Smart Power Myanmar Applied Energy Lab brief: Consumer financing
December 02, 2019
One of the fundamental problems with mini-grids profitability in Myanmar is that electricity consumption of rural customers is very low. Insufficient demand creates a very real risk for mini-grid developers to sustain mini-grid operations in the future. With the goal of finding scalable ways to increase plant utilization through its Applied Energy Lab, Smart Power Myanmar is assisting developers to predict energy demand and optimize energy usage and sustainability through Proof of Concept testing.
Access to finance has been identified as one of the major barriers for accessing and using electricity in Myanmar. Given the high upfront costs for connecting to subsidized mini-grids in Myanmar, Smart Power Myanmar set out to test whether mini-grid connection financing could play a significant role in increasing access to electricity and provide stable revenue for mini-grid developers subsidized under the mini-grid program managed by the Myanmar Government’s Department of Rural Electrification. Between October 2018 and July 2019, almost US$50,000 in zero-interest loans was disbursed through the Energy Impact Fund to 6 villages served by 3 developers. With support from Smart Power Myanmar, Village Electrification Committees disbursed and managed the financing for interested households. We surveyed about 30% of households for attitudes and energy consumption.
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