Micro-finance Interventions in Renewable Energy: Promoting Sustainable Rural Development through Solar Electrification

Resumen - EN

To promote solar electrification in rural Bangladesh, a critical barrier is high installation cost of renewable energy technology in comparison to the income of poor households. In this regard, this paper aims to assess the microfinance interventions by social enterprises and NGOs in installing Solar Home System (SHS) and thus facilitate the access to solar electricity. To do this, the study focused on SHS programs in six remote villages from northern, central and southern-east regions of Bangladesh. Primary data was collected by Key Informant Interviews with professionals in renewable energy industry. Additionally, questionnaire survey was conducted with 171 households from the study locations. The research ascertains that microfinancing the installation of SHS reduces the higher up-front cost of the technology for the rural families. They can also avail socio-economic and environmental benefits of renewable energy like better in-house lighting, savings in energy expenditure and relief from indoor air pollution that occurred from burning kerosene. However, limited user awareness and lack of maintenance service were identified as challenges for expanding solar electrification in rural Bangladesh. To deal with the challenges, a framework of stake holder collaboration and holistic research is proposed in this paper for the sustainability of renewable energy ventures.