Johan Elsen, managing director of Oikocredit Belgium, visits Ghana to see the positive social and economic impact of affordable, solar energy on low-income families.
Written by: Johan Elsen, Managing Director, Oikocredit Belgium
It is estimated that 1.2 billion people worldwide live without access to clean, affordable energy, with four out of five living in rural (often remote) areas. The negative effect on social and economic development in low-income and developing countries is profound.
This is the reason why the United Nations Development Agenda has included ‘access to affordable, reliable, sustainable and modern energy for all’ as one of their top 17 sustainable development goals (SDGs) to reach by 2030.
It is also why, in 2016, international social investor and co-operative, Oikocredit, placed €40 million of its investors’ capital in renewable energy projects which reached underserved communities in Africa, Asia and Latin America.
I find Helen Tetteh and her family living in a small village near the coast of Ghana. Helen used to get by on an irregular, subsistence income generated by her little tailoring business which she ran out of her cramped family home. Her entrepreneurial flair, focus on quality and work ethic made her popular with customers who lived around the local countryside.
After a few good trading years, she hired a tiny unit on a main road in the commercial area of the nearby town. She moved her micro business out of the home and took on two girls – Veronica and Dora – to assist her.
But a complete lack of access to electricity created obstacles to fulfilling her dream of creating a small business which would provide her family with a more sustainable income. The shop was often too dark to deliver the quality and quantity of work Helen wanted. And, after sunset at around 6pm, work was impossible.
“Until recently”, Helen explains, “I had no electricity in my shop. I couldn’t afford a connection to the national electricity grid which serves the town. Anyway, power cuts are so frequent that it’s simply not worth the investment”.
Helen came across PEG Africa’s solar technology through her friend, Aburi, who told her how much the system had revolutionised her small grocery business. Helen didn’t hesitate and ordered the system.
Into the light
PEG Africa, an investee partner of international co-operative and impact investor, Oikocredit, develops and distributes high-quality, affordable, solar home systems on credit to households in Ghana and Ivory Coast. The service is specifically developed for people on very low incomes who lack access to reliable electricity and banking services. The basic system comprises a battery, an 8W solar panel, two lamps, a torch, a radio and a phone charger.
Flanked by Veronica and Dora, Helen enthusiastically shows me some samples of their work and how the solar system works. The shop roof has a small solar panel connected to a battery inside. During the day, the charge produces enough energy to provide lighting in the shop via two bright bulbs.
The team is no longer forced to stop working during dark afternoons or gloomy days which means that they have been able to improve the quality and quantity of their work.
They can also now charge their phones in their unit. So, they no longer need to spend time and money at the telecoms shop on the other side of town and can stay in regular touch with their all-important customers.
“But what’s probably most important of all,” Helen whispers in my ear as I’m leaving, “is that we now also have a radio on solar power. So, Dora and Veronica enjoy their work twice as much.”
Brighter, cheaper and more reliable
I make a short detour to see Aburi’s small grocery stall, since it was she who first introduced Helen to PEG. Aburi is also connected to the national grid but, prior to adopting PEG’s solar system, she had to close her shop two or three evenings each week due to power cuts.
“It was extremely frustrating, particularly as I never knew in advance when the power cuts would happen,” she says. “I was also at a real disadvantage compared with others who had solar power and could continue to trade.”
It was only a few months prior to our visit that Aburi installed PEG’s solar system, but she has never looked back. “At first,” she tells me, “I only used the solar power when the grid cut out, but now I no longer use electricity from the grid to light my shop. The bulbs connected to the solar panel give a brighter light and I worked out that electricity from PEG’s system is cheaper than the grid!”
Focusing on community
My next stop is at one of the many Presbyterian churches that line the Ghanaian roads, where PEG has hired the venue for a customer loyalty event. Around 100 customers are attending alongside PEG’s regional staff.
The atmosphere is cheerful and relaxed. Having paid off their final instalment, these customers now own their basic solar systems so their energy is free. To reward their loyalty, PEG has created a festive event with food, music, dancing and freebies.
Aside from the entertainment, customers have a chance to discuss any technical issues they have with their systems, as well as learn about service upgrades.
A young woman is standing at an info stand as I enter and tells me, “a year ago, I didn’t dare dream of having a TV as there is no grid in my neighbourhood. But today a dream comes true for me”. And she promptly orders a television, fan and enhanced solar panel.
Excluded from the banking system and living in poverty
Enoch, the PEG regional representative who is accompanying me on these visits, next takes me to a very poor neighbourhood in Sege – an underdeveloped, rural area where I meet Francis, an unemployed carpenter.
Francis lives in a tiny home constructed of wood and corrugated iron with his wife Cecilia, their three children, his sister Comfort and niece, Jennifer. Money is in very short supply; Francis doesn’t yet have enough to invest in a workshop. To get by, Cecilia and Comfort make a little income selling pepper drinks and pork at the local market.
Until recently they had no electricity in their house. The grid reaches their village but is too expensive for them. They were told about the PEG system by friends, and Enoch visited them to explain how the system worked, how much it cost and what the payment conditions were.
Three months on, Francis hasn’t regretted his decision. For 2 cedis per day (30p), he and his family have light, mobile phone charging, a torch and a radio – at the same time, replacing the hazardous, expensive, unhealthy candles and kerosene lamps that they relied on previously.
Francis also seized the moment to build a little stall next to their house so that Cecilia and Comfort could sell their drinks to passers-by. The extra income they earn from customers who are attracted by the bright lights and radio supplements their market earnings. In sixteen months, Francis will no longer pay his daily 2 cedis for the technology, as he will own it outright.
Thereafter the family will enjoy the benefits of free solar power.
Established in 1975, Oikocredit invests in more than 800 social enterprise partners across Africa, Asia, Latin America and central and eastern Europe. We prioritise inclusive finance, smallholder agriculture and renewable energy sectors to empower the most disadvantaged communities in the world.
Oikocredit’s mission and associated impact reporting align with many of the United Nation’s 17 sustainable development goals (SDGs) – particularly SDGs 1, 2, 5, 7 and 8.
In 2016, Oikocredit placed €40m (£35m) of its investors’ capital in renewable energy projects, reaching underserved communities in Africa, Asia and Latin America.
The Oikocredit UK and Ireland investment opportunity for individuals and organisations can be made in euros or pounds sterling and other currencies, and has delivered a gross annual return every year since 1995. *
To learn more about investing with Oikocredit, contact us at:
Oikocredit UK & Ireland, Hyde Park House, 5 Manfred Road, London, SW15 2RS, UK
Tel: +44 (0) 330 355 3300; email: firstname.lastname@example.org;
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*Taken from annual reports and accounts. Terms and conditions apply. Your investment is at risk.