IFC, a member of the World Bank Group, in partnership with the governments of the United States and Italy, is launching a program aimed at providing safe, clean and affordable off-grid lighting to two million people living in rural India over the next three years.
The program will develop the private off-grid lighting market in India across the entire value chain: manufacturing, distribution, supply chain management and access to finance. Addressing barriers to scaling up solutions based on renewable energy, the program will support companies in market assessment and all other aspects of business planning. In line with IFC’s climate change strategy, an estimated 64,000 tons of carbon emissions will be avoided as a result of this initiative.
“The private sector must come up with an affordable and reliable lighting solution for rural India, and this would be the cornerstone of the initiative aimed at providing energy access to the masses,” said G.B. Pradhan, Secretary of Government of India’s Ministry of New and Renewable Energy. Recognizing the risk of inferior quality products flooding the market, the program will work with the ministry, and develop international quality assurance benchmarks on which to base local testing capacity.
Jonathan Pershing, Deputy Special Envoy for Climate Change of the U.S. Department of State, which is co-funding the program with technical support from the U.S. Department of Energy, said, “This program has enormous potential to transform the market for off-grid energy solutions and bring affordable and quality climate-friendly lighting devices to those who don’t yet have access to electricity.” The Italian Ministry for Environment, Land and Sea, the other sponsor, is aiding this program to fight energy poverty and improve public health for the most vulnerable sections, women and children.
An estimated 400 million people in India have no access to energy, and 94 percent of them live in rural areas. Another 420 million people have minimal grid supply, driving them to expensive, inefficient and hazardous fuel-based lighting. India spends an estimated $2.2 billion annually on kerosene for lighting, showing the large market potential for off-grid lighting.
“We aim to catalyze the market for affordable, clean and quality off-grid energy products and services through this program, and emphasize the need for a flexible, long-term approach,” said Thomas Davenport, IFC Director for South Asia. “The program will build on the successes of a joint IFC-World Bank Lighting Africa program that reached 2.5 million off-grid people.”
Despite the huge population cut off from the power grids in India, there is a scarcity of commercially successful business models for alternative lighting systems. For example, only about 4 million solar home lighting products have been sold until now. IFC aims to target this opportunity by linking consumers to the lighting appliance companies and renewable energy mini-grid solutions.