World Bank Initiates Rural Solar Energy Plan

The World Bank last week launched a $10 million project to provide 100,000 villagers with household solar power units, in an effort to bring a sustainable source of electricity to the rural majority who currently live without it.

About 700 kilowatts of energy per day are currently generated by solar power systems across the country. But that figure could rise dramatically in coming years, as the government is forced to examine alternative, sustainable energy sources.

The World Bank plans to subsidize about a quarter of the cost of each solar power unit given out under the plan, the most basic of which costs $400. Local microfinance plans will offer buyers loans to cover the remaining cost, officials said.

The solar power plan is part of the World Bank’s five-year Nation­al Renewable Electricity Action Plan, which was launched Friday. The project is due to begin next year and continue through 2009.

Currently, just 13 percent of the rural population is connected to the national electricity grid; 56 percent of the rural poor use car batteries to light up their homes and television screens.

The World Bank estimates that 70 percent of the population will be on the grid by 2030. But even now, with such a small proportion using grid electricity, the nation is facing a chronic shortage of power.

Much of the electricity in border areas is im­ported from Thai­land and Vietnam, and the gov­­ernment is currently looking into building a hydroelectric dam, officials said last week.

Sat Samy, dep­u­ty director general of the Ener­gy Depart­ment at the Ministry of Industry, Mines and Energy, said the chief purpose of the solar power plan is to demonstrate the advantages of renewable energy in poor villages.

“This is the first renewable energy action plan to take pilot projects to villages,” Sat Samy said.

Peter Banwell, general manager of Khmer Solar, a major supplier of solar energy equipment who will be involved in the plan, said the project’s success is dependent on the government passing legislation to exempt solar energy equipment from taxation—a norm in most other countries.

Similar solar projects in Sri Lanka, Bangladesh, Morocco and Kenya have been very successful, Banwell said. “But unlike these nations, Cambodia is lacking a vibrant finance system.”

One of the major obstacles to the widespread use of solar-generated power is the high initial cost of buying the solar system; three-quarters of Khmer Solar’s sales are bought on credit, Banwell said. So the provision of simple, user-friend­ly credit will be essential to the project’s success, he said.

A representative of Acleda Bank said at the project launch that his bank plans to lend money to poor families to help them purchase the subsidized solar units.

The bank’s decision to subsidize, rather than buy, the solar units is a carefully considered one.

“With a giveaway project, often what’s lacking is someone on the ground who is knowledgeable about the systems and can advise about maintenance,” Banwell said. “It’s important to maintain the system.”

Once the initial cost of the unit has been paid out, the consumer advantages of solar power are numerous, Banwell said.

They include avoiding the re­curring cost of recharging car batteries and the danger of trans­porting acid-filled batteries, and having access to a durable, de­pend­able and guaranteed source of electricity 24 hours a day.

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