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Innovations in Microfinance: Tackling the Energy Needs of the Poor

Harald Schützeichel is director of Solar Energy Foundation, which has made several clean-energy investments in developing countries.
by Stephanie Valera
24 March 2009

NEW YORK, March, 24, 2009 – Approximately 1.7 billion people around
the world have no access to electricity. At a discussion held at the
Asia Society headquarters in New York, experts stressed the need for
urgency in meeting the energy needs of underprivileged communities.

For Harald Schützeichel,
director of German-based Solar Energy Foundation, experiencing a few
nights of complete darkness in rural Africa was enough to inspire a
philanthropy-driven business that has made several clean-energy
investments in developing countries. In India, the heart-breaking sight
of children, some of whom are less than 10 years of age, selling
flowers in the summer heat was cause enough for Harish Hande, managing director of SELCO-INDIA, to dedicate his career to humanitarian causes.

Empowering underdeveloped communities, however, is not as simple as it seems, said Philip LaRocco,
president & CEO, E+Co. The optimal energy solution is one that has
been running concurrently with the existing, obsolete energy paradigm
for some time before making a complete switchover. Additionally, an
appropriate approach to empowerment is one that enhances the ability of
the customers to afford the modern energy services. For a strategic
scale-up in such underdeveloped sectors the operative word is holistic
view; a regime must be organized where the needs of the poor are
addressed from an environmental and social perspective and not just
from a business perspective. A compartmentalized approach is not the
answer to solving the worlds energy needs, Harish added.

It is reported that every dollar invested in energy has a payoff of .08 percent in GPD for emerging counties. Asim Buksh,
founder of Buksh Foundation, recognizes an opportunity in doing social
good for the 47 percent of Pakistan that does not have access to
energy. He believes that the poor should be considered as an
underserved market segment to whom organizations, either profit or
not-for-profit, must provide options. There needs to be more ground
research to understand what energy solution works best for each rural
area, added Ellen Morris, managing director and co-founder of Arc Finance.

openness of developing nations to an increased participation of foreign
organizations for addressing the energy needs leaves few impediments in
the way of humanitarian efforts. While bureaucracy continues to be an
issue, it is not compelling enough to overcome the resilience of those
dedicated to improving the livelihood of the underprivileged.

The panel agreed that a convergence between microfinance groups and
corporate financing will give rise to successful mission-driven
organizations. And it will be this successful concoction of good
intentions and business acumen that will eventually solve the energy
problems of the poor.

Reported by Chandani Punia