A report commissioned by BURKINA FASO: WILLINGNESS TO PAY FOR SOLAR LANTERNS EXECUTIVE SUMMARY

Similar documents
Promoting Sanitation Markets at the Bottom of the Pyramid in Peru: A Win-Win Scenario for Government, the Private Sector, and Communities

Development Bank of Ethiopia

How to viably market and distribute beneficial products to the BoP

What s it like in Tunisia

Evaluation African Biogas Partnership Programme Executive summary

Session 6: Offgrid Technology and Lighting Africa

The Bumpy Road to the BoP Addressing the Challenges of Distribution to the Base of the Pyramid A Ghanaian Study. Summary. Mike Debelak June 2011

FLEXGRID. A breakthrough approach for rural electrification. Inspired by nature.

Rating criteria for the fast-moving consumer goods industry. February 2018

Executive Summary. xiii

The WEF's Mobile Financial Services Project

THE WATER SECTOR IN KENYA

CALL FOR EXPRESSION OF INTEREST

The Private Sector and Development for the Poor: Principles for Success and Roles for CARE as an NGO

Village Phone A Tool for Women s Empowerment

Transforming off-grid energy transitions. SOLAR POWER FOR LIGHT, LIFE AND STUDY

SolarNow s Payment Plan Approach

Commercial Cards: Global Trends. Cardinal Consulting

H e l p i n g y o u c r e a t e a r e s i d u a l i n c o m e b u s i n e s s Reseller/agent opportunity

Product Specification for Solar Lanterns Request for proposal

An Overview of the Frequency of Credit Plus Services Offered by Global Microfinance Institutions. February 17, Abstract

STRATEGIC COURSE ON MICROFINANCE & FINANCIAL INCLUSION

Aligning Customer and Agent Value Propositions to Drive Profits. Annabel Schiff - 27 th October 2014

The Jordanian National Policy Framework for Microfinance Sector: Towards Inclusive Finance

Innovations Against Poverty

Intergovernmental Group of Experts on E-Commerce and the Digital Economy First session. 4-6 October 2017 Geneva. Contribution by SAUDI ARABIA

GOAL AREA: Economy & Jobs

Business models for solar-powered irrigation in Ethiopia

SCALING ENERGY ACCESS THROUGH ON-GRID AND OFF-GRID ELECTRIFICATION

The Climate Group Study on off-grid energy business models in India

Gender and Energy: experiences and lessons learned

EXPRESSION OF INTEREST

Building government capacity to implement market-based WASH

G.M.B. Akash/Panos. Education for All Global Monitoring Report 2

LINKAGE BANKING FOR VILLAGES IN EAST AFRICA

Notting Hill Housing Value for Money Strategy May 2017

Sub-Saharan Africa: A major potential revenue opportunity for digital payments

Draft 03/07/05 Bangladesh: Solar Home Program on Credit Sales

Emerging Opportunities in Morocco s Cards and Payments Industry

Renewable Energy Financing in Nepal. Prem Sagar Subedi CleanStart Project Coordinator United Nation s Capital Development Fund.

ANNEXURE B: LPG CONSUMPTION DYNAMICS IN SOUTH AFRICAN HOUSEHOLDS

PPPs for Rural Energy Access

REQUEST FOR INTEREST (RFI): RECRUITMENT OF GROCERY STORE DEVELOPMENT IN UNDERSERVED NEIGHBORHOODS

Building Markets to Improve National Sanitation Coverage in Cambodia.

The amendment of the energy consumption pattern Act

Microfinance increases latrine uptake in rural Cambodia Results from a randomized controlled trial

World Bank Africa Gender Innovation Lab (GIL) Call for Expressions of Interest: About the World Bank Africa Region Gender Innovation Lab (GIL)

Concept note Energy Hubs in Uganda

Feasibility Assessment EXECUTIVE SUMMARY Great Falls Food Hub

RIETI BBL Seminar Handout

Policy Developments in Turkey Bioenergy Markets Turkey

AMENDED CODE SERIES 400: MEASUREMENT OF THE ENTERPRISE AND SUPPLIER DEVELOPMENT ELEMENT OF BROAD-BASED BLACK ECONOMIC EMPOWERMENT

Towards Accessibility, Availability, Affordability and Accountability Sustainable Energy for All in India

7 Things You Need to Know About Seller Fulfilled Prime

Global Food Security Initiative Africa Regional Forum March 2013 Dakar, Senegal FINAL REPORT

Summary of the Roadmap of the ECOWAS Solar Energy Initiative (ESEI)

December, 7 th and 8 th 2015 in Abidjan

From Manufacturing to the End Consumer How to Meet the Working Capital Needs of the Off-Grid Solar Sector Across the Supply and Distribution Chain?

2017 Aid for Trade - Case Story Template SurveyMonkey

Return on Investment for VISIT FLORIDA

Merchandise Mangement, Assortment Planning, Merchandise Servicing & Buying, Supply Chain Mgmnt

BUSINESS PLAN OUTLINE

Inclusive Business & SMEs Drivers for a more inclusive economic development

Universal Access to Modern Energy Services and Clean Energy Development

Enabling Collective Action for Smallholder Market Access

AID FOR TRADE CASE STORY: ECOWAS

New technology, new livelihoods

Umm e Zia. July Women Economic Empowerment through Small Scale Food Processing. Project Proposal 30 July 2009

4-6 October 2017 Geneva. Contribution by BURUNDI

Renewable Heat Incentive: proposals for a domestic scheme. Community Housing Cymru Group response

The Role Played by Microfinance Institutions on Small and Medium Enterprise Development in Uganda

Rural and Agricultural Finance. Day 1: Block 2 History of Rural Finance and what was learned about RF Needs

Rural Women and Agricultural Extension in the Sahel

for INCLUSIVE BUSINESS

Food and Grocery Retailing in France Market Summary & Forecasts

Socio-economic factors affecting preferences for Clean Energy Technologies (CET) across households in rural and peri-urban Ethiopia

Global Alliance in Ghana

A-CARD. Smallholders Access to Finance through Bank. USAID Agricultural Extension Support Activity. Dhaka, Bangladesh

Cost structure and access to finance of cooperatives collaborating with PRO-PLANTEURS

Scale Innovations. Farmers First. Executive Summary

CORPORATE SOCIAL RESPONSIBILITY POLICY

UGANDA. About the SECOND ECONOMIC UPDATE THE WORLD BANK

Digital Financial Services for Cocoa Farmers in Côte d Ivoire. July 2016

Hidden power of the BoP. Understanding the BoP Consumer

Global Best Practices for Women s Financial Inclusion Jennifer McDonald Lagos, November 14, 2013

Emerging Diffusion and Business Models for Stand-Alone PV

UTC Rural Broadband Workshop July 21, 2014

P22 Topstep Nigeria Limited

Call for Concept notes Climate Resilient Food Security

COUNTY OF SAN JOAQUIN STRATEGIC DIRECTION FOR INFORMATION TECHNOLOGY

Key takeaways. What we know about profitability today. 85% Agree or strongly agree. 15% Disagree

GLOSSARY OF TERMS ENTREPRENEURSHIP AND BUSINESS INNOVATION

Submissions from entities in the United Nations system and elsewhere on their efforts in 2016 to implement the outcome of the WSIS

The Business Innovation Facility supports companies as they develop and implement inclusive businesses. Inclusive business is profitable, core

Company strategy and performance report

Access to Modern Electricity from GridBased Programmes: Measuring Inferred. Access

Poste Italiane - Financial results for the first half of 2018

Production of biogas from animal manure for rural household. Document Prepared and Submitted by Agriculture Technology Transfer Society (ATTS)

Enterprise Monitoring Handbook November 2016

SENATE ECONOMIC GROWTH COMMITTEE STATEMENT TO SENATE COMMITTEE SUBSTITUTE FOR. SENATE, No with committee amendments STATE OF NEW JERSEY

Transcription:

A report commissioned by BURKINA FASO: WILLINGNESS TO PAY FOR SOLAR LANTERNS EXECUTIVE SUMMARY December 2013

SUMMARY AND RECOMMENDATIONS FOR THE WIDESPREAD DISTRIBUTION OF SOLAR LANTERNS 1.1 Summary of the study 1.1.1 Target populations willingness and ability to pay Solar lanterns are poised to replace the lighting equipment currently used in Burkina Faso. Some models offer an additional service: the ability to recharge mobile phones. Surveys show that current spending on lighting in rural areas averages around CFAF 2,300 ( 3.51) per month. The extra savings generated by the ability to recharge mobile phones at home and the additional income generating activities likely to result from the use of quality products point to a payment ability of approximately CFAF 3,700 per month ( 5.64). 1.1.2 What possible role for mobile telephone service? Collaboration between mobile phone carriers and the Lighting Africa program could prove to be a win-win initiative and a major driver of the large-scale distribution of solar lanterns. The decline in average per-subscriber income noted by telephone carriers in recent years (which stabilized at around $5, or CFAF 2,500 ( 3.81), in the last two years) has convinced carriers to refocus their commercial approach on the share of monthly subscriber income spent on telecommunications. This strategy is all the more important because it allows carriers to discover other income-generating opportunities and create new services geared to expressed needs. Beyond this change of approach, carriers are looking to identify household expenditure items that are transferable to communication expenditures. In other words, how can existing expenditures be eliminated to allow subscribers to increase their spending on mobile telephone products? It is in this context that mobile carriers see potential in solar lanterns. The widespread distribution of these products would enable them to: capture a share of expenditures previously allocated to traditional lighting and the recharging of telephones; increase the number of subscribers connected to the mobile phone network thanks to the availability of mobile recharging solutions, even in the remotest areas; keep more than 5 million mobile phones connected in non-electrified areas. ii

1.1.3 Complementarity with an electricity subscription In rural areas: as a supplement to their electricity subscription, households use certain alternative sources of power, mostly battery-powered lanterns, to ensure minimal lighting during power outages. Recharging mobile phones is a priority for rural households, making any prospect of facilitating such recharging extremely attractive. In urban areas, electric customers purchase solar lanterns to maintain a minimum level of lighting, a convenience that is difficult to do without when it is available on a daily basis. Domestic surveys of national network customers show enthusiasm for this type of product among customers in all subscription categories (3A, 5A, 15A, etc.). Buying a solar lantern is not an economic decision, but one influenced far more by the desire to have a supplementary source of lighting. 1.2 Recommendations for large-scale distribution What is the best way to meet the challenge of making solar lanterns available throughout the country? Several possible approaches are proposed below. It should be noted that the establishment of a dedicated supply chain was studied in depth in the parallel study on that subject ( Burkina Faso: Mapping the Supply Chain for Solar Lighting Products ). 1.2.1 Facilitate access to financing There is no denying that the cost of lanterns is an obstacle for people living at the base of the pyramid, the primary focus of the Lighting Africa program. The involvement of microfinance institutions is an interesting option, as shown by trials under way in other countries, such as Ghana. However, this would require: Facilitating access to MFI services: shorten the prior savings period required before a loan is granted, streamline administrative formalities (most currently require the following: Urban Residence Permit, ID photos, registration fees, certificate of noninvolvement with other MFIs, etc.); Reducing the current interest rates: 24 percent per year on average (constant) in Burkina Faso, compared to, for example, 18 percent (decreasing gradually) in Togo, and consider more attractive rates for lending products with a strong social and/or environmental impact; Studying the possibility of proposing a targeted saving system: for the purchase of a specific product, and possibly remunerating such savings (ABF pays 5 percent per annum on targeted savings); Making MFIs aware of the necessity of granting loans: return to the original mission of microfinance, which is to serve the poorest and exert a positive social and environmental impact; and Helping MFIs with logistics: selection of products, knowledge of the product (objective presentation of the product by suppliers with support from the Lighting Africa program iii

from the outset in order to create a lasting relationship between the supplier and the MFI and ensure the long-term viability of the program). The involvement of MFIs is not the only option, however. First, for geographical reasons: although the network of Caisses Populaires du Burkina Faso is present in 43 of 45 regions, much of the population has no access to MFIs. The MFI penetration rate in Burkina Faso is estimated at approximately 20 percent, with some regions such as the East still grossly underserved (5 percent). For cultural reasons as well, as the people are generally not familiar with administrative agencies, much less banking and financial institutions. Moreover, there is no hiding the fact that because of the barriers to accessing many MFIs, current customers will benefit the most, while very few new customers, few young people, and few rural residents will benefit at all. These factors should be taken into account. As in the model proposed by Nafa Naana, the involvement of groups (of producers, women, etc.) and local associations (of districts, parents of students, etc.) can ensure distribution in the last mile, by offering local populations the possibility of paying over time (without the necessity of dealing with the MFIs complex procedures), while at the same time centralizing the promotion and distribution of products. Finally, distribution through MFIs poses the risk that the beneficiaries of MFIs will be pressured into buying the proposed product or risk being denied credit later on. 1.2.2 Promote the emergence of a market Give distributors sufficient margins The distributors margin should be large enough to ensure the viability of the sector, somewhere in the vicinity of 25 percent to 50 percent, based on the economic model of organization (Marketing Innovative Devices for the BoP, Hystra, March 2013). For example, one company allows margins of 13 to 23 percent, compared to 8 to 12.5 percent for another. Although the low-margin approach keeps the price low for end consumers, it leaves little room for the establishment of innovative last mile distribution. Excessively small margins will necessarily result in a low level of penetration in rural areas. Fulfill the conditions necessary for the emergence of a sustainable market The aim of the following recommendations is to expedite the emergence of, and ensure the viability of, a dedicated market: Local after-sale service: because it is still in the very early development stage, this service, which will rely on the support of existing organizations, has yet to be established. For example, a partnership between distributors and local enterprises could be considered, with a view to creating jobs and know-how at the national level, to avoid returning defective products to the manufacturer; Enhancing the awareness of target groups: facilitate consumer access to a range of affordable, reliable and high quality lighting products and services. Increasing consumer iv

awareness is crucial, as solar lanterns are at present practically unknown to people at the Base of the Pyramid. Clearly, a large-scale communication strategy carried out in cooperation with distributors in Burkina Faso will be a determining factor. The guarantee concept should be better explained in the future; Sales outlets in both urban and rural areas: sustainably facilitate consumer access to a range of lighting products and services by promoting sales through groups or launch operations, via franchised shopkeepers, for example. Policy and regulation: governmental action and institutional anchoring are essential in a large-scale rollout, as this will contribute to obligatory recycling, protect the sector against poor quality products, etc. The recent decision to exempt solar products from taxes starting in early January 2013 (see appendix) is a first step in the development of an emerging solar lantern sector; Catalyze the private sector to manufacture, market, and distribute quality products at affordable prices. It will also be very important in Burkina Faso to work with the private sector to develop entrepreneurial skills through business development services (BDS). The Chamber of Commerce and Industry of Burkina Faso (CCI-BF) should play a major role in this endeavor. v