In Bangladesh 53% of the population are still not connected to the national grid and receive no electricity. The majority of those not connected are rural families and poor families who can't afford the connection. This isn't going to change in the near future and even when it does it will be at such a cost that the poorest will be unable to manage. Clearly one answer for the problem lies in solar energy. However existing solar power systems available in Bangladesh are too expensive for the poorer people to afford.
BANZAid is partnering with Dimensions Ltd in an innovative and exciting project to set up the production and sale of an affordable solar units for use in rural Bangladesh. Dimensions is a local engineering company established by Kiwi entrepreneurs. They have experience in backup and alternative power generation systems. They have experimented with solar power for small households, and have a product that is both cheap enough to be widely affordable and which will also provide income through the establishment of assembly and sale centres in selected village areas.
The project has received support from the Sustainable Development Fund (SDF) of the New Zealand Aid Programme, and has already attracted the attention of other groups who see wider potential for solar power units of this size.
In the decades of the 1970s and 1980s, following its independence from Pakistan, Bangladesh was often categorised as the ‘basket case' of world poverty. Civil war, natural disasters, political instability, one of the highest population densities in the world, and a lack of natural resources other than the natural fertility of the river delta soil were all factors contributing to the extreme poverty experienced by the people of Bangladesh.
Slowly but steadily Bangladesh has lifted itself from the ‘basket case' category. It is still among the poorer countries, but it is no longer right at the bottom of the heap! Bangladesh has joined the global market, getting into the garments manufacturing industry - mainly for the European and United States markets. Bangladeshi expatriate worker remittances are one of the highest sources of foreign exchange with an estimated 6 million Bangladeshis working in the Middle Eastern countries.
Rural Bangladesh still lags behind the rest of the country. The majority of the population is still rural, and it is this area where many are still in the under US$1 per day extreme poverty category. The national electric power grid does not reach 53% of the population. For many areas that do have access to the grid the supply is unreliable, and the cost of connection is beyond the reach of the poorest. National power production includes one small hydro scheme, some natural gas units, and the rest is oil burning, but the supply is far behind the demand.
This is the context for this project, which proposes to set up the manufacture of micro solar power lighting units at an affordable price for these low income rural households.
For the past 15 years New Zealand Baptist groups have been experimenting with business based approaches to working in the developing countries. The result of this has been the establishment of Marketplacers International Limited (MPIL). MPIL is 100% NZ owned, and is the parent company whose purpose is to mentor and facilitate local companies established in other countries.
Peter Mihaere, Chairman of the MPIL NZ Board says "[MPIL] has seven business enterprises across Asia and NZ from manufacturing & engineering to education & distribution. MPIL enterprises are fiscally responsible. Each are also responsible stewards of the environment, as they realise the need to be part of the answer not add to the problems. Each enterprise has a spiritual and social conscience so that those who work for us or who we work to help, are given every opportunity to receive the economic, social, spiritual and environmental uplift they are entitled to." MPIL company profits are not repatriated to New Zealand, but are further invested in the needs of the countries where they are working.
Dimensions Ltd in Bangladesh is one of these MPIL companies. Dimensions was set up by Kiwi entrepreneurs as a light engineering company based in Dhaka Bangladesh. They have specialised in backup and alternative power generation systems, and they have researched and developed the solar power unit which is proposed for this project. They need seed capital to enable them to set up the production and marketing of the unit. They have the vision to ‘spin off' the assembly, sales and maintenance of the units in a franchising type arrangement to generate local employment and income in the village where the units are being sold.
BANZAid sees this as a pilot project for exploring the wider opportunities for innovative partnerships with the MPIL companies. Here is an opportunity to combine BANZAid's development sector knowledge and skills with MPIL business mentoring experience and to bring into this the funding and ‘big picture' understanding of the New Zealand Aid Programme.
In Bangladesh 53% of the population is still not connected to the national grid and receive no electricity. The majority of those not connected are rural families and poor families who cannot afford the connection. This is not going to change in the near future and even if it does it will be at such a cost that the rural and urban poor will be unlikely to be able to avail themselves of the facilities. Clearly one answer for the problem lies in solar energy.
Our research indicates that existing solar power systems available in Bangladesh are too expensive for the poorer people to afford. They are 220volt systems designed to support the operation of TV and other electrical appliances, and they cost between Taka 15,000 and Taka 75,000 (NZ$300-$1500), and so are beyond the capacity of the really poor. See report here on a World Bank subsidised system that still costs the purchaser Taka 32,000.
Dimensions Bangladesh is a local engineering company established by Kiwi entrepreneurs. They have experience in backup and alternative power generation systems. They have experimented with solar power for small households, and have a product that is both cheap enough to be widely affordable and which could also provide income through the establishment of assembly and sale centres in selected village areas.
The product developed by Dimensions is based on a 12 volt system using LED light strips and will only have the capacity to provide lighting and mobile phone charging for a village household. The anticipated sales price for the unit is only Taka 7,500 (NZ$150).
Poor rural households in Bangladesh currently use kerosene or candles for lighting. This is costly and limits evening activity. Use of this lighting unit will improve study conditions for school age children, and will enable other productive household activity.
In this project BANZAid will partner with Dimensions to establish the manufacture, distribution and sales systems for this product. Phase two of the project will see the establishment of small business units to handle local assembly and sale of the units, including training of local entrepreneurs in the necessary manufacturing and business skills.
The success of the project will be in the acceptance and takeup of the solar units by village households in the target economic range.