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Building a Sustainable Energy Future for India

Building a Sustainable Energy Future for India. GHAR GHAR ME UJALA SAUR URJA SE Charan Singh Aryavart Gramin Bank 8 - 9 February 2010. " तमसो मा ज्योतिर्गमय ” “ Lead Me From Darkness to Light” ( Taken from Brhad-aranyaka Upanishad).

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Building a Sustainable Energy Future for India

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  1. Building a Sustainable Energy Future for India GHAR GHAR ME UJALA SAUR URJA SE Charan Singh Aryavart Gramin Bank 8 - 9 February 2010

  2. "तमसो मा ज्योतिर्गमय” “ Lead Me From Darkness to Light”( Taken from Brhad-aranyaka Upanishad) Aryavart Gramin Bank started working on this concept to bring Light in the lives of 14.86 million villagers residing in 8542 villages in its area of operation covering 6 districts ( Area 20396 sq. km) in the state of Uttar Pradesh (India). Out of these villages, 2504 villages have no electricity at all and in electrified villages also the electric supply is erratic and hardly for 6 – 7 hours in 24 hours thus leaving them in utter darkness in the nights. The life comes to complete halt after sunset in these villages. To achieve the objective of bringing light to these villages, a financing scheme in the name of “GharGhar Me Ujala Saur Urja Se” meaning “Every home to be lighted upon with the help of Solar Power” was developed and started in the year 2006.

  3. Salient features of the scheme • Name : GharGhar Me UjalaSauryaUrja Se • Objective : To light up the homes with Solar Home Light System (SHLS) • Purpose : To finance the cost of SHLS to rural households for improvement in their living environment, increase in income and conservation of energy & environment. • Eligibility: Households in rural, semi urban or urban areas, small business establishments (micro business), Hostels, hospitals, Restaurants etc. which have an assured source of income for meeting the monthly repayment commitments. • Quantum of loan: maximum loan amount shall be 85% of project cost. Rate of interest: At present 12% p.a. Type of Loan & repayment: Medium Term Loan repayable in 5 to 7 years in suitable EMIs (together with interest in Equated Monthly Instalments.) Security: Hypothecation of Solar Home Lighting System Insurance: Solar Home Lighting System is insured

  4. Our solution: Venus – 1 Solar Home Lighting System Hardware (Ready-to-use kit) consists of : • 35W solar panel (to be cleaned daily to remove dust and increase efficiency) • Low maintenance battery, 12V 40Ah • MCR charge controller • Two compact fluorescent lamps (CFLs), 9 watts each Power equipments that run with autonomy of 3 days, i.e., 1 Sunny & 2 non-Sunny days. It can power: • Two CFLs (can light for minimum 5 hours) • One mobile charger • One table fan • One black & white TV

  5. Solar Home Lighting System - Economics A villager presently uses minimum lighting of 2 hours for cooking and upto dinner time, which requires consumption of minimum 8 litres of kerosene per month costing Rs 280/- approx. at street price of Rs 35/_ per litre. Thus the borrower does not face any extra cost/burden. Instead he will spend Rs 35/- (280-245) less per month.

  6. After sales service • The scheme provides for Suvidha data (Business facilitator) for maintaining 100 SHLS. The Branch Managers will identify a willing local youth, who is trained by the Company/Dealer. He is provided a tool kit with financial support from the bank to maintain the systems. • The Bank pays him Rs. 10000/- per annum ( Rs. 500/- per month & Rs. 4000/- in lumpsum if he maintains 100 systems throughout the year. One percent of interest charged (12%) is utilised for meeting above cost. • To cater to the growing requirement of after sales service 10 SHLSs’ service centres have been established with financial support from Aryavart Gramin Bank using a part of Ashden Award money. The Bank has also extended financial support to rural youth for training and tool kits for maintenance of SHLSs, thus, creating employment at local level and preventing migration to urban areas.

  7. Quality Control To make the scheme acceptable to and for the benefit of common man, the Bank thought it prudent to look into following factors before launching project. The cost of the SHLS should be such that our common borrower would be able to afford it because the subsidy was not available in the scheme. SHLS should be of a reputed company of long standing andQuality of the SHLS should be indisputable . Understanding with TATA BP Solar The bank identified TATA BP Solar for supplying the SHLS to our customers. TATA BP Solar is a joint venture between TATA Power Company Ltd., a pioneer in the power sector in India and BP Solar, one of the largest Solar Companies in the World. Their model “Venus Solar Home Lighting System”, being cost effective was chosen as the product for village homes. The bank negotiated with the company to reduce the cost of aforesaid system to compensate for non availability of the subsidy. Since we had projected a demand of the SHLs in large quantity, the company agreed to reduce the price to Rs.13,520/- (including VAT).

  8. Steps taken by the Bank to promote the Scheme The Bank has organised several village level meets for raising awareness among the rural people about the benefits/advantages. The Bank organized workshops/Managers Conferences for imparting awareness and familiarization programmes to acquaint the staff members with the scheme and credit camps for bulk financing of SHLS. For demonstration of SHLS, few systems were first installed at prominent places like our branches, schools, and residences of some valued customers of the Bank. This had tremendous impact on the psychology of the villagers as ‘Seeing is Believing’. The help of Kisan Clubs (Farmers’ Clubs) was sought to popularise and spread awareness about the scheme among the farmers / villagers. Cash Incentive and appreciation letters were given to staff members who performed well in financing SHLS. The Ashden award money was utilised for setting up service centres and all these promotional activities narrated above.

  9. The Bank organised number of Credit Camps exclusively for financing SHLSs.

  10. Public Sector When the scheme was launched there was no financial or other support available from the Govt., but now the Ministry of New and Renewable Energy(MNRE) of Govt. of India has come out with a incentive scheme giving incentives to Banks/MFIs to support installations of SHLS and other small solar systems through loans. This incentive is given to those Banks and MFIs who have financed more than 3000 systems. The amount of incentive is based on the performance of the Bank/MFIs. Our Bank has been included in the group set up by Ministry of New and Renewable Energy, New Delhi, to finalise the modalities, to take initiative for financing Solar Light Systems through Banks.

  11. Timeline of the Project

  12. 28214 Solar Home Lighting Systems sanctioned so far will result in: 27,08,544 litres of kerosene 1. Assuming that there is an average consumption of 8 litres of kerosene per month, it will result in annual saving of (8 * 12 * 28214): Assuming that there are at an average 5 members per households, we have benefited (5 * 28214 ): 1,41,070 villagers 2. With capacity of 35 watt per Solar Home Lighting System, we have generated installed capacity of (35 * 28214): 3. 9,87,490 (0.99 Mega watt)

  13. 100% coverage of identified villages by Solar Home Lighting Systems. The bank has an ambitious plan to provide SHLs to the villages where either grid power is not available or power supply is erratic. To begin with the bank has covered nine villages namely 1. Badri purwa (Hardoi district), 2. Jhabaria purwa (Hardoi district), 3. Gondwa (Hardoi district), 4. Bannai (Hardoi district), 5. Ambaur (Barabanki district), 6. Khanpur (Barabanki district), 7. Shivrajpur (Barabanki district), 8. Ranjeetpur (Barabanki district), 9. Pataunja (Barabanki district). wherein 100% households have been financed with Solar Home Lighting Systems.

  14. Aryavart Gramin Bank has won International and National Awards,viz., “InternationalAshden Award 2008” “India Power Award 2009” • for its initiative in financing the rural folk for purchasing Solar Home Lighting System (SHLs).

  15. Our efforts in financing of SHLS have also been appreciated by • Government of India, RBI, NABARD, and Bank of India (Sponsor bank) NABARD has also issued a circular to all RRBs and DCBs in the country for replication of our scheme for financing SHLS.

  16. Solar Home Lighting System – Social Benefits Mitigating the darkness in the lives of villagers Life to them comes to halt after dusk

  17. Solar Home Lighting System - Benefits Sufficient Light to do household chores Children can study at night Besides entertainment value, TV has brought us closure to National & International events Increase in income due to extended working hours in night

  18. Solar Home Lighting System - Benefits Improving knowledge, thinking, lifestyle & business

  19. Carbon Credit Agreement Bank has signed an agreement with a US Company on trading Carbon Credit, which shall result in an income of approx. Rs 30 lakhs per annum for next five years at present scale of operations alone. We intend utilize this income to strengthen the after sale services, training, developmental and promotional activities. Aryavart Gramin Bank is probably the first bank in India to have carbon credits agreement.

  20. Challenges Faced Internal Challenges • Lack of awareness and Publicity among staff • Ensuring security of Advance External Challenges • Creating demand for SHLs • After Sales Service and repairs • Creating Awareness • Maintaining the systems We could overcome all these challenges by different promotional activities, setting up of service centres and by engaging Business Facilitators. The Ashden Award money proved to be a big relief to us in this respect, as we could utilise this money for all these activities.

  21. Future Plans The Bank has ambitious plan to finance 50,000 SHLs by 31st March,2011. By financing 50,000 Solar Home Lighting Systems the Bank’s Advance portfolio will increase by about Rs. 55 Crores. However, bringing light to 50,000 households or 2,50,000 persons will give us satisfaction of discharging our Corporate Social Responsibility. Presently, Bank’s 5 branches are successfully running on Solar Power backup. In the next three years i.e. from 2010 to 2013 we plan to replace Diesel Generator sets from 180 branches (1st year – 20, 2nd year 60, 3rd year 100) and bring them on Solar Power backup. With a average solar power generation of 3 MW per branch,, the total solar power generation in these branches will be to the tune of 540 MW. The Bank also plans to popularise already devised two more schemes namely “financing for purchase of Solar Water Heating Systems” and “financing for purchase of Solar Power Packs”from this year itself.

  22. Thank you for listening

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