SUPPLY OF SUSTAINABLE ENERGY IN RURAL AREAS OF LATIN AMERICA
A study published by the itdUPM analyzes six relevant initiatives aimed to improve the energy distribution network in Latin America.
The itdUPM has recently published a study, commissioned by the Multilateral Development Fund of the Inter-American Development Bank (FOMIN/BID) analyzing six initiatives of energy distribution networks in Latin America.
These initiatives are designed to offer sustainable answers to the problem of access to energy in rural areas from Latin America. Thus, according to the World Bank (2012), more than 20 million people still don’t have access to electricity in this continent and around 90 million people still depend on traditional fuels, mainly biomass and kerosene (emitting carbon particles in smoke).
The particularities of the initiatives studied rely on the development of inclusive distribution networks, adapted to local context and able to potentiate and benefit from the resources and existing capacities.
These networks incorporate populations as actors into value chains, “co-creating” economic and entrepreneurship opportunities, and improving the empowerment and capacity for social organization.
The six initiatives represent different approaches and solutions to the issue of access to energy in remote areas. Furthermore, they reflect successful experiences of users’ integration into energy supply chain, through microfranchises as well as their incorporation into the system’s maintenance.
The six cases also pick up relevant experiences regarding the use of different technologies – solar lamps, improved cook stoves or mini-networks-, business models – institutional alliances, external distribution or microfranchises- and financing of users – microcredit, hire purchase, etc-.
To illustrate the milestones reached thanks to the Project, we will detail briefly hereafter the analyzed cases and some of their results.
In first place, we can mention the case of Microenergía México (AMM). It is a social Enterprise created in April 2012 by the Foundation ACCIONA Microenergía (FUNDAME) aimed to facilitate access to electricity through Third Generation Solar Home Systems for households in villages with less than 100 inhabitants. At this time, the initiative has achieved the installation of 3.602 systems and wishes to reach 7.500 equipments in 2016, offering a service to 30.000 people.
Other case analyzed, EnDev  Peru, focused on the encouragement of a market of different energy services through a coordinating role between pubic administrations, private bidders and potential users. Aimed to reinforce the solar lamps’ market, EnDev carries out technological advice activities, including the testing and selection of equipments, importers and suppliers’ consultancy, and identification and strengthening of retailers.
Third case of study, Energética, a Bolivian non-profit organization driving the creation of a microfranchise network specialized in selling access to energy systems, mainly through solar lamps and other residential solar systems. Through a microfranchise network, larger solar lamps and kits from different manufacturers are bided, after checking their quality through procedures similar to Lighting Global. Energética supports the microfranchises through the stimulation of direct sales to users and institutional sales, via commercial actions and agreements with municipalities.
Iluméxico is another relevant case displayed in the study. The main mission of this Mexican social enterprise founded in 2010 is to provide solar technology products and services to Mexican rural and urban communities, enabling the access to energy for people who don’t have electric network service. Each “Ilucentro” achieves sustainability after approximately six – eight months of operation. This is when the sales volume (of new equipment and maintenance) enables them to cover their operating costs. From then on the centre receives an operating margin of 12-15% which also contributes to the sustainability of central services at the head office in Mexico City.
The study also highlights the Minirredes Project, a “pilot” public initiative designed to provide electricity through photovoltaic minipower plants for difficult to reach communities in the Amazonas region of Brazil. The two main innovative elements of the solution implemented by the private consortium Guascor/Kyocera are: Decentralized photovoltaic generation and distribution through mini-power plants and mininetworks respectively, and energy marketing through prepayment systems managed by micro-entrepreneurs. The project is based on electric mini-networks with photovoltaic technology and a flexible management system to face the problems that can appear. In order to reduce operational costs, prepayment cards have been developed similar to those used for cell phones. Remote management systems for the mini-networks have also been put in place in order to reduce the number of visits by technicians from the city of Manaus.
Lastly, the case Tecnosol, a Nicaraguan company with a business model that includes designing, supplying, consulting, capacity building and installing renewable energy systemsfor any kind of energy consumption or application. Tecnosol offers financing through loans that are defrayed in micro-payments of USD 15 a month over a period of roughly five years. In parallel to their core business they also support new businesses developed by community entrepreneurs. These entrepreneurs complement product distribution activities by becoming micro-distributors able to undertake technical maintenance services.
This article has been released by the itdUPM.
 EnDev tries to impulse the take off of an improved kitchens market, awareness of users, training of entrepreneurs and certification of kitchens’ models