Lighting up rural Bangladesh

Wednesday March 8th, 2017 - Smart Villages

Interview with Farzana Rahman

Senior Vice-President (Investment), Renewable Energy, IDCOL

Location: Bangladesh

“The amount of solar home systems we have installed – 4 million – speaks for itself”

Around 12% of Bangladeshis, or 18 million people, currently use solar home systems. Solar panels sit on top of rural homes with corrugated tin roofs, connected to a battery and a charge controller. Farzana Rahman, who runs a renewable energy project at Infrastructure Development Company Limited (IDCOL http://idcol.org/home/about), is pleased with the progress. She works with a hundred other people at a company which was formed by the government of Bangladesh and the World Bank in 1997. With a mixed board of members from the state and the private sector, it is Rahman’s job to ensure that grants and loans are provided to a team of partner organisations on the ground. “The idea was to bring in larger investments from the infrastructure sector,” says Rahman, who joined IDCOL a decade ago. “We provide comfort to the private sector for their investments.”

Infrastructure was the initial focus of IDCOL, thanks to a $225 million funding round by the World Bank. “However, we could only finance private sector projects with that programme, not the public sector,” she says. So when the World Bank came up with another project idea centered on renewable energy in 2003, the remit fit with IDCOL’s mandate – rural electrification was one of it main branches, and it covered both energy and the private sector. Rahman took on the programme separately in 1997. Today, around 75 people work on the team, with almost 500 people in the field. “IDCOL provides subsidy-procurement, capacity development services, quality control, and it arrange carbon credits,” reels off Rahman.

The most popular programme in Bangladesh is the solar home systems. Over 30% of Bangladeshis live off-grid, but there have been four million installations already. Rahman says the best model the company has followed so far has been ownership. “We pick micro-finance institutions, NGOs and other private limited companies to work with us on the ground, through a selection committee formed by government bodies,” she says. “These institutions are in charge of selecting houses and sales systems, be it cash or in instalments, followed by aftercare services to the households.” These NGOs include the BRAC Foundation, or Grameen Shakti.

The suppliers that the institutions work with are also certified, says Rahman, by an independent committee of engineers and government bodies, which is coordinated by IDCOL. The committee meets monthly – collections or technical problems are two of the main issues they deal with. “We have an in-house team which collaborates with government bodies in rural areas and sub-district levels, to help partner organisations collect money.”

The solar home system programme took off when other donors came in, says Rahman. “The number of solar home systems that we have installed speaks for itself – 4 million. And we have reached out to almost every village; we started with five organisations, and now have 56 organisations working under this organisation.” In a ‘Power from the Sun’ report submitted to the World Bank in 2013, (co-written by Muhammad Yunus of Grameen Shakti), the biggest impact of the solar home systems has been in kitchen lighting, improving children’s education and creating a less polluting (and more entertaining) environment. Rahman indicates that by 2021, 6 million solar home systems should be installed.

The IDCOL inspection team goes door to door year-round to ensure households are satisfied; the partner organisations supply warranties of between five or twenty years for the products or panels, and after-care services for two years. The quality check is especially important considering the masses of alternative products which are now readily available on the open market. “They’re of inferior quality, without standard warranty terms,” agrees Rahman. “The government and IDCOL has been discussing this a lot lately. With the trust of the customer being lost, their poor quality has an indirect impact on IDCOL’s share of the market.” One solution, says Rahman, is to raise awareness in the media about the reliability of the products, and the government is also establishing a nationwide standard on quality too.

A technical audit is performed every two years by independent parties, who go to various households and perform even more checks. “If there are malfunctions from suppliers, they are made accountable via penalties and the like. In terms of product innovation, we are working on smaller sized systems.” The Bangladesh government has a target to ensure universal access to energy by 2021, meaning that for now, the solar home system is seeing a decline in installations, which peaked in 2013.

“So, the future plan is to set up solar mini grid projects,” says Rahman. “A single point power system of 152kw (the capacity range for our programme) could provide electricity to between 500 and 1000 of our customers.” Eight out of 25 of these systems are now in operation. IDCOL works in villages such as Nalchap in Barisal or Adampur in Khulna, but especially in Dhaka, and Chittagong in the south-east. In 2013, half of the villages which had solar home systems were in char lands, and areas which could suffer from river erosion. The majority of villages which have installed the solar home systems have schools, clinics or madrasas nearby. Rahman says she is pleased that the solar home system has finally reached its goal; of creating a place in the market where people can buy solar home products just as they would an electrical item. “They’re everywhere,” she says. “Various NGOs and microfinance institutions who are not affiliated to us are operating in rural areas, thanks to our work.”

–Nabeelah Shabbir, @lahnabee