Supporting creation of rural entrepreneurs to enhance access to clean lighting

Client: MINDA NexGen Tech Limited (MINDA) Period of Engagement: May 2012 onwards Area of Engagement: Solar Powered Micro Grids Number of micro/mini-grid systems installed: 66 (across 6 states in India) to reach 13,200 individuals (September 2013)

As part of the Lighting Asia India program, IFC is working with MINDA NexGen Tech Limited (MINDA) since May 2012. Through off-grid power generation facilities using mini and micro-grid power plants, MINDA has been providing energy access to communities and households that are un-electrified or partially electrified. At the beginning of September 2013, sixty six (66) mini/micro-grid systems that are able to reach 13,200 individuals of varying capacities have been installed. Another sixty nine (69) systems are in the process of installation) that will be able to reach 13,800 individuals by October, 2013. MINDA has a goal to install 1500 mini/micro grids by March 2016. The power generated from the plant is used to light two Light Emitting Diodes (LED) bulbs and charge a mobile in these houses for 6-8 hours every day. The solar panel and the battery are installed either in one of the houses connected through the plant or a community area like the panchayat office from where power is distributed to the houses. Solar plant is electronically programmed to supply electricity automatically during evening hours on a pre-agreed basis with the connected households. With IFCs advisory support, MINDA will prepare and implement a plan for scaling up this business. The specific focus is on creating rural solar entrepreneurs from the villages who are individuals who will own and operate MINDAs micro-grid solution as a business. MINDA and IFC will also design learning programs for rural entrepreneurs and consultative workshops for rural off-grid stakeholders (Picture 1 and 2).

Picture 1: IFC and MINDA teams mobilizing villages heads to build product awareness

Picture 2: IFC and MINDA teams talking to villagers about system value proposition

A standard MINDA solar grid product solution costs approximately $1800 and can service about 40 households. The rural entrepreneur purchases the system and MINDA provides operation and maintenance support, and hand holds the entrepreneur as he develops his business. With each household paying approximately $2.5 per month, the payback period for the rural entrepreneurs is between 1.5 -2 years. So far, MINDA has installed 48 systems in Uttar Pradesh, 4 in Rajasthan, 3 in Tamil Nadu, 3 in Jharkhand, 1 in Bihar and 3 in Maharashtra. The support received from IFC was specifically utilized in testing models and projects/associated activities in the field, which in turn helped lay the foundation of the mini/micro grids on the ground. MINDA is also experimenting with working with large corporates and foundations to route Corporate Social Responsibility funds to install such systems in unelectrified villages. Formation of self help groups that collect monthly payment from households connected to the grid is an important element. These funds can be utilized for replacement of battery and any other maintenance if required. This helps bring in an element of sustainability by emphasizing the role of operations and maintenance in enhancing plant lifecycle. A key challenge faced by MINDA is low awareness about its product and the company itself which makes it difficult to convince villagers about the value proposition of such a solution. IFC is supporting MINDA in the following key ways to address this issue: An initiative taken up by MINDA with IFC advisory is provision of lights for demonstration purpose to its sales team members along with house hold distribution box (Picture 3). This is part of a broader sales strategy that IFC is helping MINDA put in place. IFC helped MINDA develop and put in place leaflets for the purpose of awareness creation (Picture 4). IFC is helping MINDA mobilize its sales force and helping it develop a sales and marketing Human Resource plan. IFC is helping connect MINDA with regional micro finance institutions to seek financing opportunities.

Picture 3: Demonstration Unit

Picture 3: Demonstration Unit

Picture 4: Leaflets for Awareness Creation

Clearly, our association with IFC has played a significant role in facilitating the progress as above, and the team and I would like to place on record, our deep appreciation for the support received. Arun Nagpal, (Ex) CEO, Minda NexGen Tech Limited, ( 04/04/2013)