high quality in much of its content. I downloaded the xml data dump of each and every edit ever made in the history of six different language Wikipedias, and reconstructed this into an interaction network of contributors and articles. You said in your TED Fellows talk that it took 32 tries to get the ToucHb right. What were some of the obstacles you had to overcome? Well, all this “optical method” stuff for a bunch on relatively inexperienced doctors and engineers meant that we were walking in the dark. We learned that every small thing has its own complexities. As the saying goes, you can see the world in a grain of sand. We learned as we went along — how to identify signs of error, filters, how to make the hardware reliable. In other words, we learned the hard way — by being wrong! Have you started manufacturing and selling the ToucHb yet? And if so, are you getting any feedback about its effect? We have released the devices to a few clinics in India. But it’s early days yet. We are a long way off being satisfied with our fabrication and assembly processes. We are planning to scale the production from 30 to 40 per batch to more than 1,000 per batch. But this involves putting in place quality management systems. Apart from the production side, one of the big next steps for us is to partner with different international and national health agencies to properly understand the best way to create impact with this. The healthcare ecosystem is a complex thing — protocols are designed for good reasons, and we need to work jointly with experienced public health experts to modify the existing system, make small incremental tweaks in the way point of care community health works. Many challenges ahead, but we are looking forward! You were designing electric bikes before you started working on ToucHb. Are you also interested in bicycle innovation? Actually, I was motivated by laziness! While I was living in Bhopal, the hostel dorm was 3 miles away from my classrooms and labs. Bhopal gets to be really hot in the summer – more than 113°F. I wanted to build a power assist for my pedal bike, to help me on my way to class. This was my first attempt at building an electrically powered bicycle. It worked, sort of, but not very well. Its top speed was a magnificently slow 3.1 miles per hour. Later, I worked on the Copenhagen Wheel at MIT, a smart bicycle wheel that stores kinetic energy for use when you need a boost. Tell us about Biosense. What is the company working on now? We came together as five friends — three doctors and two engineers — to create ToucHb, just trying to fix a problem we saw in the field. We’re excited by the words “non-invasive” and “point of care.” I truly believe that there is a revolution underway in medical technologies. Similar to what mobile phones have enabled, there is a decentralization — a better word is democratization, I suppose — in the way things can be done. Simply, you have more processing power in the palm of your hand today than the most corporations had five decades ago. Similarly, I am sure that non-invasive, point-of-care diagnostics will increase in power exponentially, become all-pervasive — and, specifically, enable preventive healthcare in a meaningful way for a large proportion of humankind. We’ve started some interesting new projects looking for other molecules in the direction that ToucHb has taken with hemoglobin. Hopefully we will have something to report on that in a few months. There are hundreds of fixable problems all around us, and that’s what we’re working on. We’ve learned quite a bit of what NOT to do in product development thanks to ToucHb. We hope to use some of these lessons for developing more innovative, high-impact products. What next for you on the personal front? I remain a big fan of bicycles. I am working on a project idea for a fabrication system that enables anyone to design a bicycle for themselves, from frame to finish. That’s shaping up to be good fun! What’s your experience of being a TED Fellow been like? Completely and absolutely amazing
Healthcare in rural India is often basic, meaning people die unnecessarily. Take anaemia for instance, more than half the cases can easily be cured with a course of free iron pills, but if left untreated it is potentially fatal, especially for pregnant women. Massachusetts Institute of Technology graduate Myshkin Ingawale first heard about the problem from friends who worked as young doctors in remote areas of India. "One in five deaths among pregnant women was traced back to this. I was not aware of this problem but my friends were seeing it on an ongoing basis in the field," he told the BBC. Mr Ingawale decided to put his technology background to the test and come up with a solution that would be easy for healthcare workers - often untrained - to use in the field. Lunch box
"I knew a little about technology and how to put things in a box," he said. He took his inspiration from an unlikely source - Hollywood."I had seen this machine in Hollywood movies - when someone was lying in a hospital bed they were hooked up to it," he told the BBC. The device he is talking about is a pulse oximeter, a non-invasive method of monitoring the oxygenation of haemoglobin using light. The patient is attached to the machine via a finger clip. A similarly non-invasive device was perfect for his needs because healthcare workers in India are often not trained to conduct blood tests using needles and lack the equipment to assess the results of such tests. "I found that there was no commercial availability of a device to measure haemoglobin in the same way," said Mr Ingawale. So he set about designing one. "When we first saw it is was just circuitry housed in a lunch box," said Noah Perin, commercialisation officer at the Program for the Appropriate Technology in Health (Path). Path follows the development of new medical technologies and has been looking for devices that can help detect anaemia for the past 20 years. No needle
The finished product was a little more sophisticated, a hand-held, battery-operated device that can measure haemoglobin levels without the prick of a needle. Known as TouchHb, it comes with a probe into which the finger is inserted. When light-emitting diodes in the probe shine light through the nail, a photodiode on the other end interprets the absorption patterns to produce an instant reading of the volume of haemoglobin in the patient's blood. It can diagnose anaemia in less than a minute and is currently being piloted in clinics in South India as part of the vital data collection exercise that could see the device go commercial later this year. The batteries can be recharged and are expected to last for more than 100 tests. The probe will also require yearly maintenance. Mr Ingawale's firm, Biosense Technologies, aims to sell the machines for between $200 and $300 (£125-£188) and the cost of individual tests will be just 5 rupees (10 cents; 6p). The costs are outweighed by the benefits, he thinks. "Pregnant women are recommended to get a haemoglobin test at least once in every trimester of their pregnancy but it is inconvenient for a women to walk to the nearest primary healthcare centre that could more than 5km away," he said. "They do not feel sick enough to justify that trip that could even come against losing a day's wages, so a large number of women skip the screening and monitoring." With this simple test, available in their own community, there is much greater likelihood of spotting and subsequently treating anaemia, he suggested. Local need
"We are quite excited about it because it is targeted at and developed for front-line health workers," said Mr Perin. "This device won't cure anaemia but it can have a dramatic impact in alerting people to the fact that they have a problem," he added. Mr Ingawale wants to see more devices developed at grassroots level, based on the needs of patients in the field. "There needs to be a rethink in the way healthcare is delivered to people. It needs to be far more decentralised. It can become a consumerist movement in the same way that Wikipedia has been for information," he said. Mr Perin agrees "We have seen devices like this before but they have been huge sophisticated machines made for the developed world and adapted. There is a real advantage in inventing devices based on local needs," he said.
The World Health Organization estimates the anemic population to be 2 billion, 50% of which is attributed to iron deficiency. Every year, 1 million people die due to anemia and nearly 40% of maternal deaths are caused by this disease. In fact, anemia is a major cause of deaths in childbirth in many places across the world. The statistics are alarming because anemia is preventable and curable. Many lives could have been saved and unnecessary deaths should not have happened. This cruel problem was witnessed by Myshkin Ingawale, a co-founder of the Indian med tech company Biosense Technologies, when he visited a doctor friend in Parol, India. His friend, Dr. Abhishek Sen, who was delivering a baby at that time, greeted him with a sad news that both the mother and baby died during the labor. According to Dr. Sen, the mother died of “post partum hemorrhage”, a severe internal bleeding due to undiagnosed anemia. The mother in Parol who lost her life was not the only one in this case. Thousands of women in India die during childbirth every year because of insufficient access to any kind of hemoglobin screening during pregnancy, a standard procedure for checking iron levels in blood to diagnose anemia. Many of these women did not undergo testing for anemia several months into pregnancy and consequently risked having pre-term, stillborn, or low-weight babies. Here’s another problem: though anemia is curable with medicines, not everyone is diagnosed to have one. It’s not that easy to test anemia. Basically, you take a blood sample of the person and run it through a machine called Coulter Counter that costs around $10,000. This machine is available in developed countries and most cities in the world, but other under-developed areas in the world haven’t even seen this. Ingawale knew there has to be another way to bring help to these poor places. “I come from an engineering and consulting background so it struck me that there had to be a business solution for a disease that impacts millions of women and children in South Asia,” Ingawale said. Driven by his bold vision and compassion for helping people, Ingawale, a self-proclaimed lover of brainstorming and building things, together with his engineer and doctor friends, decided to prevent more maternal deaths by building a machine that could easily measure blood count, requires no needles and pricking, and most importantly, a portable gadget that health workers in rural areas like Parol can carry anywhere with them. The intent was noble, but the journey towards building the promising device was not easy. His team built and failed for 32 times, and finally last year, they successfully built ToucHB Quik, a device that measures hemoglobin, oxygen and pulse rate. It is only as big as an iPod Classic, so it’s very handy. It’s simple to use: just insert the clip into your finger, turn the switch on, and after 20 seconds, the value of hemoglobin, oxygen saturation and heart rate are shown on the little screen. It’s definitely a blood-free blood test. How it works? Ingawale explained in Ted Talks conference this year how the device works. “You might have seen a little light inside of it. In fact, there are three lights in there, three wavelengths of light. And we essentially pass light right through the tissue, and from understanding how much of it is transmitted, how much of it is scattered and how much of it is absorbed, we can figure out how much hemoglobin is there in the blood. And this is something which is based on a principle called photoplethysmography,” the 28 year-old co-founder of Biosense Technologies said. How significant is ToucHB Quick to the community? Anemia is a major killer among people of all ages, and the team at Biosense aims to put an end to deaths caused by this disease by early diagnosis. ToucHB Quik is a prick-free blood hemoglobin measurement device that would heavily reduce pain and blood loss encountered when testing for hemoglobin. Aside from giving instant results, ToucHB Quik is non-invasive, inexpensive, portable and runs on battery, which makes it an ideal and convenient tool even for a semi skilled health worker to bring and make tests for anemia-stricken communities. The company hopes this technology will be used in developing world where cost and access is limited. In Ingawale’s presentation in Ted Talks, he expects that the rate of death from anemia in the world will be gone by 2020.
11:35PM IST Rajesh Sawhney-promoted Global Super Angels Forum has invested in Mumbai-based medical devices startup Biosense Technologies Pvt Ltd. According to persons with direct knowledge of the deal, the fund has invested more than Rs 50 lakh in the company and Samir Sood, a member of the forum, will join the board of the company. Biosense has developed a portable gadget called ToucHb that measures the haemoglobin count without the prick of a needle, to help detect anaemia. "The proceeds will be used for production and commercial launch of ToucHb," said Dr Abhishek Sen, a co-founder of Biosense, in response to an e-mail query by VCCircle. He, however, refused to share the financial details of the fundraising. Attempts to contact Global Super Angels did not elicit any response. An incubatee of Centre of Innovation, Incubation and Entrepreneurship (CIIE), IIM-Ahmedabad, Biosense secured seed funding from the Echoing Green Foundation and Chennai-based Villgro, an organisation that invests in early-stage social startups. Besides Sen, other co-founders of the company are Myshkin Ingawale (CEO), Dr Yogesh Patil and Aman Midha. According to Sen, Biosense is looking for another round of funding of around $0.2 million and is in talks with investors for the same. The company would raise close to $0.5 million in a year to meet its working capital and expansion needs, he added. "We plan to launch ToucHb in the Indian market after testing for specifications conformity. After that, we would be looking to penetrate other overseas markets. Biosense also plans to diversify into development of other technologically intensive biomedical sensors/devices," he said. Biosense will go for series A round of funding after the commercial release of ToucHB. Global Super Angels, which currently has 13 members on board, was founded by Rajesh Sawhney, the president of Reliance Entertainment. Other key members are Sasha Mirchandani from Kae Capital; Vijay Shekhar Sharma, founder of One97 Communications; Dinesh Agarwal of IndiaMart.com; Ravi Adusumalli of SAIF Partners; Deep Kalra, founder & CEO of MakeMyTrip.com; Naveen Tewari of InMobi; Murugavel Janakiraman, founder of Bharatmatrimony.com and Rajan Mehta of LiveMedia. In February this year, the fund invested in e-commerce logistics firm Chhotu.in that takes care of the last-mile delivery of the goods purchased online.
Editor's note: Myshkin Ingawale is co-founder and CEO of Biosense Technologies, an India-based life-sciences startup. He spoke at the TED conference in Long Beach, California, in February. TED is a nonprofit organization dedicated to "ideas worth spreading" which it makes available through talks posted on its website (CNN) -- I have been fortunate to have lived and experienced two worlds: My childhood in India -- which in many parts is a world of poverty, infrastructure problems, and a paucity of qualified health-care personnel, a world of many preventable deaths. The other world is the United States, where my time at the Massachusetts Institute of Technology exposed me to amazing technologies, tremendous resources to build "things," to build businesses, and where -- for the most part --there exist reliable systems, processes and medical technology which enable us to save lives, whenever they can be saved. The opportunity that exists, one might well be told multiple times, by multiple very enthusiastic and entirely well-meaning people, is to take the best of the West and put it to good use in the so-called East. Scientists develop 'bloodless' blood test. So, that would mean that, to improve health care in the so-called Third World -- we should take lifesaving medical technologies that the West has developed and transplant these to countries like India. The poster child for this kind of transplant is the mobile revolution in many developing nations like India, which have leapfrogged the rather expensive wired telephony phase altogether, and jumped straight to mobile phones. In India today, about half the population already owns mobile phones. It is not only their primary means of voice communication but also becoming their most important source of all forms of information -- business, media, health ... So can we replicate this kind of success story in health care delivery? Can we take the cool technologies developed in Route 128 and in Silicon Valley, put them on Indian soil, amidst lower resource settings, and expect a similarly spectacular outcome in health care? There might be a case to made for this approach, but to date my experience suggests that the problems in health care in the developing world are too complex, too entangled with other issues (social, political, economic) and -- in some cases -- too alien altogether from the Western world perspective -- to have a simple "tech-transfer" fix. Also, a similar problem emerges when the best brains in the West, with all the best intentions, design new products intended to solve the problems of the developing world, while not having a full knowledge or context to the problem the product is designed to solve. The story I told in my TED talk was my personal narrative of a team of doctors, engineers and designers who were thrown into the midst of a severe problem -- anemia in children and pregnant women in a rural, underserved part of India. As many as 1 million or more children and pregnant women are dying as direct or indirect result of undiagnosed, untreated, unmonitored anemia. The treatment for anemia is not only well understood, but also widely available --iron tablets, folic acid, iron injections, supplements and in extreme cases -- blood transfusions. Many government and WHO-backed schemes (e.g. "Janani Suraksha Yojana" in India) exist that provide subsidized health care -- free treatment. In rural India, there is a village health worker (Accredited Social Health Activist) in every village -- a ratio of one for every 1,000 people. The implementation of these health-care schemes is largely on the shoulders of the ASHA workers. In India there are more than 500,000 -- a really big (if not highly qualified medically...) force for doing good. Having experienced the conditions in a village in India, my group of friends -- who eventually set up the startup Biosense Technologies -- developed a simple, hand-held device that the ASHA worker could use to diagnose and monitor anemia noninvasively (without needles) and at the point of care (she could carry the hand-held device door to door). The ToucHb is designed for low-resource settings, requires no medical expertise and is perfect for the quick and affordable anemia screening it is tasked to do. The device emits three wavelengths of light. The light passes through the tissue, and from understanding how much of it is transmitted, how much of it is scattered and how much of it is absorbed, we can figure out how much hemoglobin there is in the blood. Our insight behind the ToucHb product was not merely that anemia needed diagnosing -- this is obvious to every person in public health care. Our insight was not merely that the ASHA worker needed to be empowered to solve problems in her community, and that she was the real centre of the public health system, rather than the doctors sitting in cities and towns -- again, obvious to folks in the development world. Our insight was not merely scientific -- how to develop a product that could measure blood hemoglobin and diagnose anemia all without needles and in the form of a device no bigger than a TV remote control -- there are other scientific approaches and technologies available for noninvasive hemoglobin estimation. Our real insight was that we needed to not only build something that works from a scientific standpoint but also makes sense from a commercial and cultural and political-adoption angle. This was not easy and I cannot point to any single glorious "aha" moment in time when it all clicked. All I have are a series of failures -- monuments to our own stupidity, ideas and prototypes and commercial models failing in the lab, in the field, in a government office, at the VC (venture capital) meeting, failing due to some reason from a plethora of reasons in the complex entangled mesh that is India. Slowly, over three years, our team and ToucHb stumbled our way to making the beginnings of impact. We are still stumbling forward, but have been told we are going the right way! I want a thousand stories like ToucHb to emerge to solve the pressing health care needs of the 3 billion underserved people in the world, dying or suffering from completely preventable diseases. I believe neither the "First World" or the "Third World" can do this alone. The best researchers sitting at MIT or Stanford do not always understand the context and nuances of the developing world's problems they sometimes set out to solve, and the best field people in the developing world do not have the resources and scientific expertise to create robust and cutting-edge technology solutions that scale to the levels of the problem. There are ways around this impasse, but none are quick or simple: Either technology innovators from the West who propose solutions for the East must follow through and stick it out in the field, to design and implement their vision to the end, or the developing nations must wait for a few more years while their indigenous tech innovation ecosystems mature... In the face of this complexity, I have personally found three simple rules that I have internalized, for tech innovators to create real impact:
1) Experience the problem: Don't assume you understand the problem.
2) Fail early, fail often: Don't fall in love with your ideas -- expose them as early as possible to data, to real life, and hence to failure.
3) Build a team: Surround yourself with people smarter than you, with very diverse skill sets ... and have fun!
A recent edition of TED Talks featured Myshkin Ingawale a co-founder of Mumbai-based Biosense which has invented a needle-free, handheld haemoglobin measuring device. This is big for a country where anaemia or low haemoglobin count is the leading cause of maternal mortality even though iron supplements are cheaply and plentifully available. Many of these deaths can be averted with early diagnosis but women often lack adequate and timely access to healthcare facilities and don’t know they need iron supplements. Biosense’s product ToucHB is a point-of-care device which means it takes diagnosis to the patient rather than the other way around. So, for instance, in a rural area a woman will not have to trek several kilometers to a primary healthcare centre if a government worker can visit her with ToucHB and test her on the spot. Since it’s non-invasive (no needle pricks necessary), it also addresses another problem – the unwillingness of women to give blood samples if they don’t feel ill. Anaemia does not always manifest itself in overt symptoms like say, morning sickness does. The product is currently undergoing testing. Biosense’s product is a good instance of how something made to address an urgent public health need can also have a wider market that could create enough volume to make the project feasible even successful. In urban areas, for instance, “people would have the paying capacity to buy such a product for constant monitoring,” says Abhishek Singh, head (healthcare) at Crisil Risk and Infrastructure Advisory. Direct selling could be done through clinics and pharmacies, he says. That would be a better bet in the short term than the rural market which is best tapped in partnership with the government. The National Rural Health Mission has targeted a reduction in maternal mortality rates to 100 per 100,000 live births from 212 in the period 2007-09 (the last reported official estimate). Ingawale said in a conversation with me last week that while the government would be an “impact player” this being a new technology with “rough edges” getting its buy-in would take time. Assuming it clears testing, the initial adoption would most likely be from “risk-takers” such as clinics run by private foundations, individual doctors with CSR budgets or non-profits. Maybe even pharmaceutical companies who have strong haematinic portfolios who want to do free camps, he said. “It won’t happen overnight,” he said. “We have to show results.” The company’s ambition is to take the cost per test to Rs 10/ which is a fraction of what it costs using conventional technology in a city like Mumbai. It also wants to use ToucHB as a point-of-care platform for other tests. Biosense is but the latest instance of homegrown medical device companies doing product innovation. This is doubly interesting because for years now the medical technology sector has been the poor cousin of the Indian drugs industry for a variety of reasons. A critical mass of synthetic chemists, favourable policy and entrepreneurial vision has led to a revolution in the Indian generic drugs industry. But medical technology has found it tougher on all counts. For one, the sector needs a variety of unrelated capabilities such as medicine, engineering, design and so on to be available in plenty and work together at a similar level of competence and quality not just within the organisation but also its vendors. In India, that has been lacking. For instance, Biosense gets its processors made in the US, its LEDs from Japan and its boards from Germany. Two, regulation has been a travesty. Barnyard operators have operated with impunity tarring the entire indigenous industry. Importantly, the market for medical technology in the form of hospitals and laboratories has been very limited until recently not justifying the risk and investments called for. And even those who dared usually made cheaper versions of western innovations. A few things are changing – med tech start-ups are now buoyed by relatively more avenues of funding such as venture capital and impact investing. And they have a growing market – private healthcare is taking off and the government too plans to commit more funding to healthcare. But there’s still need for world-class regulations. Even now, important legislation governing medical devices is in limbo and device companies are governed ad-hoc under the Drugs and Cosmetics Act since 2005 in a kneejerk reaction to a court order. There is also need to create global quality manufacturing so that various capabilities can be sourced efficiently and indigenously. Entrepreneurship in med tech has emerged against the odds. It won’t hurt to even things out a bit.
By making diagnostics economical and accessible, Biosense Technologies aims to eliminate anaemia, which is a problem on the rise in developing countries. Towards this effort, it has developed its first product ToucHb. Dr. Abhishek Sen, Dr. Yogesh Patil, Dr. Darshan Nayak, Aman Midha and Myshkin Ingawale got together to work on a not-for-profit project to reduce mortality caused by anaemia. What started as a project ‘AnaeMedia’ turned it into a full-fledged technology startup in December 2008, when the project gained traction in the ecosystem. The team won the second place at IIT-Bombay’s Techfest in 2008 for its project and was the runner-up at the Piramal Prize (a partnership between Piramal Foundation and CIIE – Centre for Innovation, Incubation, and Entrepreneurship at Indian Institute of Management, Ahmedabad) and was awarded incubation at CIIE. This project was then transformed into Biosense Technologies (Biosense), a company that monitors anaemia, which is a problem on the rise in developing counties. “Our incubation at CIIE gave us the confidence and reassurance to do our own thing and that it was alright to be disruptive and sometimes, even fail in an otherwise traditional industry,” says Myshkin Ingawale, co-founder and chief executive officer. Biosense received Rs. 1 crore from its promoters and angel investors. “Funding is not a problem for a startup unless you treat it like one. If you have a strong team and show commitment to your idea, then the investors who really believe in what you stand for will support you,” says Ingawale. The company got innovation grants from the Government of India in 2009 (through the Technopreneur promotion programme for Rs. 12 lakh) and in 2010 from US-based Echoing Green, a fund that encourages social
innovation, to the tune of Rs. 40 lakh. In 2011, Villgro, a company that empowers rural development by identifying and incubating innovation that can be translated to market-based models, offered them support. “Since anaemia is a big problem in rural India, Villgro was interested in working with us to meet the needs of people,” says Ingawale. He adds, “It has committed Rs. 30 lakh and will provide mentorship and support from its expertise in rural innovation scale-up.” Beating anaemia.
Undiagnosed anaemia kills more than a million women and children each year globally, with a large number being from developing countries. “The tragedy is that the cure is relatively well known – iron tablets, folic acid and regular monitoring of haemoglobin level. But we found that monitoring anaemia was the real problem,” says Ingawale. In general, access to diagnostics is expensive in developing countries relative to its treatment. And the founders felt that this is a very big impact area for the future and a great place to be for a technology startup. Biosense’s innovation, ‘ToucHb’, is an instant non-invasive, hand-held, battery operated device for monitoring anaemia. The company wants this to be the beginning of change in the way public healthcare functions. By making diagnostics affordable and accessible, it is shifting the focus to preventive medicine, rather than expensive reactive medicine. Based on the initial pilots, its pricing will be Rs. 10 per test as against Rs. 300 to Rs. 800 for a laboratory (lab) test. However, Ingawale clarifies, “As a screening tool, ToucHb will not give the accuracy that a lab test offers. And hence, we will not replace lab tests but be complimentary.” Lab tests not only give haemoglobin count results, but also offer 13 other blood analytes in the output report and are accurate. It requires expertise to come up with this result and takes about a day to turnaround. If a patient is diagnosed with anaemia through ToucHb, he/she has to undergo further investigations via lab tests to understand the depth of the problem. With four out of the five founders working full-time, Biosense took three years to develop this product and has filed two Indian patents and one world patent for the product. The company also has five others in the team – designers, field staff and engineers. It plans to market its products through channel partners, medical distributors, pharmaceutical companies and through direct sales to healthcare chains. It earns its revenue from selling the device and through a recurring yearly maintenance fee to service the devices. How does it work?
ToucHb is a hand-held, needle-free (non-invasive), AA battery-operated medical device that screens for anaemia. It has a small finger clip that goes on the patient’s finger and a LCD screen on a mobile phone sized body that reads the blood haemoglobin, oxygen saturation and heart rate in 10 seconds. “The closest device you might have seen to ToucHb technology-wise is the heart rate and oxygen saturation monitoring device called Pulse Oximetry in hospitals,” says Ingawale. It is a mature technology that measures oxygen in blood non-invasively, but not haemoglobin. In high resource settings (like the urban areas), an anaemia test is done through a blood test to check the haemoglobin level at a hospital or a diagnostic pathology lab. These centres use machines called the Coulter Counter (costing US $ 20,000). In low resource settings (like in the rural areas), the existing solutions are not so effective. While pregnant women are recommended to get a haemoglobin test at least once in every trimester of their pregnancy, it is inconvenient for them to walk to the nearest primary healthcare centre (which could be more than five kilometres at times) and hence, end up skipping the tests. Even if they go, in most cases, the health worker does not have such machines for surveillance. “I have seen field workers use a device called the Sahli’s apparatus in settings where there is no access to such sophisticated equipment or technicians,” says Ingawale. “There is a lot of subjectivity, problems like breakages, lack of acceptability and more with this method, and the clinics in rural areas are crying out for a better option,” he states. Even if the right tools are available, the population is less compliant with the idea of withdrawing blood. ToucHb, with its non-invasive nature, aims to get over this specific problem and help keep track of rural health. At this stage, ToucHb is the only commercial product from Biosense. “But we have a few aces up our sleeves in our lab,” shares Ingawale. Since the company has a non-invasive platform technology, it can do diagnostics of adjacent areas like jaundice, pneumonia and sleep apnea.Starting small, aiming big.
The company had a pilot launch early this year for its product. “This was a controlled, limited launch. We will have a full launch later this year, once we have the quality analysis in place,” says Ingawale. Biosense sells ToucHb to clinics – both public and private. “We are not planning to scale our sales too heavily for the next six months and would only sell to select clinical outfits. This is because we would like to develop the service infrastructure to scale this reliably to as many clinics as possible over the next three years,” says Ingawale. In five years, Biosense hopes to increase its sales numbers significantly. “There is a potential to sell about 10 million devices across the world,” says Ingawale. It plans to sell its product in at least six to seven countries – those with similar healthcare related problems like Mali, Ghana and Kenya in Africa and Bangladesh – after it establishes itself in India. “At some stage, we would also enter the U.S. and European Union, which have specific regions where this technology would be very well received,” concludes Ingawale.
Villgro Innovations Foundation today announced that Biosense Technologies Pvt Ltd, a company incubated by Villgro, has raised a significant round of investment from Global Superangels Forum Investors. Abhishek Sen, Myshkin Ingawale, Aman Midha and Yogesh Patil founded and promote Biosense, a startup at the forefront of Indian point of care diagnostics. With their first offering, ToucHB, Biosense has developed a noninvasive diagnostic tool for Anemia with their patented ‘needle-free’ hemoglobin measurement system. TouchB takes the guesswork out of Anemia diagnosis with an intuitive and robust interface while driving down the costs of consumables associated with old-fashioned diagnostic methods. Anemia is linked with the leading cause of death during childbirth in India. Combining the vague symptoms of Anemia with a largely uninformed public, results in most women finding out they are anemic when it’s far too late. TouchB, with its low user-skill requirements and high levels of accuracy makes anemia screening and diagnosis easier and more efficient. Biosense also happens to be a CIIE portfolio startup.
A new device that destigmatises anaemia diagnosis should be of major benefit to women and children in developing countries "We believe in chaos," says Myshkin Ingawale, the young CEO of Biosense Technologies, an Indian startup on the verge of launching the world's first needle-free anaemia scanner. He is standing in the company's mechanical lab, a tiny room cluttered with circuit boards, cables and several dummy devices. This modest second-floor apartment in Thane, a busy suburb of Mumbai, is now the headquarters for the team of engineers and doctors – among them Dr Yogesh Patil, Dr Abhishek Sen, Dr Darshan Nayak and Aman Midha – that started Biosense with Ingawale. Clinical trials on their first innovation, a hand-held, battery-operated device that can diagnose anaemia in less than a minute, are due to end in December. Anaemia, or abnormally low haemoglobin in the blood, affects more than half of children under five and pregnant women in the the developing world, according to the World Health Organisation. The disorder, which remains the biggest indirect cause of maternal mortality in such countries, weakens the blood's ability to clot, increasing the risk of postpartum haemorrhage. Low levels of haemoglobin, the iron-rich molecule that transports oxygen from the lungs to the rest of the body, have a detrimental effect on the development of the body, including the brain. The young inventors at Biosense say their device can help to fight anaemia more effectively. ToucHb, as their device is called, comes with a probe into which the finger is inserted. When light-emitting diodes in the probe shine light through the nail, a photodiode on the other end interprets the absorption patterns to produce an instant reading of the volume of haemoglobin in the patient's blood. "Every substance, including haemoglobin, has a characteristic wavelength at which it absorbs light the most," says Ingawale. "If you shine light at the right wavelength it will tell you what you want to know about that component. This is how a pulse oximeter works." Pulse oximeters are widely used by doctors to measure the oxygen saturation in the blood. Although they have been around for more than two decades, they cannot diagnose the haemogloblin count in the body. Only a blood test can. "To put it very simply, our device emits a broader range of wavelengths when compared to a pulse oximeter," says Ingawale. As a result, ToucHb can measure both haemoglobin and oxygen saturation in the blood. And it can do so without drawing blood from the patient. That is its biggest advantage, according to co-founder Patil. "In rural areas, people will proudly tell you that they have never been pricked by a needle," he says. "Whether it's fear or stigma, they won't get a blood test done unless the symptoms are serious." But the symptoms for anaemia, he explains, are far from severe: its most common signs are weakness and lethargy. "One of our partners, Dr Abhishek Sen, was interning in a village when he saw a woman and her baby die in childbirth," says Ingawale. The woman was severely anaemic but had never been diagnosed. It was Abhishek's unsettling experience that convinced the Biosense team to try and invent a device that could test for anaemia. Treatment, in the form of iron tablets or injections, is both easily available and subsidised. But Patil says the difficulty lies in diagnosing the condition. He believes ToucHb could solve the problem since it is portable, easy to use, and therefore ideal for places like rural India, where health centres are few in number and usually short-staffed. Anaemia can be life-threatening but, Patil points out, it also has less overtly obvious implications. "Children who are severely anaemic are dismissed as being lazy, but studies have shown that their IQ can drop up to 15 points," he says. "And if it's girls, they will grow up and give birth to children with low birth-weight and other complications." ToucHB will be officially launched at the TED conference in California in February. But the device has already caught the attention of non-profits like the IKP Centre for Technologies in Health. "They have the pulse of the technology and we have the pulse of the problem," says the centre's president Zeena Johar. "It's a perfect collaboration."
Describe yourself briefly. I am co-founder of Biosense Technologies, a medical device startup focusing on point of care non-invasive diagnostics for the developing world. Biosense aims to provide usable, affordable, non-invasive anemia screening tools to empower global maternal and infant health programs. In the past, I have worked at Mckinsey & Company as a business consultant. I have also been a researcher at MIT as part of the team that conceptualized and built the Copenhagen Wheel, demoed at the United Nations Climate Summit '09. I am an electrical engineer who likes to play with anything with wheels. I have a PhD from IIM-Calcutta, where, apart from studying balance sheets and suchlike, I tried to figure out, as part of my doctoral research, how Wikipedia works so darn well. I am passionate about technology (preferably, with wheels!), startups (preferably, with an idea to change the world!) and football (specifically, Liverpool F.C). Describe your Unreasonable Venture in 100 words or less. Biosense is building technologies to eliminate maternal and infant deaths caused by anemia. Our business model is based on screening and monitoring of the population for anaemia for better diagnosis and treatment; We would be rolling out ToucHb a novel, non-invasive hemoglobin estimating device which can be used by governments and organizations in the present healthcare scenario. Why is your team uniquely qualified to run this venture? For those times we were on the down side of advantage, we relied and supported each other purely based on our courage. Complementary strengths, opposing views and a shared passion to design for impact are our strengths. Our Team comprises of: Aman Midha - is primarily responsible for the product design and usability. He has a masters in design from IIT-Delhi and a Bachelors in Mechanical Engineering from NIT-Bhopal. He is also an Echoing Green Fellow 2010. Dr. Abhishek Sen Leads the technology development and research. He is a medical doctor from Nair Hospital Mumbai and a biomedical instrumentation engineer from IIT Bombay. He is also a fellow at the University of Washington, Seattle and an Echoing Green Fellow, 2010. Dr.Yogesh Patil - heads the business development and clinical trials. He has business education from IIT-Bombay and an Internal Medicine Degree from Nair Hospital, Mumbai. Abhiraman Viswambharan - handles the vendor development and public relations. He has earned a Bachelors in Computer Science from NIT-Bhopa. What is the urgent social or environmental need you're addressing? Every minute a woman dies as a result of pregnancy or childbirth. Nearly 40% of maternal deaths are attributed to anaemia. Anaemia presents with symptoms of breathlessness, fatigue and low immunity to infections thus having serious economic and social consequences. Overall it affects the productivity of a geographical enclosure. The WHO estimates the anaemic population to be 2Billion of which 50% is attributed to iron deficiency. Furthermore 71% of pre-school children and 49% of pregnant women are anaemic with 1million deaths due to anaemia every year. Current anaemia screening technologies are not very accurate, require laboratory facilities, have high recurrent costs, and necessitate a blood draw that many are unwilling because of the existing socio-cultural stigmas. What is your solution to this need? We ascertain a solution using our device ToucHb, a non-invasive, runs on battery and is an inexpensive technology to estimate haemoglobin (Hb). The device gives instant results, is portable and convenient even for a semi skilled health worker to take it to the doorsteps of the affected community. Our business strategy is three pronged. At the top level we have the public health infrastructure which includes the PHC's and Sub centres. We intend to reach here through the government and organisations like WHO and other NGO'S. At the second level is the health clinics, general practitioners, hospitals etc where we plan to reach out by tying up with pharmaceutical companies and their distribution. Finally is the home market where internet, advertisements, campaigns play a vital role. Convince us it will work. What milestones have you achieved? ToucHb has successfully finished pre-clinical trials and the device is currently in clinical studies at Nair Hospital ,Mumbai. So far, we have achieved excellent results which fall in par with the WHO color scale standards. The previous two years of development had seen phases of failures, but the passion towards this social cause coupled with the undying zest in the team never shined down. This spirit of collectiveness has landed us in a position today where, we are getting ready and pacing ourselves towards the launch of our product, ToucHb.
What problem are you addressing? Why should people care? My name is Myshkin Ingawale. I am a researcher and entrepreneur addressing the problem of undiagnosed anemia, which affects 2 billion people world-wide. The cure is known, the medicine is widely available but 1 million children and pregnant women die of this completely preventable condition because there is no affordable, point of care test available. Over the last 3 years, my team at Biosense has worked in India with public healthcare officials, hospital administrators and village health center nurses to develop “ToucHb”, a revolutionary non-invasive (prick free!), portable mobile-based diagnostic technology that will solve the problem. It contains a sensor and a mobile app that are used to measure blood hemoglobin without a prick and empower the health workers who can now administer the right medicine and monitor treatment at the point of care. This will save 1 million lives and improve productivity levels of many more who are screened and treated. I believe affordable, appropriate technology like this is needed to turn the present healthcare paradigm on its head and make medical technology accessible to everyone, regardless of economic status. I want to democratize healthcare. The present system confines the best technology to a privileged economic class. To break the barriers to access, I want to use low-cose mobile based technologies and innovative distribution and delivery models. The economics of the model would be driven by mass-scale, tiered value-based pricing pricing and its wide reach is the only way that impact can be achieved and health outcomes improved. The ToucHb sensor consists of a probe – a paper clip-like element – that goes on the patient’s finger and uses an optical principle to measure blood hemoglobin through the finger nail, much like a pulse oximeter. A mobile app is used to view, log and integrate the data with an open electronic health record system. The system is operated by a semi-skilled health worker. I believe we can use similar appropriate technologies to address many more healthcare problems being faced by both the developing and the developed world, in a cost-effective way
Biosense Technologies is introducing a cheap, portable prick-less scanning device for village health workers to screen and monitor anemia in rural India. The company estimates that 40% of maternal and neonatal mortality in India is due to anemia. Under their Anaemedia project, Biosense has developed a prick-less anaemia scanner that can measure HB levels and help diagnose anaemia by referring to an accompanying simple chart. It is designed for use by low skilled village health workers, rugged and dust-proof to last in the countryside, and equipped with a rechargeable battery and hand crank mechanism for operation in areas with infrequent electric supply. Darshan Nayak came out of Stanford/India's Biodesign program. Biosense Technologies won the Emerging Award for innovative key entrepreneur ideation in healthcare at Sankalp 2009, India's Largest Social Enterprise and Investment Forum. The teams will undertake a pilot study with 3,000 women to be screened for anemia in primary healthcare centers in Parol and Bhatane in Maharashtra.
DANIEL EPSTEIN wants to get one thing straight: He is an unreasonable man. Happily, proudly unreasonable. Entrepreneurs who want to change the world, he says, have got to be a little crazy. And so, to foster some practical zaniness, Mr. Epstein is a co-founder of something called the Unreasonable Institute, in Boulder, Colo. For the last two summers, he has helped preside over this academy for entrepreneurs who want to solve social problems and make some money, too. Part schmooze-fest, part group hug, this six-week program connects entrepreneurs with one another, as well as with executives, investors and thinkers who might help them. Its name derives from a quotation by George Bernard Shaw: “All progress depends on the unreasonable man.” For good measure, Mr. Epstein recently had Unreasonable’s logo tattooed on his derrière. Welcome to the age of the spreadsheet humanitarian. The central idea of the Unreasonable Institute is that profit-making businesses can sometimes succeed where their nonprofit counterparts might falter. Mr. Epstein, 25, and a serial entrepreneur, says the Unreasonable Institute wants people who are willing to think big, even when skeptics scoff. Competition is stiff. This year, about 300 people vied for 26 spots. Many who have attended praise the program for its networking opportunities. Some have even gotten businesses off the ground. One of them is Ben Lyon. Two years ago, Mr. Lyon, a recent college graduate in international relations and economics, was in Sierra Leone and feeling highly discouraged. Through a nonprofit group, he had tried to start a pilot program meant to allow microfinancing organizations to receive loan payments via their cellphones. But he just couldn’t get it off the ground. Today, he is running Kopo Kopo Inc., which is based on that earlier effort. With four full-time employees in Kenya, it offers a mobile payment app that helps people make purchases in areas where banks don’t exist or where fees are too high for the poor to open accounts. How did it happen? Mr. Lyon, 24, originally from Hanover, N.H., attributes his success to a commercial structure he created with the help of the institute. So far he has raised nearly $1 million from institutional investors. “We select for-profit ideas that we think have the ability to meet the needs of at least one million people,” says Mr. Epstein, who founded the institute along with Teju Ravilochan, 24, and Tyler Hartung, 26. The selected entrepreneurs include people like Myshkin Ingawale, 28, of Biosense Technologies, which makes a device that tests women and children for anemia; Luis Duarte, 30, who started YoReciclo (I Recycle) in Monterey, Mexico; and Jamie Yang, 31, founder of a EGG-energy, a company based in Tanzania that sells rechargeable batteries through a portable power grid. The institute conducts its program at a fraternity house it rents at the University of Colorado. The six weeks are intense and communal. Fellows sleep three or so to a room. A chef prepares three in-house meals a day. The fellows dine at a table seating 60, alongside mentors who might include the chief technology officer of Hewlett-Packard or the former director of Google.org. On any given day, the fellows might go on a hike or a bike ride with a potential investor, attend a workshop about building corporate partnerships, or take part in “family pitch night,” when two entrepreneurs present their companies to the rest of the group for feedback. At the end of the program, the fellows travel to San Francisco and pitch their ideas to a group of investors. Mr. Epstein says market-based solutions are important in spurring economic growth throughout the developing world. “This is really in contrast to the prevalent model of international aid,” says Cynthia Koening, 33, who attended the program this year. Her company, Wello, based in Rajasthan, India, is aimed at people — most of them women — who must walk long distances to bring drinking water to the home. Her cylinder-shaped product allows women to roll water home from the source rather than carry it on their heads, which can be dangerous and time-consuming. Ms. Koening says the decision to run Wello as a commercial business — it will sell its product, the WaterWheel, to consumers — was an easy one. “When people make choices in a market economy, they are deliberately choosing the solution that best meets their needs, she says. “Also, we don’t want to have to depend on donor grants and donations. That’s not sustainable.” MR. LYON, of Kopo Kopo, agrees that it’s time to use more commercial muscle to help solve global woes. His company plans to generate revenue through small subscription fees. “The nonprofit space has been so massive but has had disproportionally little impact in solving some of the world’s biggest problems,” he contends. But investors can be leery of commercial social ventures. One obstacle is due diligence. Investors generally “can’t go to Liberia or New Delhi to kick the tires before they write a $50,000 check,” says Nick Flores, investment director at Investors’ Circle, a network of more than 150 people who finance businesses with a social or environmental impact. He says one question kept tugging at him when he attended the institute’s pitch day last June: “Is it financial first or impact first?” The network, so far, has not invested in any companies based on those pitches, he says. “One of the only fellows who got a standing ovation was a young man helping rehabilitate child soldiers in Liberia,” he recalls. “We will have investors interested in that from an impact standpoint, but the larger question will be how are they going to get their money back?” Mr. Epstein says: “These companies are forcing investors to rethink investment terms beyond just having equity that liquidates. They’ll have to get creative with their financial mechanisms, but most firms and funds aren’t comfortable with that.” Nevertheless, about half the fellows in last year’s class received financing, ranging from $40,000 to $400,000, from the investors they met on pitch day, the institute says. The companies might aim to generate revenue through subscription fees (as Kopo Kopo is doing) or through government contracts, charging for advertising and — in the most time-honored way of all — charging for a product or service. MR. EPSTEIN is no stranger to starting businesses. He turned down Princeton to go to the University of Colorado because he thought it would be “less academically intense” and give him give more time to be an entrepreneur. By the time he was 19, he had started two companies: Tuition Specialists, which helps out-of-state students at the university work through the complicated process of paying in-state tuition legally, and Unreasonable Adventures, an ecotourism Web site. But neither company fully captured Mr. Epstein’s vision of an enterprise that would be good for both shareholders and consumers. So he set about creating the institute, which is a nonprofit, financed through a combination of private donations and grants. The institute, which has four board members, has raised more than $300,000 to run the program. Entrepreneurs compete fiercely for spots. Finalists raise the $8,000 tuition by mobilizing their friends, families and professional networks to donate in small amounts. (This process avoids what the institute calls the “rich uncle” advantage.) When the two dozen or so finalists who have won the funding race meet, ideas are proposed and retooled, eureka moments happen, and help is offered, sometimes by way of crowd-sourced fund-raising. During the first week of this year’s institute, Raj Janagam, founder of Cycle Chalao, a bicycle-sharing program based in Mumbai, received an e-mail from the Ministry of Urban Development in India requesting a meeting to discuss a government partnership with his company. Mr. Janagam, 23, had been trying to schedule this meeting for two years and had to get back to Mumbai, but he did not have $2,000 for a last-minute plane ticket. Ties Kroezen, another fellow at the institute, set up a campaign on ChipIn, a Web service that helps individuals and groups raise and collect money for various projects. Five days later, Mr. Janagam had a plane ticket to India. “I had never raised that amount of money in my life,” Mr. Janagam said. “In India, $2,000 is a lot of money. It was amazing the kind of support I got.” As for the meeting with the ministry, Mr. Janagam says it gave Cycle Chalao national credibility, and moved it closer to a partnership that will help it expand throughout India over the next few years. Forty-eight hours after the meeting, Mr. Janagam returned to the institute. For others, the benefits are not that instantaneous. Mr. Ingawale, 28, and a 2011 fellow, recently quit his job at McKinsey & Company in Mumbai to start Biosense Technologies, which makes the ToucHb, an iPad-size device that tests women and children for anemia. In 2008, Mr. Ingawale was in a village outside of Mumbai and witnessed a woman die in childbirth because of complications related to anemia, which she had never been tested for. “I come from an engineering and consulting background,” he said, “so it struck me that there had to be a business solution for a disease that impacts millions of women and children in South Asia.” Mr. Ingawale and his company have a long road ahead, even though the World Health Organization named ToucHb as one of the new emerging technologies to address global health concerns. Like any start-up, the company will have to raise capital, but it will also have to navigate issues specific to socially minded ventures: How to market a product in the developing world? And how to strike the right balance between being a profit-making business and having a social mission? Mr. Ingawale went searching for answers at the Unreasonable Institute. He says he didn’t come away with much that was concrete, but he felt more energized. “Being at the Unreasonable Institute created the complete feeling that we can do anything,” he says. He also met people like Rajesh Anandan, a senior executive at Unicef. “That’s someone I will definitely be reaching out to,” he says, “when it makes sense to deploy ToucHb across the developing world.” The device is now in clinical trials. FOR some participants, the institute is just one stop on a kind of social entrepreneurship circuit; they’ve been awarded numerous fellowships, won different business plan competitions and are regular faces at industry conferences. For others, the institute is their first encounter with this scene. This is especially true for many of the 60 percent of fellows who live outside the United States. By coming to Boulder this year, Mr. Duarte of Mexico, founder of YoRecicolo, which operates recycling programs, was able to meet like-minded people who work on recycling and waste issues. He even received an invitation to speak at a Clinton Global Initiative conference in New York last month. His company has been profitable since last year. Like Mr. Duarte, Mr. Janagam of Cycle Chalao found that the institute helped him forge contacts with other people interested in tackling social issues. “I do not come from a business family,” Mr. Janagam says. “I lack connections with high-profile people.” After six weeks, though, his smartphone was packed with contacts.
- NPR- National Public Radio - April 04, 2013
- The Phnom Penh Post - November 19, 2012
- The Phnom Penh Post - September 13, 2012
- The Phnom Penh Post - May 27, 2010
- The Phnom Penh Post - June 1, 2009
If you've applied for a mortgage recently, you know how hard it can be. The bank demands all kinds of obscure documents and wants proof of almost every asset you own. But an innovative mortgage program halfway around the world will evaluate your application without any extra documentation — and if you're approved, it will give you a 15‐ year fixed‐rate mortgage. There's just one catch: The mortgages are only for low‐income people in Cambodia. The program is a throwback to the days when bankers got to know their customers — and trusted them. Sriv Keng and her husband are prime examples of the people who are applying for these special mortgages. Until several weeks ago, they lived on the fringes of Phnom Penh, the capital of Cambodia. Their home wasn't a house, but a long corrugated metal shack that they shared with another family. It sits at the side of a field choked with green algae and trash. The shack's uneven and lumpy floor is made of hard‐packed dirt. There is no indoor plumbing, and the nine residents shared a hole in the ground for their toilet. "If it rains for like two or three days in a row, the water gets into my house," Keng, 39, says through an interpreter. "When it's flooded, the water level is high, above my ankle." Keng says her family had been living there for five years, and they were desperate to move to a better home. But if they had walked into a regular bank in Cambodia, or just about any country in the world, and asked for a mortgage to buy a nicer house, executives mostly likely would have turned them away. Keng and her husband both work. She makes and then sells rice soup at a street stall, while her husband sells clothes at another stall. But they don't meet one of the crucial requirements for getting a mortgage: They don't receive salary slips or other financial documents, so they don't have what bankers call "verifiable income." Late last year, Keng heard about an unusual bank called First Finance, which was designed specifically to give mortgages to low‐income people like her. She and her family could already imagine the new home they wanted to buy: a two‐story house with indoor plumbing. It would cost about $20,000. "I have always wanted to live in a nice, beautiful house, but with my business, with my small, very small business like this, I never expected I can afford to buy a house," Keng says. A New Kind Of Bank For A Changing Country
The First Finance mortgage program in Cambodia was the brainchild of Talmage Payne, a 45‐year‐old American. His parents worked as eye doctors in Nigeria, so he grew up wanting to help low‐income people in poor countries. When Payne graduated from college in the early 1990s, he moved to Cambodia to work with the refugees of the fighting between the government and Khmer Rouge guerrillas. "When I first came here, it would be dirt roads, the roads weren't paved, there would be no building over two stories. A few wandering cows," Payne says. "If you wanted electricity, you needed your own generator. The only vehicles were some form of rocket launcher or jeep. The country was at war." But since the United Nations helped make peace later that decade, Cambodia has been changing dramatically. It's still one of the poorer countries in the world, but you can hear the transformation. Just five years ago, everyone rode bicycles, and the streets of Phnom Penh were quiet. Today, they are clogged with noisy motorbikes, along with more and more SUVs. A Dairy Queen just opened last year — a sign that globalization has come to Cambodia. Payne used to run the Cambodian branch of World Vision, the international Christian relief and development organization. He also helped lead a microfinance program, which would lend small amounts of money for a few months at a time to help people kick‐start a business. But Payne says the more he watched Cambodia's economy grow, the more he realized it was leaving many low‐income people behind — especially in housing. "If you go to their homes, they had horrendous homes, they were living all in the parents home, too many people, they don't have access to getting a good house," he says. Microfinance, he says, was not the solution. People needed much bigger, long‐term loans to buy homes. Payne also says he realized something else that contradicts traditional banking assumptions: Low‐income families make great mortgage customers. Just about everybody in a typical Cambodian family works. The wife might run a market stall, while the husband does day labor. "Grandma sells peanuts, the kids work," Payne says. As a result, many of the families are financially resilient. If one person has to stop working, the others can chip in. "You're giving somebody something that they never thought they could have. So no matter what the hardship is, what's the one bill they're not going to miss? They're not going to miss the mortgage," Payne says. A few years ago, he took that message to major banks in Cambodia and suggested starting a program together to help low‐income families buy their first homes. Payne stressed that the program would be run like any careful business. The bank would not be subsidizing homebuyers; instead, the homebuyers would have to make down payments, and the banks would earn a profit. But the commercial banks didn't bite. So Payne set up a new bank by himself with the help of some friends. They chipped in a total of $300,000. They raised another million from investment funds that want to do good and make money. They applied to the Cambodian government for a license, and the First Finance bank opened for business four years ago. Shortly after Keng and her husband applied for a mortgage, two credit officers from First Finance showed up at her soup stall at lunchtime to see how she runs her business. These visits from the credit officers are the key to what makes the First Finance lending programs work. Keng sells her soup on battered wooden tables along a side street in a dusty neighborhood. It's flanked by factories that make clothing for the U.S. and Europe. As the factory bells sound and hundreds of workers wearing kerchiefs pour into the streets, the credit officers watch and take notes. They want to see how many workers buy her soup and how much they pay. They also want to know what other vendors think about her. For example, they talk to the man who grills corn cobs across the road from Keng's stall, asking if she usually has many customers and if other vendors trust her. The man, along with two other vendors, speaks positively about her. After the lunch rush, the credit officers interview Keng while she washes dishes in plastic buckets. They create a financial spreadsheet by asking her details about how much rice, meat and vegetables she buys to make the day's soup. They ask for the contact information for the merchants she bought the ingredients from so they can verify how much they cost. The officers have also been doing the same detailed research about her husband's clothing business. The officers calculate that Keng and her husband make almost $800 a month. A lot of First Finance customers make half that much. After a full evaluation, executives at First Finance approved a $16,000 mortgage for Keng and her family. They immediately purchased and movied into their dream home, just down the gravel road from their shack. Many families receive 10‐ or 15‐year mortgages from First Finance, but Keng says she will try to pay it back faster. The family will pay 18 percent interest on their mortgage, while most Cambodian banks charge about 12 or 13 percent. But then, regular banks would never lend money to low‐income people like Keng. First Finance has given out more than 700 mortgages and building loans, Payne says. Roughly 2 percent of the customers have defaulted, which is lower than the rate in the U.S. The bank and its investors are now making a profit.A New Home
Keng's new house is a world away from the corrugated metal shack that would flood when it rains. It has decorative tile work and arches, a living room with a 14‐foot ceiling and a dining room. It also has an indoor kitchen with a sink and faucet. The second floor includes a good‐sized bedroom. The house also has a bathroom with a porcelain sit‐down toilet. Back at the metal shack, nine people shared a hole in the dirt. "I'm happy and excited for the new toilet, because it's easier for us when we want to use it," says Eng Sreng, Keng's 63‐year‐old mother. "And it's beautiful."
For the first time in ASEAN history, Cambodian businesses won three awards, presented on Saturday night at the 5th ASEAN business awards at the 49th ASEAN-Business Advisory Council meeting. The winning Cambodian companies were Agrotech Vita Co Ltd; ACLEDA Bank Plc and First Finance Plc. ACLEDA Bank’s CEO In Channy received two awards. One for growth in the category of a large company and in the employment category. Agrotech Vita’s Tom Kimson received the trophy for growth in the division for Small and Medium Sized Enterprises (SME). Kevin Lim of First Finance also received a trophy for growth in the SME division. Singaporean companies were awarded nine trophies, the largest number of the 27 total awards given from the 10 ASEAN countries. Recipient companies were Falcon Incorporation in the growth category, Meritus Hotels and Resorts in the innovation and growth categories in the large company division, Feinmetall Singapore in the employment category and Rigel Techonology in the innovation category in the SME division. Indonesia took home the second-most awards in the ceremony, six in total. Indonesia’s large company division winners were: PT Bank Negara Indonesia (Persero) Tbk in the employment and corporate social responsibility categories, PT Kalbe Farma Tbk, PT Anugraha Wening, and PT MagFood Inovasi Pangan, all in the innovation category were the Indonesia recipients in the SME division. Malaysia tied with Cambodia for third most awards. Top Globe Corporation Berhad received a corporate social responsibility award in the large company division. Natural Health Farm Marketing Sdn Bhd got the award in the employment category, while Malaysia Microelectronic Solution Sdn Bhd won in the innovation category for the SME division. The awards ceremony, widely broadcast by local and regional media, took place as part of the ASEAN Business & Investment Summit which concluded yesterday evening.
For many people in Cambodia, the idea of owning their own home is a distant dream. To save the amounts needed for a deposit can be almost unimaginably difficult. But there are organisations that are dedicated to changing that, using the principles of the microfinance institution (MFI), to provide mortgages to lower-income Cambodians. As Kevin Lim, CEO of First Finance, the country’s first low-income mortgage lender, says, “we have people who work in factories, and when you talk to them about owning a home they say ‘oh, maybe in the next life,’ so then we get them to sit down and discuss the possibilities, and then they end up borrowing, say $5,000, and they end up owing their own home, and they’re very happy.” First Finance originally started operating in 2009, with two distinct aims: to return a profit to its investors, and to help families in Cambodia “live in dignity, security, happiness and stability through home ownership.” The company was founded by Talmage Payne, an entrepreneur with a strong ethical drive. “I’ve been here since 1992” he says: “I was doing humanitarian relief work originally – the country was still in conflict. It was a very different kind of time to be here – it’s a very different country today.” With a background in the non-profit sector, Payne was well placed to see how business could advance ethical causes. “My first MFI experience was starting VisionFund, with World Vision – out of that context I began to understand the business world better and the role of markets in driving development.” Payne believes that home ownership is crucial for the future health of Cambodian society: “It is important for the future prosperity of the country that as many people as possible be helped to get a foot on the property ladder: in any society where more people own homes, when you own the house in your neighbourhood, you care more about garbage collection, you care more about who gets elected to be village chief, commune chief, you care more about democracy; you have an invested interest in your neighbourhood, in good security, in everything,” he says. But achieving positive social change isn’t the only aim for First Finance: the company has to make money. “We’re here to return money to our investors, we have our own money in it too, because of our social ambitions we probably don’t always look for the most profitable markets, but we are going to provide a return to our investors.” When he was working with MFIs, Payne says he became aware of the need for affordable mortgage finance, and that things needed to be done slightly differently: “There were very few options for financing homes years ago - it’s definitely changing – and because more and more Cambodians were moving to the city , we had this post Khmer Rouge population boom, overcrowding houses, and there just wasn’t access to capital to buy a house. The kind of risks that you take with a mortgage loan are very different than with MFI, so it seemed wiser to try this new idea in a different company.” Payne says it wasn’t al plain sailing: “It took a while to get the regulators on board because it’s a very different thing to loan for a house, and this was the time when mortgages globally had a bad name, so to be starting a mortgage company during 2009 was politically very difficult, in terms of what kind of risks you’re taking, and the risk of titles not always being that clear here.” But Payne says things are working out well. “We’ve achieved sustainability, and more and more people are entering this market, and I think we’ve shown that there is a market.” Currently the company has nearly $5 million out on loan, and expects to double that within months. The average loan is for $10,000, and the loan can be for up to 15 years. Payne says that First Finance occupies a unique position in the Cambodian financial and mortgage market. “I believe that we’ve helped to demonstrate that there is a mortgage market further down, and because of our experience and skills we’re able to take some risks that might not be prudent for a big bank - I don’t see the big banks as doing evil, or anything like that – they’re just not going to take the same risks as we would take.” However he believes that as his company leads, others will follow. “As in any sector, when the market leader goes out there, other businesses will take a look, and see, and say ‘well they’re doing it, we should join in’ and there are definitely more established banks looking at this market. We have plenty of customers, but it’s all good for the country, when someone comes in and shows what’s possible. From a social perspective it’s a good thing that others are coming in”. CEO Kevin Lim says the company also has a role to play in making Cambodians more financially literate. “Often planning financially over the longer term can be quite new for our customers. They have been so used to hoarding money under the mattress, that using the banking system is very difficult for them. It’s a new thing for them, and they haven’t been exposed to it, so for us as a lender, we are a lender and an educator at the same time.” The company says that at present, default rates on mortgages are under 2 per cent. But for Payne, defaults aren’t always a bad thing: “From our defaults we learn how to make better loans – if it’s a really low income loan, you can’t just look at how much money they make, you have to look at the whole social context, so that if something goes wrong in the family, or someone loses an income, what’s the resilience of that group of people to maintain their loan? So in addition to looking at money, we look for character references and referrals.” Payne and Lim both stress that they take a wider look at the background of the loans they make. “When the social context that you’re lending into is strong, with a good family, popular with their neighbours, then if somebody loses a job or something they can maintain payments, or they’re confident enough to come in to the office and say ‘I need to reschedule a payment, I can’t do it right now,’ we’d much rather a person who’d had a serious illness or lost their job come in and we work it out.” Payne and Lim are both bullish about the future of Cambodia, and plan to open more offices around the country, to follow their recently opened ones in Battambang and Siem Reap. However they would like a little more support from the government in the future. “As Cambodia develops, and gets a growing middle class, the government should look at pro-housing policies that maybe reduce the transaction costs for titles and help to get more money into the sector - and then having more affordable houses – recognising that many people will have lower incomes,” Payne says. Payne says the job is very fulfilling: “It’s a very rewarding and life-changing product to sell. A person that owns a home, they get very emotional about it, they cry about it,” he says. Lim echoes him: “There’s very few products in the world that when you get it right the person is deeply moved and emotional. Maybe if you win the lottery. Helping a wealthy person get a third house is OK, but it’s not what we’re about; helping a low-income person get their first house has a huge emotional and social impact.”
Talmage Payne, chairman of the board for First Finance PLC, talks about partnering with the charity Habitat for Humanity. First Finance was licenced to operate as a micro-finance institution (MFI) by the National Bank of Cambodia in April 2009. What makes it unique among the many financing institutions in the country? Our social mission is to get a person their first home and we’re trying to do that as low in the market as we can go while still staying commercially viable. We’ve distributed over US$1 million in loans to almost 100 clients. More than 70 percent have never had a home or anything before and about 30 percent are people who have a small piece of land. Has it been difficult to find viable low-income borrowers? It’s not hard to sell the value of the product. Everyone wants to have a house. [Low-income workers] are just not anticipating that they would ever have the resources and means to do it. So it’s helping them understand how mortgage finance works. We have some of the longest-term mortgages in the country. We need to explain that this is a 15-year loan and what that means. So it’s not, “Hey you should be a homeowner,” it’s helping them understand how they could be a home- owner. You have just signed a memorandum of understanding with the NGO Habitat for Humanity to take on mortgages for around 1,000 homes of low-income Cambodians. How will this partnership work? Everyone knows Habitat is good at developing homes. Its target is people who have an income of below one dollar a day. It goes through a three-year process of selecting qualified families in slum areas or the urban poor. Habitat mobilises those families to begin some savings, then they will identify a piece of land and work with those families and volunteers to build a house at a very low cost. They put sweat equity and some savings into it, but there is still a mortgage that goes on for the remainder of the cost. We will finance and manage those mortgages for them so they can then take the money raised into another project. We will essentially purchase their existing portfolio. We can handle the credit and mortgage aspect very well, and they can handle the social aspect of identifying people and building a house. Will the financing of these loans be altered when they change hands? I am not sure exactly how this will work. I can tell you that the interest rates we charge will be between 15 percent and 18 percent. We will not make their loans any harsher than they were with Habitat. Could you reach this segment of the population without partnering with someone like Habitat? No, without a partner like Habitat I don’t think we would successfully reach them. We would love to have more partners like this in the non-profit space. If we can work lower in the pyramid, I think there is a lot more business down there. With somebody whose household income is $200 to $400 a month, those are the kind of people who will walk into a bank and say “I heard my friend got a loan and I want to get a loan”. But once you get down to an [income of] a couple dollars a day it requires some sort of partnership. One challenge with that is there are just not enough products in the market. Developers are all building 20-, 40-, 60-, 80-thousand-dollar homes. We found a couple of developers doing things under $10,000. So we have begun some partnerships with them to try to put some special promotions on those types of properties to encourage development. Does financing loans to such a low-income population present a greater risk to your institution? The risk is not the clients. Poor and middle-income people here are good credit risks – they pay. Look at the balance sheet of any MFI. The difference with our loan is they are paying over 12 years or 15 years and not six months. They’re still paying $40 a month or $80 or $20, it’s just a longer-term loan. The risk to us right now is all of our lending is based on equity. Being a new company in a new space is scary for lenders. Everyone is afraid of the mortgage market. Lenders or equity investors are looking to give loans for two to five years, so the risk for us is how we structure our balance sheet. You can’t have a lot of loans that are due to lenders when your money is coming back over a longer period of time. So who are the investors in First Finance? We have three great shareholders: Insitor Fund, who provides seed funding to help launch businesses like ours; First Home, which was begun by myself and some other Khmer and long-term expatriates with a lot of experience in microfinance; and Phillips Capital, a Singapore-based financial services company like a Merrill Lynch. They have set up a sort of philanthropic investment fund to invest in these sorts of things. Do they stand to profit from your investments? We are seeking a 10 percent internal rate of return over a five- to seven-year period. Do you have any reservations about returning a profit to shareholders on these sorts of investments? Every social enterprise has this debate and needs to have the debate. I don’t have any concern with people making a return on investment. But if you want to carry the social enterprise name, name your social goals and work hard on it. For us it’s looking at the household income that we lend to and driving our portfolio as low as we can go in those different spaces. I think any good ethical business here benefits the economy. Not everything needs to be a social investment to be positive. We can make more money just loaning to bigger houses and not partnering with Habitat, but can also partner with Habitat and make a return.
First Finance – a joint venture with Phillip Capital Group of Singapore and private investors – says it will lend to the struggling property sector despite the continuing downturn and bad loans. The construction sector has seen reduced activity and an increase in nonperforming loans since the economic crisis hit. WHILE most banks remain reluctant to provide real estate loans to customers amid the global financial downturn, a new microfinance institution set to launch June 8 says it will channel lending to house purchases and construction. "For the first time, home financing will be available to middle- and lower-income Cambodians," Talmage Payne, CEO of newcomer First Finance, told the Post on Friday. "We are going to offer a product that the other [microfinance institutions] are not touching - loans for house purchasing." First Finance is a joint venture between Phillip Capital Group and local individual investors. The Phillip Capital Group is a Singapore-based Asian financial house with operations in eight countries in the Asia-Pacific and Europe. "We see largely younger Cambodians getting educations who really want to improve their lives. Many of them want to own their first home," he added. He said First Finance will offer long-term repayment loans - up to 15 years - with a competitive interest rate. "The medium loan size is US$14,000, and clients will be required to use the title of the house or apartment they are buying as collateral." The UN Development Programme said last month that more than 30 percent of construction projects "may have been placed on hold due to the global downturn", while analysts have blamed a rise in nonperforming loans this year on the faltering property market. Payne said that despite the current downturn in real estate, First Finance had not been discouraged to invest. "The Cambodian economy will come back soon, so we want to be ready," he said. "For those people that have the income and resources, it will be a good time to buy because it's cheaper due to the downturn period." First Finance will expand to cities in Preah Sihanouk and Battambang provinces by 2010, said Payne. Hout Ieng Tong, president of the Cambodia Microfinance Association and general manager of Hattha Kaksekar Limited, said Sunday that he welcomed the new institution. "Most of the MFIs focus lending on small businesses rather than home buyers," he said, explaining that more customers benefitted from loans given to micro-, small- or medium-sized enterprises rather than individual real estate buyers. He said that Hattha Kaksekar planned to lend $30 million this year, but would not issue property loans. Bun Mony, a board member of the Cambodia Microfinance Association and general manager of Sathapana Limited, said Sunday this was a new market for MFIs. "First Finance will be an evolutionary institution, and its focus on loans for house purchases reflects the progress of the real estate sector in Cambodia," he said.
- The Yum List - Aug 3, 2014
- The Phnom Penh Post - May 2, 2014
- Pencils of Promise - April 3, 2012
- Westlake Vietnam - 2012
- Backpacker South East Asia - Aug 8, 2011
.... Top Five Restaurants in Vientiane
- Joma - Start your day with one of the many morning beverages served at Joma. Offering a quality slate of baked goods, sandwiches, hot, cold and frappe beverages, you will want to come back again the next morning. For being a coffee chain, Joma was pleasing and charming in ways that some of the other larger chains are not. I'd be a regular if I lived there. (Downtown location: Rue Setthathilath, though there are six outlets in Laos)
Opened in February, Joma brings something unique to the Phnom Penh café scene – and it’s a whole lot more than simply coffee, even if the ground-floor centrepiece is an industrial-size roasting machine. Sure, Joma – a three-storey, loft-like space with about 400 square metres of seating, including an alfresco second-floor balcony for smokers – does coffee. It brews it from fair-trade, organic beans cultivated in southern Laos. But the café also offers freshly baked loaves of bread, bagels, sandwiches, salads, and vegetarian and beef lasagne, among other hot-food offerings. “Joma is so much more than a coffee shop,” Cambodia country manager Tina Shim says. Everything is homemade, from the cakes to the ice cream, made by our bakery and production team – all the things you miss from home.” It’s a well honed routine. The Joma story goes back to 1994 in Vientiane, Laos, where it first started life as wholesale outlet for bakery products, later reinventing itself as a retail outlet, Healthy and Fresh Bakery, in 1996. In 1999, the current team of four owners bought the operation, and in 2004 they rechristened it Joma – a name that derives from the three Canadian and one Thai owners: Jonathan, Jocelyn, Michael and Aun. Currently in the planning stages and slated for a September opening, a Russian Market-area Joma Bakery Café will be the brand’s 12th offering in the region (other branches operate in Vientiane, Luang Prabang and Hanoi) and the third in Cambodia. Joma’s second Phnom Penh branch recently opened in the Tuol Kork area, which Joma chief operating officer Michael Harder describes as Phnom Penh’s version of suburbia. With its leafy views, Joma is the perfect spot for a business meeting, breakfast, lunch or a session catching up on emails, and at least part of the proceeds (2 per cent of all sales) go to community causes. The burgeoning chain also has a nondiscriminatory hiring policy, actively hiring disadvantaged Cambodians who under normal conditions would not have a chance to work.
Joma is one of PoP’s favorite cafes in the Lao community. Not only has Joma been a strong supporter of PoP, but it continues to keep our staff well fed and caffeinated. Read more about Joma’s partnership with PoP here. Meet Joma! Joma is a cafe in Laos that has been a supporter of PoP from the beginning. They have encouraged their staff to volunteer time to organize community days and mentor the students at our schools. Along with their time, they have also donated money to specific projects. Joma recently gave us the funding to print five different SHINE posters to go up in each one of our schools. The Lao staff, along with an intern from New York, worked to develop posters that the SHINE coordinators could use as a teaching aid for their lessons. We narrowed down all the ideas to these five topics: Washing Hands, Clean Water, Nutrition, Life Planning, and Brushing Teeth. With the completion of the posters, Joma put on another community day at Pha Theung. They used the nutrition poster to teach students about the importance of eating a variety of food and discussed the five food groups. They finished the day with a Peanut Jaew (dipping sauce) Contest. The students decided what ingredients to include and the teachers became the judge of each Jaew. The Joma staff did an incredible job engaging the students and when it was time to go, there wasn’t a single spoonful left. In celebration of our partnership, we decided to put up a PoP Wall at the Joma Cafe. We created a visual representation of the work PoP has done in Laos over the last three years, as well as the work PoP and Joma have done together. We feel really proud and excited with how it turned out. We are very thankful for all the work that Joma has done to support PoP and hope the collaboration will continue to grow.
Joma Bakery Café
Joma café is a famous café in both Hanoi and Laos, offering organic and healthy baked products. Appearing with commodious space, Joma bakery café always knows how to utilize its advantages to bestow upon customers special novel things.Long-standing history
Opened in Laos in 1993, this café was formerly known as Healthy & Fresh bakery. The new owner took over in 1999, and re-branded under the name Joma in 2004. Joma is an acronym of the four founder’s name: Jonathan & Jocelyn Blair (JO) and Michael & Areerat Harder (MA). Jonathan, Jocelyn, and Michael are from British, Columbia, Canada. Areerat is from Bangkok, Thailand.Luxurious and modern architecture.
Joma Bakery café on 54 To Ngoc Van, westlake district has luxurious appearance with classical architecture… All of them made up a close, warm and friendly feeling for visitors. The decoration form of Joma café is chocolate colors combined with hanging lamps which lie beside sofas and sophisticated patterns, abstract painting hung somewhere on walls. Furthermore, only in Joma café in 54 To Ngoc Van does it have a special leisure center for kids, satisfying the need of many families when coming to enjoy here at the weekends.Excellent menu ever
Savory sweet cakes with extraordinary taste and diversity menu are attributes making Joma café occupy an important point in customer’s mind. Starting with fragrant cheese cakes, fatty cinnamon buns or perfect sandwiches, everything in Joma café will bring satisfaction and unforgettable impressions to customers. In addition, enjoying a cup of cappuccino coffee with sweet smell mixing with greasy milk and cream or sipping a drink of cinnamon bun or smoked salmon… leading to the gradual appearance of great feeling which dominate all of senses and make anxieties and hurries of life disappear. The only thing remaining in customers’s mind is delicious and smooth flavor of cakes and coffee when flying with beautiful songs in here.
Coffee growing on the Bolaven Plateau, Laos
Rising to an elevation of 1,350 metres, the beautiful Bolaven Plateau region in Champasak province, Laos, is perfect coffee growing country. With cool temperatures, rich volcanic soil and plenty of rainfall, the conditions are just right for the cultivation of world-class coffee beans.Realising the potential of the area, in 1915 the French colonialists originally brought coffee to the region from the botanical gardens in Saigon. Yet it has only been the last twenty years that the coffee industry in Laos has really taken off, now generating around 20,000 tons of coffee each year!Joma Bakery Café & Fair Trade Arabica Coffee Beans
Beneath the lush, shady forests of the Bolaven Plateau, the Jhai Coffee Farmers Co-operative (JCFC) works with farming families to produce special Fair Trade Arabica coffee beans.Canadian run, Joma Bakery Café, has been a huge supporter of JCFC Fair Trade beans for over seven years. You can enjoy cup after delicious cup of organic Arabica Coffee at one of their branches in the charming French colonial towns of Vientiane or Luang Prabang.With 80% of the coffee that is grown in Laos being Robusta, the Jhai Coffee Farmers Co-operative are one of the few groups in the area that produce the ‘specialty’ Arabica beans, renowned for their medium body, mild citrus and floral flavours.The JCFC received the certification in 2005 to recognize their ongoing efforts to ensure a higher sale price for the local farming families. Many of the families living in the Bolaven Plateau region are ethnic minority groups, such as Mon-Khmer and they rely almost entirely on coffee harvest for their income.Organic, environmentally friendly & a distinctive taste
Jhai coffee trees are shade grown, which means forests are not harmed by planting the coffee trees. Rather, the forest actually helps the coffee trees by giving much needed shade from direct sunlight and helping to balance the soils nutrients. This mutually beneficial environment also maintains the natural habitats of native birds and insects. The Arabica plant has been found to thrive in these elements, yielding one of the world’s most rare and distinctive coffees.Tourism & the Support of Local Communities in Laos
Although Laos is becoming more developed in terms of tourism in recent years, with backpackers leading the way in many ways, it is important to remember that Laos remains one of the poorest in the world. It is a country that holds some of the most alarming statistics, including the record for being the most bombed country on the planet!Projects such as JCFC are few and far between in protecting local people against the negative side effects of rocketing development and consumerism. It is a great inspiration and hope for the future of the country that here on the Bolaven Plateau, crops are being grown with local people and the protection of the environment in mind. Joma Bakery Café owner says, “Our business is about supporting local people and economy. As tourism continues to develop in Laos, the demand for quality coffee will also increase. Working with projects like JCFC allows Joma to provide top quality coffee to our customers while supporting Lao communities fairly and sustainably.” At the moment, Joma Bakery Café is also working with various other local organisations including Hagar International, an organization that supports the recovery, rehabilitation and community reintegration of women and children who have been victims of domestic abuse and are in danger of human trafficking. The project recently partnered with Joma in Vietnam to open up opportunities of employment for women who have suffered badly from human rights abuse. ‘Career Pathways’ is a job-readiness program that gives women the skills they need to be financially independent and filled with hope once again. Served by friendly and skilled baristas, you can sip the aromatic organic Arabica coffee knowing that your purchase goes into sustaining the environment and helping local communities in Laos! Joma commits to giving 2% of every sale back to the people and planet through various organisations in Laos and Vietnam. Eat, drink, give. 2% People & Planet. You can read more about their projects and how you can help via the Joma Bakery Café website.
- The Ground_Up Project - June 18, 2014
- HuffPost Green - June 12, 2014
- Ashden Awards 2014 - January 13, 2014
- RTCC - Responding to Climate Changes - October 8, 2013
- The Economist Times - October 3, 2013
- The Economist - July 20, 2013
- The Straits Times - February 25, 2013
- Energy Boom - November 28, 2012
- Mercy Corps - October 29, 2012
- Technology Review - June, 2012
- Business Today - July 31, 2012
- Tree Hugger - March, 2012
- Center for Global Development - January 31, 2012
- The Guardian - January 16, 2012
- US Aid - July, 2012
- Financial Times - October 28, 2011
One of Al Gore’s favorite proverbs stresses the place of community in environmentalism: “If you want to go quickly, go alone. If you want to go far, go together.” When talking about environmental business especially, this is all too true. Working with an entire community to solve a problem lets solutions reach more individuals while reducing per-capita ecological impact. Just as importantly, the act of implementing an environmental solution can unite a community, a valid goal in and of itself. Mera Gao Power, founded in 2011 by Americans Nikhil Jaisinghani and Brian Shaad, incorporates this communitarian ideology into the business of spreading solar power in India. Uttar Pradesh, the state where Mera Gao focuses, has 125 million residents who lack electricity, or 63% of the region’s population. Many of those lacking electricity live in rural communities of around fifty households, a situation perfectly suited for Mera Gao’s alternative power solution, the solar micro-grid. Villages that solicit Mera Gao’s services are carefully surveyed by employees who determine the best place to put solar panels and batteries. Then, with the help of community members, Mera Gao sets up two solar panels, batteries, and power lines, all within one day. Electricity is wired to any household that pays the subscription fee of 25 rupees, a cos t that is half that otherwise paid for kerosene and phone charging. The subscription also includes two LED lights and a phone charger, eliminating the need to travel to charge phones. Mera Gao takes responsibility for all maintenance within the price of the subscription as well, meaning villages are free from worry about the future costs of their new grid. With lights coming on after dark, the nighttime life of the community completely changes. Additional light lets existing businesses extend their hours and encourages the creation of new businesses, like the eyeglass crafter and the sari seamstress that popped up in two villages with Mera Gao micro-grids. Children can study in their homes at night, and lit homes become resources even for those whose homes remain unlit. Community members feel safer walking around and in their homes. It’s no wonder that, in some newly lit areas, cheers accompany the flicking on of Mera Gao’s lights every night. The lights transform the very nature of community life. As of September 2013, Mera Gao has reached five hundred towns and lit 13,000 households which house 65,000 individuals. They show no sign of slowing down: new villages receive micro -grids nearly every day as Mera Gao sweeps across rural Uttar Pradesh. Their grids have been recognized by MIT Technology Review as one of the 10 Most Important Technology Milestones of 2012, honored alongside technology created by Facebook and Kickstarter. The business has also been shortlisted by the 2014 International Ashden Awards and in 2011 was identified as a Green Game Changer by the World Wildlife Fund. Mera Gao’s success comes from not just improving the environment or improving individual lives, but from improving entire communities within the space of a day. They sell more than electricity, they sell n ew lifestyles.
Just as solar leasing from the likes of SolarCity unlocked the solar market in the U.S., pay as you go solar providers are unlocking solar power for the masses worldwide. That's a big reason the off-grid solar market is booming, with over $45 millionflowing into the market since November 2013 and a smorgasbord of start-up companies popping up for investors to choose from. Yesterday, the National Geographic's Terra Watt Prize validated this market trend by awarding two 'pay-as-you-go' off-grid solar companies its top honors. Focused on rural village electrification, the Terra Watt Prize was created to provide entrepreneurs with access to investment and the opportunity to be reviewed by credible experts which in turn provides valuable business exposure. This year's winners -- who were evaluated on feasibility, impact, sustainability, and scalability of their products -- are India- based Mera Gao Power and Tanzania-basedEGG-energy. Each company will receive $125,000, plus the prestige of being honored by National Geographic through a rigorous process designed to add to the due diligence process. Mera Gao Power produces and operates micro grids in rural Uttar Pradesh, one of Ind ia's poorest states but also a hotbed of distributed solar activity. The company describes itself as a 'lighting utility' and lights its customers lives with highly efficient LED bulbs. Mera Gao Power collects weekly payments, and if those payments aren't received, the micro grid systems shut themselves off via self-resetting fuses. This unique model has allowed the young company to expand power to more than 100,000 people. EGG-energy has been working toward their mission of scaling up the solar home system (SHS) distribution in Tanzania and East Africa. EGG-energy started in 2009 as an on-grid battery business (the "Netflix of batteries"), then expanded their battery business to include off-grid areas, and eventually added SHS to their portfolio. Today, EGG-energy is focused on expanding their 'rent to own' 80 and 200-watt SHS across Tanzania and East Africa by using mobile money platforms that allow them to remotely monitor their systems. As we've pointed out before, mobile phone penetration and off-grid solar are converging to create clean technology's next big market. It is one of the most innovative and exciting opportunities the international community has seen in a long time. But for too long it has gone unnoticed as a silent revolution in rural parts of the developing world. Perhaps the National Geographic competition will be the wake-up call the world needs to recognize just how fast the revolution is proceeding and how profound the implications of this revolution will be.
Shortlists have been announced for the 2014 Ashden Awards, which uncover and champion the most exciting low -carbon enterprises and programmes in the UK and developing world. A total of 61 green energy organisations and programmes from 17 countries have been shortlisted across 4 categories of Awards, which are now in their 14th year. Said Sarah Butler-Sloss, Ashden Founder Director: “This shortlist represents the enterprises and organisations that have passed the first hurdle on the journey to winning an Ashden Award. Over the coming months we’ll be continuing our judging and assessing process of shortlisted applicants, which will result in our announcement in May of the most exciting sustainable energy champions of 2014.” • UK Ashden Awards shortlist Abundance NRG, Alquist, Accuflow: Flowsave, Change Agents UK, Chop-Cloc, Decarbon, Demand Logic, The DoNation, TreeStation, Global Action Plan, Lime Technology, OVESCO, Pilio, Pure Leapfrog, T4 Sustainability, Ventive and Your Homes Newcastle. • International Ashden Award shortlist African Clean Energy, Awango by Total, All Power Labs, CV Kreasi Daya Mandiri, The Design Group, Ecosystems Research and Development Bureau, Enzen Global Solutions, Greenway Grameen Infra, Green Heat, Greenlight Planet, Infosys Ltd, Kéré Architecture, Mera Gao Micro Grid Power, Off.Grid:Electric Tanzania, Promethean Power Systems, Service Humanitaire de Développement, Proximity Designs, Rajasthan Horticulture Development Society, Signet EnerTech, Sakhi Unique Rural Enterprise, SimGas, Société Générale Haitienne de Transferts, Sustainable Green Fuel Enterprise, UPM Umwelt-Projekt-Management GmbH, and Visionary Empowerment Programme. • Eurostar Ashden Awards for Sustainable Travel shortlist Bespoke Logistics Solutions, Cambio, Co-wheels Car Club, Ecotricity, iDBUS, Living Streets, Pignon sur Rue, Taxistop, Tisséo, Mountain Wilderness, Provincie Limburg and Stad Mechelen. • Ashden School Awards shortlist Ashton Vale Primary School, The Churchill School, Edwalton Primary School, St Faiths, Sir George Monoux College, Queen Elizabeth II High School and Woodhouse College. Finalists for each Award category will be announced in early April, with Awards to be presented at a ceremony at the Royal Geographical Society in London on 22 May. The ceremony will be hosted for the second year running by broadcaster and cultural commentator Emma Freud. Ashden Award winners will receive a cash prize of between £5,000 and £40,000, a platform to promote their work and tailored support to grow even further. The funders of the 2014 Ashden Awards are: Citi Microfinance, the Department for International Development, Eurostar, the Garfield Weston Foundation, Impax Asset Management, the US Agency for International Development, and the Waterloo Foundation.
....... Nominations for the inaugural RTCC Climate Change Awards, due to be presented at UNFCCC COP19 in Warsaw RTCC 2013 Climate Change Awards: ....
Mera Gao Power Mera Gao Power builds, owns, and operates micro grids in Uttar Pradesh, India serving off-grid villages with high quality, dependable lighting and mobile phone charging services. As of September 2013, MGP serves over 12,500 customer households and 60,000 people across more than 500 villages of Sitapur District Uttar Pradesh, and as of April, MGP became profitable. MGP’s Micro Grid was included as one of the 10 Most Important Technology Milestones of the Last Year by MIT’s Technology Review in 2012, and MGP was selected to attend White House event on Innovations for Global Development in February 8, 2012. The were identified as WWF Green Gamechanger in 2012 and were selected as a finalist for the Wantrapreneur 2011 business plan competition........
Numerous solar energy startups are delivering cheap and accessible power to rural India. These ventures have come up with solutions - ranging from solar off-grids to solar-powered home systems - that are not just cost-effective but also less toxic than traditional fuels like kerosene. "In a country, where large swathes of population have little or unreliable access to basic power, off grids is the solution," said Shyam Patra, 36, founder of Naturetech Infrastructure. The four-year-old, Lucknow-based startup provides electricity to more than 25 villages across Uttar Pradesh and Bihar by offering power directly to homes and micro and small enterprises. "UP alone has 20 million rural households that have no access to electricity. Even if we choose to work only here, we will not be able cover more than 10% of the market," said Patra, who was formerly with infrastructure companies Lanco and GMR. Naturetech's off-grid is installed underground, with cables attached to households. Customers pay through a tamper-proof prepaid meter. Consumers pay up to 150 a month for 24-hour electricity, almost half of what they spend on kerosene and diesel. "The aim is to provide the last mile connectivity," Patra said, adding that he expects to install at 10 more off-grids by the end of the year and earn revenue of Rs 10 lakh by the end of the current fiscal. Solar has for long been viewed as the energy source with the most potential to offer low-cost power, with policy support and plummeting prices of solar panels used to store power boosting entrepreneurial activity in the sector. "That has had a big impact, because project capital expenditure is now much lower. In 2007, we sold power at 16 to 17 a unit in Punjab. Now they can look to sell it at 7 and 8," said Sanjeev Aggarwal, managing partner at Helion Venture Partners, an early investor in solar power company Azure Power. The launch of theJawaharlal Nehru National Solar Mission has also spurred startup activity. The target of 20,000 mw of grid-connected solar power by 2022 has led to increased domestic production of critical raw materials and components. "It has been a big boon, we are seeing a lot of entrepreneurs enter the space, and who are bringing in the changes," said Karan Gupta, an investment manager at social venture capital fund Insitor Management. "Economies of scale will bring down costs and thereafter tariffs. We are very bullish on this space," said Gupta whose fund has invested in Lucknow-based startup, Mera Gao Power. "Power is so scarce in India that the situation provides us with massive opportunities," said Nikhil Jaisinghani, founder of Mera Gao Power. Born and raised in the US, Jaisinghani and his cofounder, Brian Shaad, both 38, quit their jobs with development agency USAID and Shell, respectively, to start Mera Gao Power in 2010. The company currently serves the Sitapur district in UP, providing electricity to more than 600 villages that account for about 65,000 people. "Our target is to reach 1,000 villages by end-2013," said Jaisinghani. Mera Gao Power's micro-grid system, which costs about Rs 50,000, can be built and set up in a single day, and the system can generate, store and distribute power, turning itself on and off automatically. "We finance it for the consumer, offering them at seven hours of light and phone charging capacity. It is much more energy and cost efficient," Jaisinghani said. He, however, did not disclose Mera Gao Power's topline projections for the financial year ended 2014, but said monthly revenue is expected to be about Rs 13 lakh for September. In Kolkata, Onergy operates eight renewable energy centres and provides a range of products, from solar lanterns and solar home systems, to solar power installations, in the process, reaching about 700 villages.
FLY by night over Uttar Pradesh in northern India, the country’s most populous state, and its cities appear as dazzling islands. In between, however, lies an inky sea. Perhaps two-thirds of Uttar Pradesh’s 200m people have no regular electricity. In India as a whole, 700m, or more than half of the population, suffer unreliable connections to the national grid, or none at all. On paper, plans exist for linking the country’s northern and southern grids. That would help, yet nobody expects rural India to be properly plugged in for a long time yet. Meanwhile, villagers soldier on with paraffin lamps, which harm lungs and emit a dim light that is of little use for school homework. Darkness breeds danger, so women stay home after the sun goes down. A lack of electricity limits business, as markets and shops close early. Banks have been ordered to reach villages, but they need electricity. And though most Indians have mobile phones, many struggle to recharge them. Lots of India’s 400,000 mobile-phone towers are powered at least in part by diesel generators, which are noisy, dirty and costly. Power can account for two-fifths of a mobile-phone company’s operating costs. Official figures boast that 90% of villages are electrified, but that means little. If just a tenth of a village is on the grid, plus a few homes of low-caste or minority families, officials count it as entirely electrified. It is also quite another matter how much electricity actually flows down the wires. The lack of grid power grows more severe as rural incomes rise and feed demand. Diesel prices are up by a fifth since September because subsidies have been cut, pushing up the cost of running generators. What is more, the government has told mobile-phone firms to switch half of their rural towers, and a fifth of those in cities, to green energy by 2015. Around 150,000 will need a new power supply. With the state incapable of providing electricity, the good news is that aid donors, “social entrepreneurs”, NGOs and investors are rushing to promote rural off-grid power. Arunabha Ghosh of CEEW, a Delhi consultancy, counts 250 companies in the field, mostly relative newcomers. A few try mini-power stations that use hydropower or burn rice husks or methane from cow dung. The vast majority, however, bet on solar energy using increasingly cheap equipment, often made in China. One approach is to stick panels on a village roof and run wires to a few dozen nearby homes, allowing each seven hours of light a day plus a phone charger. Brian Shaad of Mera Gao Power, a firm in Uttar Pradesh, says even poor households can pay for this, by switching spending from paraffin. The firm has so far wired up some 9,000 homes. Mr Shaad says he sees “kids studying, coming from the dark homes to the light ones to do homework”. He also tells of a woman who, thanks to being able to work later under LED lights, has tripled her overnight production of the samosas she sells at market each morning. Others work on a bigger scale. Omnigrid Micropower Company (OMC) has built ten solar plants that power phone towers and sell electricity to around 3,000 nearby households, as well as to businesses. It plans 4,000 more such plants in the next three years, mostly in Uttar Pradesh. They will light millions of households. It begins by renting out charged lanterns, fans and battery boxes, laying cables to households and businesses later. The impact is striking. In one Uttar Pradesh village with a solar plant a shopkeeper claims his income soared once he opened late, while his wife and other women took to making bangles in the evening. A tailor in a mud house says longer stitching hours lifted his monthly income by nearly half, to 7,000 rupees ($120). Last year in nearby Atrauli village, on the edge of mango woods, OMC opened a solar plant to power two phone towers. Once a local businessman, Pradeep Singh, got electricity to his petrol station, he opened it 24 hours a day. Next he rented a dozen lanterns for his bar. Sales rose and costs fell. For Mr Singh, in neatly ironed shirt and white trainers, the sky is now the limit. On July 1st he opened a college for 550 undergraduates, built on a field behind the plant. Mr Singh claims he will outshine the competition. Electricity means not only light: “I offer fans to the students,” he says. “No other college will offer that.” Some 165 students have enrolled. Now Mr Singh plans a rural mall for 20 small businesses, such as a motorcycle repair shop, restaurants and a cinema. A Swiss firm is mulling a water-purification plant. A state bank is moving in. OMC hopes to develop solar-run irrigation for farmers, plus a scheme to rent villagers cheap tablet computers to serve as televisions. Village leaders hope that electricity and the economic growth it brings will help slow the rush of youngsters to Lucknow, the state capital, 50 kilometres (about 30 miles) away. If anything, the government’s lack of interest has fed the boom. With cheap land and little regulation in rural areas, OMC can set up a solar plant for just $165,000, which it can then run for decades at little cost. Unlike with grid- supplied power in India, no one blocks or diverts off-grid electricity for the sake of bribes or some sort of electoral gain. Such schemes are of little help to industry or other heavy users of electricity. Nor is solar power yet as cheap as the grid. For all that, the rapid arrival of electric light to Indian villages is long overdue. When the national grid suffers its next huge outage, as it did in July 2012 when hundreds of millions were left in the dark, look for specks of light in the villages.
NEW DELHI - Rising early may be a good habit for many, but for the people of Kalepurwa Village, it was always about making the most of daylight. At night, life ground to a halt. Children struggled with schoolwork under rickety kerosene lamps, their mothers cooked meals in candlelight and, with darkness shrouding everything, people slept early. It was easy to see what even a mere light bulb could do for these homes and millions like them across rural India that still have no access to grid power. The thought struck Mr Nikhil Jaisinghani, a United States-educated young maverick, as a perfect opportunity to mix business with social enterprise. Thus, the dark nights of Kalepurwa inspired one of India's most successful off-grid energy models - built with ultra-low-cost solar power micro grids, giving thousands of rural residents access to both light and power for the first time in their lives. In 2010, Mr Jaisinghani's company, Mera Gao Power (MGP), which he started with partner Brian Shaad, began installing rooftop solar photovoltaic panels in the villages of the northern state of Uttar Pradesh. Each household that signed up was provided with two LED lights and one mobile phone charging point at a cost of 100 rupees (S$2.30) a month. "The market seemed clear to all - people living in darkness would be willing to pay for improved lighting, and if that lighting were cheaper than kerosene, it would be a no brainer," Mr Jaisinghani, 37, told The Straits Times. So he let there be light, and it changed lives: People could work after dark, generating more income; children got extra time to study; more affordable mobile phone charging, which until then cost 10 rupees per charge in town, allowed villagers to stay connected on their phones. "In one village that MGP serves, some of the women began producing saris in the evenings," Mr Jaisinghani said. "Now, there are five micro enterprises in the village employing local women to produce these saris, which are sold at a healthy profit." For many more customers, solar-powered lights were simply cheaper than kerosene, the burning of which also damaged their health and the environment. Now, as the quality of power improves, these villagers can aspire to more amenities like television sets, refrigerators or even clean drinking water. MGP's efforts have been recognised by both the Indian government and international agencies such as the US Agency for International Development, which provided a grant of US$300,000 (S$371,250) for its project in the villages of Uttar Pradesh last year. Now, MGP lights up 155 villages, with thousands of customers. "We believe our work is part of a larger strategy of nationwide energy access and that we are actually implementing the country's energy strategy as it has been laid out by policymakers," said Mr Jaisinghani, a father of two who has degrees in international economics and development from Johns Hopkins University and the London School of Economics. A country facing an energy deficit, India hopes to generate 20 gigawatts of solar power by 2022. Large-scale solar facilities that directly feed the grid are growing. But it is off-grid solar power that offers a ray of hope to the around 40 per cent of India's 1.2 billion population that the Renewable Power Ministry estimates lack access to energy. Part of Mr Jaisinghani's altruism can be traced to his grandfather, a Christian missionary who served communities in southern India. Mr Jaisinghani, too, spent two years as a voluntary maths teacher in Nepal, an experience he describes as "life-altering". Later, he met Mr Shaad in the course of a development project in the Niger Delta. "Living in an off-grid village of Nepal two days' walk from the nearest road, I learnt what it was like to live without amenities or any sort of government services," he said. Working in Indian villages can be tough: Sometimes the sites are almost inaccessible, local politicians often seek bribes, and sourcing equipment parts can be a nightmare. But it is a different kind of challenge that worries Mr Jaisinghani: government regulation. "Some in government have described off-grid service companies as exploitative, charging high fees for basic services. We feel this is generally misunderstood," he said. "MGP's service is actually cheaper than the most basic grid connection in many of India's northern states." The young social entrepreneur has set himself big targets. "In 2013, MGP aims to serve 25,000 customers, and by 2015, MGP aims to serve over 100,000," he said. "In addition, MGP will be looking at new services to provide to its customer base, ideally ones that help them increase or stabilise their incomes. "MGP also aims to take this innovation from India to other parts of Asia, where off-grid populations still rely on kerosene for night-time lighting."
The Sustainable Energy for All initiative has rightfully united the world’s attention on a critical development issue – delivering universal energy access. But whether it’s grid extension, distributed clean energy, or a combination of both that ultimately ends the darkness that traps the rural world one thing is clear – an obsessive focus on the price of the first kilowatt hour the poor receive, all but ensures the job will never get done. The biggest problem with a focus on the price per kilowatt hour is the failure to prioritize coverage, and speed. Today, it is clear that off grid clean energy is cheaper than subsidized diesel and kerosene even if it may not be as cheap as the subsidized grid electricity prices in India, Malawi, Haiti and other nations. But it is unconscionable for those without energy to be forced to continue to spend huge portions of their monthly income on dirty kerosene and diesel instead of cheaper and cleaner solar or biomass because we want them to wait for the grid to arrive; A grid that hasn’t come for decades, and won’t come for decades more. How many babies need to be borne in the dark? How many women need to die unnecessarily of snake-bite while picking vegetables in the dark, or get lung cancer from breathing kerosene fumes? How many children should lose their schooling opportunity to darkness because SOMEDAY the grid will arrive, and when it does, its electrons – but not the total cost of the connection -- will be cheaper than those you could pluck off a mini-grid next month? The conversation about price per kilowatt hour sounds very much like a conversation among folks who already have electricity, not one you would have with people who lack it and are going without food to pay for kerosene. The second problem is the nature of subsidies meant to reduce prices for the poor. Let's be clear. Government subsidies to the power sector, (or socialism) can provide universal, or well nigh universal, electrification. Vladimir Lenin proved this. So did FDR. Vietnam is the most recent success story. But many countries with enormous un- electrified populations have shown that subsidies alone cannot, ever, provide universal access to electricity in the absence of a driving national development mandate for universal service. Where pictures can easily be snapped of electric wires soaring over kerosene dependent homes you can be fairly certain that such a driving national mandate is lacking. Happily enough a new bottom-up approach is emerging even though it has a long way to go. Bangladesh is now installing 30-40,000 solar home systems every month. Dlight distributed their 2,000,000th solar lantern this month. OMC is busy completing its 10th solar mini grid because the economics of centralized grid extension simply don’t work. The poor no longer need to wait decades for power. Instead they wait days or weeks for small scale localized systems to be installed by local companies employing local installers whose money is recycled in local purchases. The cascading development impacts of decentralization. But for this approach to scale we need entrepreneurship, not bureaucracy. These approaches are working not because subsidies made them affordable. They were delivered because the alternative, no power or dirty kerosene, was too costly to bear. Every day a village waits for the grid to inch its way closer this cost is paid and its one those who obsess over the kwh price of energy the poor pay fail to include.
Could decentralized, solar energy be the solution to India’s power poverty? Indian solar advocates are sounding alarms that government response to the country's giant blackout could only deepen existing subsidy of the coal industry, raising the question: Would solar investments be better for India's economy in the long run? The pollution-belching coal industry can’t keep up with demand; the coal-driven grid is wracked by corruption; and the advantages of solar power are already blossoming in both poor and rural India. In early September, NPR reported on blackouts and workhorse generators that private entities employed when the centralized power grid failed. Because middle-class Indians demand continuous energy, they spend $8 billion a year on diesel-run generators; that’s three times “what it would cost to produce the same amount of energy with state coal- generated power.” Regardless of how the energy is produced, NPR’s Julie McCarthy explains, “whether India becomes a 21st-century powerhouse, whether it continues to pull millions from poverty all rest s on its capacity to produce enough electricity for everyone.” This crucial fact leaves some renewable energy leaders like Harish Hande of SELCO worried that the Indian government will push for more coal or nuclear plants rather than support a fledgling solar industry, reported Bloomberg Businessweek. Hande’s fear is not a small one: “The state-owned Coal India Limited (CIL) is the only agency which sells coal in India. It is also the world's largest producer of coal - during 2011-12, it produced more than 435 million tonnes,” reported the BBC. Just weeks after the blackouts, reports emerged that $33 billion was lost due to mis-selling of coal fields, resulting in “Coalgate,” one of India’s biggest scandals in years. The industry is subsidized from abroad, too. The Nation reports that “World Bank Group lending to coal, oil, and gas is up 94 percent from 2007, reaching over $3 billion. Coal lending alone has increased an astonishing 256 percent in the last year.” CIL divvies up coal plots through a Byzantine process wracked by graft, reports The Nation in an article that questions how a country as rich in coal as India could have such disastrous blackouts. “Theft and corruption have played a role in India’s power failures for decades” -- hurting the wealthy in the form of graft and the poor in simple theft. In fact, The Nation reported,“as much as 40 percent of India’s electrical power is stolen." Some believe building more centralized, coal power plants is not the answer, because the coal system is already debilitated by scandal, inefficiencies and decades-long subsidies from the World Bank. Had the bank heeded its own studies in the early 1990s, which showed that a more economically efficient way of handling the energy needs of the poorest in rural areas would have been to invest in renewable energy, many of India’s energy and environmental problems would have been solved. And had the World Bank focused on its mandate—providing energy for the poorest, rather than rich urban areas, and businesses—India might have ramped up its use of renewable energy to a level comparable to Germany’s, which, with far less insolation, recently derived 40 percent of its electricity from solar power. Rather than “How did coal-rich India end up with power blackouts?’ maybe The Nation’s question should have been, “Why didn’t India opt for renewable energy?” Last year, India did invest $12.2 billion in green energy, and through a “Solar India” policy the government pledged “to install 20,000 megawatts (Mw) of grid-connected and 2,000 Mw of off-grid solar power by 2022,” reports the Business Standard. However, India's 1 gigawatt of solar power is just 0.5 percent of its total power consumption. But bear in mind that 400 million Indians don’t even have access to energy, even the unreliable kind. As the Indian government continues to strike out with the big grid,private social entrepreneurship is stepping up to the plate with a solar bat. Dowser reports on several social entrepreneurs that “are pioneering a decentralized energy paradigm, characterized by improving efficiencies that bring energy cost into parity with grid alternatives, and contribute to economic development and the eradication of poverty in rural areas.” These entrepreneurs include Bihar -based Husk Power Systems; SELCO India, operating out of Karnataka and Gujarat; ONergy in Kolkata. Solar solutions are simply more flexible, both for urban communities during peak demand as well as rural localities that are off the grid. Mera Gao Power in Uttar Pradesh is a perfect example of a private company that offers an adaptable, efficient alternative to centralized coal power. The Guardian reports on this company, set up in 2010 by two Americans, Nikhil Jaisinghani and Brian Shaad. At the village level, the company sets up micro grids, which provide low cost energy for small appliances and mobile phone charging services. After about 18 months to three years, the company can recoup its costs. Jaisinghani and Shaad, with the help of a grant from USAID, believe in the power of business to support social and environmental causes."Donations run out eventually," said Jaisinghani. "But if we can create a system that is self- sustaining, it can serve these communities well into the future." Business Today delves deeper into how this for-profit company works. It explains that it’s difficult to gauge the efficiency of the micro-grid model, because there isn’t much precedent or comparison. Mera Gao's solar energy costs more than state-powered coal energy would in the city, but that’s not an option for these rural communities. The following video provides more insight into the aims of Mera Gao Power and how it’s working to provide low-cost energy to off-the-grid Indian villages. There’s more to be said for the fact that solar solutions are based on an unending supply of renewable energy and don’t contribute to greenhouse gases or toxic fumes associated with coal and kerosene. There does seem to be a tremendous opportunity to both reach rural, off-the-grid communities and urban centers that must resort to polluting generators when the centralized grid fails. Market-driven solutions from companies like Husk, SELCO, ONergy and Mera Gao Power are out there, but they’re facing serious hurdles in the likes of entrenched coal, high startup costs, and the timeless impediment of going against the grain.
Nearly 400 million Indians, mostly those living in rural communities, lack access to grid power. For many of them, simply charging a cell phone requires a long trip to a town with a recharging kiosk, and their homes are dimly lit by sooty kerosene-fueled lamps. To change that, Nikhil Jaisinghani and Brian Shaad cofounded Mera Gao Power. Taking advantage of the falling cost of solar panels and LEDs, the company aims to build and operate low-cost solar-powered microgrids that can provide clean light and charge phones. Microgrids distribute electricity in a limited area from a relatively small generation point. While alternative solutions, such as individual solar-powered lanterns, can also provide light and charge phones, the advantage of a microgrid is that the installation cost can be spread across a village. The system can also use more efficient, larger-scale generation and storage systems, lowering operational costs. Mera Gao's first commercial microgrid was deployed last summer, and eight more villages have been added since; there are plans to expand to another 40 villages this year with the help of a $300,000 grant from the U.S. Agency for International Development. The company has also encouraged others to enter the Indian market for off -grid renewable energy, which the World Resources Institute, a think tank based in Washington, DC, estimates at $2 billion per year. For a cost of $2,500, a hundred households, in groups of up to 15, can be wired up to two generation hubs, each consisting of a set of solar panels and a battery pack. The grid uses 24-volt DC power throughout, which permits the use of aluminum wiring rather than the more expensive copper wiring required for higher-voltage AC distribution systems. The village is carefully mapped before installation to ensure the most efficient arrangement of distribution lines. (Circuit breakers will trip if a freeloader tries to tap in.) "This mapping and design is our biggest innovation," Jaisinghani says. Each household gets 0.2 amps for seven hours a night—enough to power two LED lights and a mobile-phone charging point—for a prepaid monthly fee of 100 rupees ($2); kerosene and phone charging generally cost 100 to 150 rupees a month. Jaisinghani says Mera Gao's microgrid is not a replacement for grid power, but it's what people want and can pay for right now. Currently the technology supports only lighting and phone charging, but the company is exploring ideas such as community entertainment centers where the costs of television, radio, cooling fans, and information services are spread across a group of homes rather than being paid by a single user.
"Sarkari sasti hai, par aati nahi," says Ram Kumar Shukla, 48, referring to the power situation in Thigra , his village in Uttar Pradesh's Sitapur district. Indeed, while state-supplied power is cheap, Thigra, just 90 km from Lucknow, doesn't get any of it - the village is not connected to the grid. Nevertheless, Shukla and other villagers have been enjoying the benefits of electricity, thanks to Mera Gao Power (MGP) and its solar microgrids. MGP was set up in 2010 by Nikhil Jaisinghani and Brian Shaad, both from the United States. To date, the company has given people in 35 villages in Sitapur district, including Thigra, access to electricity through its solar microgrids. The electricity is more expensive than state-supplied power, but the villagers don't mind - they're just happy to have it. MGP's microgrids are standalone devices. They consist of two solar panels of 120 volts each and two batteries that store power. Each microgrid generates enough electricity to power 35 households for seven hours every evening. The power that is generated is sufficient to run low wattage appliances such as lights and mobile chargers. The villagers pay the company Rs 100 each month for their consumption. The initial cost of the system is high - each microgrid costs around Rs 65,000. MGP invests that money and expects to recoup its costs in three years. The for-profit organisation has received a grant of $300,000 from development agency USAID. In addition, the two founders have together brought in seed capital of $30,000. Jaisinghani also expects MGP to get some equity investment by the end of this year. Solar projects get a capital subsidy on purchase of solar panels and batteries from the central government. With such market imperfections it is difficult to assess the long-term viability of such projects or their commercial operations. According to Bharat Bhushan Agarwal, a solar energy analyst with Bloomberg New Energy Finance (BNEF), India, this is a high-risk, high-return strategy. In addition, he points out, there is no benchmark for margins in microgrid systems. "In many cases microgrid power has no competition and the villagers have no alternative," he adds. Once installed, MGP's system has no operational cost and only needs occasional maintenance. It functions well even on cloudy days. Many villagers have now stopped buying torch batteries or using kerosene lamps since they no longer need them. "Solar runs on its own. We don't want huge human resources, or the operational and maintenance costs that come with other modes of microgrid power," says Jaisinghani. The company, which began commercial operations in December 2011, has strict criteria about where it operates. For starters, it focuses only on villages that are not connected to the grid. "We don't want to go to villages where people are used to drawing more power by using fans, televisions etc," says Sandeep Pandey, Operations Manager of MGP. It is also essential that users' houses are located close to each other, and at least 35, or 70 per cent, should opt for the service. The system works on community pressure. If one house draws more power, that particular line, which will have around 10 households, suffers an outage. MGP currently serves around 900 households in Sitapur. It aims to ramp that up to 100,000 households by 2014. "Once you have understood the basic dynamics of the market operations, the whole process of identifying and construction is easy," says Jaisinghani. Earlier, the company was constrained to pull out its microgrids from some Uttar Pradesh villages when local thugs and politicians refused to pay for the power. So, what happens when a village is connected to the grid? "Our system is very simple. We will uproot and move on to another village. Most of the resources can be reused," says Jaisinghani.
In Uttar Pradesh, one of India's poorest states, a pair of US-born entrepreneurs is creating a new model for energy delivery to villages far from the grid. The founders of Mera Gao Power build and operate solar-powered micro grids to provide low-cost lighting and mobile phone charging to village houses, giving many rural people access to both light and power for the first time in their lives. For many villagers in off-grid areas in India, their only source of light after dark comes through kerosene powered lanterns, which can cause serious health issues, both from the fumes released while burning, and the chance that children may accidentally drink the kerosene. So when Nikhil Jaisinghani and Brian Shaad give them the opportunity to have LED lighting to replace the dirty kerosene lights, plus a way to charge their mobile phones, they also give them a way to change their lives. "Quality, dependable light transforms lives; children are able to study at night, adults are able to earn additional income, and indoor air quality is improved. Our services benefit women who traditionally spend more time working indoors and children who accidentally drink kerosene and inhale its fumes." - Mera Gao Power Households that sign up to the services of Mera Gao receive two to four LED lights and a mobile -charging point in their home at a cost of just $0.50 per week, plus a one-time setup cost, which is an affordable price for most of their potential customers. Mera Gao Power's low energy design calls for just four solar panels for each system, which are sufficient to supply a village of 100 households with both light and mobile charging. And because most light is used at night, but generated during the day, banks of four batteries are used to store up to two days of power are also installed near the panels. Power is then distributed from the batteries to the other households in the village. The company has received enough investment funding from USAid to set up 50 villages this year, but according to the Guardian, their aim is to power100,000 households with their solar micro grids by 2016. In order to scale up to that level, Mera Gao Power will need to go through more investment rounds in the near future.
Between 2000 and 2010, the number of mobile phone subscriptions in developing countries increased from 215 million to 4.1 billion. From a luxury for the rich, the mobile has become a ubiquitous presence in rural and urban areas alike, even in some of the most fragile countries in the world. Afghanistan saw 38 subscriptions per 100 people in 2010, an average of more than one phone per household. And while ubiquity in Afghanistan is evidence enough that mobile phone access hardly guarantees quality of life or sustainable development, mobiles have proven themselves powerful tools to improve livelihoods –associated with higher prices paid to farmers, improved job seeking opportunities and (more recently) direct payments to those in need. So what’s going to be the next mobile phone –the technology that spreads rapidly to improve the lives of even the poorest people in the developing world? One possibility is solar power. Much like phones were two decades ago, electricity remains a luxury, especially in rural areas. Three hundred million people in India alone live without electricity. But much like telecoms in the 1990s, the electricity industry in developing countries may be on the cusp of a revolution thanks to technology advance. Take Mera Gao Power (MGP for short), which operates in Uttar Pradesh. It puts solar panels on the roof of a house, batteries inside the building below and runs wires to other houses in the village to provide power. Four panels are sufficient to provide an entire village of 100 households with two to four LED lights each and mobile phone charging. And while stand-alone solar lanterns are becoming increasingly price-competitive with traditional lighting, the microgrid model has an even lower cost per household –as reported in a wonderful article on MGP by Anna daCosta, it is about eighty cents per house paid on installation plus fifty cents per week. That compares very favorably to the prices villagers are paying for less convenient, lower quality services today. One mobile charge in the local village costs twenty cents. Unsubsidized kerosene costs about 64 cents a liter, or a little under 30 cents if villagers can find government subsidized supplies. Use a liter of kerosene a week for lighting and the combined costs of mobile charging and kerosene fuel approximately equals MGP’s prices. Three differences: you can charge you phone at home; the quality of lighting is considerably higher –so that work and study can continue after dark; and the risks are lower – about 2.5 million people are burned by overturned kerosene lamps each year, not to mention inhaling fumes from the lamp has about the same impact as smoking two packs of cigarettes a day. Meanwhile, MGP hopes it can make back investment costs of about $2,100 per village within eighteen months o f setup, with a return on investment of 15% over three years. That suggests the supply side of an electricity access revolution may be settling into in place –private firms can make good money providing the service, like they have (hand over fist) in providing mobile telephony. But there is another side to the story. The MGP financial model depends on 70 percent household takeup at the village level. That means strong demand is crucial to rollout. Of course, given cost competitiveness with kerosene and the considerably higher quality of the product, you would have thought demand would be no issue. But remember Esther Duflo’s work on vaccinations in Udaipur: even when a local NGO helped ensure free, regular and well-publicized visits by traveling immunization camps, full immunization only reached 18 percent of kids. Offer a technological innovation for free that can have a massive impact on quality of life and, still, four out of five families may not take you up on it. Mobile phones haven’t faced the same problem: in fact in the Philippines a survey of 135 communities found that mobile phone ownership led to a 20 percent decline in monthly tobacco consumption –people even gave up smoking to afford their talking and texting addiction. What makes paying for a mobile so much more attractive than a free vaccination? The list is long but it would surely include instant gratification (rather than a crying baby you get to chat to your friend), obvious impact (maybe the kid wouldn’t have got sick anyway) and conspicuous consumption. On those three counts, at least, light spilling out of your house at night on the day you are connected probably scores well. Further evidence that people really like the volts: enterprise surveys frequently rank electricity access as one of their top concerns. So maybe lighting is cool enough to follow in the footsteps of the phone. And what’s the role for donors? USAID’s Development Innovation Ventures fund is already supporting the MGP with a $300,000 grant that will allow the firm to build out 40 village micro grid lighting facilities reaching 4,000 households. As part of the financing, MGP will have to carry out quarterly assessments to measure the impact of MGP’s service on education, health, and income. It would be great if other donors could provide (more) seed finance to similar models and to their rigorous evaluation. And as, or if, the projects scale, perhaps the IFC, OPIC and other private finance agencies could become as large investors in micro and small-grid electricity as they have been in mobile telecoms. But the ICT revolution has an important lesson for aid agencies. While private-sector financed mobile telephony was spreading faster perhaps than any other technology in history across the world, donor-funded public Internet kiosks or ‘telecenters’ were languishing largely unused. A 2001 survey by the UNDP concluded starkly that “Although donor - funded centers are undertaken to service specific developmental objectives, none have proven to be sustainable t o date.” (More recently, Kentaro Toyama, formerly of Microsoft research, wrote elegantly of his disillusionment with the telecenter movement in the Boston Review). The lesson: start with the simple, cheap and robust technology in demand (the mobile) rather than trying to ‘leapfrog’ to unsustainable service delivery which people can’t or won’t use (Internet kiosks). In this UN Year of Sustainable Energy for All, when the global community is pushing for universal access to modern energy services, that’s an important lesson to trumpet. Because the International Energy Agency has defined ‘modern energy services’ to involve the average currently unconnected household gaining access to 800 kilowatt hours of electricity a year by 2030 –enough to run a fan, a refrigerator, a television and a computer along with the phone and lights. It also throws in access to LPG or biomass stoves. The IEA estimates that extending universal access to this level of modern energy services will cost $48 billion a year until 2030 –or more than five times current global investment in energy access, and more than a third of total global aid flows. So, a plea to donors: remember the telecenter. Start small. Support simple, cheap and sustainable delivery models. Evaluate and repeat. Any other approach to universal electricity access would be shocking. On which note, CGD will be hosting a brown-bag with Rachel Kleinfeld, president of the Truman National Security Project to talk about her new book Let There Be Light: Electrifying the Developing World With Markets and Distributed Energy on February 22nd at 12.00pm –it will be a great opportunity to push the discussion on micro-grids and the role of the private sector forward.
A social enterprise is providing low-cost mobile-charging and light services through micro grids in Uttar Pradesh, enabling the poorest to cease relying on kerosene – and to stay connected It's late December and an icy fog cloaks the northeastern state of Uttar Pradesh. Here, far from the cities, smoke rises in dense, choking spirals from meagre wood fires and scantily-clad children shiver against the cold. These are largely farming families, and their mud huts fortified by the occasional brick wall are for the most part devoid of light, heat or clean water. But it is here in Uttar Pradesh, one of India's largest and poorest states, far away from the country's straining power grid, that US-born entrepreneurs Nikhil Jaisinghani and Brian Shaad have started to pioneer a wholly different energy system, designed to meet some of the most basic needs of the poorest. Their company, Mera Gao Power (MGP), provides ultra- low cost lighting and mobile phone charging services to individual houses by building and operating solar-powered micro grids at a village level. Each household that signs up to their service receives two LED lights and one mobile- charging point in their home at a cost of 25 rupees (£0.301) per week. The setup cost is an additional one-off payment of 40 rupees (£0.48). "This is the kind of price point that the majority of them can afford," Sandeep Pandey, MGP's operations manager, explained. The benefits of these simple services for a village household are multiple. The lights not only allow individuals to work after dark, providing additional time for activities that generate income, but they permit ex tra time for children to study. "I wanted this light straight away, as it enables me to cook after dark," said Muni-devi, a grandmother from the village of Kaharanpura who makes samosas to sell at the local market. "With longer hours to work, I can ear n more for my family each day." Santram Pal, a father of four from the neighbouring village of Chuck, was exuberant, too. "I'm very happy with the lights," he said. "Now my children can study at night and my house won't go so black inside from the smo ke. Thieves won't come either." Mobile charging, too, which costs 10 rupees (£0.12) per charge in town, is now far more affordable, allowing villagers to be both connected and even entertained – listening to music and watching films on their phones. For many more customers, these lights simply outcompete kerosene as a light fuel, which is not just expensive but damaging to their health when burned. According to Shaad, the need to supply lighting at such a low cost both inspired their business model and was its greatest challenge. "Many social enterprises sell products such as solar lanterns or wind-up chargers to meet their customers' lighting or charging needs," he said. "But in this region, where average family incomes are rarely higher than 800-1600 rupees per month, villagers would have to put themselves into debt to purchase such products." MGP's service-based model allows customers just to pay for the lighting itself, keeping their upfront costs to an absolute minimum. Through the small payments they receive, they hope to get back their investment in each micro grid system within 18 months, with a projected return on investment of almost 15% over three years. "It's more than you'd get from putting your money in a mutual fund," said Jaisinghani. To provide such low prices and yet make profits, Jaisinghani and Shaad have had to innovate constantly. "We've learned a lot over the past year by making a lot of mistakes," said Shaad, describing their early work, which began near the city of Kanpur in August 2010. "Our model will never really stop evolving," said Jaisinghani, "but most importantly, we are trying to keep it as simple as possible." Despite these challenges, the pair have an ambitious vision. They aim to reach 100,000 households with their solar service by 2016. That means installing systems in 50 villages this year, increasing to 1,000-2,000 over the next five years. The signs are promising, as demand is already starting to come to them. "Representatives from nearby villages have been arriving with lists of names of people who want to subscribe to the systems. We've had five new villages this week alone," said Pandey. However, to scale at the rate they envisage, they will need to source additional funding by the end of 2012. "We have enough investment, thanks to USAid, to reach at least 50 villages this year," said Jaisinghani "but this work is capital intensive, and new rounds of investment will be essential for us to grow beyond this point." Working conditions are far from easy. Their sites are inaccessible, finding reliable suppliers for the different system components can be a challenge and corruption (village leaders sometimes ask for bribes for the "privilege" of installing the systems) is an ever-present difficulty. Furthermore, the team must often spend weeks living in the villages while they set up systems, weathering the region's extreme temperatures. Yet Shaad and Jaisinghani see these very challenges as an opportunity. "There's a reason no one wants to work here," said Jaisinghani frankly, as we shivered our way across a village he was mapping for new panels. "But this is an opportunity to establish a foothold in an as yet untapped market." And indeed, with the World Resources Institute estimating India's off-grid distributed energy market at $2bn a year, clean energy growing in popularity, and Uttar Pradesh being a region of some of India's largest power deficits, they seem to be onto something. Jaisinghani and Shaad are firm believers in using the power of busine ss to support social and environmental causes. "This is the way to ensure we last into the long term," said Jaisinghani. "Donations run out eventually, but if we can create a system that is self-sustaining, it can serve these communities well into the future." They hope that providing lights and mobile charging will be just the first step towards improving services. "In the future, we would like to use the networks we are creating here to expand into other services these communities need," said Shaad. "This could include irrigation and agricultural technologies, healthcare, education and even entertainment."
THE NEED: 61 million households in India do not have electricity. Communities resort to low quality sources of energy such as kerosene, wood, diesel, candles, and disposable batteries. THE SOLUTION: Mera Gao Power has developed a low cost micro grid tailored to the needs of off-grid villages. Mera Gao Micro Grid Power (MGP) will construct and operate approximately 40 new village-level micro grid lighting facilities to reach 4,000 new customers and 20,000 new beneficiaries in Sitapur districts of Uttar Pradesh, India. COST EFFECTIVENESS: The average off-grid household spends Rs. 150 per month on kerosene, producing dim and dirty lighting from a single kerosene lantern. For Rs. 70 per month, MGP provides its customers with two lights that are more than ten times brighter than a kerosene lantern. In a village less than a half hour drive from the industrial city of Kanpur, a family eats by kerosene and candlelight. Limited access to a national grid that already experiences rolling blackouts from burdensome demand levels keeps their home in the dark. They, and the other 350 households in the area, typically spend Rs. 150 per month on unclean kerosene fuel alone. Scaling the problem up, the Government of India estimates that 61 million base of the pyramid households and 300 million people live without electricity. More than 600 million people in South Asia lack access to electricity, and worldwide the figure is approximately 1.4 billion. The World Resources Institute estimates that off-grid energy in India is a $2 billion a year untapped market. USAID/DIV will support Mera Gao Micro Grid Power (MGP) with a grant of $300,000 to demonstrate a commercially viable, easily replicable micro grid design that uses a solar-powered lighting system; and use rigorous analytical methods to assess the development impact of these micro grids on the lives of MGP’s customers. MGP will provide rooftop solar photovoltaic panels that villages can afford communally. MGP’s service is anticipated to alleviate 4,000 household’s dependency on kerosene, reducing kerosene consumption by 144,000 liters per year. By doing so, carbon emissions will be reduced by an estimated 400 tons per year. MGP anticipates that customer households will experience fewer respiratory conditions, increased time children spend studying, and increased income. The support from USAID/DIV will also allow researchers to clearly measure the impact of micro grids on these social indicators; if the results are positive, USAID’s investment could attract greater levels of social investment into the sector, potentially impacting the lives of hundreds of millions of people.
In the developing world, where many citizens lack access to power or clean water, a wave of innovation is bringing these vital services to growing numbers of people, often using renewable energy and water-saving technologies. And in some cases, clean-tech solutions may provide lessons for wealthier countries. Many of the innovations replace expensive, dirty and inefficient systems. In countries such as India, Tanzania and Kenya. For instance, d.light offers affordable but high-quality, solar-rechargeable LED lights as an alternative to kerosene lamps. Meanwhile, in India, SBA Hydro and Renewable Energy have developed micro-turbines to bring hydroelectric power to villages in the Himalayas. Many of these clean-tech innovations use small-scale, distributed systems that are often easier to set up in developing countries than they would be in mature economies, since they compete only with lack of access or inefficient solutions rather than attempting to displace legacy infrastructure. “There’s an interesting opportunity for someone to come in with something more efficient,” says Raj Kundra, deputy chief investment officer at Acumen Fund, a non-profit venture capital outfit that invests in companies such as d.light and SBA Hydro and Renewable Energy. He adds: “You’re not competing with existing pipes – you’re competing with no access.” Small-scale distributed innovations are also found in systems that deliver access to clean water. For example, Grundfos Group, which manufactures pumps and water technologies, has developed a solar -powered water pump that people can pay to use with their mobile phone. Some systems allow communities to spread the cost of technology. In rural villages in Ut tar Pradesh, India, Mera Gao Micro-Grid Power (MGP) is installing rooftop solar photovoltaic panels that generate power that can be shared by other villagers. “Everyone shares the cost, which might be too high if you were putting it on every house,” says D ax Lovegrove, head of business and industry at WWF. Its Green Game-Changers study highlights such innovations, many in the developing world. Mr Lovegrove points out that such products and systems go beyond technology. “New financing models are emerging as well as co-ownership between suppliers of technology and communities that want to own renewable energy schemes,” he explains. “So it’s the applications and the uptake that’s the interesting bit.” And while existing infrastructure might make some of these models hard to integrate into mature economy infrastructure, Mr Kundra says opportunities do exist in wealthier markets to think differently about how services are delivered. He cites the example of street lighting. “Questions are being asked as to whether it makes sense to extend power lines and connect them all to the grid – or whether to put up individual solar panels,” he says. “So the models are being challenged.” Daniel Nocera, a Massachusetts Institute of Technology energy and chemistry professor, goes further. He believes the developing world will show the rest of the world how to use sustainable technologies. Prof Nocera has developed an artificial leaf as a source of power for developing countries. It is a small silicon panel that uses light to split hydrogen from water to create energy. He believes his invention could also solve global energy problems. “If you can get great discoveries to the poor, they will adopt them because they’re the ones who need energy,” he says. “So you can head off climate change most quickly – and they can teach the world.”
- The Ground_Up Project - December 3, 2014
- Founder Live - November 11, 2014
- The Times of India - September 21, 2014
- The New Global Citizens - November 26, 2013
- The Alternative - August 29, 2013
- Ashden - September 7, 2012
- Ashoka - 2011
- Cartier Women's Initiative - 2011
India is the second most populous country in the world, and more than two thirds of its population relies on biomass like charcoal and wood to cook every day. When so many people are burning wood it leads them to cut down trees solely for that purpose, causing deforestation. Another danger comes from indoor air pollution, which can cause respiratory diseases, heart disease, and cancer. This is especially true for women and children, as they are usually the ones cooking at home. The stoves normally used in India are cheaply made and of poor quality making them inefficient as well as cumbersome for consumers. The nonprofit organization TIDE recognized that the technology existed to provide better, more fuel-efficient stoves, but it wasn’t reaching the market. Sustaintech was founded in 2009, using a business model to reach more people with their products. Sustaintech’s PYRO brand of stoves is designed to be not only fuel-efficient, but also safer than traditional stoves, and completely smokeless. They have created multiple designs to fit people’s needs, from small businesses selling food on the roadside to daily household cooking. They are also concerned with providing a quality product to ensure that fuel efficient stoves are adopted by as many people as possible, saving consumers money, protecting their health, and reducing CO2 emissions. Sustaintech estimates their stoves use 30% to 50% less wood than traditional stoves, saving between 7 and 10 tonnes of firewood per year. For a small business, this means less money is spent on fuel, increasing profits. Sustaintech calculates that with the money saved on fuel, one of their stoves can pay for itself within a year and create additional profits of 14,000 to 20,000 Rs. (about $225 to $320 US) per year. In 2013, Sustaintech set itself goals to sell 10,000 stoves to commercial kitchens, open six more distribution centers, and train 40 more producers and 160 more salespeople. In addition, they will be seeking new financing through investors and carbon credits to reduce the price of their stoves. Is your kitchen fuel efficient? Environmental impact: Avoided deforestation, efficient fuel use, avoided use of fossil fuels, including reduced emission of GHGs and harmful substances
Vision: To improve lives of under served and needy people through energy access by an innovative, ethical social business. Mission: To use market mechanisms for rapid adoption of sustainable energy technologies and products. Goal: To reach out to about 20,000 cooks and about 100,000 others working in commercial kitchens with a cooler, cleaner, working environment, better health and longer productive life span.
To save at least 300,000 tons of CO2, (equivalent to 200,000 tons of firewood or 2800 hectares of open forests) in about 5 years. Company Profile: Sustaintech, is a social enterprise engaged in marketing and sales of large cookstoves to street food vendors, commercial kitchens, institutions etc. It has an exclusive technology sharing agreement with TIDE for the PYRO range of stoves. It has outsourced, manufacturing and decided to outsource consumer finance to competent partner institutions as feasible.
1. Smokeless Stove. I have not heard this before. Can you please tell more about it?
A smokeless stove is a fuel efficient wood burning stoves that usually comes with a chimney. Normally when you burn wood, which is a solid fuel very similar to cellulose in chemical composition, then you would have products of combustion like carbon di oxide and products of incomplete combustion like carbon monoxide, particulates, tar etc. Incomplete combustion is often a characteristic of a solid fuel when there is insufficient mixing between the fuel and oxygen from air. The products of incomplete combustion cause indoor air pollution and are usually harmful to health. A smokeless stove is therefore one where the combustion of wood is complete and no pollutants are released to the atmosphere (which rarely happens even in the best of designs) or one where combustion is as complete as possible and the products of incomplete combustion are transported out of the cooking area or kitchen by a well designed chimney. This way whatever little smoke that gets generated during wood burning is expelled outside the cooking zone. It prevents indoor air pollution and protects the health of cooks cooking around wood fires.
2. Was smokeless stove commercialized?
Yes and that is the core business of Sustaintech. Sustaintech sources cookstove designs appropriate for large community kitchens from TIDE, its non profit partner. It also outsources manufacturing to local fabricators and is engaged in the business of creating a sales network for the stove. Currently stoves are sold through the direct sales model in the state of Tamil Nadu but we have plans of expanding throughout south India and hopefully also Maharashtra and Rajasthan in 2015.
3. Can you tell us more on TIDE and how it helped in your Journey to SustainTech?
TIDE is the non profit partner of Sustaintech. TIDE has been developing designs of wood burning stoves for small businesses for about 15 years now. TIDE has developed stoves for silk reeling, textile dyeing and bleaching, arecanut boiling, herbal medicine preparation, rubber vulcanizing etc. and transferred the same to grass root enterprises. For Sustaintech it has developed a range of wood burning cook stove designs for a variety of large scale cooking operations.These are special stove designs for making rotis, dosas, deep frying etc. to maximize the performance of the stove. So the technical expertise of TIDE and its understanding of needs of small users has helped Sustaintech enormously in developing robust user friendly products. TIDE has also mastered the skill of listening to the consumer and factoring that into the product design. So TIDE offers to Sustaintech the comfort and confidence of having a competent partner that understands and delivers to it technology and product innovation. This helps sustaintech focus on the sales function.
4. Was this product completely developed in India? Is there any Patent associated with it?
Yes, these stoves were completely developed in India and not even in a laboratory. TIDE being a non profit organization and not an R&D lab, it did not have the funds or access to laboratories, sophisticated testing equipment or researchers. So in designing stoves it relied on its core competence of user engagement, listening to India’s many roadways feature a diverse collection of roadside eateries, which produce some of the most delicious and fragrant Indian food ever imaginable. People from all walks of life enjoy taking a break from their day and popping in for a quick and delicious meal that can rival their grandmother’s cooking.
Svati Bhogle, Co-Founder, Sustaintech: For centuries, roadside eateries have played an integral role in India’s culinary tradition and have provided livelihoods for millions; however, little has changed with regards to the types of stoves they use. Many use devices that are not only inefficient with regards to fuel consumption, but which also have a hugely negative impact on the health of their users, due to the smoke they produce. Over the past few years, the clean cookstove movement came out swinging. Yet, its primary focus, has been on cookstoves used in everyday households. Commercial businesses like roadside eateries have been left largely underserved with advances in clean cookstove technology largely focused on household designs. Sustaintech, a social enterprise in India, quickly identified the gap and seized the opportunity. Sustaintech founder, Svati Bhogle, had been working to perfect clean cookstove technology for over 20 years. She began her cookstove career working for TIDE (Technology Informatics Design Endeavor), an NGO that seeks to promote sustainable development through design interventions where she quickly recognized that the commercial stove market was deeply underserved. In 2002, TIDE received a grant to start developing and distributing stoves for commercial customers. TIDE developed a product that fit the customers’ needs, but realized that they would never be able to achieve an impact of any scale without creating a separate company. She founded Sustaintech as a for-profit social enterprise to bring the stoves to the market. Sustaintech focuses on designing and selling commercial clean cookstoves that cater to the base of the pyramid–specifically the owners of roadside eateries. Through their efforts, Sustaintech learned firsthand why the market has remained underserved for so long. Selling a new product to a relatively dispersed set of customers who haven’t seen new cooking technology in their lifetime is difficult, but Sustaintech realized that the positive environmental and health impact of reaching these customers made it worth the effort. These Indian eateries do in fact have a few different stove options, but none are particularly beneficial. Most are costly and severely impact the environment and undermine the health of the workers who use them. Over the years, designs like the traditional mud stove pictured below, have changed little, reflected in their performance. Ultimately these eateries could benefit from advances in fuel efficient and smokeless stove designs that have characterized the clean cookstove movement. The Global Alliance for Clean Cookstoves estimates that there are 170 million household cookstoves in India. While India’s estimated 10 million commercial cookstoves may pale in comparison, commercial cookstoves run eight to ten hours each day and at a much higher fuel consumption rate. The environmental impact of a commercial cookstove is about 10 times that of a household stove—meaning that if those 10 million commercial stoves were traded out, it would be equivalent to removing 100 million traditional household stoves from the market. Sustaintech stoves cut fuel consumption by 40-50% over a traditional stove, significantly reducing the demand on forest resources, which will likely become stressed as India’s population continues to grow. Traditional stove designs give little consideration to the health of employees, which can, as a result, undermine their ability to earn a living. Through her time working with the eateries, Svati has found that cooks who use traditional stoves are rarely able to work past the age of 35 or 40 due to the constant exposure to heat and smoke. Additionally, many of these eateries are family-run businesses which causes children to be exposed to high levels of smoke and toxins on a daily basis. Restaurant owners report that because Sustaintech stoves produce less heat and smoke, their cooks have to take fewer sick days and the rest of the staff is more comfortable moving around the kitchen. Providing this market with clean cookstoves will have a demonstrable impact, especially on the health of children, giving them the opportunity to live healthier lives. While these positive impacts make for a nice story, at the end of the day, it is the bottom line that drives purchasing decisions for these businesses. Unlike many subsidized household cookstoves that remain unused and idle, Sustaintech stoves continue to be used day after day. Customers consider their Sustaintech stoves a business investment, and as such, they learn how to use them properly and keep them maintained. Sustaintech developed a product that meets the needs of this underserved market. This product provides 50% increased fuel efficiency, which means that most customers pay for their new stoves based on fuel savings alone in just the first few months. Additionally, by improving their staff’s health, they are increasing their business’ efficiency and efficacy. Though Sustaintech has grown consistently, the company is eager to scale more quickly and move beyond its current Tamil Nadu footprint so that it can provide clean commercial cookstoves to underserved customers across India and elsewhere. As is the case for most start-ups, the company’s greatest obstacle is that the processes and structure necessary for the company to scale successfully have not kept up with the growth of the company to date, and are starting to hold the company back. Sustaintech has figured out how to solve most of the challenges associated with accessing a market that is difficult to reach, but struggles to execute them consistently due to a lack of strong, well-defined processes that leaves Babu Subramanium, Sustaintech’s CEO, fighting proverbial fires instead of focusing on growing the company. For the past four months, I’ve been working with Sustaintech to make their business processes more robust. The remainder of my project will focus on institutionalizing these standard processes and improving information flow with the goal of creating a more scalable organization. More robust processes will allow more decisions to be made at a lower level and thus reduce the need for management attention, while allowing decisions to be made faster so the company can be more responsive to the customer. Better information flow will give Babu the tools he needs to make more informed decisions that will help the company accelerate its growth. Together, these efforts will transform Sustaintech into a company capable of scale that can reach all of the underserved business customers across India, ensuring more Indians and visitors alike are well fed.
Giri, a hardworking 29-year-old from Andhra Pradesh, runs a paying guest accommodation in Marathahalli. Serving affordable hot breakfasts, lunches and dinners to the 80-100 residents of his PG is a daily challenge. Roti, rice, dal, and curries all need to be cooked in a short period of time. The quantities are huge; 500 chapatis roll off his kitchen daily. His biggest cost is fuel (firewood), because he can't afford commercial gas. After buying two firewood-burning clean cookstoves for between Rs 8,000 and Rs 12,000, Giri decided to sink in another Rs 35,000 for a bigger stove. The Rs 45,000 that he plonked down may sound like a lot, but it saves him between Rs 8,000 and Rs 10,000 a month, compared to using commercial gas. The stoves he uses solve the problem of traditional cookstoves that require far more firewood, emit harmful gases, don't transmit enough heat and have to be located outdoors because of the copious smoke emissions. "Even the food tastes better," says Giri. The stoves that Giri uses are the product of over two decades of research, design and engineering by Svati Bhogle, CEO of Technology Informatics Design Endeavour (TIDE), and her team at SustainTech, a for-profit arm of the organisation. TIDE is a non-profit company supported by a 15-year grant of Rs 18 lakh a year from the Department of Science and Technology, Government of India. SustainTech's stoves are different from conventional mud-and-brick stoves because they are designed to consume less firewood, produce more heat, are almost smokeless and reduce harmful emissions like carbon monoxide. According to the WHO, more than 1.3 million people in India die annualy from causes linked to indoor air pollution. The excessive use of firewood also has an environmental impact. Bhogle founded SustainTech in 2011 to market commercial stoves primarily targeted at street food vendors and small businesses, like the one Giri runs. By last count, they have sold almost 3,000 stoves, mostly in Tamil Nadu and Karnataka. Bhogle plans to expand to Andhra Pradesh, Maharashtra and Rajashtan, and is targeting selling 5,000 stoves annually within two years. Considering that the National Association of Street Food Vendors of India (NASVI) estimates that there are 1 crore street-food vendors in India, this is an almost inexhaustible market segment. Bhogle, well-known cricket commentator Harsha Bhogle's sister, has an MTech from IIT Bombay, and began her career at Hindustan Unilever Research Centre. She later became part of an ongoing project at the Indian Institute of Science (IISc) to work on clean cookstoves. Designing a good cookstove is about solving two main problems: making them efficient from an engineering design standpoint, and designing them based on user needs. "I wasn't socially sensitive when we started. We just knew we had to maximize heat efficiency, minimize loss, and reduce emissions. But we hadn't gone to the field to find out what else users wanted. We were talking down to people, being intellectually arrogant," recalls Svati. The group went ahead with designing what they thought was the most fuel-efficient stove. It was summarily rejected. Users wanted faster cooking and soot-free vessels, but Bhogle and her team members focused on making the most smokeless and fuel-efficient stove. Changing tracks, Bhogle learned Kannada, socialized with the women, cooked, ate, and listened to their stories. The feedback helped her understand that for faster cooking, the power level had to increase, but that meant losses would also go up. Since heat gain is defined by parameters like vessel surface area, they had to find a way to translate the need into a design concept and engineering equations. Insulation was important, because the idea was to maximize heat gain and minimize loss. The team redefined the specs of the stove and also made it easy to build using a simple mould, which anybody could use to build stoves on their own. Through various grants, they started a training program for women in Tumkur, trained 100-odd women in using the mould to build stoves using mud and bricks, and market them to other women. This evolved into an women entrepreneurship project in 2010 under the forest department, who placed orders directly with the women. The program has been exported to Orissa, West Bengal, Uttarakhand and Andhra Pradesh. Some of the women who were trained in Karnataka were instrumental in building a bigger stove using the same design in Faizabad, Uttar Pradesh, for a school mid-day meal scheme. Bhogle realized that selling household stoves was a tough market to crack as it had plenty of competitors, and they started building bigger stoves for small industries. Even though by 2009, they had sold 11,840 small business stoves, 7,000 household stoves and 200 1-5 kW hydro-power plants, which cumulatively represented wood savings of nearly 65,000 tonnes a year and a 116,000-tonne annual reduction of carbon dioxide emissions, they needed scale and a new market segment. The breakthrough came in 2008, when TIDE got the Ashden Energy Champion UK Award, which came with a £40,000 prize. Bhogle decided to plough the cash into setting up a for-profit social enterprise to target street-food vendors. TIDE started designing from 2009 and have released four different prototypes in 2011 under the Pyro brand-name - the tava stove, the multi-purpose stove, the tea stove and powdery biofuel stove. The stoves come in different dimensions because a one-size-fits-all approach doesn't work, as they are used for different purposes like making tea, rotis, dosas, biryani and deep-frying. Interpreting spoken and unspoken user needs is key to usable design, says Bhogle. "If you do not understand this, you can go wrong. If a vendor says 'I want 16 kg oil heated up in 20 minutes' or wants to cook 20 kg of biryani, you need to convert that into the correct power input and output. The design should take into account the rate of fuel intake, so the opening of the fuel feeding port should be smaller or bigger depending on the need. The correct insulation is important and so is the size of the vessel," explains Bhogle. Understanding user needs also helps in quickly responding to demand by tweaking the design of existing products. After initially launching tava stoves that were of a 2x3 feet dimension, TIDE started getting orders for stoves that were 4x2.5 feet from vendors catering to commuters traveling on long distance buses. Their need is to serve 20-25 dosas in 15 minutes. For this, the tava needs to be at uniform temperature throughout. Compared to conventional woodstoves, the Pyro stoves burn on an average 3 kg of fuel an hour (as opposed to 5 kg) with a 40% lower fuel consumption. They cost more, but vendors and home-makers can recover the cost within 6-8 months due to lower fuel costs, says Bhogle.
India’s many roadways feature a diverse collection of roadside eateries, which produce some of the most delicious and fragrant Indian food ever imaginable. People from all walks of life enjoy taking a break from their day and popping in for a quick and delicious meal that can rival their grandmother’s cooking. Svati Bhogle, Co-Founder, Sustaintech: For centuries, roadside eateries have played an integral role in India’s culinary tradition and have provided livelihoods for millions; however, little has changed with regards to the types of stoves they use. Many use devices that are not only inefficient with regards to fuel consumption, but which also have a hugely negative impact on the health of their users, due to the smoke they produce. Over the past few years, the clean cookstove movement came out swinging. Yet, its primary focus, has been on cookstoves used in everyday households. Commercial businesses like roadside eateries have been left largely underserved with advances in clean cookstove technology largely focused on household designs. Sustaintech, a social enterprise in India, quickly identified the gap and seized the opportunity. Sustaintech founder, Svati Bhogle, had been working to perfect clean cookstove technology for over 20 years. She began her cookstove career working for TIDE (Technology Informatics Design Endeavor), an NGO that seeks to promote sustainable development through design interventions where she quickly recognized that the commercial stove market was deeply underserved. In 2002, TIDE received a grant to start developing and distributing stoves for commercial customers. TIDE developed a product that fit the customers’ needs, but realized that they would never be able to achieve an impact of any scale without creating a separate company. She founded Sustaintech as a for-profit social enterprise to bring the stoves to the market. Sustaintech focuses on designing and selling commercial clean cookstoves that cater to the base of the pyramid–specifically the owners of roadside eateries. Through their efforts, Sustaintech learned firsthand why the market has remained underserved for so long. Selling a new product to a relatively dispersed set of customers who haven’t seen new cooking technology in their lifetime is difficult, but Sustaintech realized that the positive environmental and health impact of reaching these customers made it worth the effort. These Indian eateries do in fact have a few different stove options, but none are particularly beneficial. Most are costly and severely impact the environment and undermine the health of the workers who use them. Over the years, designs like the traditional mud stove pictured below, have changed little, reflected in their performance. Ultimately these eateries could benefit from advances in fuel efficient and smokeless stove designs that have characterized the clean cookstove movement. The Global Alliance for Clean Cookstoves estimates that there are 170 million household cookstoves in India. While India’s estimated 10 million commercial cookstoves may pale in comparison, commercial cookstoves run eight to ten hours each day and at a much higher fuel consumption rate. The environmental impact of a commercial cookstove is about 10 times that of a household stove—meaning that if those 10 million commercial stoves were traded out, it would be equivalent to removing 100 million traditional household stoves from the market. Sustaintech stoves cut fuel consumption by 40-50% over a traditional stove, significantly reducing the demand on forest resources, which will likely become stressed as India’s population continues to grow. Traditional stove designs give little consideration to the health of employees, which can, as a result, undermine their ability to earn a living. Through her time working with the eateries, Svati has found that cooks who use traditional stoves are rarely able to work past the age of 35 or 40 due to the constant exposure to heat and smoke. Additionally, many of these eateries are family-run businesses which causes children to be exposed to high levels of smoke and toxins on a daily basis. Restaurant owners report that because Sustaintech stoves produce less heat and smoke, their cooks have to take fewer sick days and the rest of the staff is more comfortable moving around the kitchen. Providing this market with clean cookstoves will have a demonstrable impact, especially on the health of children, giving them the opportunity to live healthier lives. While these positive impacts make for a nice story, at the end of the day, it is the bottom line that drives purchasing decisions for these businesses. Unlike many subsidized household cookstoves that remain unused and idle, Sustaintech stoves continue to be used day after day. Customers consider their Sustaintech stoves a business investment, and as such, they learn how to use them properly and keep them maintained. Sustaintech developed a product that meets the needs of this underserved market. This product provides 50% increased fuel efficiency, which means that most customers pay for their new stoves based on fuel savings alone in just the first few months. Additionally, by improving their staff’s health, they are increasing their business’ efficiency and efficacy. Though Sustaintech has grown consistently, the company is eager to scale more quickly and move beyond its current Tamil Nadu footprint so that it can provide clean commercial cookstoves to underserved customers across India and elsewhere. As is the case for most start-ups, the company’s greatest obstacle is that the processes and structure necessary for the company to scale successfully have not kept up with the growth of the company to date, and are starting to hold the company back. Sustaintech has figured out how to solve most of the challenges associated with accessing a market that is difficult to reach, but struggles to execute them consistently due to a lack of strong, well-defined processes that leaves Babu Subramanium, Sustaintech’s CEO, fighting proverbial fires instead of focusing on growing the company. For the past four months, I’ve been working with Sustaintech to make their business processes more robust. The remainder of my project will focus on institutionalizing these standard processes and improving information flow with the goal of creating a more scalable organization. More robust processes will allow more decisions to be made at a lower level and thus reduce the need for management attention, while allowing decisions to be made faster so the company can be more responsive to the customer. Better information flow will give Babu the tools he needs to make more informed decisions that will help the company accelerate its growth. Together, these efforts will transform Sustaintech into a company capable of scale that can reach all of the underserved business customers across India, ensuring more Indians and visitors alike are well fed.
A social enterprise which sells wood burning stoves to commercial kitchens and street food vendors is what SustainTech stands for. SustainTech was founded in early 2009 and has successfully sold over 1700 stoves in two and a half years of operation. Currently operating in Tamil Nadu, SustainTech is exploring ways to increase its presence in south India. “We have just scratched the surface and there is a long way to go,” says Svati Bhogle, MD of the organization. PYRO stoves has made cooking a lot more easier and healthier for the street vendors. Every year millions of street vendors give regular visits to hospitals and pay high medical bills due to unhygienic cooking practices. Bhogle, an expert in sustainable technology development, had worked with fuel-efficient biomass stoves and formed a social enterprise that would make the lives of these vendors simpler and healthier. The Journey: The journey of selling commercial cookstoves to street food vendors started in Tamil Nadu. The concept is unique because, while everyone else focused on cookstoves for household needs, SustainTech looked it as a livelihood. “Most large scale cooking uses firewood for fuel as it is the cheapest, unregulated fuel. We wanted to make sure that the cost of fuel in preparing a meal was reduced,” Bhogle says. This increases profitability of the street food business while reducing deforestation and CO2 emissions. Through an agreement with TIDE, a non-profit that developed the wood burning stove designs, SustainTech is developing a delivery network to offer specialized stoves for different cooking operations. They have different types and sizes of stoves for different purposes, which reduce fuel consumption by about 40 percent. Apart from manufacturing, marketing and selling of these stoves comprises a major part of the business. In the short time they’ve been operational, the young team of a CEO, 4 area sales managers, about 15 sales officers, technicians and accounts & administration staff has managed to bring company to a stage where they gather 1,300 customers. The Impact: The enterprise has sold around 1,700 stoves to 1,300 consumers, helping not only in the livelihood but also in terms of better health and safer working environment. These cookstoves save about 10 tons of firewood every year. “We think we can double our sales turnover every year with some dedicated hard work and smart planning,” Bhogle says. SustainTech is also different from most solution providers who look at a fuel supply chain besides sale of stoves. A prepared fuel supply chain increases the cost of fuel compared to use-as-harvested cookstove designs that SustainTech offers. “We believe that our work is creating social, economic and environmental impact. Users of our stoves save between Rs. 50 – 80 per day of fuel cost,” Bhogle says. Usage of these stoves helps in reducing CO2 emissions, arresting deforestation and mitigating climate change impacts. The social impacts are a bit difficult to quantify but surely it has offered clean and safe working environments. To Scale Up: These stoves are present in about 30 districts in southern India. The enterprise believes that the consumers are their best ambassadors and the sales through customer referrals are gradually increasing. “Our visibility is also quite high in Tamil Nadu with a very high brand recall among the street food segment,” Bhogle says. SusainTech is aiming to be as inclusive as possible, making sure the products they sell are actually making great economic sense to the customers. “We want our customers to make a big savings first. We can wait for our returns,” she says. The Challenges: Working with a sector that can afford goods and services but does not have bank accounts is a challenge. A bank loan for a customer is a major challenge and the SustainTech team is looking for other options of financing. “If you’ve got big ideas and a big vision from the start, it’s not going to happen. It is only now, when we’ve learnt the ropes, that I feel confident that we can bid for a much larger investment,” Bhogle says.
After winning an award in 2009 Svati Bogle has set up a social business, Sustaintech, that takes the robust model of delivering energy efficient cook stoves to the vast middle income businesses and street vendors across India. Last week I had the chance to catch up with her after coming back from the Corporate Sustainability Summit at Rio +20 and caught up with her news on what has been happening since we last met in 2011 as well as her thinking for the importance for ethically minded businesses to succeed in the developing world. So Svati, tell me how has it been going with Sustaintech recently? We are really proud to have reached 10 crore, that’s 13 million rupees, in sales for stoves last month. This is a big milestone and the psychology or reaching this far has had far-reaching effects on our own confidence. We are also now perceived differently within the business arena in India. I am now getting a lot more work with the government for instance. Are government contracts pushing forwards your businesses then? Well, we have realised that our own distribution networks must get strengthened because the danger with government schemes is that although it is great to be that mainstream, they can be frustratingly slow and can get changed quite easily. Building our own channels must still be key to our strategy. What has brought you this far then? Has it been a great team or a particular business strategy? We’re lucky to have a good team running the company, we have a great CEO and committed and motivated salespeople. What we’ve found is that in being a social business we face the challenge of wearing two hats and thinking in different ways – to be aware of the social sensibilities involved not just profits. This requires a special skill set at senior management levels.We also made a tactical decision to start with small investments from several investors that gave us the space and the freedom to grow at our own pace and with our own vision. If you’ve got big ideas and a big vision from the start it’s not going to happen. It is only now, when we’ve learnt the ropes, that I feel confident that we can bid for a much larger one million dollar investment. What about the appetite for sustainability within businesses at the moment – did you pick up a mood change at Rio + 20 recently? I was surprised by the focus on the green economy at the summit and the high net value of the commitments made by corporates. I’m a bit in doubt over who can actually hold them to account though – are they answerable? Do they have the right knowledge capacity? This could all just be a feel good and image building exercise on a global platform. You’re not convinced that large corporates are committed to sustainability? In their own estates there is some commitment. For instance cutting their own energy use or investing wind farms that will serve their enterprises. However, when it comes to widening this to be more inclusive, for instance, getting energy access in the communities where they work, they are less progressive. At Sutaintech we are aiming to be as inclusive as possible, we like to make sure the products we are selling actually make great economic sense to our customers. We want our customers to make a big savings first. We can wait for our returns. Is there anything exciting coming up that you’d like to tell us? We are really pleased to be forming a relationship with this year’s Ashden Gold winner SKDRDP – they are going to support the sale of our stoves to poorer families through their microcredit scheme. We’re really excited about this because it helps us to bring our stoves to a community who has lower incomes than the businesses we are serving right now – watch this space!
Svati Bhogle has created a distribution system to counter the inefficient use of cooking stoves by street food vendors in India; enabling them to easily own fuel efficient stoves, save money on fuel, and earn a better profit. Built on ecological considerations, these improved stoves not only increase their income, but ensure better health conditions for vendors and their consumers. THE NEW IDEA: Svati has built her model based on her belief that technology alone is not enough to improve livelihoods. She realized that in order to ensure improved technologies reach scale, there have to be systems that incentivize each stakeholder in the value chain to build an effective distribution network. Svati encourages a financial outlook among the street vendors; envisioning a substantially reduced fuel bill and a fumeless environment. On the other hand, for banks it becomes a viable business proposition to extend credit to an otherwise un-bankable group of informal street vendors. A 40 percent savings on fuel bills enables them to repay their bank loans in fifteen months while their earnings dramatically increase. Svati replaces hazardous and unsafe traditional stoves with safe, smokeless and environment-friendly ones, while ensuring vendors sustainability and profit. In 2009 Svati founded Sustaintech Private Limited to promote the rapid adoption of fuel-efficient and environment-friendly cooking stoves across rural and semi-urban regions in India. THE PROBLEM: In India, close to 70 percent of the population relies on solid fuels to meet various energy needs (World Energy Outlook 2007-IEA “China and India Insights”). Close to 30 percent of this comes from biomass (India’s Integrated Energy Policy, 2005). Though India is a fast growing economy with a serious energy crisis, access to thermal energy has not gotten the attention of policymakers (with electricity generation taking most of their time and resources). Thus, there is an obvious void in the enabling mechanisms for ensuring sustainability of rural livelihoods. Small street food establishments that provide services from forty to one hundred individuals in rural and semi-rural areas face the three-pronged problem of not having access, both financially and in terms of availability, to liquefied petroleum gas (LPG) and having to incur the costs of large amounts of biomass required to run their relatively inefficient stoves while dealing with the associated health impacts that inefficient, outdated stoves generate. Traditionally, street food stove manufacturing is unorganized and done in small shops without quality or safety standards. These stoves use open fire and do not have smoke ventilation systems, contributing to India’s high incidence of respiratory ailments, especially for the vendors and their customers. A survey limited to the states of Karnataka and Kerala in 2000 showed that there are nearly 50,000 small businesses using biomass as their thermal energy source. A survey carried out for Sustaintech in 2009 shows that there are about 200,000 street food vendors and roadside kitchens in Tamil Nadu alone that require energy reform. They typically use between 5 to 100 kg of biomass per hour and operate for 150 to 330 days a year, for nearly ten hours a day. The rising cost of firewood is eroding the profitability of the rural processing operations: The street food vendors were shown to be spending up to Rs. 30,000 (US$500) annually on firewood with a monthly take-home income of around Rs. 7,000 (US$117). Burning wood in street kitchens creates CO2 and other greenhouse gases. Establishments, based on size, generate between 20 to 80 tons of CO2 a year. This considerably small amount multiplied by the street vendors at a national or global scale, significantly contributes to climate change. Producing such large carbon emissions, street vendors have no financial incentives to bring emissions down and have no access to carbon credit markets. A survey conducted by Sustaintech also shows that 38 percent of street food vendors and tea shops use kerosene for their cooking needs. Very limited kerosene is available in fair-price shops but is inadequate. Often the sector uses unfair means to procure kerosene, which creates stress and tension besides eroding profitability. Moving to a biomass stove would reduce the stress associated with the procurement of kerosene, improve business profitability, and show that it is possible to replace a fossil fuel with a renewable energy source. THE STRATEGY: Based on the premise that “Clean energy is possible for the poor,” Svati has designed stoves that warrant a shift from fossil fuel and firewood to biomass. The biomass cooking stove is an application-specific high efficiency stove specifically designed for a range of street food vendors cooking needs, operating on push carts or railway platforms, roadside shops, and small restaurants. It saves fuel costs by 40 percent through high combustion and heat transfer efficiency; it is smokeless with an attached chimney that vents fumes away from the breathing zone. Thus, it provides a safer, cooler and healthier working environment and, importantly, prevents burns while offering a fume-free eating environment to customers. Sustaintech is involved from the early stages of this work. It outsources the fabrication of the stoves to a central manufacturer while a rural entrepreneur assembles them locally before the units arrive in the vendor’s kitchen. On both stages of manufacturing, Sustaintech ensures that strict quality controls and standards are followed. Sustaintech starts its marketing in the area by identifying leading street food vendors and installing demo stoves for them followed by promotional activities by the Sustaintech sales team. The bank pays Sustaintech directly and the local sales officer delivers the stove to the street vendor without a down payment. The vendor begins repaying from the saved cost on fuel on a monthly basis; in the process vendors learn about savings and banking, and book-keeping for their business. The Sustaintech team assists vendors to open bank accounts. As the vendors start saving 40 percent on the fuel, half is repaid to the bank. After repayment of the first loan and financial credibility is established, vendors may apply for a second loan to improve their shop. In this way, the purchase of the stove becomes a first step to building a sustainable business supported by the banking system. As the initial investment into the energy efficient stove is a huge burden for a small vendor, the economic benefits of saving fuel and easy ownership makes it an attractive proposition for informal sector vendors to increase their earnings. Each year a vendor saves an average of Rs. 20,000 to 30,000 (US$333 to $500) in fuel. For resource-scarce communities this translates into Rs. 4000 million. As a result, the idea is catching on fast. Sustaintech plans to sell 65,000 fuel-efficient stoves over their first five years. The environmental implication is enormous; with a projected stove-life of five years that offers a safer, cooler and healthier working environment to at least 65,000 vendors and 6.5 million people who are eating around them in one state. The carbon abatement potential of the venture through a five year period would be 3.7 million tons of carbon dioxide (1 kg of firewood is equal to 1.5 kg of CO2). Meanwhile, Sustaintech has been able to attract venture funding from a European consortium of clean-tech investors worth US$260,000. Its preliminary funds came in mid 2008 when Svati received US$64,000, as part of the prestigious Ashden Award for Sustainable Energy innovations. Sustaintech also received an interest-free loan from Villgro, a social venture company founded by Ashoka Fellow Paul Basil. With this initial success, Svati plans to expand her work to other states in India after some minor design changes to adapt for local needs. The pilot has already started in Kerala. Once sufficient scale is achieved, Svati is considering connecting her venture with the global carbon market to enable her to distribute the stoves free-of-cost to street vendors since carbon credits will cover each stove’s production costs, including Sustaintech’s overhead. After completing her master’s degree in Chemical Engineering from IIT Bombay in 1981, Svati joined Hindustan Lever Research Center as part of the team that conducted research on personal care products. She realized that to make a difference for the rural poor she needed to be in the technology research domain. Eventually her interest shifted to designing and developing appropriate technologies. Inspired by her grandmother to be independent, during her childhood Svati worked toward increasing other people’s independence. While at IIT, she brought the nearby sex-workers to operate the hostel, as an initiative to rehabilitate them into mainstream society. Svati also campaigned for gender equality and against a no-entry rule for boys into girls’ hostels. To this day, IIT Bombay is the only IIT in the country where this rule does not exist. In 1996 Svati joined Technology Informatics Design Endeavour (TIDE) established by Ashoka Fellow Dr. S. Rajagopalan in 1993. TIDE was created to promote sustainable development by bringing appropriate technology to the people whose health, economic, and social situations could be improved by it. With TIDE, Svati developed and implemented over a hundred projects on efficient energy and the environment, and her approach covered different aspects of the innovation process, from idea generation and technology development, to participatory rural processes for innovation acceptance. In 2000 Svati became a director at TIDE. After bringing TIDE to significant scale, Svati expanded her work through her own organization, Sustaintech, to directly address the needs and demands of millions of stove users in India.
For 10 years, Svati Bhogle has headed a non-profit organisation, TIDE, that develops sustainable applications and technologies for grassroots entrepreneurs in India, namely wood-burning stoves. ‘I designed fuel-efficient household stoves that can make a serious impact. As a non-profit it was difficult to scale up in that market, however, yet to make the shift to a commercial market, you have to attract investors.’ Taking ideas to market She and her colleagues had investigated options outside the non-domestic market, such as herbal medicine stoves, but still all related to grassroots sectors. ‘We asked ourselves what science is for: isn’t it to uplift society? Then realised we were thinking as scientists and should ask a different question: shouldn’t we seek a product with universal appeal? Shouldn’t we reduce deforestation?’ She decided to set up Sustaintech, a for-profit entity to take her ideas to a market with mass appeal: cooking stoves for street vendors and small commercial kitchens. India’s levels of migration mean that millions of people with limited incomes eat outside, buying food from street vendors. In a city such as Calcutta, for example, approximately 130,000 street vendors provide food for nearly 7.8 million people daily. Multiply that by the scale of India’s population and it’s easy to see the potential. Clean and bright. ‘Currently street-food vendors burn huge amounts of firewood on open fires,’ says Svati. ‘Not only does this cost them a lot of money, it also has adverse effects on the climate and deforestation.’ Firewood is nonetheless the cheapest fuel, so Sustaintech has developed and produced three wood-burning stoves. Sold under the brand name Pyro®, each is adapted to a particular type of cooking. ‘There’s one to make pancakes on a flat plate, one to make tea by the roadside, and one for frying and multi-purpose cooking,’ Svati says. The insulated stoves reduce fuel consumption by 40%, burning an average 3 kg of fuel an hour as opposed to 5 kg, and create a cleaner, healthier environment for the cook, ‘who is no longer over an open fire breathing in fumes and scorching his skin.’ Attention has been paid to design, with bright colours and clean lines: ‘we want everyone to aspire to have one!’. For the time being, Sustaintech is targeting the state of Tamil Nadu, in southern India, which has a high migrant population. Market surveys have been particularly encouraging: up to 50% of 94,300 potential vendors and small catering outlets in the region would be willing to invest in a cleaner, more efficient stove. To help poor vendors with the initial outlay, Sustaintech has struck advantageous loan deals with banks. ‘The trouble is most of our clients have little time to go to the bank to repay! So we’re looking at repayment options via the mobile phone,’ she says. ‘In renewable energy, the way to scale up is through financial innovations, not the technology.’ Research for the people. Moving into for-profit has brought a whole new range of challenges: ‘you have to learn about sales, marketing, financing, know how to pitch to investors, handle financial projections, factor in inflation… it’s no easy task!’ Despite her initiation, Svati hasn’t lost an inch of her social conscience. Some profits from Sustaintech will fund the initiatives led by TIDE, always with the goal that ‘research ends up with the people, not just in research papers.’ Svati started out in research, but felt there was a gap between what it could offer and people’s real needs. When she moved into non-profit and met the women her stoves were destined for, she saw them as role-models: ‘they never give up; they work hard, live in debt and for social reasons often hide their drive from their families, who expect them to appear submissive. But they always have hope and they inspire me to keep aiming high.’
- Finalaya - November, 2014
- The Hindu Business Line - November, 2014
- Next Billion 2.0 - May 1, 2012
- REUTERS - April 26, 2012
- Business Wire - April 26, 2012
- President of Mongolia - November, 2011
- The Northwest Energy Angels - January 25, 2011
- Tree Hugger - February 18, 2010
- India Microfinance - December 28, 2009
- MicroCapital - November, 2009
- Global Giving Matters - Summer 2009
- Next Billion 2.0 - April, 2009
- World Changing - April 23, 2008
Canara Bank, a leading nationalized bank has entered into a memorandum of understanding (MOU) with Micro Energy Credits Corporation to finance bank customers buying energy efficient ‘green’ products such as cook stoves, solar home systems, biogas digestors and water purifiers. With this MOU, the bank wanted to assist and promote the use of green products and reduce carbon emission. Over the years, the bank has been scaling up its market position to emerge as a major 'Financial Conglomerate' with as many as nine subsidiaries/sponsored institutions/joint ventures in India and abroad. In the current fiscal, the bank had opened 875 branches, taking the total number to 5,632, including seven in overseas locations. The bank opened 1,188 ATMs during the year taking the total to 7,500.
Canara Bank has signed a memorandum of understanding with Micro Energy Credits Corporation to finance bank customers buying energy efficient ‘green’ products such as cook stoves, solar home systems, biogas digestors and water purifiers. The partnership has identified Chitradurga district in Karnataka to promote such green products on a pilot basis. PS Rawat, Executive Director, Canara Bank, said the MoU will go a long way in helping customers adopt green products and help reduce carbon emissions.
In Ulaanbaatar, the capital and largest city in Mongolia, more than one quarter of the population lives in “gers,” the traditional and ubiquitous tent-like structures (similar to “yurts” in other locales). Gers are traditionally under-insulated and heated by inefficient coal-burning stoves that contribute to Ulaanbaatar’s stifling air pollution. Now, in a deal that spans the work of parties in Mongolia, London, and Seattle, Citi’s Environmental Products Trading and Origination team, working with Citi Microfinance, has agreed to purchase 1.17 million metric tonnes of carbon credits. These credits will be generated by capturing reductions of greenhouse gas emissions following the installation of more efficient household insulation and heating fixtures, like energy-efficient stoves and “ger blankets,” in many of Ulaanbaatar’s gers. The purchase and installation of the fixtures will be funded through microloans from Mongolia’s XacBank. Here’s how it works: The reductions in household emissions accrued through the use of energy efficient fixtures will be earned by XacBank clients and then assigned to Seattle-based social enterprise MicroEnergy Credits, which develops carbon finance projects and brings clean energy to low-income microfinance households in developing countries. (For more on MicroEnergy Credits, read a past NextBillion story here). MicroEnergy Credits will then quantify, aggregate, and sell the credits to Citi, which will monetize these credits on the European Union Emissions Trading Scheme. Portions of the proceeds from Citi’s carbon credit purchases will be distributed by MicroEnergy Credits back to XacBank, allowing the Mongolian lender to expand its clean energy program, build additional marketing and distribution centers, and increase access to affordable clean energy loans. The purchase program will take place over the next seven years, with the first carbon credits expected to be available for purchase by Citi in March 2013. The program is in the process of being registered and approved through the Clean Development Mechanism run by the United Nations Framework Convention on Climate Change. The global collaboration will lower the rate of fossil fuel consumption and carbon emission in Ulaanbaatar. Equally important, the arrangement increases the capacity for low-income ger occupants to access credit to make home energy efficiency improvements, save money, and limit their harmful environmental impact. It is an innovative example of using creative microfinance to address community needs, and a model the collaborators hope to apply in other initiatives and countries.
Citi to Purchase 1.17 Million Tonnes of Carbon Credits in Innovative Microfinance Deal with MicroEnergy Credits and Mongolia’s XacBank. In a deal that combines microloans in Mongolia with the sale of carbon credits on the European Union Emissions Trading Scheme (EU ETS), Citi’s London-based Environmental Products Trading and Origination team, working with Citi Microfinance, has agreed to purchase 1.17 million metric tonnes of carbon credits over the next seven years from Seattle-based social enterprise MicroEnergy Credits. The carbon credits will be generated by capturing reductions of greenhouse gas emissions following the installation of more efficient household insulation and heating fixtures in Ulaanbaatar, the capital and largest city in Mongolia. The purchase and installation of the fixtures will be funded through microloans from Mongolia’s XacBank. Under the arrangement, a XacBank customer will purchase an energy efficient stove or home insulation products like a “ger blanket,” which covers a ger, the traditional and ubiquitous Mongolian portable tent-like structures in which more than one quarter of the Ulaanbaatar population lives. Gers are traditionally under-insulated and heated by inefficient coal-burning stoves that contribute to Ulaanbaatar’s especially severe air pollution. Ger blankets greatly increase heat retention, and, like energy efficient stoves, lower the rate of fossil fuel consumption and carbon emissions. The reductions in household emissions accrued through the use of energy efficient fixtures will be earned by XacBank clients and then assigned to MicroEnergy Credits, which develops carbon finance projects and brings clean energy to low income microfinance households in developing countries. MicroEnergy Credits will then quantify, aggregate, and sell the credits to Citi, who will monetize these credits on the open market through its Environmental Products Trading and Origination team. Portions of the proceeds from Citi’s carbon credit purchase will be distributed by MicroEnergy Credits back to XacBank, allowing the Mongolian lender to expand its clean energy program, build additional marketing and distribution centers, and increase access to affordable clean energy loans. “Citi and our partners collaborated to design a carbon credit financing chain that connects and values energy saved at the household level with global emission reduction targets and markets,” said Bob Annibale, Global Director of Citi Microfinance and Community Development. “Together, we are creating the capacity for Ulaanbaatar residents, living in gers, to access credit to make home energy efficiency improvements, save money, and limit their harmful environmental impact. It is a great example of using creative microfinancing to address client and community needs, and a model that can be applied in other initiatives and countries.” “We are very excited to be at the heart of a deal which combines the best of Citi’s environmental products market expertise and our track record in the microfinance sector to deliver tangible positive outcomes for local communities and the environment,” said Stuart Staley, Global Head of Commodities at Citi. “Under this arrangement, we are implementing an innovative market-based strategy to tackle real challenges faced by developing countries.” “MicroEnergy Credits is proud to partner with Citi in this landmark agreement, which brings microfinance households access to clean energy incentives typically only accessed by large agencies and corporations,” said April Allderdice, CEO, MicroEnergy Credits. “Microfinance institutions like XacBank have the reach to impact the energy-use options of millions of low-income households around the world. MicroEnergy Credits provides the carbon monitoring and aggregating system to be sure these carbon incentives reach the people that can use them. Agreements like this one allow low income families to use microfinance to clean the environment and improve their quality of life.” “As a triple bottom line bank, dedicated to working for People, Planet, and Profit, XacBank is committed to tackling air pollution in our capital city- now the most polluted city in the world in the winter,” said Bat Ochir Dugersuren, CEO of XacBank. “With access to carbon revenues through our partnership with MicroEnergy Credits and agreement with Citi, XacBank’s Eco Banking Department will expand our services so that all Mongolian families have access to energy efficient products to reduce pollution, improve their health, and save money.” The first carbon credits are expected to be available for purchase by Citi in March 2013. The program is in the process of being registered and approved through the Clean Development Mechanism run by the United Nations Framework Convention on Climate Change (UNFCCC).
NEW YORK--(BUSINESS WIRE)--In a deal that combines microloans in Mongolia with the sale of carbon credits on the European Union Emissions Trading Scheme (EU ETS), Citi’s London-based Environmental Products Trading and Origination team, working with Citi Microfinance, has agreed to purchase 1.17 million metric tonnes of carbon credits over the next seven years from Seattle-based social enterprise MicroEnergy Credits. The carbon credits will be generated by capturing reductions of greenhouse gas emissions following the installation of more efficient household insulation and heating fixtures in Ulaanbaatar, the capital and largest city in Mongolia. The purchase and installation of the fixtures will be funded through microloans from Mongolia’s XacBank. Under the arrangement, a XacBank customer will purchase an energy efficient stove or home insulation products like a “ger blanket,” which covers a ger, the traditional and ubiquitous Mongolian portable tent-like structures in which more than one quarter of the Ulaanbaatar population lives. Gers are traditionally under-insulated and heated by inefficient coal-burning stoves that contribute to Ulaanbaatar’s especially severe air pollution. Ger blankets greatly increase heat retention, and, like energy efficient stoves, lower the rate of fossil fuel consumption and carbon emissions. The reductions in household emissions accrued through the use of energy efficient fixtures will be earned by XacBank clients and then assigned to MicroEnergy Credits, which develops carbon finance projects and brings clean energy to low income microfinance households in developing countries. MicroEnergy Credits will then quantify, aggregate, and sell the credits to Citi, who will monetize these credits on the open market through its Environmental Products Trading and Origination team. Portions of the proceeds from Citi’s carbon credit purchase will be distributed by MicroEnergy Credits back to XacBank, allowing the Mongolian lender to expand its clean energy program, build additional marketing and distribution centers, and increase access to affordable clean energy loans. “Citi and our partners collaborated to design a carbon credit financing chain that connects and values energy saved at the household level with global emission reduction targets and markets,” said Bob Annibale, Global Director of Citi Microfinance and Community Development. “Together, we are creating the capacity for Ulaanbaatar residents, living in gers, to access credit to make home energy efficiency improvements, save money, and limit their harmful environmental impact. It is a great example of using creative microfinancing to address client and community needs, and a model that can be applied in other initiatives and countries.” “We are very excited to be at the heart of a deal which combines the best of Citi’s environmental products market expertise and our track record in the microfinance sector to deliver tangible positive outcomes for local communities and the environment,” said Stuart Staley, Global Head of Commodities at Citi. “Under this arrangement, we are implementing an innovative market-based strategy to tackle real challenges faced by developing countries.” “MicroEnergy Credits is proud to partner with Citi in this landmark agreement, which brings microfinance households access to clean energy incentives typically only accessed by large agencies and corporations,” said April Allderdice, CEO, MicroEnergy Credits. “Microfinance institutions like XacBank have the reach to impact the energy-use options of millions of low-income households around the world. MicroEnergy Credits provides the carbon monitoring and aggregating system to be sure these carbon incentives reach the people that can use them. Agreements like this one allow low income families to use microfinance to clean the environment and improve their quality of life.” “As a triple bottom line bank, dedicated to working for People, Planet, and Profit, XacBank is committed to tackling air pollution in our capital city- now the most polluted city in the world in the winter,” said Bat Ochir Dugersuren, CEO of XacBank. “With access to carbon revenues through our partnership with MicroEnergy Credits and agreement with Citi, XacBank’s Eco Banking Department will expand our services so that all Mongolian families have access to energy efficient products to reduce pollution, improve their health, and save money.” The first carbon credits are expected to be available for purchase by Citi in March 2013. The program is in the process of being registered and approved through the Clean Development Mechanism run by the United Nations Framework Convention on Climate Change (UNFCCC).
Today, President of Mongolia Tsakhia Elbegdorj received Edward Hanrahan, Executive Director of ClimateCare Program of JP Morgan, and April Allderdice, Director and CEO of Micro Energy Credits. The guests made a brief introduction on their operations in the world carbon market, and explored opportunities of collaboration with the Office of the President of Mongolia. With Law against the Air Pollution in the Capital City recently passed by the State Great Khural by his initiative, President Elbegdorj stressed there are many measures planned to address this challenge, and expressed his support for their activities in this regard. Micro Energy Credits has recently established a carbon credit collaboration mechanism with Mongolia’s Xac Bank. The carbon credit system focuses on selling carbon credits created by air pollution to major financial institutions in the world. The revenue from this operation will mainly be used to provide citizens with discounted loans in their purchase of ger covers and energy efficient stoves. The meeting was also attended by L.Purevsuren and E.Zorigt, Advisors to the President, and M. Bold, CEO of Tenger Financial Union.
The Northwest Energy Angels, the Pacific Northwest’s only angel group focused exclusively on providing early-stage capital to cleantech entrepreneurs, saw significant innovation and new early-stage companies within the cleantech sector in 2010, despite the weakened economy. The angel group witnessed an increase in company applications and investment deals made by its members, closing out the year with 11 significant investment deals worth over $1.3 million. “Our mission is to foster a vibrant cleantech industry in the Pacific Northwest by connecting promising entrepreneurs with experienced cleantech investors,” said Byron McCann, co-chair of Northwest Energy Angels. “We’re extremely excited by the number of cleantech innovations that we saw over the last year, coupled with the interest and growth in membership.” Since its inception in 2006, the Northwest Energy Angels have invested over $3.5 million in 23 regionally based cleantech companies. This year the group welcomed 16 new investors bringing the group’s total to nearly 50 members. In 2010, the Northwest Energy Angels invested in 11 cleantech companies, four of which were follow-on rounds to a previous investment. New Investments • EMME – www.getemme.com EMME delivers an affordable platform for optimal comfort and savings for light commercial and residential customers. • Full Circle Farm – www.fullcirclefarm.com Full Circle Farm combines the traditional values of local, organic farming with the scalability of a modern, multi-market, e-commerce distribution business. • G2B Ventures – www.GreenCanopyHomes.com G2B Holdings drives efficiency in existing homes and demonstrates solutions for neighbors to take action on efficiency solutions in their homes through its homebuilding company, Green Canopy Homes. • Hydrovolts, Inc. – www.hydrovolts.com Hydrovolts makes hydrokinetic turbines to generate renewable energy from water power for agriculture, industry and global sustainable development. • InvenTyS Thermal Technologies Inc. – www.inventysinc.com InvenTyS is developing breakthrough CO2 capture technology to produce CO2 from industrial smokestacks for use in enhanced oil recovery applications. • Micro Energy Credits Corp – www.microenergycredits.com Micro Energy Credits links microfinance institutions to the carbon markets when they lend for clean energy creating an $8 B market. • Skyline Innovations LLC – www.skylineinnovations.com Skyline turns commercial rooftops into revenue-generating assets by developing clean power plants and sharing the value created with building owners.
Described as "providing the handshake" between the carbon market and the microfinance industry, MicroEnergy Credits is a business solution that holds the potential to speed along clean tech adoption globally by making it much more accessible. The company has used the business model of microfinancing - handing out small loans to small businesses that wouldn't otherwise have access to captial - and reapplies it to the carbon market. By facilitating the adoption of green tech, MicroEnergy Credits hopes to give a shot of adrenaline to clean tech adoption. Traders in the carbon market are usually looking for the biggest investments they can find, such as giant solar farm or wind farm start-ups. However, there are billions of people on the planet who can't get access to clean energy - or energy at all - for daily living. MicroEnergy Credits wants to fix this, providing a path between the carbon markets and small scale adoption of clean tech. They take their inspiration from the microfinancing industry. Microfinancing institutions usually loan to traditional businesses - a Peruvian woman who sews purses from her home, or a Brazilian farmer who needs funds to purchase additional livestock - but the industry could start moving into the sustainable energy markets as well, if given the right help. Using the same system as microfinancing, MicroEnergy Credits is starting to bridge this gap, helping poor households get access to green tech, which earns carbon offsets that can be sold on the carbon market by the microfinancing institution. It's a way to reward microfinancing institutions for brokering clean energy investments among households. Poorer households who can't afford green upgrades like better insulation, solar panels, fuel-efficient cook stoves and so forth could get financing from the microfinancing institutions for the upgrade. By installing greener systems in their home, they earn credits for reducing their carbon emissions. Those credits can then be collected and sold on the carbon market by the financing institution so that not only do poor households benefit from green tech upgrades, but the microfinancing institution can gain more funds by leveraging the carbon market. Here's how it works: MicroEnergy Credits is a social enterprise which links microfinance institutions to the carbon markets when they lend for clean energy. MEC sells the carbon credits earned by replacing dirty fuels like kerosene, wood, coal and dung on the voluntary carbon markets and passes the carbon revenues along to its partner institutions. The institutions can then use the revenues to offset their costs of running the clean energy program or can pass the savings along to the client in the form of reduced interest rates, free battery replacements or other benefits. In 2008, MEC won the Global Social Venture Business Plan Competition for its innovative business model which makes accessing the carbon markets easy for MFIs. MicroEnergy Credits also has to verify that the loans for green tech are installed as they're supposed to be, and that the household is continuing to use the clean energy technology and have indeed reduced their carbon footprint. The company has tools for the microfinancing institution to monitor emissions reductions on their loans: "When MFI loan officers monitor clean energy loans, they use their handheld device to report the operational status of the investment. These loan officers also record the GPS location of each investment. By leveraging existing microfinance loan monitoring processes, MEC's mobile phone-based technology reduces the audit and verification costs that typically drive up the costs of carbon credits for small projects." It is a brilliant idea for speeding up the adoption of green technology to households that are currently using the dirtiest fuels out of necessity. They're providing the ability for poor households to not only get lights for the first time in their home, but lights that use clean, renewable energy
ULAANBAATAR, Mongolia, October 15, 2009 – XacBank, through its partnership with Micro Energy Credits (MEC), has become the first micro-finance bank in the Northern Hemisphere to sell its carbon offsets and access financing through the carbon markets. “MEC is proud to work side by side with another pioneering financial institution that is finding innovative ways to offer better and cleaner energy choices to underserved markets in developing regions” said MEC CEO, April Allderdice. Ulaanbaatar city is the coldest capital in the world. Temperatures average -20 Celsius in the winter months. 60 percent of the city’s population live in Mongolian traditional dwelling called a ‘ger’, with wooden frames covered by layers of wool felt. Pollution levels in the city during the winter heating season are, on average, twenty times those of summer of levels. The World Bank attributes 60 of this pollution to coal burned in the sub-urban ger-district areas. On average, households located in the ger-districts use 5 tons of coal and 1.5 tons of wood per year. The bottom fifth socio-economic quintile spends as much as 40 percent of their monthly winter income on heating fuels. In September, XacBank launched its Eco Products Program, offering low interest loans for energy products to poor clients in Mongolia. “XacBank has a successful history of serving low-income communities throughout the country. Through the Eco Products Program we are providing an affordable means for Mongolian households to lower their fuel costs, breathe cleaner air, and stay warm in the depths of the long winter months” said the Bank’s Deputy CEO, Tur-Od Lkhagvajav. Previously, product clients spent over a third of their monthly income on coal and wood for cooking and heating fuel in the winter. Switching to energy products like a highly efficient stove, or an extremely insulated ger provides these families with a far more efficient way to heat their home leaving more money each month to spend on food and family needs. Additionally, each household reduces their emissions of green house gases through reduced dependence on fuels such as coal, wood and kerosene. XacBank signed its carbon purchase Memorandum of Understanding with MEC in March of this year. On October 15th, XacBank and MEC finalized their Carbon Purchase Agreement in a formal signing ceremony. On this signing occasion, MEC presented a check for the carbon emissions reductions derived from the Bank’s first Eco Loan disbursed at the beginning of this month. The check represented the first carbon revenue generated by a micro-finance institution in the Northern Hemisphere.
In the debate over how best to address global warming, the consensus among scientists, policymakers, and environmental activists is that solutions must incorporate both mitigation – reducing carbon emissions – and adaptation – helping communities cope with the current and future effects of climate change. Yet in the run up to the Copenhagen climate change summit in December 2009, public discourse has focused largely on mitigation – and even more narrowly on the issue of carbon reduction targets. Will developing countries – particularly Brazil, China, India, Mexico, and South Africa – eventually agree to binding targets for reducing emissions? Does the Waxman-Markey bill recently passed by the US House of Representatives go far enough in calling for a 17% reduction in 2005-level emissions by 2020 – and will the bill be watered down, or killed, in the US Senate? Are bilateral negotiations between China and the United States laying the foundation for a multilateral agreement in Copenhagen, or are the world’s two largest carbon polluters merely looking to sidestep the deep cuts the rest of the international community insists upon? While mitigating climate change is the key long-term issue, adaptation is arguably the more pressing concern for the world’s poorest citizens. Simply put, climate change disproportionately affects the world’s poorest, particularly those in least-developed counties. According to a 2008 United Nation’s Development Programme report, drought-affected areas in sub-Saharan Africa could expand by up to 90 million hectares. Likewise, melting glaciers in the Himalayas and Andes are changing water flows, threatening to undo decades of agricultural progress in Asia and Latin America, undermining food security and threatening human health. By 2080, an additional 1.8 billion people could be living in regions where water supply is scarce, and the number of people affected by malnutrition could rise to 600 million. Meanwhile, the Intergovernmental Panel on Climate Change projects that rising sea levels will inundate 20 percent of Bangladesh, flooding costal areas and raising salinity in croplands, imperiling the livelihood of 37 million people. Since 2002, the world’s richest countries have pledged nearly $18 billion to various bilateral and multilateral climate change funds and projects, including the World Bank and the Global Environment Facility, the funding arm of the United Nations Framework Convention on Climate Change. Yet, a recent analysis conducted by the Guardian (UK) found that less than 10% of the money promised by rich counties to help poorer counties adapt to global warming had actually been delivered. According to the report, published this past March, just $900 million has been disbursed. More importantly, the main policy instrument being advanced to help counties mitigate the impact of climate change is climate insurance. Yet, while climate insurance may help poor counties buy food when crops fail or re-build communities devastated by floods, hurricanes, or other climate-driven disasters, it does little to help people cope with the day-to-day realities of climate change. Finding ways to help communities in the developing world both mitigate and adapt to climate change is one of the key moral, political, and economic questions of our time – and one of the principal challenges for global philanthropy. Fortunately, strategies that accomplish both of these goals at once – generating what are known as “co-benefits” – are starting to emerge. Donors, policymakers, and NGOs are developing new models and strategies that cut across issue areas, bringing together the fields of public health, education, economic development, environmental conservation, and energy access. Yet ensuring that the world’s poorest citizens benefit from strategies that blend co-benefits will require innovation and advocacy: innovation to identify replicable models and operationalize them as quickly as possible; advocacy to ensure that public policies and funding mechanisms support integrated action at a scale commensurate with the challenge. Solar power: Reducing carbon supports health, education, and development According to the United Nations, 1.6 billion people lack access to electricity. Many turn to wood for cooking and kerosene for lighting. But cutting wood for stove fuel saps the soil’s ability to hold water, creating arid soil and taxing water tables. Meanwhile, kerosene is expensive to buy, dirty to burn, and hazardous to human health. That’s why the Good Energies Foundation (www.goodenergies.com/foundation/), the corporate foundation of Good Energies, a New York-based private equity firm specializing in renewable energy, has made the elimination of kerosene lighting one of its top priorities. Since the early 2000s, the Good Energies Foundation has partnered with German-based Stiftung Solar Energie (Solar Energy Foundation), which uses the King Baudouin Foundation USA as its local fiscal agent, to bring low-cost solar power to Rema, a village of 3,000 in the rugged Mida region of Ethiopia. Located about 140 km north of Addis Ababa, 90% of Mida’s residents live through subsistence farming amidst steep, arid canyons. Through contributions from Good Energies and other donors, the Solar Energy Foundation and its local partners have equipped the village with solar panels, batteries for energy storage, and LED lamps. Most systems were installed in families’ huts, but public institutions – an orthodox church and three mosques, a clinic, the village school, and the police and local administrator’s office – also got power. To date, the project has installed over 3,000 solar home systems acrosss Ethiopia. Although the project started out with a model based on subsidizing capital costs – with villagers making small payments towards the eventual cost of replacing batteries – the group uses a revolving credit facility, a model that will help accelerate growth into other areas of the country without making the systems unaffordable to the poor. “Our goal is to focus on energy access and poverty alleviation,” said Good Energies’ CEO Richard Kauffman, who spoke with members of Synergos' Global Philanthropists Circle in May at a learning forum on climate change and poverty. “We are focused on practical solutions, and we recognize that there are various other co-benefits as well.” Since the average lamp burns 70 liters of kerosene every year, producing about 160 kg of carbon dioxide, the Rema project prevents 368,000 kg of carbon emissions each year. Students can now study after sundown by the cool glow of LED lights. Tea shops can do more business now that their hours of operation extend into the evening. Meanwhile, solar-powered water pumps, installed last year, have obviated the daily four-hour trek many women had to make, down steep canyon walls, to fetch water from the valley below. The village’s solar-powered disinfection system ensures that the water is safe and clean, and solar-powered refrigerators ensure that the local clinic has safe, cool medicines – all at a much lower cost than kerosene. The key to Rema’s success with solar power has been local control. While the first phase of Rema’s solar installation was overseen by staff members from the Solar Energy Foundation, long-term sustainability depends on local know-how. In 2007, Rema became home to the International Solar Energy School, which provides a comprehensive six-month technical training course to Ethiopian electricians. By investing in local know-how, the project ensures its sustainability and lays the groundwork for continued expansion. “The idea is that the graduates will go back into their home regions, where they can work with the Solar Energy Foundation – or become solar entrepreneurs in their own right,” Kauffman said. In addition to Rema, there are three other solar service centers in various parts of Ethiopia. The four centers provide installation and ongoing servicing of local systems. Two more centers are scheduled to come online over the next 18 months. The Green Belt Movement: Fighting poverty and environmental degradation. The Green Belt Movement (www.greenbeltmovement.org) is a leading example of how local communities can integrate mitigation and adaptation. Founded in 1977 by Wangari Maathai, the Kenyan environmental activist and 2004 Nobel Laureate, the Green Belt Movement began with the simple recognition that poverty, environmental degradation, and lack of women’s rights were inseparable. Over the past 32 years, the Green Belt Movement has planted over 40 million trees, mainly through its network of 6,000 community-based nurseries, which are run mainly by poor rural women around Africa. “The women of the Green Belt Movement have learned about the causes and the symptoms of environmental degradation,” Maathai said in a 1994 speech at Harvard University. “They have begun to appreciate that they, rather than their government, ought to be the custodians of the environment.” The Green Belt Movement is a case study in co-benefits. Planting trees preserves soil while also providing shade and firewood. Trees reduce aridity and help trap water in the soil, thus increasing crop yields and improving food security. And the process of organizing that women to do planting increases civic participation and helps empower women. “Through the Green Belt Movement, soil erosion has been reduced in critical watersheds, thousands of acres of biodiverse-rich indigenous forest have been restored and protected, and hundreds of thousands of women and their families are standing up for their rights and those of their communities to live healthier, more productive lives,” Maathai said. But the real impacts of the Green Belt Movement are most evident at the local level. In rural villages throughout Africa, women are responsible for cooking meals and harvesting firewood. As trees are felled for firewood, women have to travel further from their homes to collect wood, which means that they have less time to care for their children and tend to their crops, not to mention engage in politics or get an education. Yet, according to a recent study by the Nairobi-based World Agroforestry Centre, Kenyan farmers who plant an average of 500 fodder trees are able to provide high-quality feed to their livestock, thus increasing their farm income by $95 to $120 per cow per year. As Wanjira Mathai, the Green Belt Movement’s Executive Director and daughter of Wangari Maathai, explains, helping women see the connections between poverty and environmental degradation is key to the Green Belt Movement’s model. Whenever the Green Belt Movement begins work in a village, they begin with a seminar called “Know Yourself.” Trainers first ask women to identify their problems, a question that invariably yields a litany of complaints: not enough money, bad crop yields, sick children, a paucity of firewood. Then women are asked to identify where their problems come from. In most cases, women begin by blaming others – the government, their husbands, colonialists. But eventually they begin to see their role: how cutting trees increases evaporation and creates aridity; how monocrop farming requires expensive chemical inputs; and how all of these phenomena are tied together. “After three days of meetings,” Mathai explains, “women understand that they have a role to play.” And that role is to plant trees and care for their environment. By allowing women to embrace their own agency, the Green Belt Movement has become a force for democratic reform in Kenya and a clarion voice for sustainable economic development worldwide. In 1989, the Movement was instrumental in halting President Daniel Moi’s plans to build a 62-story office building – featuring a four-story statue of Moi himself – in Uhuru Park, the largest public park in Nairobi. Wangari Maathai directly lobbied the British government to cut off financing, a move that provoked a crackdown by Moi. Protests erupted when Maathai was jailed but, when the tear gas had cleared, project financing was withdrawn and the park had been preserved. “The former government was completely against the Green Belt Movement and our work of mobilizing women into groups that could produce seedlings and plant them,” Maathai said. “The government was also against the idea of educating and informing women. It didn’t want citizens to know that sometimes the enemy of the forests and the environment was the government itself, which was supposed to be protecting the environment.” Taking co-benefits to scale. Both Maathai and Kauffman are optimistic about the impact their work is having on local communities. But both note that far more needs to be done in the philanthropic and policymaking communities to take projects like theirs to scale. Kauffman, for instance, makes a persuasive case for linking the fight against global warming to the politics of energy access. “A lot of governments are more interested in looking at issues of global warming than they are at looking at equity in terms of access to electricity. But there are companies coming online that are looking at delivering small-scale solar power at a remarkably low cost.” And that, he continues, could be revolutionary. “We’re talking about providing a two-watt panel and a few LED lights for around $12. That’s affordable, even to the very poor.” Meanwhile, Maathai notes that the Green Belt Movement’s goal of planting 1 billion trees worldwide is already benefitting from the emerging market for carbon offsets – yet another example of how climate change mitigation and adaption dovetail. In 2006, the Green Belt Movement signed an agreement with the World Bank’s BioCarbon Fund to reforest 1,876 hectares of land within the Mount Kenya and Aberdares region of Kenya. Under the agreement, the BioCarbon Fund will purchase 375,000 metric tons of carbon offsets between 2007 and 2017, with a call option to buy 150,000 more. “We have set some building blocks with this pilot project,” Maathai said. “We hope that we are showing the way for many other organizations in Africa and beyond to follow.” The reforestation will bring important environmental benefits by reducing the erosion process, protecting water sources, and regulating water flows. Plants and fauna, primates, and birds, will also benefit from the re-introduction of a wide range of natural tree species. Meanwhile, community forest associations (CFAs) will employ local residents to plant and tend the seedlings during the first two years, thus stimulating the local economy. Likewise, CFAs will be allowed to extract honey, deadfall firewood, and medicinal goods from the forest. For philanthropists, the challenge will be to find and support innovative work. Part of this challenge involves scaling up what works. In a 2006 organizational update, for instance, Wanjira Mathai pointed to the success of the Green Belt Movement’s Billion Trees Campaign as a sign that the international community is slowly moving in this direction: “The launching of the Billion Tree Campaign in November during the Climate Change Conference in Nairobi was a great success. To date, individuals and institutions around the country have committed to plant over 123 million trees.” But innovation also requires breaking down the barriers between various issue areas and developing funding models that integrate grantmaking, social investment, and policy advocacy. “The combination of microfinance and renewable energy is a really important enabling innovation,” Kauffman said. SELCO India, another social investee of the Good Energies Foundation, was a pioneer in the financing of solar power through micro-credit. “It was challenging at first, because many microfinance institutions are cash-flow lenders, not asset-based lenders, but now that SELCO and others have shown that this can work, we’re hoping that microfinance can help low-cost solar projects become more sustainable.” Kauffman points to ARC Finance and Micro Energy Credits Corporation as two pioneering intermediaries in the financing field. (Indeed, by using revenue from carbon offsets for forest preservation in local communities as capital for low-cost solar systems, Micro Energy Credits’ model gets a double bang for the buck.) “These companies may not be viable as straight commercial investments – yet. But there is definitely room in this space for philanthropic venture capital to help get them there.” Kauffman insists that the elimination of kerosene lighting is an attainable goal within the next fifteen years. “By our estimate, providing a 50-watt system – enough to power lights, a radio, and, possibly, a small television – to the 1.6 billion people who currently lack access to electricity would cost roughly $150 billion. That’s less than the size of the AIG bailout.” Kauffman likens the challenge of low-cost solar to disease eradication. The key, he continues, is finding the right combinations of technology and financing – along with the right management teams - and then scaling them up. “What’s so exciting is that there is a finite number. We can foresee the elimination of kerosene lighting in 10-15 years if we shine a spotlight on it.”
A few weeks ago, I was fortunate enough to catch Richenda Van Leeuwen, a founding board member of the Good Energies Foundation, after the Ross Net Impact Forum. I asked her a series of questions about the firm where she works, Good Energies Inc., a global private equity firm focused on renewable energy investing, and its affiliated non-profit, the Good Energies Foundation. The foundation is trying to tackle the multiple challenges of providing clean energy to citizens around the world, particularly in developing nations. The following is the transcript from our conversation: Grace Augustine, NextBillion.net: I find your organization’s design interesting. Is it the hope of the Good Energies Foundation to fund projects that can one day be commercial through Good Energies Inc.? Richenda Van Leeuwen: The Good Energies Foundation is an independent non-profit foundation, and the operations are separate. Our mission in the foundation is two fold: poverty alleviation via provision of access to modern energy, and future poverty prevention through climate change mitigation. Where we can, we actually leverage our corporate expertise to drive our work in the social sector. The Good Energies Foundation focuses on geographies and situations where a fully commercial approach may not be viable, where any returns may be lower or take longer to achieve than generally accepted by investors or the people are so poor that even with micro-credit they couldn’t afford any sort of system. We have focused a lot on small scale solar powered lighting to date. Our foundation’s work with Stiftung Solarenergie, a solar provider in Ethiopia would be one example. See video on the Stiftung Solarenergie website on its Ethiopia project here. Initially, Stiftung Solarenergie was completely dependent on subsidies, but having proved their model and shown that solar lighting works in the local context, it is now exploring quasi-commercial community solar options. This includes such solutions as solar home products, LED lanterns and small lighting systems, in order to drive scale. The organization is currently raising a fund to support their drive to scale. Our social mission is not just concentrated within the foundation. On the commercial side, our company, Good Energies, also has a 3-P mission, which stands for People, Planet and Profit. Good Energies is a private equity firm focused on investing in renewable energy with the goal of having a positive impact on people and the planet, but of course needs profit to function. In fact, all the investment work of Good Energies is, broadly speaking, beneficial to society from an environmental standpoint and in terms of reducing carbon emissions. NextBillion.net: Could you tell me a little more about your other partnerships, maybe specifically with SELCO India? I see that SELCO is a social enterprise. Richenda Van Leeuwen: We recently made a “social equity” investment in SELCO India, along with E+Co and the Lemelson Foundation. SELCO India is an award winning registered business based in Karnataka, India. It is a strongly mission-based social enterprise, focused on energy access for the poor, and has cumulatively sold almost 100,000 solar systems since being founded in 1995. SELCO has to be commercially viable in order to be sustainable and to scale their services further, but their mission orientation is all about providing custom solutions for their low income customers. In fact, they were the first solar company focusing on access for poorer customers to reach scale in conjunction with a microfinance partner, SEWA Bank, even before Grameen Shakti in Bangladesh, another significant social enterprise operating in this space. With our social investment in SELCO, if we made a dividend or decided to exit, any money that we made would go back into supporting SELCO or to other projects of the Good Energies Foundation. NextBillion.net: Speaking of E+Co, I think our readers are familiar with both E+Co and Acumen Fund, which both seem to be pursuing similar objectives, so what would you say differentiates you? Richenda Van Leeuwen: We look at both of those organizations as cooperative partners. In the case of E+Co, we’ve already been an investor alongside them. I think what they do is terrific. I would say that the only difference is that we’re trying to get ahead on the issue of climate change, and develop products that intentionally mitigate the risk for the most vulnerable populations. We keep in touch closely with Acumen Fund as well. The primary difference there is that we’re affiliated with a major global player in the renewable energy space, with deep expertise across the solar, wind, hydro, green buildings, and other sectors, and therefore we can bring that commercial expertise to the table as well. NextBillion.net: I’ve heard that microfinance is becoming a bigger part of the solution to energy access. Can you tell me more about these recent advances? Richenda Van Leeuwen: The combination of renewable energy and microfinance is just now becoming fully mainstreamed, although some groups such as SELCO India and Grameen Shakti have shown that the model can work for a number of years. There are now proven track records, despite the fact that historically many microfinance groups (MFIs) have been leery of going into any kind of asset-based lending. It has also been challenging for MFIs to structure the right kind of product. For example, if you’re trying to lend to a farmer who only gets paid once a year, how do you structure an appropriate payment plan? On the renewables side, it is also difficult at the local level for system installations to have expertise as a loan collection agent, so generally speaking it has usually worked best when each entity focuses on its own core competences. There are new groups out there, like ARC Finance, headed by Ellen Morris and Niki Armacost, and Micro Energy Credits Corporation, led by April Alderdice, that are providing a roadmap for MFIs to show how they can work together with renewable energy providers. MECC is also tackling the carbon credits side of the equation, helping the MFIs tap into the carbon markets, which could be a potential for revenue generation, while ARC focuses more on assisting MFIs entering the renewable energy lending space. NextBillion.net: In terms of technology, what advances have you seen that are making energy access more of a reality? Richenda Van Leeuwen: There have been many recent technological advancements that have helped this sector tremendously. The cost of solar panels has gone down 20-30% even since the start of the year. If these savings are passed along to consumers, it increases affordability to an entirely new class of people, since the poor are very price point sensitive. There has also been innovation in LED lights. There are now super-bright LEDs used in low-cost lighting projects. When I was in India with SELCO recently, I saw a product working very well when I visited a poor village outside of Bangalore with approximately 50-60 people that had just installed some solar lighting projects. The houses were probably 12 x 8 feet and the LED lights, hooked up to a solar panel, produced sufficient light for those spaces. LEDs are also more environmentally-friendly than CFLs, as they don’t have the issues of mercury and special disposal, the latter being unrealistic in a rural village. LEDs do, however, tend to be very directional. Only recently, groups like d.light, Barefoot Energy and SunNight Solar have designed low cost products to overcome that limitation. Battery technology, and energy storage in general, has also been on ongoing issue, but there is a lot of research going into these solutions and I think we’ll see some major developments in the near future. It’s important for me to note that the Good Energies Foundation is technology neutral, meaning that we don’t give preference for one technology over another, although to date much of our work has been focused on solar lighting, since it is a natural fit. NextBillion.net: Ok, so to wrap up, can you tell me about the major challenges with providing energy access to the world’s poorest people? Richenda Van Leeuwen: I think one of the challenges is just the scale of the problem. The average person in the U.S. or Canada probably does not realize that one-quarter of the world does not have reliable or often any access to electricity. Many non-profits and SMEs are in the space, but face challenges around taking their business or non-profit model to scale. Access to finance is one part of it. I did a rough back of the envelope calculation recently, which found that to provide a 50W system to the 1.6 billion people without access to electricity – generous enough to power lights, a radio, and possibly a small TV – it would cost in the range of US $150 billion; less, incidentally, than the size of the bailout given to AIG. It could probably be done on a more basic scale for around US $100 billion. It may sound like a lot, but it is a finite, solvable problem where cost savings would not only be seen at the level of the household, but also in terms of improvements in health and education that accrue with a non-smoky, less dangerous and better source of lighting. Our foundation is focused primarily on Sub-Saharan Africa and South Asia, where the largest concentrations of people lacking access to electricity live, but we’re also supporting a non-profit in Nicaragua, Blue Energy that is helping to bring electricity to Caribbean coast communities there. Because of the scale of the problem, working in partnership is essential, with groups such as Lighting Africa, run out of the World Bank. We need to emphasize those approaches that really have the capacity to scale up in order to eliminate kerosene-based lighting. I have spent years working in the non-profit world, and that is a sector that has often really struggled with producing scalable and sustainable solutions, in part due to the inherent limitations of completely subsidy-driven approaches, or lack of business expertise. A commercial orientation, even within the context of a social enterprise, will often bring more discipline to evaluating the viability of a particular business model, although finding the right balance between commercial and social orientations is a challenge, as we have seen in the microfinance sector over the years.
It is impossible to argue against the need for reliable energy at the base of the pyramid (BoP). Energy drives every facet of society, from nourishment to communication. According to the UNDP, at least 1.2 billion people suffer from energy poverty, which has profound impact on health, education, and livelihoods. Increasingly, people are calling for the new energy models in developing nations to be "sustainable" and drawn from "clean" and renewable sources. The accepted belief is that if we can get developing nations on a path of adopting clean technologies, they can completely leapfrog the dirty, self-perpetuating system we have created in the west. However, there are barriers to establishing renewable energy projects at the BoP, on both the supply and demand side. One recently-launched for-profit social enterprise that hopes to revolutionize financing in this field is MicroEnergy Credits Corporation (MEC), and I had the wonderful pleasure of conversing with its founders, April Allderdice and James Dailey, last week. Allderdice and Dailey both have impressive resumes, from Peace Corps to Columbia Business School to McKinsey and Grameen; they have the research and the on-the-ground experience to move this field forward. MEC realizes that even though clean technology pays off in the long-run compared to conventional sources, very few BoP consumers can afford to pay high up-front costs when they are concerned with day-to-day survival. According to Allderdice and Dailey, BoP consumers "cannot afford to pay extra for environmental or even social benefits, and therefore adopt traditional energy." And let’s be honest, who are we to tell others that they should sacrifice their meager income to save a planet which we are primarily responsible for destroying? In addition to the high up-front cost, there has not traditionally been a local broker to provide financing to the poorest and the most remote clients who do want to adopt clean energy projects. That is where MEC hopes to create change. MEC’s solution is to use existing Microfinance Institutions (MFIs) and the recent developments in the carbon credit markets on the supply side to facilitate the adoption of clean energy at the BoP. According to Allderdice and Dailey, "Putting a significant portion of the world’s population on a clean energy path could have a huge impact in the long term, and is an opportunity that should not be wasted." Their idea has been well-received, by both the Tomberg Family Philanthropies and the judges at the Global Social Venture Competition, where MEC recently was awarded first prize. To provide financing on the ground, MEC will go through the MFI network, since MFIs are embedded in the community, especially rural off-the-grid communities that need decentralized solutions. This is a very timely post, as a recent post on NextBillion.net highlighted in CGAP Senior Advisor Katharine McKee’s article on microfinance and climate change, which said that "A number of respected MFIs and networks – including ACCION, BASIX in India and Equity Bank in Kenya – are exploring products to respond to climate change." MFIs have expertise in structuring deals, establishing appropriate loan repayment schedules and interest rates. According to Dailey, "MFI field officers meet with millions of households every week; they are a channel to market for financial services, and financed energy services are a natural outgrowth." MFIs such as ACCION and Grameen have also proven to be incredibly scalable, and they can spin off renewable-energy focused businesses; the most notable example of this has been Grameen Shakti, a member of the Grameen family that provides renewable energy technologies for rural households. Allderdice recently worked for Grameen Shakti, and says that it is "currently scaling faster than Grameen Bank was at year eight." The other piece of the puzzle on the supply side is to provide incentives to the MFIs through the evolving world of credits for renewable energy projects. Carbon finance is a valuable source of capital, yet it is a complex and evolving field that is difficult for the traditional on-the-ground MFI to tap into. In order to reduce the transaction costs of carbon financing, "MEC provides MFIs carbon revenues on a per unit basis for each system they finance. This gives them near term access to finance for the seed costs of starting an energy program. As their program scales up, they can pass on the subsidy to end users which enable them to achieve greater volume by reaching poorer clients." Allderdice and Dailey have developed two credit instruments, Microfinance-originated Carbon Credits and Millennium Development Goal (MDG) credits. With the first, MFIs can receive revenue when they lend for energy systems that create verified carbon emissions reductions, such as solar PV systems, improved cookstoves and biogas digesters. With the second, MFIs can receive MDG Credits when they lend for an intervention that enables an MDG household to meet all or part of an MDG. According to Allderdice, "There is no established market in MDG credits yet, but MEC is building the infrastructure to enable it." When I asked the founders about the possibility of using Kyoto-established Clean Development Mechanism credits, which I wrote about last month, they said that "MEC’s unique approach will create extremely high quality transparent, and verifiable carbon credits that will first be sold on the voluntary markets and as CDM policies evolve, MEC will be among the first to tap the CDM markets." Well, I guess that there is my answer for the possibility for CDM credits in the short-term. The hope for the future is clear – to put households and communities on a clean energy path that allows them to be owners of their own reliable and renewable systems. This is what Allderdice was able to see first-hand during her work with Grameen Shatki in Bangladesh: "some villagers now use solar for electricity, light, tv and radio and biogas for cooking and heating. They are full owners of their own energy generation, without being susceptible to the price of oil, or the fallibility of the electric grid. And they enjoy the environmental benefits of clean, silent, reliable, continuously renewing energy. As their income increases they are demonstrating a preference to buy another solar panel for a fan or a color tv — rather than switch to a diesel genset, or pay a high connection fee for unreliable grid connected service. Once they are on the clean energy path, there is less incentive to get off it." Editor's note: WorldChanging Guest Poster Grace Augustine is a Research Associate with the William Davidson Institute (WDI) at the University of Michigan. At WDI, Grace writes cases in international business, and has a particular interest in exploring market-based solutions to poverty alleviation, social entrepreneurship, and clean technology at the base of the pyramid (BoP). She holds a B.A. in Organizational Studies from the University of Michigan and has worked as a Business Analyst with Deloitte Consulting.