Micro-finance Institutions and renewable energy companies unite to launch first-of-its-kind household solar pilot
Freetown, Dec. 1st, 2016 -- Today the Sierra Leone Association for Microfinance Institutions (SLAMFI) and the Renewable Energy Association of Sierra Leone (REASL) launched a pioneering household solar pilot project.
The household solar pilot—which will enable 1000 families to affordably purchase clean, safe home solar units—will help the Sierra Leone financial sector build a better understanding of the business opportunities presented by the emerging solar market. By addressing financing challenges and raising awareness of the potential of the sector, the pilot aims to unlock significant commercial capital to support the Sierra Leone Energy Revolution goal of achieving modern energy for all by 2025.
Within the pilot scheme, micro-finance institutions (MFIs), will provide consumer financing to their customers to enable them to purchase home solar systems—bringing significant benefits to unelectrified families. The solar home systems will be supplied by companies in the Renewable Energy Association that are registered, certified as compliant with quality standards, and who will be able to provide after sales support to customers.
The pilot will also address key financing challenges, including:
- The provision of finance to off-grid enterprises so they can make bulk order purchases of home solar systems
- The establishment of industry track record so that local commercial banks and micro-finance institutions (MFIs) become more comfortable making affordable loans to the emerging solar sector, and solar energy customers
- The creation of financing mechanisms that can help mitigate foreign exchange risks
President of, SLAMFI, Mr. David Kamara said: “This pilot marks the beginning of the Energy Revolution as it will bring the technical power of solar to those communities that have been for decades without access to electricity. As MFI’s this is a part of our efforts to promote financial inclusion in rural communities”.
President of REASL, Madam Sophie Johnson, said: “This is the beginning of a solid collaboration between the Sierra Leone Association for Microfinance Institutions and the Renewable Energy Association, which is a milestone achievement as we promote the Energy Revolution. This pilot will be very instrumental in unlocking finance as we scale up energy access in Sierra Leone”.
SLAMFI commitments within the pilot scheme include:
- Pre-financing 1000 home solar systems
- Selecting 5-10 micro-finance institutions (MFIs) to make payments against the loan
- Identifying 1000 suitable customers to take loans to purchase household solar systems
REASL commitments within the scheme include:
- Assessing and selecting 5 companies to take part in the pilot
- Delivering 1000 IEC quality solar products, with a minimum of 4 lights, phone charging capacity, and up to 2 years warranty
- Providing customer service following purchase (including a help desk for queries)
- Conducting training on the use of the systems to both MFIs’ and customers
The household solar pilot was initiated following joint discussions on energy access finance between local commercial banks, MFIs, REASL, Sierra Leone Opportunities for Business Action and international financial and development institutions, including, Sunfunder, the World Bank, the UK Department for International Development, and the Global Off-Grid Lighting Association. Discussions were convened by Power for All, and supported by the Sierra Leone Energy Revolution Taskforce.
More information and interview requests
Please contact Power for All Sierra Leone Campaign Leader, Ami Dumbuya