Bringing Light to the Poor

Salwa AbdulTawab

A plan to bring low cost lighting solutions to the poor in developing countries won a major prize in this year’s Business in Development (BiD) Challenge.

The project presented by Australia’s Barefoot Power Pty Ltd. gives villagers an access to renewable electricity. It uses an innovative business model to gradually build a power system, which would stagger investments in accordance with kerosene expenditure.

The idea sparked two years ago. Stewart Craine, a renewable energy engineer and entrepreneur, was a volunteer in Nepal, where 1 per cent of rural households have access to electricity. He suggested the idea to his employers, but they were not interested. Now he is starting in Papua New Guinea.

Rural families in the Pacific spend two to three Australian dollars every week on kerosene. The aim is to redirect this expenditure towards more sustainable energy sources and provide dramatic improvements in lighting services.

Traditional solar lighting systems cost 250 US dollars or more, which require loans to cover the three to five years payback periods. Offshore outsourcing to a low cost labour market like China helps offering products of appropriate quality and affordable cost.

The Barefoot business model splits the solar system in two. In the first year, a villager takes a lighting kit and battery charger for sixty US dollars cash, which can be paid back to the bank in one year. The solar panel is added later, with a one to two years loan, if required.

The target here is to support good payment habits, to start investing in micro hydro and gasifier mini grids, in three to five years.Barefoot Power is planning to provide services to one million people over the next five years.

The company started with Papua New Guinea and Fiji, and is developing a global network of interest. Testing covered 100 rural households and 200 more are expecting the services over the next two months.

“My plan contributes to two main Millennium Goals,” Stewart Craine says. “The first is developing global partnerships. At least 100 local distributors will be active and 3000 village energy enterprises will be created, through linking quality, low cost original equipment manufacturers directly with local NGOs.

“The second is improving environment and housing through the increase of families living in safer domestic conditions,” Craine adds. “We are providing a clean alternative to the usual diesel generators. Kerosene consumption will decrease by 10,000 tons a year, reducing CO2 emissions. Fire incidents will drop. Children will be able to study for more hours.”

The BiD Challenge is founded on promoting small business in developing countries as a direct way to improve living standards. Barefoot Power was selected from 1600 nominations. The prize amount will add to the total they need to start the project.