In this episode of the Power for All podcast, a forum for leaders working to end energy poverty, Power for All speaks with Shaily Jha of the Council on Energy, Environment, and Water (CEEW). Shaily is CEEW’s energy access program lead, works in access to clean cooking with a focus on gender and social inclusion, leads the work on integrating a gender lens and empowering livelihoods, a USD 3 million initiative. The conversation is based on CEEW’s recent report -- Improving Women's Productivity and Incomes through Clean Energy in India.
One of the initial pieces of CEEW’s work around energy access and livelihoods noted that 4.3 million microenterprises operated by both men and women in India, lacked reliable electricity supply. Traditionally, even in family-based occupations, women’s access to energy has been poorer than that of men. Gender bias and socio-economic conditions have also deprived women’s decision-making powers and access to credit for economic activities. These are some of the reasons why the focus should be on women as they are an untapped market for clean energy businesses. This would also improve the productivity of women and reduce drudgery.
Women comprise half of the self-employed farmers in India. One-fourth of micro-enterprises are run by women alone. When they are run by men, a huge share of the employees are women. The farm sector consists of 42% women according to CEEW. It is hence, of prime importance that the product design and business models of the clean energy interfaces focus on the main customers. Access to finance is also a key issue for entrepreneurial women. Asset acquisition and slow return on investments are some of the socio-economic barriers that women face. This gets further exacerbated when it comes to decentralized renewable energy (DRE) products because of the high upfront capital costs.
Clean Energy Approaches
According to the study, clean energy enterprises have two basic approaches in meeting these challenges and barriers. First, is a product-based approach wherein the clean energy enterprises offer sales and services for the product along with other aspects of the business such as market linkages-backward and forward, financing and training. In most cases, it is done through development partners. These could be non-governmental organizations (NGOs) or it could be state support, livelihood missions. Most times, the additional cost of these services is either borne entirely by the partners or is shared among partner organizations. The second approach is the value-chain approach wherein clean energy enterprises, along with partner organizations are directly involved throughout the end-user value-chain process. They would be involved in financing, product deployment, buyback of finished products, and market linkage support.
A majority of energy enterprises are now focusing on the value chain approach for sustainable growth, repeat customers, and closer engagement with micro-enterprises. This enables them to verticalize their product range and enables users to move into an entrepreneurship zone.
To improve women’s entrepreneurship, incubation hubs and acceleration programmes can play an important role. Entrepreneurship Development Programmes are the recent introduction to this sector. Women who are part of the clean energy companies have benefited from these programmes. Although there is limited focus on rural and urban women, entrepreneurship development programs can focus on women micro-enterprises in a more targeted manner. There are programmes that solely focus on providing support to women in micro-enterprises in the form of technical knowledge, training, marketing, financing, and other such assistance.
Another suggestion is to use existing incubation programmes, which provide market linkage assistance to clean energy customers. CEEW’s partner Villgro also has a similar programme called ‘Powering Livelihoods’ through which they provide capital and installation support as part of their end-user financing component. This helps the micro-entrepreneurs manage the high upfront procurement costs of machines, which increases production capacity and reduces drudgery for women.
Most women don't have business registrations, collateral margin money, and there is a trust deficit from the financial institutions about the loan repayment capacity.
This is further exacerbated by the high upfront cost, the novelty of the technology being used, and the viability of clean energy businesses.
Clean energy enterprises play a significant role in building financial confidence to formalize lending to first-time borrowers, especially in the non-traditional livelihood space. They can do this by acting as aggregators of loan demand for these financial institutions and enabling financing for their customers. Many of the clean energy interfaces have already done this by partnering with a range of non-banking financial operations. Secondly, these clean energy enterprises could leverage their profit into philanthropic capital to finance their customers through a revolving fund, along with providing a first-loss default guarantee. Traditional microfinance institutions (MFIs) loans have smaller ticket sizes than what may be required for DRE asset acquisition. Although there are targeted loan products for women, the report recommends a separate category of loans for DRE asset acquisitions that are slightly larger than the usual loans.
Clean Energy Enterprises Efforts
Clean energy-based businesses are also quickly recognizing that investing in women-run enterprises opens up new markets for them as well as a good customer base for their top line of products. Moreover, entrepreneurship development programmes (EDPs) and NGO initiatives have incentivized clean energy companies to invest more in women. The innovative stem cells come up with various ideas that can address the challenge of reducing drudgery for women.
Additionally, a lot of enterprises have taken up initiatives such as community-based workshops addressing social norms within the households. Since many of these companies are still in their nascent stages, they are open to suggestions, modifications and have included gender-mainstreaming in their business plans. This has helped in strategically investing in their women customers.
There is a lack of integration of energy, gender, and livelihoods in the various government schemes and programmes. The focus remains on women in sectors that already have their presence, for example, textile, and clean cooking. But in non-traditional sectors such as e-mobility, women are not the focus group. Also, the energy policies for DRE are not integrated across sectors such as clean cooking, food processing, and agriculture. There needs to be more cohesion between mechanization and skill upgrading as well. Further recommendations to the government include gender budgeting to close gender gaps, driving gender-disaggregated data across policy design, implementation and evaluation, and capacity building not just for policy-makers alone but also for implementation officials.