Grameen Shakti’s socially conscious model is not only beneficial to the millions of people of the rural communities of the developing world and the societies being served but is also profitable in the long run for the investors, and other stakeholders
The Sustainable Development Goals and Paris Agreement reconfirm that growth and development cannot continue without all countries tackling climate change and boosting environmental sustainability. With the signing of the Paris Climate Agreement 2015, aiming to limit global warming to well below 2 degree Celsius relative to pre-industrial levels and to strive to keep it to 1.5 degree C, countries pledged to reduce carbon dioxide (CO2) and other greenhouse gas emissions, as well as to adapt to the impacts of climate change.
For this, every country submitted its intended Nationally Determined Contribution (NDC) to UNFCCC in the year 2015 that includes Bangladesh as well. They also agreed that each country will update and submit their revised NDC every five year and Bangladesh submitted an updated NDC (Interim) on 31st December 2020 and it is expected that Bangladesh will be able to submit ambitious quantified emission reduction targets in our updated NDC by the year of 2021.
By scaling up renewable energy, we can sharply reduce one major source of the problem: energy-related CO2 emissions. However, this will require a huge investment to transform the current development pathway into a low-carbon, and climate-resilient infrastructure. This will require significant investment and innovation and, more importantly, a shift in the way governments and the private sector make decisions. The climate-related risks and opportunities are fully understood and reflected in the decisions that public and private actors make. The private sector should engage in adapting to climate risks because financial impacts related to floods, droughts, cyclones, tidal surges, high temperatures, and other weather-related disasters have risen steadily due to climate change.
To combat the complex issue of climate change which has social and economic impacts on the vulnerable community, there is a need for innovative solutions in the areas of climate change mitigation and adaptation. It is an opportunity for companies to develop new products and services and serve new markets.
Successful private sector engagement in adaptation will catalyze greater investment in vulnerability reduction; this will accelerate the replication of climate-resilient technologies and services in core development sectors, especially in developing countries like Bangladesh where investment in long-lived infrastructure is growing rapidly. It is important to understand how the private sector is responding to the threats and opportunities arising from climate change. This understanding can help inform the development of policy frameworks that are conducive to adaptation, identify if there are currently barriers to action and share lessons learnt.
Here in this article, we tried to depict the activity of Grameen Shakti (Rural Energy) a Social Business founded by the Nobel Laureate, Dr Muhammad Yunus in 1996. This social initiative has the aim to improve “Access to Energy” by promoting the renewable energy technologies like Solar Home System (SHS) at an affordable price. It's an innovative approach through acceptance of the financing mechanism by the low-income people and the infrastructure are the two major factors for the sustainability of rural energy access and caused a paradigm shift for thousands of rural poor with access to clean energy at affordable price.
As a pioneer of Renewable Energy in Bangladesh, in 1996 Grameen Shakti started offering SHS through both cash sale and credit sale approaches. Leveraging Grameen Bank’s successful experience in microcredit lending and managing an extensive countrywide network helped Grameen Shakti to become successful and to be the largest partner organization (PO) of the Infrastructure Development Company Limited (IDCOL) in the SHS program.
Furthermore, the micro-finance scheme helped to reach many low-income households that equate the instalment with the disposable income for energy of that time. This financial factor influenced the uplift of sale of SHS where credit facility was offered within a 3 years repayment cycle, delivering renewable energy to the off-grid areas.
So far, Grameen Shakti has installed around 1.8 million solar home systems (SHS) which are benefiting more than 9 million people with access to clean energy and it enables sustainable light and power to thousands of rural poor, promotes good health, education, and productivity that creates a positive impact by improving the quality of life and socio economic conditions of the rural communities
To know more about how the company is taking up activities to tackle climate change at local level we interviewed Sohel Ahmed, the Managing Director of Grameen Shakti.
Ahmed mentioned the company is guided by social business principles, where it must have a positive impact on the society and environment through all its activities. Grameen Shakti through dissemination of sustainable renewable energy solutions contributes to empowering women, creating green jobs, reducing poverty, and building up healthy communities including environmental conservation.
Talking about solutions on how Grameen Shakti is making a difference, Ahmed shared how the company is continuously working on building resilience with local community-based tailored solutions that positively impact the community with lots of social co-benefits through access to clean energy links to improve the quality of life in the rural areas.
These are done through designing individual self-sustainable projects and enabling a sustainable model with local field experience including environment, climatic and social issues and turning the problems into solutions for the local community to achieve its social and environmental goals.
Ahmed added, one of the innovative concepts that they are working on is Eco-Village Development (EVD), which involves the implementation of inexpensive, renewable energy solutions, food security interventions, and livelihood enhancing solutions, mainly through demonstration of the solution, creating a sustainable model for the same where it is applicable.
Grameen Shakti won the prestigious ASHDEN Award and Energy Globe Award for its unique and impressive SHS movement which brought light energy and income to rural Bangladesh with green power at an affordable cost. In 2017, the partnership of Grameen Shakti and ME SOLshare, had won the ‘Powering The Future We Want’ initiative of the United Nations Department of Economic and Social Affairs (UN DESA) for implementing the project titled ‘Smart Peer-to-Peer Solar Grids for Rural Electrification & Empowerment’.
So far Grameen Shakti has installed over 1.8 millions of Solar Home System (SHS), with 33% of its share in Bangladesh and 20% international. In addition, it has contributed to 35,000 biogas plants (40% share in Bangladesh) and distributed 1 million Improved Cook Stoves (ICS) 30% share in Bangladesh. These activities cumulatively are reducing around 1.5 million metric tonnes of CO2 per annum and saving fuel cost by $270 million per annum.
Currently, more than 97% of people in the country have access to electricity. Sohel Ahmed said that with 90% under grid system, Bangladesh is the unique example of having largest off-grid SHS system in the world, around 6 million SHS all over the country. However, the lack of operational maintenance and misuse of the system may hinder the growth of the SHS.
Availability of conventional grid electricity may also create a situation of not utilizing the captured solar energy and hence, a case of wastage of the same. At the same time, it’s opportunity to utilize the achievement of existing SHS and working together on how this could be more productive to maximize the best use of solar energy. This is a matter of integrating the off-grid SHS coverage with Rural Electrification Board (REB), the agency responsible for extending grid electricity in the rural areas.
He addressed the knowledge gained and lessons from these local projects must be shared within the country as well as around the world. GS has long involvement and collaboration with national and international partners and agencies for project design and implementation for achieving different social and environmental goals.
Grameen Shakti has the experience and expertise of working and implementing projects supported by UN, World Bank, JICA, GIZ, ADB, KFW, SNV, USAID and other similar organizations. In recent years, to leverage, optimize and institutionalize its knowledge, experience and expertise gained through the above activities and achievements, GS has established and put in operation a separate cell naming ‘Consultancy & Knowledge Practice’.
Through this cell, Grameen Shakti is implementing projects like Eco Village Development, Peer-To-Peer Solar Trading, Energy Transition, WePOWER, Bangladesh Challenge, etc. These projects are contributing toward improving the socio-economic condition of the rural people while simultaneously maximizing the approach to climate resilience and creating various green opportunities.
Grameen Shakti’s socially conscious model is not only beneficial to the millions of people of the rural communities of the developing world and the societies being served but is also profitable in the long run for the investors, and other stakeholders. The implementation of the Grameen Shakti replication can help achieve the goal of universal energy access by 2030.
Noor-E-Elahi is working in the International Centre for Climate Change and Development (ICCCAD) as a Research Officer, he is affiliated with Policy Support Program and Private Sector Program. Noor-E-Elahi can be reached at [email protected]