endeva energize the bop 2011 new
TRANSCRIPT
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Eegiee BoP!
Cisia Gadl ad Claudia Kobloc
Eegy Busiess Model Geeao
o Low-Icome Makes
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E n E r G I z E t h E B o P !
Ackowledgemes
te auos would like o ak
eveyoe wo coibued o
is publicaio.
Partners
We would like o exed a special aks o ou paes:
The German Federal Ministry or Economic Cooperation and
Development (BMz, Budesmiiseium wiscalice
zusammeabei ud Ewicklug) ad E.ON Energie AG po-vided ei expeise ad acig o is publicaio.
MicroEnergy International, ogee wi Edeva, boug is
pojec o lie ad ougou e pocess as coibued ei
exesive kow-ow i povidig eegy sevices o low-icome
people.
te Wittenberg Center or Global Ethics ad e Vattenall-
Europe Endowment Chair Energy Management and Sustain-
ability coibued advice i seig up is pojec.
Academic panelSeveal academic expes coibued ei ime ad expeise o
e developme o is publicaio. We ae gaeul o:
Rahul Barua, VU Uivesiy Amsedam
Christoph Birkholz, Uivesiy S. Galle
Nicola Ursina Blum, Eth zuic
Noara Kebir, Uivesiy o Luxemboug
Dr. Malte Schneider, Eth zuic
Ronald Venn, Uivesiy o hambug
Research supportWe ae also idebed o ou aleed Edeva eseac associaes
wo ave made possible e collecio ad evaluaio o e
massive amou o eseac iomig is epo.
Katharina Kaesehage
Judith Mayer
Alyssa Rivera
Experts
Expes o iclusive eegy issues om cosulacies, academia
ad ogaisaios acive i e eld coibued o is publica-
io wi ei eedback ad by saig ei expeiece i ie-
views. We ae gaeul o:
Delphine Bazalgette, Plane Fiace Deusclad e.V.
Barbara Brner, Caopus Foudaio
Dr. Anil Cabraal, Cosula
Dr. Nicolas Chevrollier, BoP Iovaio Cee
Shantanu Dixit, Payas Eegy Goup
Mauro Fadda, E.On Climae & reewables
Lisa Feldmann, GIz Povey-Oieed Basic Eegy Sevices
Pogamme (hErA)
Christian Friebe, Euopea Busiess Scool
Jennye Greene, E + Co
Mark Hankins, Aica Sola Desigs (K) Ld.
Lars Holstenkamp, Leupaa Uivesiy o Lebug
Oliver Karius, LGt Veue PilaopyJim L. Koch, PD, Saa Claa Uivesiy
Stean Koch, E.On Eegie AG
Guido Konijnendijk, Cosula
Diana Krat, GIz
Saurabh Lall, Wold resouces Isiue
Laurent Liautaud, hysa
Matthew Lynch, WBCSD
Matthew McDermott, GIz
Jonas Naguib, GIz
Filippo Veglio, WBCSD
Suppoed by:
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Eegiee BoP!Eegy Busiess Model Geeao
fo Low-Icome Makes
Cisia Gadl ad
Claudia Kobloc
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E n E r G I z E t h E B o P !
WHY VENTURE INTO THELOW-INCOME MARKET?
HOW DO WE DO BUSINESS WITHLOW-INCOME CUSTOMERS?
WHAT RESOURCES ARE REQUIRED
TO DEVELOP A BUSINESS?
WHERE DO WE FIND
SUPPORT?
18
42
8
30
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Coe
Business CaseWhY VEntUrE IntO thE LOW-InCOME MArKEt? ........................................ 8
Use eeds .............................................................................................................................. 10
Make developme ........................................................................................................ 11
Make sie ............................................................................................................................. 12
Coecio ypes ad ecologies ...................................................................... 13
te saes ole ..................................................................................................................... 14
Paes .................................................................................................................................... 15
Busiess model .................................................................................................................... 16
Customer InteracehOW DO WE DO BUSInESS WIth LOW-InCOME CUStOMErS? .......... 18
how i woks ......................................................................................................................... 19
Geeal calleges ad soluios ........................................................................... 20
Sales ............................................................................................................................................ 22
Payme ................................................................................................................................... 24
Sevice ....................................................................................................................................... 26
Ed o poduc use ............................................................................................................ 28
Development ProcessWhAt rESOUrCES ArE rEQUIrED tO DEVELOP A BUSInESS? .......... 30
how i woks ......................................................................................................................... 31Poduc ..................................................................................................................................... 32
Make isig ...................................................................................................................... 34
huma esouces ............................................................................................................... 36
Fiace ..................................................................................................................................... 38
Support DirectoryWhErE DO WE FInD SUPPOrt? .............................................................................. 42
Poduc desig ..................................................................................................................... 44
Make isig ...................................................................................................................... 44
Fiacig ................................................................................................................................. 44
Cabo make ..................................................................................................................... 45
Plaoms ................................................................................................................................. 45Fue eadig ................................................................................................................... 46
Acoyms ................................................................................................................................. 47
Edoes .................................................................................................................................. 47
Appoac ................................................................................................................................. 48
Abou Edeva ........................................................................................................................ 50
Abou e Eegie e BoP aiig .................................................................. 50
Publicaio iomaio ................................................................................................ 51
LISt OF CASE StUDIES
SKG Saga, Idia
page 23
La Elecicidad de Caacas (EDC), Veeuela
page 25
temasol, Mooccopage 27
Sulabob, Laos
page 29
Bosc ud Siemes hausgee Gmbh
(BSh), Pilippies
page 33
d.lig desig, Aica & Asia
page 35
lecici de Face SA (EDF), Malipage 37
Selco, Idia
page 39
SPOtLIGht
Accessig e cabo make
page 40
develoPPP.de Developme
paesips wi e pivae seco
page 41
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E n E r G I z E t h E B o P !
A leas 250 busiesses ave aleady bee esablised o povide
eegy sevices o cosumes a e base o e global icome
pyamid (o BoP). I ac, may moe pobably exis, as ese
ae simply e documeed cases we ave oud i e couse o
ou Eegie e BoP eseac. Bu i is is ue, ow is i pos-
sible a 1.4 billio people sill lack access o eleciciy? Wy
ave so ew o ese busiesses gow o a lage scale?
te easo, ad e impeus o is guide, is a mos busiess-
es ageig e BoP do o ave a susaiable busiess model.We see e same misakes beig made ove ad ove agai. too
may o ese veues se o o ee e make wi used,
lile o eve o make eseac ad ail o coside ow sales
ad sevice pocesses ca suppo ei ecology. too may
also ail o coside e kid o uma esouces eeded o gow
ei busiess i local coexs. neveeless, we absoluely be-
lieve i e powe o busiess o eegie e BoP. tis guide is i-
eded o sege is powe by suppoig eepeeus i
akig e ig seps owad doig susaiable busiess i e
BoP. I is coceived as a busiess model geeao o ose ad-
dessig e BoPs eegy make i paicula. Dawig upo e
documeed expeieces o 250 busiesses, 35 o wic we aveaalysed i dep, e geeao is divided io ou capes:
Business Case peses e aioale o veuig io e
low-icome make.
Customer Interace sows ow o ieac wi low-icome
cusomes.
Development Process povides advice o saig, impleme-
ig ad gowig a busiess.
Support Directory collecs useul coacs ad liks.
We ae o aloe i ou passio o eablig eegy busiesses.
As soo as we esablised is pojec, eseaces ad ogaisa-
ios bega appoacig us, askig o be pa o i. Oes joied
a ou eques. te log lis o ackowledgemes impessively
illusaes is eusiasm. We ak evey oe o ese paes
o coibuig ei expeiece, acial esouces ad ime.
te poduc o ese combied eos is a vey pacical guide.
I is aimed a paciioes wo age low-icome cosumes o-
day, o wo pla o move i is diecio. te coe souldpove useul o compaies o all sies ad backgouds, om
e sa-up o e lage uiliy, om compaies oeig gid co-
ecios o mii-gids o ose sellig o-gid appliaces suc as
lamps o soves.
Like ay eliable guide, e geeao coves e mos impoa
acos o coside. howeve, because e BoP eegy make
is a emegig make, is guide is ecessaily icomplee. As
compaies coiue o iovae ad expeime, we coiue
o lea. We eeoe ecouage all eades o add o e kow-
ledge peseed ee by saig you expeieces wi us via
email. You aaives will o oly be iegaed io ou aiigpogamme, bu will elp sape e uue o eegy busiess a
e BoP.
Sincerely,
Christina Gradl and Claudia Knobloch
[email protected] [email protected]
Poo:SusaeUlleric
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Foewods
Dea Eepeeus,
As you ca ell om is ame, e Fedeal Miisy o Ecoomic
Coopeaio ad Developme (BMz) cosides ecoomic co-op-
eaio a iegal compoe o developme policy.
tee ca be o susaiable developme wiou susaiable
ecoomic developme. We eeoe ecogise e busiess
seco as a esseial pae. Compaies develop poducs ad
sevices a eace e qualiy o lie o millios o people
evey day. howeve, low-icome populaios i developig ademegig ecoomies oe ave o access o ese poducs ad
sevices. We i comes o eegy, 1.4 billio people woldwide
lack access o eleciciy ad a eve lage umbe ely o a-
diioal biomass o cook ad ea ei omes. Iclusive busi-
ess models ca poduce iovaive soluios a povide low-
icome ouseolds wi access o eegy i cos-ecie, sae
ad susaiable ways, wile ceaig oppouiies o scale-up
value cais i ou pae couies. Fo eepeeus doig
busiess i demadig eviomes, e calleges ae gea,
bu o isumouable.
tis publicaio guides you oug e busiess model devel-opme pocess ad oes pacical advice. Ceaive soluios
aleady ude way by compaies successully sevig base o
e pyamid cusomes ae sowcased ee. We ope a ese
examples ad e iomaio povided ee will suppo ad
ispie you o ceae ad impleme iclusive eegy busiess
models a bee you ad you cusomes.
Hans-Jrgen Beereltz
Sae SeceayFedeal Miisy o Ecoomic Coopeaio ad Developme (BMz)
Eegy makes aoud e wold ace eomous calleges.
Povidig climae-iedly ad aodable eegy ae e calls o
acio. te eegy idusy beas a paicula esposibiliy o
iclude wii ese makes e millios o people woldwide
livig a e base o e pyamid (BoP).
te eegy seco ca pomoe susaiable developme i
ese makes by applyig sma ecologies ad bee busi-
ess models. We ca also deepe ou kow-ow by leaig om
e eeds ad cosais o people livig a e BoP. tis divesiovaio i developig poducs ad sevices aued o ese
makes.
As a ieaioal povide o eegy soluios, E.On daws upo
a boad age o expeiece ad ecical expeise i e aeas
o eegy geeaio ad supply. tis sudy addesses ue
impoa issues egadig makes i developig ad emegig
ecoomies. A e same ime, i povides E.On wi valuable i-
sigs ad pacical ecommedaios. As a paciioes guide,
is publicaio elps us evaluae e ioducio o ou compe-
ecies io ew makes esposibly ad susaiably.
E.On is commied o povidig cleae ad bee eegy o all
makes ow ad i uue. te goal is o pomoe viable busi-
esses a ceae a wi-wi siuaio. Soud eegy soluios
sould expad e scope o oppouiies o e people a e
base o e pyamid as well as e compaies ivolved.
Eegiig e BoP also meas eegiig e uue. tis is a u-
ue we aim o sape susaiably.
Pro. Dr. Klaus-Dieter Maubach
Membe o e Boad o Maageme E.On AG
reseac & Developme, new Build & tecology,
Copoae resposibiliy, heal/Saey & Eviome
Poo:BMz
Poo:
AdreasPolma/E.O
n
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E n E r G I z E t h E B o P !
BusiessCase
Poo: Pilips
Wi is lamp om Pilips Ligig, isyoug sude ca do is omewok aesuse wiou exposig imsel o e
polluas geeaed by keosee lamps.
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WhY VEntUrEIntO thE LOW-InCOME MArKEt?
1.4 billion people around the world lack access to electricity, while 2.7 billion people cook with traditional biomass.
This energy poverty hinders economic and social development.
The 4 billion people living on less than $3,000 per year spend $433 billion per year on energy.
Technical solutions providing clean, aordable and reliable energy services to this target group already exist.
Leaprogging is possible.
Developing sustainable business models is the key to entering low-income markets.
ESTABLISHEDMARKETS
LOW-INCOMEMARKETS
2.7 billio people cook ad ea wi
adiioal biomass
1.4 billio people do o ave access o
eleciciy
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B U S I n E S S C A S E
Access o clea, aodable ad eliable eegy is a udameal
dive o ecoomic gow, eviomeal susaiabiliy ad
social developme. Jus as ames eed pumps o iigae ei
elds, ad woksops eed eegy o powe macies, sevicepovides equie compues ad elecommuicaio devices i
ode o povide mode sevices. hospials, oo, eed eegy o
keep vaccies cool ad u mode opeaig ooms. Eegy also
uels e uue by allowig sudes o sudy io e ig wi
pope ligig. tVs ad adios iom ad eeai, wile mod-
e domesic devices suc as eigeaos ad soves educe
womes budes ad elp aise sadads o livig.
neveeless, billios o people lack access o clea, aodable
ad eliable eegy: 1.4 billio ave o access o eleciciy ad
mus ely o cadles o keosee o lig ad diesel o poduc-
ive uses. te lowes elecicaio ae is oud i sub-Saaa
Aica, wee oly 31% o e populaio as access o elecic-iy. Aoud 76 millio people i nigeia ad 68 millio i Eiopia
lack coecio o eegy supplies. Aoud e wold, 2.7 billio
people cook o adiioal ee-soe es usig wood o dug.
Mos live i ual egios o emegig ad developig couies.2
Use eeds: 1.4 billio wiou access o eleciciy
te adiioal use o biomass ad peoleum-based uels caies
a umbe o seious disadvaages:
Fumes om idoo es cause eal poblems. te Woldheal Ogaisaio esimaes a evey yea ealy 2 millio
people die om diseases elaed o idoo smoke maily
cilde ad woma wo pepae meals.3
I addiio o eal poblems, collecig wood cosumes
ime a could be used poducively o o educaioal pu-
poses. Gils ad wome all ove e developig wold sped
ous eac day collecig ewood.
Ususaiable avesig o wood ad oe biomass accele-
aes deoesaio, causig a loss o biodivesiy ad absop-
ive capaciy o CO2. Black cabo om icomplee combus-
io o ossil uels o biomass also coibues o climaecage.4
Eegy om keosee o cadles is muc moe expesive a
eleciciy om e gid; e disadvaaged pay expesive
aes o low-qualiy sevices. te ig cos ides ecoomic
poduciviy.
I may couies, e public seco is uable o povide eegy
sevices o low-icome ouseolds. te exesio o powe gids
o emoe aeas ca be acially ueable due o low popu-
laio desiy ad low cosumpio levels. Pivae compaies
eeoe play a impoa ole oe i collaboaio wioe sakeoldes suc as nGOs ad govemes i sevig
e eeds o e ucoeced.
Figure 1
People without access to electricity
(i millios, 2009)
Souce: IEA/OECD (2010) Eegy Povey Souce: IEA/OECD (2010) Eegy Povey
Figure 2
People relying on the traditional use o biomass or cooking
(i millios, 2009)
Latin America 31
Arica 587
China 8
Other Asian
countries387
India 404
Latin America 85
Arica 657
China 423
Other Asiancountries
659
India 855
Total1.4 billio
Total2.7 billio
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E n E r G I z E t h E B o P !
te global eegy make a e base o e ecoomic pyamid is
aleady vas, ad will gow ue i e decades o come.
te global populaio is iceasig a a ig ae. Fom odaysalmos 7 billio people (2011), i will ise o moe a 9 billio i
2050, e Un esimaes. Viually all o is gow will ake place
i emegig ad developig couies, ouside e OECD.5 te
global uba populaio will double as ciies expeiece a dis-
popoioae sae o is populaio icease.6
Accodig o e new Policies Sceaio o e Ieaioal E-
egy Agecy, 1.2 billio people i 2030 will sill lack access o elec-
iciy.7 te global elecicaio ae will ise om 79% i 2009 o
85% by 2030 bu wi pooud egioal dieeces. Weeas
Cia will eac uivesal elecicaio, oly 50% o people liv-
ig i sub-Saaa Aica will ave access o eleciciy. I abso-
lue umbes, aoud 650 millio Aicas will be wiou accesso eleciciy.8 Iovaive appoaces will be equied o close
is gap. take ogee, ese gues sow ee is a uge ad
gowig poeial make o compaies a supply clea, a-
odable ad eliable eegy sevices o low-icome ouseolds.
Govemes i developig couies ae wakig o e poe-
ial o pivae eegy sevices o is age goup. te Idia
goveme, o example, esablised a aioal goal o uive-
sal access o eegy wi is rual Elecicaio Policy i 2006.I ode o acieve is aim, i ceaed a umbe o ew acig
aagemes, icludig subsidies o e isallaio o eew-
able eegy plas.
Small ad lage compaies ae espodig o e demad. how-
eve, mos o e busiess-dive eegy pojecs a e base o
e global icome pyamid ave ye o gai sigica scale.
te ladscape o playes is divese, agig om muliaioal
compaies ad lage uiliies o small ad medium-sied eew-
able eegy compaies, o social eepeeus om developig
couies, o spi-os om desig cees a uivesiies.
Make developme: isig populaios, gowig poliical suppo
Figure 3
Population growth, 19502050
(i millios)
Figure 4
World population without access to energy,
2009 and 2030
(i millios)
Souce: IEA/OECD (2010) Eegy PoveySouce: Un Populaio Divisio (2008) Wold Populaio Pospecs: te 2008 revisio
LATIN AMERICA
2009 2030
274 8
2
SUB-SAHARANAFRICA
2009 2030
465
120
544108
INDIA
2009 2030
38123
28112
CHINA
2009 2030
0
800
OTHERDEVELOPING
ASIA
2009 2030
32859
21240
rualUba
1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050
10,000
9,000
8,000
7,000
6,000
5,000
4,000
3,000
2,000
1,000
Uba less developed
rual less developed
Uba moe developed
rual moe developed
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B U S I n E S S C A S E
Mos people wiou access o eleciciy live i poo pas o
emegig ad developig couies, i slums ad ual aeas. te
4 billio people a live o less a $8 pe day (adjused o lo-
cal pucasig powe paiy) sped a esimaed $433 billio oeegy pe yea, accodig o IFC ad WrI esimaes. tese nex
4 Billio make up e base o e global icome pyamid, o e
BoP. te lages egioal make is Asia (icludig e Middle
Eas), wi aual spedig esimaed a $351 billio amog a
oal o 2.9 billio people.
nex o ood ad ousig, eegy is e bigges expese o low-
icome ouseolds. A aveage 9% o e oveall BoP ouseold
expediue is spe o eegy. houseolds wi a aual i-
come o up o $500 sped a aveage o $148 pe yea o eegy,
equivale o aoud $0.40 a day. tose eaig bewee $1,000
ad $1,500 pe yea sped ealy $1 a day. tese pe-cusome
amous ae compaaively small, bu i sum ey epese amake o sigica sie.9
Make sie: almos al a illio dollas
I some couies, e BoP compises e lages sae o e e-
egy make. I accous o 90% o spedig o o-commecial
eegy i couies suc as Idoesia ad nigeia, ad moe a
50% i couies suc as Bail, Idia ad Ugada.
10
A commo peomeo i low-icome makes is e povey
pealy. tis ees o e ac a poo people ave o sped
moe a wealie oes o e same poduc o sevice. A
sudy peomed by MicoEegy Ieaioal sowed a 1
kW coss $2.30 i ual Baglades, compaed o abou $0.30 i
Wese Euope.11 te cos o ligig ca also be muc ige,
as sow i a epo om Guaemala o 2000. I a yea, 1 kW
o lig cos $0.08 om e gid, $5.87 om keosee ad $13.00
om cadles.12 People i ese coexs ae eeoe well pe-
paed o pay aodable sums o clea, eliable eegy sevices.
Mos eegy-elaed expediue is ocused o cookig, eaigad ligig. Wile eegy o cookig ad eaig is oe po-
vided oug e adiioal use o biomass, suc as wood o
cacoal, low-icome ouseolds geeally use paa cadles
ad keosee lamps o lig. Spedig is vey fexible o all o
ese uels, as poducs ad sevices may be pucased i mico-
amous. As BoP icomes ae o oly low, bu ypically also i-
egula, low-icome cosumes ed o value is fexibiliy. tis
compeiive advaage is wo cosideig we developig
picig models o iclusive eegy busiesses.
Figure 5
Energy expenditures o those withannual incomes below $3,000
(i billio $ PPP, 2006)
Figure 6
Cost o 1 kWh electricity
(i $)
Souce: WrI/IFC (2007) te nex 4 Billio. Souce: MicoEegy Ieaioal
BANGLADESH
GERMANY
0.30 $
2.30 $
Arica 26.6
Eastern Europe 25.4
Latin America 30.5
Asia 350.9 Total$433 billio
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E n E r G I z E t h E B o P !
Compaies use a vaiey o ecologies o povide low-icome
ouseolds wi clea ad aodable eegy. Wi egad o e
busiess model, e coecio ype is moe impoa a e
way e eegy is poduced, as i dees ow e compay willieac wi e cusome.
Grid connection: Fo ouseolds, public commuiy acili-
ies o local small busiess a ae easoably close o exis-
ig asmissio ad disibuio lies, geig coeced o
e gid may be e bes ad mos ecoomical opio. Uses
ypically pay a oe-o ee o e iiial gid coecio, ad
eeae a moly sevice ee based o e eleciciy ey
use. Povides o suc sevices ave geeally bee exisig
uiliies i developig couies. I Sou Aica o example,
ESKOM as coeced 3.8 millio ouseolds o e gid sice
1991.13 tese eleciciy povides oe d iovaive ways
o collec payme, ioducig iems suc as pe-paid cadso collecive mees o a eie eigbouood. May uilise
social ewoks o icease e acial susaiabiliy o ei
eos, o example by paeig wi exisig co-opeaives
o commuiy ogaisaios o ogaise coecios o a lo-
cal level.
Mini-grids: remoe villages ca be elecied by seig up
small powe plas a povide eoug eegy o e vil-
lages ouseold ad poducive eeds. Mii-gids ae usually
u eie by a local eepeeu o a village co-opeaive, bu
lage compaies ca also d a busiess case ee. Fec
eegy povide EDF developed wo mii-gids i Mali i pa-esip wi a leadig Duc eegy compay, nUOn. te
ecologies used o geeae e powe age om biomass/
biogas o ydo o sola eegy, o i some cases, a combia-
io o diee souces o e applicaio o ybid sysems (a
combiaio o ecologies). reewable eegy souces ae
oe backed up by a diesel geeao i ode o esue a 24/7
eegy supply.
O-grid systems and appliances: I some cases, mii-gids
cao be opeaed poably i ual aeas due o e small
umbe o poeial cusomes, geogapical cosais
o e icome sucue o e commuiy. O-gid sysemsca play a key ole i ese coexs. Suc sysems (o appli-
aces) povide a sigle ouseold wi eegy. Fo example,
sola ome sysems isalled o u ooops ca povide
eoug eegy o lamps ad o cagig mobile poes. I
oe cases, sola-poweed lamps ca povide ligig, ad
impoved cooksoves poweed by gas o oil ca make smoke-
ee meals possible. tese poducs ae equely poduced
locally ad sold by e poduces emselves, o oug sales
ages o local eailes a oe also povide pos-pucase
sevice ad esue e collecio o paymes. te make o
o-gid sysems ad appliaces is quie divese, aacig a-
eio om esablised muliaioal copoaios (MnCs)
suc as Pilips ad Sell ad iomal eepeeus alike.
Aloug e coecio ypes peseed ee equie vey di-
ee busiess models ad cusome appoaces, iclusive e-
egy eepises ecoue may simila issues ad soluios
alog e way. te isigs colleced i e capes Cusome
Ieace ad Developme Pocess ca eeoe iom e
aciviies o a boad age o iclusive eegy povides.
Coecio ypes ad ecologies: o e gid, o e gid ad mii-gids
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B U S I n E S S C A S E
Eegy is eavily egulaed ad subsidised aoud e wold.
Govemes ave a vial iees i secuig uivesal eegy
povisio, because i is a peequisie o ecoomic gow, so-
cial developme ad equaliy. Fo is easo, eegy geea-io ad disibuio was o may yeas moopolised by pub-
lic compaies. Ideed, may o odays eegy uiliies ae sill
public compaies o ave oly bee ecely pivaised. Gove-
mes ad aioal egulaios coiue o play a cucial ole i
e seig up o a eegy busiess.
Paiculaly i developig couies, wee access o eegy is
o uivesal, govemes oe se up policies a povide i-
ceives o e pivae seco o ives i elecicaio o ual
aeas ad slums. Fo example, Idias rual Elecicaio Policy
o 2006 esablised a aioal goal o uivesal access, assiged
esposibiliies o implemeaio ad ceaed ew acig
aagemes a beeed e pivae seco.
Aoe dive o egulaio is e eed o comply wi iea-
ioal limis o CO2
emissios. tis is a impoa moivaio
i emegig ecoomies suc as Cia o Idia, wose ecoomic
gow as led o a as-iceasig demad o eegy. I ese
cases, acoies ad e middle class ae e lages coibuos
o emissios ad ca eeoe ave e lages impac i mii-
misig emissios. howeve, people a ae o ye coeced o
e gid ca leapog o e use o eviomeally iedly e-
egy souces. tis idea is suppoed by may o e ieaioal
public ogaisaios ad doos a suppo govemes i
developig couies i ceaig a eviome suppoive oeewable eegy use.
tee ae seveal useul ools i exisece a elp compaies
d ei way oug e muliude o policies. Fo example, e
global policy ewok rEn21 oes a oveview o eegy poli-
cies, wi a ocus o eewable eegy all aoud e globe.14
te saes ole: povidig access, secuiy ad iceives
Goveme acio suppos pivae ivesme i eegy po-
visio i ee diee ways: by povidig make access, i-
ceasig ivesme secuiy ad oeig diec iceives o
ivesme. Pivae compaies will oly develop busiess o alage scale i ese acos collecively coibue o ceaig a
welcomig, busiess-iedly eviome. Eac is examied i
moe deail below.
Market access: Uideed access o eegy makes is a
peequisie o all compaies i e eegy seco, o oly
o ose sevig low-icome makes. tis is ue bo o
domesic ad oeig compaies. Govemes eed o ope
up eegy makes o pivae ivesos i ode o allow com-
peiio ad aac oeig diec ivesme. Public pivae
paesips (PPPs), wee e sae coacs e povisio o
sevices ou o pivae compaies, ave bee equely used
as a mode o make access.
Security: Pivae compaies eed o be able o calculae ad
maage isks. Ivesos seek poliical sabiliy ad eliable,
log-em egulaio o issues suc as eed-i ais. te se-
cuiy o ei ivesmes wi espec o eves suc as e
aioalisaio o compaies is also a cucial coce.
Incentives: Subsidies i e om o gas, iees-ee loas
o ax olidays o ual elecicaio ad clea eegy po-
visio suppo busiess models a mig o oewise be
poable om e sa, especially wee ey equie lage
levels o ivesme. te pomoio o climae-iedly eegysoluios is suppoed oug aioal, egioal ad global
cabo makes suc as e Clea Developme Mecaism
(CDM) ude e Un Kyoo Poocol.
I addiio o ioducig policies addessig eegy povisio
diecly, govemes ca impove e geeal busiess evi-
ome o compaies by eacig iasucue, culivaig
kowledge ad skills amog e populaio, ad aciliaig ac-
cess o omal makes o low-icome people.
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to eac low-icome commuiies, busiesses ypically wok
wi paes. Oe eoug, eve domesic compaies om de-
velopig couies do o ave exesive expeiece doig busi-
ess wi people i povey i a eviome a lacks basiciasucue, acial sevices ad cosume lieacy. nGOs,
micoace isiuios (MFIs) o co-opeaives ae usually e
paes o coice because ey equely maiai opeaios
o e goud ad ave sog local ewoks a eac ou o
people i povey.
Non-governmental organisation (NGOs): nGOs ae missio-
dive ogaisaios aimig o acieve social o ecological
objecives. May umaiaia ad eviomeal nGOs i
developig couies ae ivolved i e eegy busiess be-
cause i is so ieliked wi opics suc as eal, educaio
ad climae cage.
By paeig wi compaies, nGOs may pusue log-em
viabiliy ad gai a muc lage scale a would be possible
wiou e ecoomic powe o e compaies. tey ca po-
vide ei age goups wi susaiable eegy soluios a
solve addiioal poblems suc as e pevalece o smoke-e-
laed diseases, o wic ga people access o mode meas
o commuicaio.
Compaies bee om suc collaboaio because nGOs ca
elp cay ou make eseac, o aise awaeess o e be-
es o mode eegy soluios, assis wi e disibuio o
poducs, ad ai sales pesoel.15
Paes: combiig capabiliies, magiyig success
Micronance institutions (MFIs): MFIs oe loas agig
om $10 o $1,000, wiou askig o collaeal i e mae
o a coveioal bak. Oe o e classic models is e goup
loa, wee a goup o boowes beas collecive esposibil-iy o e cedi. Idividual ledig models also exis. Boow-
es iclude wome wo ideally ives e moey i saig a
small busiess o i impovig e poduciviy o ei am.
MFIs play a impoa ole i acig all kids o ives-
mes i slums ad ual aeas.
Some MFIs ave discoveed eegy soluios as a ew seam
o eveues, ad as a way o suppo ei ow cusomes ge-
eaio o icome. MFIs ca ioduce soves, laes o sola
ome sysems as complemeay poducs io ei poolio,
us divesiyig ei busiess eveues.
Eegy busiesses oe coose o pae wi MFIs i odeo povide ei cusomes wi easy access o cedi o ace
ig up-o ivesmes suc as a o-gid sola pael o a
gid coecio. Someimes, MFIs ake o oe oles suc as
sellig eegy sysems o povidig ae-sales sevice diecly.
Co-operatives: Co-opeaives ae ogaisaios i wic mem-
bes ave come ogee o a commo pupose suc as e
pucase o sale o goods ad sevices. Fames co-opeaives
ae a widely used model i developig couies a aciliae
access o makes. Co-opeaives usually esue ig ad eli-
able poduc qualiy by povidig aiig ad ceicaio o
ei membes. tese bodies ae eeoe oe ieesed ipovidig ei membes wi ways o impove poduciviy.
Co-opeaives play a ieesig ole i e eegy seco i
wo ways. O e oe ad, ey ca be used as a pae o
e disibuio ad sale o sola ome sysems o appliaces
suc as laes. O e oe ad, co-opeaives ca also be
omed o opeae a mii-gid, o eve o ogaise disibuio
ad paymes o gid coecios.
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B U S I n E S S C A S E
A busiess model descibes ow a busiess ceaes value. I de-
pics ow e m ieacs wi e acos i is ecosysem,
icludig is cusomes, supplies ad busiess paes. Moe
pecisely, i dees e value poposiio o e busiess o eaco ese acos ad ow asacios wi em ae ogaised i
ode o alig iceives.
te ea o ay successul busiess is a value poposiio a
uly mees e eeds ad was o is cusomes. Eepeeus
oe build ei busiess idea o a specic ecology wiou
ciically assessig i ad ow is ecology ca ceae value
o cusomes, wa ei aleaives ae, ad by wic cie-
ia ey assess ei aleaives. Fo example, may busiesses
ave ecoueed elucace amog cusomes o pucase
clea cooksoves because o culual peeeces ad adiios.
Sola cookes also ave o value o uses wo wa o cook i
e eveig we i is dak. A deep udesadig o e pee-eces o oes cusomes mus eeoe be e saig poi o
ay busiess developme.
Busiess model: a clea value poposiio o all sakeoldes
tasacios wi cusomes epese e mos uusual cal-
lege associaed wi buildig a ew busiess model i low-i-
come makes. Cusomes ae ypically embedded i make e-
viomes a ae o oly ew o may busiesses, bu alsodicul by may sadads. te slums ad villages i developig
couies oe lack e codiios a make busiess i moe
developed makes smoo, ecie ad ecoomically viable. I
developig couies, make iomaio is scace, pysical i-
asucue suc as oads ae oe poo, ad legal amewoks
ad eoceme mecaisms ae udedeveloped ad ueli-
able. Fuemoe, low-icome cusomes i ese aeas lack i-
omaio, ad sevice povides able o ogaise ayig om
acial asacios o logisics ad eail may simply o ex-
is. I so, e cos o doig busiess i low-icome makes is
ypically ig. A e same ime, low-icome ouseolds ave a
vey limied budge o spedig o eegy, ad d i dicul
o make ig up-o ivesmes due o e ig cos o adlimied access o cedi.
A successul busiess model a e BoP mus d iovaive
ways o ieac wi is cusomes wiou spedig moe a
wa e deal is wo. teeoe, e desig ad ogaisaio
o e cusome ieace is e ocus o e secod cape.
Fou ypes o ieacios ae ciical: sales, paymes, sevice,
ad ed o poduc use. te eegy busiesses aalysed i is
eseac ave developed a umbe o pomisig soluios o
ypical issues ad ca seve as a ispiaio o oe busiess
models.
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A busiess evolves ove ime. Eve oug e basic value pop-
osiio may emai e same, pocesses eed o be adaped as
e busiess gows i ode o eable geae eciecy. I is o
always easy o ave all e ecessay esouces o gow iplace a ay oe ime, amely acig, uma esouces, ma-
ke isig ad poduc. te id cape eeoe summaises
pomisig appoaces o developig ese esouces om e
desig pase o e implemeaio ad gow pase. te
ou cape seves as a eeece guide o e boad age o
ogaisaios ad paciioes wi expeise i aeas agig
om ace o capaciy buildig o desigig busiess sae-
gies ailoed o low-icome makes.
Figure 7 :
Schematic overview o the business model generator
SALES
PAYMENT
PRODUCTHUMAN
RESOURCES
MARKETINSIGHT
FINANCE
COSTUMERINTERFACE
Cape 2
DEVELOPMENTPROCESS
Cape 3
VALUE PROPOSITION
SUSTAINABLE BUSINESS MODEL
SERVICE
END OFPRODUCT USE
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E n E r G I z E t h E B o P !
CusomeIeace
Photo: The Ashden Awards
d.light sales representatives demonstratingthe solar lamp Nova D.Light at a stall inChamieyani, India. They explain the advan-tages o the lamp to convince potentialcustomers o the products benets.
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how i woks
Wa mos dieeiaes busiess i low-icome makes om
busiess i moe upscale makes is e ieacio wi e cus-
ome. Limied iasucue, iomal makes, a lack o acial
sevices ad oe cosais icease asacio coss ad
limi e applicabiliy o sadad busiess models. te geeao
eeoe coceaes o busiesses ieaces wi ei cus-
omes. how ca you covice e cusome o you poducsvalue i ey ave eve ead o eewable eegy? how ca you
esue paymes we you cusomes lack access o a bak ac-
cou ad ave limied cas fow? how ca you povide eliable
sevice we ee is o cusome suppo i place? Ad wa
appes wi you poduc a e ed o is lieime? Is i eused,
ecycled o jus ow away?
tis cape ideies e mai cosais busiesses ace i
eac o e ou key cusome ieace aeas sales, payme, se-
vice ad ed o poduc use. I also liss saegies ad cocee
soluios a ave poved successul. Paciioes ca apply
ese ideas o ei ow veues ad use em o ceae a ew
busiess model o impove o a exisig model. te ex wo
pages summaise e geeal pae o calleges ad soluios,
wic is lae applied o eac eleme i moe deail.
Fo eac eleme o ei busiess model, eades o e geea-
o sould ask emselves:
Wa cosais do we ace wi ou busiess?
Wic o e soluios ca we apply o ou busiess, ad wic
soluios addess e cosais mos eecively?
Sep by sep, uses ca desig a cusome ieace able o deal
wi ypical issues i low-icome makes. te ou seps evolve
aoud e ollowig mai quesios:
hOW DO WE DO BUSInESS WIthLOW-InCOME CUStOMErS?
Interactions with customers are ocused on our main areas:
sales, payments, services and dealing with products at the end o their use.
Companies oten struggle with challenges in the market environment, in particular with regard to inormation about the market,
regulatory burdens or complications, shortcomings in physical inrastructure, gaps in customers knowledge and skills, and the
limited access to nancial services.
The generic strategies to address these problems include engaging in market research, providing customer service, ensuring local
representation, educating stakeholders and nding innovative nancing solutions.
Figure 8
Elements o the customer interace
Souce: Edeva
SALES
PAYMENT
how ca we commuicae e value o ou
poduc o e cusome?
Wo sells ou poduc, wee ad ow?
how ca ou cusomes aod e poduc?
how ca ou cusomes bes pay o
e poduc?
how ca we povide eliable sevice
a low cos?
how ca we avoid wase ad polluio?
how ca we eace e
value o used poducs?
SERVICE
END OFPRODUCT USE
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C U S t O M E r I n t E r F A C E
Geeal Busiesses ace udameal calleges i low-icome makes ad adop boad
saegies i acklig ese poblems. tese geeal calleges ad soluios ae
evisied ougou e secios o eac o e ou ieace elemes sales,
paymes, sevice ad e ed o poduc use. Udesadig is pae ca elp
paciioes develop ei ow iovaive soluios.16
Market inrmatin
Cusome pole iomaio is limied (om e pespecive o peeeces,
cicumsaces ad spedig paes, o example).
Eegy makes ae igly egulaed. Make eviomes ad egulaoy
pocesses oe lack aspaecy, especially o oeig eas.
Reulatry envirnment
People lack legal lad iles, leadig o coac ad cedi issues.
Due o pevious bad expeieces ad a lack o omal poecio,
cusomes oe lack us i ewcomes.Coacs wi cusomes o coiuous sevice ae dicul o eoce
oug omal pocesses.
A lack o secuiy iceases e isk o e ad damage o equipme.
Gaiig ocial appoval o isallaios (seig up small gid sysems,
o example) ca ake cosideable amous o ime.
Physical inrastructure
People i emoe aeas ae ad o eac, wic iceases e cos o isallig
ad maiaiig equipme (due o e lack o oads o poe coecios,
o example).has aual eviomes ca cause damage o equipme.
Skills and knwlede
Compaies d i dicul o ecui ad eai skilled sa.
Cosumes lack awaeess o poducs ad sevices ad ei bees.
Cusomes lack e skills o isall, maiai o epai equipme.
Access t fnancial services
Cusomes d i dicul o obai cedi o ace ig up-o coss.
Cusomes do o ave access o bak accous oug wic o
make paymes.
Cha
llen
g
es
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Cnduct market research
Coduc make eseac wi sadad ad specialised meods a di-
ee imes o e day ad yea (usig ools suc as ome says,
eld ips, ec.).
tes e poduc wi cusomes.
Build pocesses eablig coiuous eedback om cusomes ad sa.
Prvide custmer service
regulaly visi cusomes o maieace.
Povide waaies (ad be sue a you ae able o ull e ems).
Ogaise payme collecio so a i is coveie o cusomes.
Ensure lcal representatin
Esue local epeseaio oug exisig local soes, e compays
ow subsidiaies o acisees.
Povide a local supply o spae pas ad uels.
Divide sevice esposibiliies bewee epeseaives ad e com-
pays ow sa.
Educate stakehlders
Educae ad ai cusomes, e compays ow sa ad
local epeseaives.
raise public awaeess.
Ivolve ad collaboae wi local auoiies.
Find innvative fnancin slutins
Adjus payme soluios o cusomes acial siuaios.
Povide cusomes wi access o micocedi.Faciliae icome geeaio.
Apply o goveme subsidies.
an
d
solution
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C U S t O M E r I n t E r F A C E
SalesI ode o sell eegy poducs o low-icome ouseolds, sales sa mus be ad-
ep a udesadig cusome eeds ad cosais, ad able o explai e use
ad bees o e poduc. Busiesses mus ave e capaciy o eac ou ad
coac wi cusomes, wic ivolves buildig cusome kowledge ad sales
caels. teeoe, ey oe wok wi local commuiies ad ei auoiies
as well as ogaisaios a ave used elaiosips wi e age goup.
Limited understandin custmer preerencesI e ealy pases o low-icome make ey, busiesses oe lack kowledge
abou e age goup. Iomaio abou issues suc as cusome peeeces,
use poles ad payme baies ae o eadily available oug coveio-
al esouces. reseac isiuios ad cosulacies able o delive is kid o
iomaio o low-icome makes ae ae. Poducs ae likely o ail i ey ae
o waed, eeded o cosideed appopiae.
Lack leal title
People wi low icomes i developig couies oe do o ave e legal ile
o ei omes. Fo povides, e absece o a omal ceicaio o owesip
makes i dicul o sig coacs, especially o gid coecios. A e same
ime, low-icome people ae esia o ives cosideably i ei omes o
plo o lad i e duaio o ei eacy is uclea. As a esul, eie egios
may be excluded om e gid, wic is oe e case o slum aeas i ciies.
Inefcient delivery channels
reail ad logisics sevices ae limied i low-icome makes, paiculaly ual
aeas. Some villages may o ave a ceal sop, equiig esides o avel o
e ex village o supplies o sevice. Fo busiesses, poo oad codiios ca
icu coss by makig emoe villages dicul o eac. Buildig disibuio e-
woks is also expesive, bu may also povide oppouiies o collaboaio.
Limited skills amn lcal sta
Local sa mus ave good commuicaio ad egoiaio skills i ode o sell
e poduc eecively. howeve, e available pesoel oe lack e equisie
educaio ad aiig o sell eegy soluios. Lieacy skills may be limied ad
compue o bookkeepig skills eiely abse.
Limited knwlede prducts and use
tage cusomes, wose expeiece is oe limied o adiioal oms o e-
egy supply, ae aely awae o e ucioaliy ad compaaive bees o a
sola lamp, impoved cooksove o o-gid sysem. tey may also o udesad
e advaages o a legal gid coecio, especially i ey ave bee appig
e gid illegally. I some cases, egaive expeieces wi simila poducs i e
pas mig ave geeaed disus.
Ch
allen
g
es
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Cnduct market research
Use standard and specialised methods. Make eseac mus be de-
siged wi e age goup i mid.
Test product with customers. Pooype esig ca be coduced duig
makes, ais, commuiy meeigs o diecly a a cusomes ome. A
es sale o aucio o e poduc ca yield iomaio abou e pice
cusomes ae willig o pay.Find specialised support. Bo local ad oeig cambes o commece
ca elp wi iiial make eseac ad esablisig coacs. Expo
agecies ca ogaise busiess ips ad povide advice. Developme
agecies suc as GIz povide udig o easibiliy sudies ad ca acili-
ae excage wi local expes.
Cllabrate with lcal authrities
Engage community leaders. We developig commuiy-level iasuc-
ue suc as mii-gids, wokig wi commuiy leades is a mus. tey ca
ave cosideable impac o e decisios ake by commuiy membes.
Establish alternative contracting processes. tis mig iclude, o ex-
ample, elyig o social pessue mecaisms by aseig esposi-
biliy o payme o e commuiy as a wole. Suc aagemes mus
ave e cose o e appopiae legal auoiies.
Create lcal representatin
Build own representation. Busiesses ca ope ei ow soes o e-
cui local epeseaives. havig diec cool pemis eecive moi-
oig o sa peomace ad sevice qualiy. tis elps build us
wii e commuiy ad esablis a sog bad.
Establish micro-ranchises. By oeig a sadadised busiess model,busiesses ca esablis a ewok o local eepeeus.
Use existing networks. Busiesses ca pae wi exisig local eail
soes, used local nGOs, MFIs o co-opeaives o sell ei poducs.
Train sta and lcal representatives
Develop training programmes. Busiesses develop ei ow sa-
dadised aiig pocesses ad maeial ocused o ecuig asks ad
eque calleges. tese sould be ailoed o local coexs.
Organise on-the-job training. Busiesses also povide pacical aiig
o ew epeseaives i coos o aiees o by avig em ac-compay meos.
Train via partners. taiig sessios ca also be coduced by local im-
plemeaio paes suc as nGOs o local compaies.
Educate taret rup
Use local communication channels. Poses, adio ad eeaime
eves ca povide eecive meas o commuicaio i low-icome e-
viomes.
Educate customers. Local epeseaives ae well-placed o explai co-
acs, e poduc, is use ad maieace o cusomes. Simple ioma-
ioal maeial i e local laguage, wi illusaios, ca guide cusomes.
Organise and train communities. We sevices ae povided o a wole
commuiy, as i e case o mii-gids ad gid coecios, busiesses
oe ogaise e commuiy io use goups ad impleme goup
pocesses.
C ASE STUDY
SKG Sangha, IndiaUsing biogas to oer rural indian
households clean energy alternatives
SKG Saga povides impoved cookig
ecology maily impoved wood
soves ad amily-sied biogas plas
o ual ouseolds i Idia.
Saga sesses eavy commuiy i-
volveme i all sages o ei imple-
meaio ad sales pocess. Awae-
ess o e biogas pogamme is aised
oug couses, eld visis ad adio
boadcass. Bees o is ecol-
ogy ae publicised oug co-odia-
io wi pae nGOs, wo also elp
ideiy poeial uses. SKG Saga
membes iom villages o meeigs,
wic ae eld i e local laguage.
SKG Saga as gow apidly, povid-
ig 92,000 domesic biogas plas i I-
dia ad pilo scemes i Keya, Gaa,
Mali ad Ugada. Is cusome base cu-
ely sads a 1 millio wi a pojec-
ed 5-yea gow o 40,000 ew amilies
beig added eac yea.
SOURCES
www.asdeawads.og
www.skgsaga.og
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C U S t O M E r I n t E r F A C E
PaymeLow-icome people ypically coduc may o ei asacios i e iomal
cas ecoomy. tei icomes ae o oly low, bu also iegula ad uceai.
tey oe lack access o bak accous o cedi. tis ceaes calleges i collec-
ig paymes, especially i e case o egula ees ad big up-o ivesmes.
Busiesses ca ease cusomes payme diculies by collecig ees locally, al-
lowig fexibiliy ad coecig o uisig cusomes wi micocedi. help-
ig membes o e age goup geeae icome also elps em mee payme
obligaios. Busiesses ca also geeae eveues om oe souces.
Ardability
Access o eegy ca icease peoples poduciviy. Bu ealiig is poeial
equies a oe codiios also be me, suc as e availabiliy o maciey
o access o makes o oes poducs. Wee ese codiios ae o i place,
e eu o ivesme associaed wi bee eegy access may simply be
oo small, makig e poduc uaodable o simply uaacive o e cus-
ome. I e pomise o iceased icome ails o maeialise, people may be
uwillig ad uable o pay.
Calculaios o wa people sould be able o aod ae oe based o ei
cue eegy coss ad wa ey would be able o save by swicig o e
ew eegy souce. I ealiy, e ew eegy souces coveiece oe leads
people o cosume moe eegy, ad may coiue o buy uel i addiio.
Liquidity
Up-o expeses o equipme ivesmes, as o a sola ome sysem, ca
be ig. Eve i e eu o ivesme jusies e ivesmes cos (plus
some iees), low-icome cusomes oe lack sucie savigs o access o
cedi a a easoable cos.
Enrcement payment
te slums ad villages wee mos low-icome people live ypically lack access
o e saes omal eoceme mecaisms. Eocig a coac by eso-
ig o legal mecaisms suc as cous mig ake yeas, could icease e isk
o bibey ad would i ay case be uaodable. I addiio, bak accous
a aciliae paymes via auomaic deducios ae aely available i ese
coexs. Isead, people ely o iomal mecaisms buil o pesoal ela-
iosips ad social ewoks o ogaise coac eoceme ad paymes.
tese may o be easily accessible o oeig eas.
Lack understandin
Cusomes oe d i dicul o udesad cos sucues, especially wi e-
gad o payme plas. Wee cusomes ave peviously apped e gid illegally,
wiou payig, ey oe ail o see wy ey sould pay o a legal coecio.
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Cllect payments lcally
Task local representatives with collecting payments. regula visis by
epeseaives o e cusomes ouse make payme moe cove-
ie, ad eables equipme o be maiaied.
Build on existing social structures. Micocedi goups, ame co-ope-
aives, egula makes, o oe social sucues ad pocesses wee
acial asacios ae ogaised povide coveie payme occa-sios o bo e cusome ad e compay.
Make the community responsible or the collection o payments. Gid o
mii-gid coecios ae oe isalled wi a collecive mee. A local
epeseaive is esposible o collecig e paymes ad o disco-
ecig people wo do o pay.
Custmise payment methds
Enable fexible payment schedules. Adjusig e payme scedule
o cusomes cas fows ca make i cosideably easie o pay. Fo ex-
ample, ames mig pee o pay e majoiy o wa ey owe ae
e aves. Povidig fexibiliy i payme scedules ad allowig odelays ca also elp.
Oer pre-paid cards or grid connections. Pe-paid cads eable fex-
ibiliy o e cusome, wile elimiaig acial isk o e busiess.
Small amous make pucasig cedi aodable eve o pooe cus-
omes. I addiio, pe-paid cads ca be easily combied wi subsidies.
Fo example, cusomes wii ceai icome segmes ca eceive a ba-
sic amou o eleciciy pe mo oug a sae subsidy ad pucase
e es as equied.
Cnnect custmers t micrcredit
Forge links to local MFIs. Mos eegy compaies wok wi exisig mi-
coace povides i wa as bee called e wo-aded model:
te eegy compay adles e ecical aspecs ad e MFI e a-
cial aspecs o e coac.
Provide micronance services. I e oe-aded appoac, e eegy
povide also acs as a micocedi lede. Aleaively, exisig MFIs ca
add eegy sevices o ei ow poolio.
Establish additinal revenue streams
Seek subsidies. Subsidies ae a egula eaue i eegy makes. Fo
eegy povisio, wo mai ypes ae used. Subsidies o isallaio payo eac device isalled o eac ouseold coeced o e gid, us
educig e ig up-o coss o gaiig access o eegy. Subsidies
o use ae mosly see i e case o gid coecios, deayig e cos
o eac ui o eegy disibued.
Register or carbon credits. te cabo make oes oppouiies o e-
ewable eegy ad eegy eciecy pojecs o bee om e sale o ca-
bo cedis. te egisaio pocess ca be legy ad cosly, oweve, so
coss ad bees sould be weiged ciically beoe eeig e pocess.
Intrduce incme-eneratin slutins
Provide productive inputs suc as maciey o local cas, seeds ad live-
sock, o iigaio sysems as pa o e busiess poduc oeig.
Create new market opportunities by iiiaig ew local aciviies suc
as sewig o ood pocessig, o eablig access o makes o agicul-
ual poducs o abicaed goods.
C ASE STUDY
La Electricidad de Caracas (EDC),Venezuela
Transorming electricity pirates into
legitimate customersEDC povides omal, sae eleciciy
sevices o low-icome secos i Ve-
euela, wee slum esides pevi-
ously apped lies o access eleciciy
illegally.
EDC uses wo kids o payme e-
oceme sysems. Cusomes wo
ca aod a idividual coecio use
pepaid powe cads a ae simila o
ose used o mobile poe sevices.
Lowe-icome cusomes may make use
o collecive mees. Goups o peopleae made esposible o ese, allow-
ig esides o co-odiae payme
ad discoec ose wo do o pay.
Payme delays o e pooes cusom-
es wi iegula icomes ae pemi-
ed beoe sevice is discoeced.
te pojec was implemeed i 2000.
Fom 2004 o 2006, omal elecic se-
vice use coveage iceased om
110,000 o 460,000. Elecical losses due
o e also deceased om 18% o 15%
o oal use i is ime ame. EDC assice isalled udeds o mees a
bee ousads o cusomes.
SOURCES
WBCSD (2008)
Connecting Low-Income Consumers: AES in Venezuela
www.laedc.com.ve
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C U S t O M E r I n t E r F A C E
SeviceBo e isallaio o equipme ad e ogoig povisio o eegy eed o
be eliable. We equipme beaks o e coecio ails, immediae suppo is
equied. howeve, povidig as ad ig-qualiy sevice ca be cosly, especially
i ual aeas. Wee sevice ails em o is oo expesive, cusomes oe y o
x poblems o ei ow, someimes doig moe am a good. to esue eli-
able sevice, busiesses povide egula maieace visis. to make ese visis e-
ecive, ey ai local epeseaives, supply spae pas locally, deskill poduc
isallaio ad maieace, ad educae cusomes.
Hih cst service prvisin
Paiculaly i ual aeas, poo oads ad aspoaio sysems make cus-
ome visis expesive. A ip wi a o-oad veicle o x a boke appliace
may ake a wole day ad be cosly i ems o sa ime ad uel. I addiio,
maiaiig skilled sa ca be expesive.
Availability spare parts
Keepig spae pas a cusome pemises o a a eaby sie ca be expesive.
havig lage amous o maeial soed wiou use ceaes dead capial.
Deliveig ese pas ca also be cosly, especially i ual aeas, due o poo
logisics iasucue.
Envirnmental damae
Poducs ae oe exposed o as eviomeal codiios, icludig ex-
eme weae codiios ad e icusio o aimals. tis iceases e e-
quecy o damage. Sola paels ca beak i a som, biodigeses may sue
om exeme empeaue fucuaios ad wies ae oe eae away by o-des. Poducs ae subjec o damage idoos as well, as slum ad village ous-
ig is oe iadequae, wiou pope isulaio o poecio om vemi.
Lack custmer skills
Cusomes someimes y o avoid e coss o isallaio o sevice by isall-
ig, maiaiig ad epaiig e poduc emselves. Wiou pope aiig
ad iomaio, ey oe damage e poduc i e pocess.
Unskilled lcal representatives
te coe o ay sevice is e people povidig i. Bu local epeseaives oe
lack e ecical capabiliies o povide maieace ad epai sevices. I
cases wee busiesses ely o sel-employed ages o e sa o oe o-
gaisaios, esuig adequae skills ca be a callege.
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Prvide reular maintenance visits
Visit customers at dened intervals. Cusomes wa o kow we o
expec a maieace visi ad will ely o i. regula visis aciliae ac-
cess o spae pas, educe addiioal sevice coss ad ceae us i evalue o e poduc. Sa ca esue e pope adlig ad ucio-
ig o equipme.
Provide warranties including service. te cos o sevice povisio du-
ig waay ime (o eve beyod) sould be icluded i e egula
poduc o sevice pice i ode o simpliy e cos sucue o cusom-
es ad o avoid uiomed epais by uses.
Train lcal representatives t perrm cmmn service tasks
Provide training directly. taiig a goup o aies wo ca e pass
o ei skills ca elp ceae e equied capaciies.Train through partners suc as acisees, nGOs, o MFIs, i cases wee
ese paes ae esposible o local epeseaives. howeve, ai-
ig sessios sould sill be sadadised ad ely o aiig maeial.
Divide responsibilities i a cascade o sevice asks. Simple asks ca
be caied ou by e cusomes emselves, moe complex oes by local
sa, ad uusual oes by specialiss.
Supply spare parts lcally
Provide basic spare parts in advance. Basic spae pas sould be i sock
wi all local epeseaives o o pas a eed o be equely
eplaced soed diecly wi e cusomes so a commo poblems
ca be xed quickly.
Use a limited variety o parts. Usig ew ad sadadised pas i pod-
ucs weeve possible makes i easie o maiai a supply o spae
pas.
Deskill prduct installatin and maintenance
Deskill processes. Cusomes ad local epeseaives oe lack eci-
cal skills. Makig poducs simple o adle allows moe asks o be pe-
omed locally ad avoids damage. Descipios o sadad soluios o
e mos commo poblems sould be povided.Adjust products. Poducs sould be desiged i a way a is sae o as-
sembly by cusomes o sa wi lile aiig. to avoid damage, pod-
ucs sould be desiged o wisad commo eviomeal wea ad
ea. Ideally, e mos commo issues i poduc maieace ca eve-
ually be avoided by updaig e poduc o efec pas expeieces.
Educate custmers
Train customers ow o use ad maiai e equipme we ey e-
ceive i. We cusomes kow ow o adle e equipme popely,
damage ca be avoided, sevice coss educed ad e eliabiliy o e
equipme impoved.
Provide customers with reerence material a explais adlig ad
maieace ad oulies commo issues ad soluios. Guidelies
sould be simple, ad i e local laguage, ad make use o illusaios.
C ASE STUDY
Temasol, Morocco
For Moroccans living in rural areas,
good service has a positive impact
temasol povides poovolaic kis o
emoe ual ouseolds i Moocco.
Cusomes eceive key sevices. regio-al baces ave ee o seve ages
eac: a supeviso ad wo o six ec-
icias, wo make use o cas o collec
ees ad aswe quesios a weekly
makes. tese ecicias also ull
coacual obligaios suc as xig
ecical poblems wii 48 ous ad
visiig cusomes a leas oce a yea.
Cusomes sig a sevice ageeme
ad pay a oe-ime coecio ee
beoe isallaio ad a moly ee
eeae. Fees ae depede o e
level o sevice seleced. Upo isal-
laio, cusomes ae give ads-o
aiig o ow o use e equipme.
Local baces eceive spae pas e-
quied by cusomes o esue pope
maieace. temasol povides a ull
guaaee o sevice o 10 yeas.
temasol coeced 26,000 ew cusom-
es (182,000 people) bewee 2002 ad
2008. te compay also scoes well i
saisacio suveys, wi cusomes
sayig e sevice povided as ad a
posiive eec o ei qualiy o lie.
SOURCES
Baim Allall (2011)
TEMASOL: Providing Energy Access to Remote Rural
Households in Morocco.
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C U S t O M E r I n t E r F A C E
I ode o ceae a susaiable poduc ad avoid coibuig o eviomeal
degadaio, busiesses mus coside wa appes we ei poducs useul
lie comes o a ed, as well as ow cusomes deal wi i aewads. May slums
ad ual villages wee low-icome people live lack mode wase maageme
sysems, wic meas a o-degadable wase quickly becomes a poblem. Ba-
eies, e oxic coes o wic ca cause eal issues, ae a paicula co-
ce. Busiesses ca avoid damagig esides eal ad e eviome, ad
ca eve ceae ecoomic value, by usig local uels ad eviomeally iedly
maeials, maiaiig ad eusig equipme, ad oeig ecyclig sevices.
Additinal waste assciated with uel
Buyig uel (e.g., keosee, coal) ca lead o addiioal wase om packagig.
Plasic packagig does o degade ad us subjecs e sees ad evio-
me aoud low-icome commuiies o log-em polluio i o disposed
o popely.
Dispsal prducts
Poducs ae disposed o we ey ae boke ad cao be xed, o we
ey ae eplaced i a sysem upgade. Fo example, we a commuiy gescoeced o e elecical gid, all o-gid soluios ca become supefuous.
Poduc disposal ca ceae addiioal wase.
Lack waste manaement systems
Due o a lack o pope wase maageme sysems, poducs ae oe dis-
posed o usaely, leadig o eal issues ad eviomeal polluio. Ba-
eies ae a paicula coce because ei oxic coes ca coamiae
goudwae, leadig i u o eal poblems o aimals ad umas. Bo-
ke bulbs o poovolaic (PV) modules also eed o be adled wi cae.
Ed o
poduc use
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Use lcal uels
Use local waste as biomass, suc as saw ad usk om ceeal poduc-
io, o ouseold wase o biodigeses. tis also ca save coss o e
cusome. I addiio, biodigesig avoids cabo emissios.
Produce uel locally, om souces suc as jaopa, palm o oe olei-
eous plas, o om cookig a. Fiewood ad cacoal o impoved
cooksoves ca also be poduced locally. Local poducio ceaes a ew
icome seam o commuiies. I also avoids cabo emissios associ-
aed wi packagig ad aspoaio. Esue a local uel poduc-
io does cofic wi ood poducio ad avoid agiculual moo-coppig.
Use envirnmentally riendly materials
Replace harmul material. hamul, polluig, esouce- ad eegy-i-
esive maeials ca be eplaced by moe eviomeally iedly oes.
te cos o is maeial is someimes ige. Bu ig-qualiy maeial
ca also exed e lieime o e poduc, makig e ige up-o
ivesme wowile o cusomes.
Maintain and reuse equipment
Prolong product lietime by povidig waaies ad egula maie-
ace sevice, ad esuig e availabiliy o spae pas.
Reuse broken or unused equipment. I low-icome makes, igs o
value ae eused as a mae o couse. tis ca be aciliaed by eablig
e simple ad sae disassembly o poducs. Usig a small vaiey o
pas ad sadadised compoes wee possible makes e excage
ad ade o pas easie. tis also iceases e local availabiliy o
spae pas. I addiio, busiesses ca ogaise a make o used pas
oug ei local sevice povides o oe meas.
Provide training on reuse. I ode o eable local sevice povides o
euse, dismale ad epai pas, aiig may be equied.
Recyclin
Establish a recycling service. Local sevice povides ca collec boke
equipme o pas, especially baeies, a local collecio pois o du-
ig egula maieace visis.
Collaborate with external recycling services. Compaies ca co-opeae
wi oe ogaisaios a collec expied baeies o oe valuable
maeial. tese will oe pay cusomes o e busiess o e scap
value.
C ASE STUDY
Sunlabob, Laos
Clean energy or Laos
Sulabob is a commecial compay
based i Laos a povides eegy se-
vices o emoe aeas o coeced o
e public gid. A combiaio o eegy
souces biouels, ydo ubies ad
sola paels is used o povide ese
sevices. Sulabob pays special ae-
io o e susaiabiliy o is sevice.
Oe suc example is e eabiliaioo boke ydopowe plas io uc-
ioig ybid gids.
Maieace o sola paels is also im-
poa. I ode o polog e equip-
mes lie ad impove eciecy, ese
mus be kep clea ad ee o sadow.
I a cicui is boke a ay poi, e
eie ui ceases o ucio. Sula-
bob addessed is issue oug e
aiig o local ecicias. I a piece
is oo dicul o epai i e eld, e
local acisee will aemp o x i oeplace e boke compoe. te cus-
ome is o caged o e ime ey
sped wiou powe, ad i e aul
was caused oug misuse, e pob-
lem is clealy explaied o e cusome
o avoid uue issues.
Sulabobs devices make use o e-
cageable baeies. A cage cool-
le is uilised o esue a e baey
is o ovecaged. te sevice ewok
maages empy baeies, wic ae e-
ued o ecyclig.SOURCES
Ady Scoee (2007)
Rental o PV Systems Provides Quality Lighting in Remote
Laos Villages
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DevelopmePocess
Poo: te Asde Awads
te rual Eegy Foudaio ais pospec-ive Sola now-eailes i Mooo, Ugada,esuig a ei pesoel ave e skillseeded o sell sola eegy soluios.
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how i woks
te developme pocess cecklis is a ool o pla i advace
e developme o you busiess. Ay busiess mus esue e
availabiliy o ou key esouces a eac sage o is developme:
Product. te poduc be i a sola ome sysem o a gid co-
ecio wi ogoig sevice povisio is a e ea o e
busiess. Poducs sould do moe a simply ull cusom-es cue expecaios egadig qualiy, bees ad pice.
tey mus also allow o busiess gow, so a poducio
ca keep up wi demad.
Market insight. A ooug gasp o cusomes peeeces,
budges, cosais ad poduc use is esseial o e suc-
cessul developme o a busiess, as is udesadig e
compeiio ad udelyig make codiios, icludig po-
eial poliical iceives.
Human resources. People execue busiess pocesses. tey
eed e ig skills ad aiig, bu also e moivaio, o beeecive ad ecie. tis elaes bo o e busiess ow
sa ad o busiess paes.
Finance. Fuds sucie o ace ivesmes ad opeaig
expeses mus be available. Wile opeaig expeses sould
be coveed by eveues, a leas ae e sa-up pase, ives-
mes oe equie ouside udig.
te developme o a busiess ca be divided io ee eleme-
ay pases: desig, implemeaio ad gow. te ca below
depics e mai aciviies i eac pase. Fo eac pase, a di-
ee se o esouces will be equied. Fo example, a busiess
mig equie a pooype o e poduc duig e desig pase,
bu egage i mass poducio duig e gow pase. tee-
oe, e calleges will also die i eac sage.
noe a ee ae oly a ew busiesses a ave maaged
o ee e gow pase ad gai sigica scale. hece, e
obsevaios om e case sudies icluded i is epo, wic
wee suppoed by expe ieviews, ae soge i aalysig
e desig ad implemeaio pases. Fue eseac ad
above all a lage umbe o successul busiesses will be e-
quied o lea moe abou e gow pase.
As a use o is cecklis, i may be elpul o go oug eac
esouce ad ideiy e calleges you ae likely o ace i eac
sage. You ca also exploe e appoaces a seem mos po-misig o you busiess. Wokig oug e vaious esouces
ad sages will elp you oesee calleges ad pla o eecive
soluios!
WhAt rESOUrCES ArE rEQUIrEDtO DEVELOP A BUSInESS?
A business needs to continually develop its resource base, rom the design phase through implementation to growth.
Four basic types o resources are essential or any energy business: the product itsel, market insight,
human resources and nance.
Promising approaches can help companies manage these resources successully.
DESIGN GROWTHIMPLEMENTATION
Expad e busiess model
sysemaically
replicae i moe locaios
Impleme e busiess
model i oe locaio
Acieve acial susaiabliliy
Udesad e make
Dee e busiess model,
icludig poduc ad pocesses
Figure 9
Stages o business development
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D E V E L O P M E n t P r O C E S S
PoducI ode o oe a aacive poduc, busiesses mus udesad cusome eeds
ad peeeces. A e same ime, ey eed o develop poducio pocesses a
guaaee good qualiy wile coiuously bigig cos pe ui dow ove ime.
Coiuous impoveme o e poducio side eables busiesses o keep pi-
ces low ad icease eveues. A umbe o specialised isiuios ca elp wi
poduc desig.
Descriptin
Desig poducs a mee cusome peeeces, wi good qualiy ad a a
aodable pice.
Challenes
Poducs ae oe developed pimaily om a ecical pespecive, wiou
sucie cosideaio o culual paes ad cosume peeeces.
Buildig pooypes is expesive. Pooype esig ca equie may iea-
ios, us iceasig e cos.
Prmisin appraches
Desig e poduc o esue low coss wile efecig local peeeces ad
e local eviome. Base poduc developme eavily o make eseac.
Ivolve e age goup i e poduc desig, oug meas suc as idea
compeiios o ocus goups i wic uses ca desig ei ow models.
Ivolve sudes om desig scools o elp wi e iiial cocep ad po-
oype developme.
tes pooypes wi e age goup. Sow e poduc a makes. Aucio i
o ouseolds o elp udesad cosumes willigess o pay.
design
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Descriptin
Sadadise poducs ad pocesses o mass
poducio.
Challenes
Capuig ecoomies o scale.
hig qualiy sadads mus be maiaied eve
wi lage poducio us.
Prmisin appraches
Sadadise e poduc o mass poducio.
reduce e vaiey o pas o aciliae poduc
upgades ad spae pas maageme.
Mauacue aboad. Wokig wi ig-qualiy
poduces i oe developig couies ca keepcoss low ad avoid poibiive ime ivesmes
i buildig poducio ad qualiy maageme
capaciies wee ey do ye exis. Maiai a
posiive oopi by makig sue poduces adee
o uma igs ad good labou sadads, ad
poduce i a eviomeally susaiable way.
Descriptin
Adjus poducs accodig o expeiece ad
eedback.
Souce locally o eaced impac.
Challenes
Poducig a compaaively small umbe o uis
a a low pice ca be dicul.
Cagig esablised poducio pocedues is
always cosly.
Prmisin appraches
Poduce locally, wokig wi local woksops
o small poduces wee local poducio coss,
qualiy ad impo ais allow. Someimes,allowig local poduces o adap e poduc is
e bes meas o poduc developme ad
make success.
Impove poducs based o cusome eedback.
C ASE STUDY
Bosch und Siemens HausgerteGmbH (BSH), Philippines
Getting it right: improving products
through redesign
BSh is oe o e wolds oemos mau-
acues o ome appliaces. te compa-
y s ioduced is susaiable, ecie
pla-oil-based cooksove i e Pilip-
pies. Fom 2004 o 2006, BSh coduced
eld ess o e poduc ivolvig ove
100 amilies i uba ad ual aeas, us-
ig cocou oil as uel. BSh is cosaly
seekig o impove e use-iedliess,
cos ad eciecy o is cooke, ad used
eld esig as e basis o seveal modi-
caios a eveually icluded wo com-
plee desig oveauls. Fo isace, es-
ig i Idoesia evealed a palm oil was
igly poblemaic due o is ig melig
poi ad viscosiy, so BSh sudied die-
e bleds o oils o impove usabiliy. Cas-
o oil ad jaopa, a o-edible seed a
gows o magial lad, wee ulimaely
deemied ideal o use i e cookes.
BSh poducs ae well acceped amogs
ial goups. A ew, impoved vesio o e
poduc desiged o mass poducio was
lauced i May 2010 i Idoesia. tis
iiiaive, wic as pojecs i Idoesia,
Idia, Eiopia ad Cosa rica, as sold ap-
poximaely 1,500 uis o dae.
SOURCES
http://stoves.bioenergylists.org/bshprotosupdate
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Descriptin
Impleme coiuous impoveme pocesses o
suppo e gow o e busiess.
Ideiy ew makes o eplicae ealie successes.
Challenes
Feedback pocesses ca be quie ime cosumig.
As e busiess gows, sysemaic iomaio-
gaeig pocesses become iceasigly eleva.
Busiesses may jump oo asily om success i
oe make o eplicaio i aoe. Evey couy
is diee ad equies is ow caeul make
eseac.
Prmisin appraches
Coduc egula suveys ad collec peomace
daa. tese suveys ca be caied ou by local pa-
es suc as nGOs, acisees, local govemes
o eseac isiuios.
Coduc make sudies i ew makes. Local ui-
vesiies ad eseac cees, ieaioal nGOs
ad oudaios ca suppo make eseac ad
easibiliy sudies.
Descriptin
Lea om opeaioal expeieces ad eedback
pocesses i ode o impove appoaces o
implemeaio.
Challenes
Ae e pilo, busiesses ed o ocus o imple-
meig wa as woked. As a esul, sysemaic
iomaio gaeig someimes loses is pioiy.
Oce a cocep as bee poved, i becomes ade
o callege oes ow assumpios.
Cages i e eviome ca udameally
ale e oudaios o e busiess.
Prmisin appraches
Gae ad icopoae eedback om cusomes,
sa ad paes o a sysemaic ad ogoig
basis. Local epeseaives ca be aied o ask
o eedback duig egula maieace visis, o
aalyse e iomaio obaied ad o povide
is daa o e makeig depame. nGOs ad
oudaios ca suppo make eseac ad
easibiliy sudies.
Use exisig ewoks o gai iside kowledge
o cages i e busiess eviome. Busiess
associaios ad ei eves ae good oppoui-
ies o lea abou cages i e poliical evi-
ome. Ieaioal coeeces may eveal
oppouiies ad eas based o acos suc as
doo developme policies.
C ASE STUDY
d.light design, Arica & Asia
Enlightened product design based on
customer knowledge
d.lig sives o eplace keosee la-
es wi sola lamps, povidig ual
ad poo ouseolds wi clea, sae ad
big lig.
I is ealy sages o poduc developme,
d.lig addessed e callege o ude-
sadig ei cusomes peeeces
by coducig eld eseac i villages
ougou Sou ad Sou-Eas Asia, ad
lae also i Eas ad Wes Aica. te pod-
uc desig eam spe udeds o ous
i villages speakig o cusomes ad ob-
sevig ei lives, deemied o povide
e cusomes wi wa ey eeded
ad waed wiou beig ifueced by
pevious assumpios. tis eseac ide-
ied obvious eeds, suc as a lig big
eoug o sudyig ad ig-ime i-
come geeaig aciviies, as well as less
obvious eeds. Fo isace, cusomes
like avig muliple lig seigs, as is
allows em o opimise ei eegy us-
age based o ei eeds. A mobile poe
cagig eaue was also i ig demad.
d.lig esed evolvig pooypes o so-
la-poweed LED lamps, wic eceived
posiive eedback ae mos o desig
eeme. d.lig lauced is s sola
laes i 2008, ad coiued o coduc
eld eseac i villages i Aica ad Asia
seekig coiual impoveme o ei
poducs. Sice a ime, d.lig as e-
leased ew, moe aodable models wi
addiioal eaues suc as mobile poe
cagig.
d.lig as gow quickly: tey ave sold
ove 600,000 sola lamps, ad ave allowed
ouseolds a moe cosise lig ad e-
egy supply.
SOURCES
www.dlightdesign.com,
www.extreme.stanord.edu/success_stories/dlight_design.
html
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huma esoucesEmployee skills ad moivaed people ogee om e basis o ay successul
busiess. I low-icome makes, skills ae oe i so supply. Busiesses ave
o povide aiig ad d ways o eai aied sa, eve wee codiios
may be as ad uaacive o skilled people. People also eed o be moivaed
o coibue o busiess objecives, bo iisically by esuig ey ude-
sad ad believe i e ogaisaios missio, ad exisically oug acial
ad oe bees.
Descriptin
We desigig e busiess pocesses, busiesses eed o ake io accou
e skills available om locally ied sa.
Duig e busiess developme pase, ouside expes ca povide ciical
ideas ad quesios.
Challenes
Skilled sa membes ae oe ad o d, especially i ual aeas.
Oce skilled sa membes ae locaed, ey ca be expesive o ie
ad eai.
Prmisin appraches
Ciically assess e availabiliy o poeial local sa i e age commui-
ies. Lea abou uma esouce issues om oe busiesses.
Desig pocesses ad ouies based o e availabiliy o local capaciies.
Compaies eed o base ei job descipios ad aiig plas o e skillsad aiig poeial aleady possessed by poeial local employees.
Dee eal ad saey sadads wic ae i lie wi e compays sa-
dads i oe makes wiou limiig busiess developme oppouiies.
Develop a aiig pla om e sa.
Wok wi uivesiy sudes o ellows om pogammes suc as Acume o
IDEO.
Aac suppo om expeieced maages lookig o ew expeieces ad a
way o coibue o social objecives, peaps duig a sabbaical om oe
employme.
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Descriptin
Sadadise ad ousouce compay aciviies.
Challeneste qualiy o ousouced sevices ca be dicul
o cool.
Sa wi valuable expeiece is impoa ad
ad o eai.
Prmisin appraches
Oe moe subsaial moeay ad o-moe-
ay bees (kidegaes, eal isuace) as
iducemes o eai sa.
Povide coacig o sa membes, eablig eacpeso o gow oug pesoal caee develop-
me plaig.
Sadadise uma esouces pocesses ad e-
able suc depames o coiuously lea ad
impove.
Develop mico-acisig models o eable col-
laboaio wi small-scale eepeeus. Sel-
employed sa as a clea moivaio o coibue
o a busiess commecial success wile wokig
idepedely.
take o addiioal paes (e.g., i oe couies)
o eplicae e busiess elsewee. Selec us-woy paes ad moio ei qualiy.
Ioduce success idicaos ad cool em
pesoally. Measue employee peomace o e
basis o peviously deed milesoes.
Descriptin
nuue ad develop e skills o e compays
sa ad oe local epeseaives.
ChallenesEecive aiig pocesses mus be desiged ad
ogaised.
Employig qualied sa a aodable aes ca be
dicul.
Prmisin appraches
Develop sadadised aiig pocedues. tis
ivolves e omal deiio o aiig coes
ad e ceaio o documeaio i e om o
ceckliss ad oe aiig maeial. taiig cabe povided diecly by you ow ogaisaio, by
ouside aies o oug pae ogaisaios.
Ceck e eeciveess o aiig oug eed-
back pocesses ad qualiy evaluaios.
Povide clea job descipios ad caee pas.
Make you missio, visio ad values explici o
sa ad local compay epeseaives.
Selec people a sae you values. I ieviews,
udesad peoples moivaio o wok wi you
busiess, suc as by cosideig ei pevious
caee coices.
Empowe local pesoel. Usig maageme sa
daw om e aioal make bes esues a
amiliaiy wi local coexs ad makes.
C ASE STUDY
lectricit de France SA (EDF), Mali
Not just clients: engaging locals as
employees and managers
I 1999 ad 2001, Faces EDF ad is pa-
es toal ad nuo ceaed wo ual e-
egy sevices compaies (rESCOs) i ode
o povide eleciciy based o sola ome
sysems o small low-volage village mico-
ewoks o aeas i ual Mali (ea Kayes
ad Kouiala).
te rESCOs wee desiged o avou local
owesip. All employees ae Malia, ad
aioal ad local auoiies ae ivolved.
I ode o guaaee local owesip, EDF
gadually aseed is saes o Malia
compaies. EDF also oeed sog sup-
po i e om o aiig pogammes
ad maageme assisace.
te s rESCO employs 51 Malias (i-
cludig e dieco) ad povides eegy
o 53,400 people i 14 villages. te secod
is compised o 15 decealised oces
ad 34 employees; i supplies eegy o
49,500 people. Maageme is i e ads
o a Malia dieco, wo is suppoed by
wo vice diecos.
SOURCES
Cisope n. Suo (2007)
The Role o the Utilities Sector in Expanding Economic Op-
portunity. Ecoomic Oppouiy Seies, vol. 24. Cambidge:
havad Uivesiy.
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D E V E L O P M E n t P r O C E S S
FiaceFiacig e sa-up ad expasio o a eegy busiess is callegig. howev-
e, a umbe o ogaisaios ae oday suppoig eepise-based appoaces
o eegy povisio o low-icome ouseolds. Iclusive eegy busiesses ca
access uds i e om o gas, pies, equiy ad deb udig, ad bee
om peeeial codiios.
Descriptin
Fudig o e developme o e cocep ad e pooype, as well as o
pilo esig ad poo o cocep.
Challenes
Because ew busiesses do o ave a poo o cocep, uceaiy abou
model viabiliy ad eu o ivesme is ig.risk capial o busiesses a opeae ude e callegig codiios o
low-icome makes is scace. Eepises a aim o solve a social issue bu
cao pomise compeiive eus d i ad o covice ivesos.
Loas ae expesive ad ad o obai o a commecial basis we e isk o
ailue is ig, especially o sa-up compaies.
Prmisin appraches
For start-ups and SMEs:
Paicipae i busiess pla compeiios o ge exposue o ad eedback
om ivesos, gai cedibiliy ad poeially wi sa-up moey.
Wi a sa-up ga. Some ogaisaios povide ull gas, wile oes po-
vide oly paial udig o wa a poio o e moey back.
Aac seed udig om social ad pivae ivesos.
Joi a icubaio space. tese spaces o oly povide ee o aodable wok
space, bu i may cases also oe ewokig ad coacig oppouiies.
For large corporations:
Sa pojecs i e copoae social esposibiliy (CSr) o eseac ad devel-
opme (r&D) depames, i ode o ceae e acial ad ogaisaioal
fexibiliy o ial ad eo.
Build a ybid busiess case a ceaes bees o vaious depamessuc as uma esouces, makeig ad r&D, ad ask o moeay o i-kid
coibuios. Fo example, e uma esouces depame ca use ew
busiess developme iiiaives o leadesip aiig.
Pae wi local busiesses able o soulde some o e isk i
implemeaio.
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Descriptin
Aac ivesme o expasio ad eplicaio.
Challenes
I may cases, e (acial) eu o ivesme
o busiesses i low-icome makes cao com-pee wi a o busiesses i moe esablised
makes.
Poliical uceaiy i some developig couies
limis e availabiliy o lage ivesmes due o
e ig isks o losig a ivesme compleely.
Prmisin appraches
Use ivesme capial povided by developme
baks, suc as ADB, IADB o IFC.
Ideiy local pivae equiy ivesos.Use ogoig subsidies om govemes o elec-
iciy povisio.
Descriptin
Fiace ivesmes o implemeaio ad
ollou.
Challenes
Fudig eeds o be fexible o espod o cages
i e busiess pla, suc as slowed ollou o pod-uc adapaios.
Admiisaive budes associaed wi public
udig, subsidies o social iveso moey ca be
ig.
Local commecial baks ae oe way o po-
jeced eus om eegy busiesses ageig
low-icome cusomes.
Prmisin appraches
Aac addiioal equiy ivesme om spe-cialised ivesos.
Wok i paesip wi ieaioal develop-
me ogaisaios.
regise o cabo cedis ude e compulsoy
o e voluay cabo make.
Use subsidies povided by e goveme o
isallaio o equipme ad gid coecios.
C ASE STUDY
Selco, India
Financial backing turns ideas into reality
or SELCO India
SELCO uses sola poovolaic modules o
povide eleciciy o ual aeas i Idia.
Sice 1995, SELCO as opeaed 25 eegy
sevice cees, isalled ove 115,000 sola
ome ligig sysems as well as e lag-
es sola wae eaig sysem o a sigle
clie i Idia, ad as suppoed ume-
ous sola eepeeus.
SELCO bega wi o acial backig.
te oude, hais hade, me neville
Williams wile i Si Laka. Williams would
become SELCOs co-oude ad ode is
s commissio, a 100-ome sola pojec.
te wo ouded e compay wi Inr
15,000 (e equivale o abou $430). I
1996, acial backig was assued wi a
$150,000 loa om Wiock Ieaioal
oug USAID, wi e codiio a a
ceai umbe o sysems be isalled.
By 2000, SELCO ad paid back is loa.
SELCOs s iveso was E+Co, a ives-
o a makes clea eegy ivesmes
i developig couies. tei iiial ives-
me oalled $107,500. Oe majo ives-
os oday iclude e Lemelso Fouda-
io ad Good Eegies.
SOURCES
www.selco-india.com
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Accessig
e cabo make
te level o cabo emissios as seadily iceased
sice e age o idusialisaio, a ac a oday
is apidly cagig e global climae. Suc cages
may seveely impac umaiys well-beig, oug
isig empeaues ad sea levels ad a lage umbe o
exeme weae eves suc as soms ad foods. to mii-
gae climae cage, compaies ad couies ave se
emissios-educio goals. tese goals ca be legally bid-
ig, as we ey ae se ude cap-ad-ade scemes suc
as e Kyoo Poocol o e Euopea Uio Emissios tad-
ig Sysem, o ca be ully voluay, as we pa o a com-pays coe missio o slae o CSr iiiaives.
Apa om cubig emissios esulig om ei ow op-
eaios, compaies ca also pucase cabo cedis o
e global make. tese cedis ae poduced by pojec o
compay aciviies a would o ake place wiou e
eveues geeaed by e sales o ose cedis, ad ae ac-
cedied, moioed ad egiseed ude sic sysems o
cool. te Clea Developme Mecaism (CDM), a pa o
e Kyoo Poocol, egises cabo cedis a ca be used
o obligaoy (legally bidig) emissios educios, wile
e Voluay Cabo Make (VCM) geeaes cedis o vol-uay educios.
te volume o cabo emissios adig as bee seadily
iceasig i ece yeas. te base ui o ade is ypically
oe meic o o CO2-equivale, deoed as CO
2e. Despie
a dicul yea o e make due o e global ecoomic e-
cessio, oal volumes i 2009 gew o 8.7 billio CO2e, epe-
seig a make sie o $144 billio.17
Pices o CO2e uis vay gealy. tee ae a umbe o
sadads available o cabo emissio educios poj-
ecs. I e compliace make, a Ceied Emissios reduc-
io (CEr) o oe CO2
issued ude e CDM is wo aoud
$17.5. A Voluay Emissios reducio (VEr), wic ca be
ceied ude a umbe o diee voluay make sa-
dads, ca big bewee $2 ad $7.
te Gold Sadad is a ceicaio body ocusig o pojecs
a specically ceae susaiabiliy co-bees o e com-
muiies ey seve, o example by poecig biodivesiy
o ceaig icome geeaig oppouiies o low-icome