The Rural Electrification Agency (REA) of Uganda, a semi-autonomous public-private partnership created by the Ugandan Government, has announced a 45% subsidy, up from the current 14%, on all solar power equipment. The subsidy will be will be promoted through a network of rural microfinance institutions (MFIs), and non-government organisations (NGOs), who will be providing a cash payout to those who install the solar systems, or a loan or a loan-offset.
The new policy is part of the solar power component of the Energy for Rural Transformation (ERT) programme, a 10 year plan that aims at increasing electricity access to rural areas. The programme is an initiative of the Ministry of Energy & Mineral Development and the Private Sector Foundation of Uganda (PSFU), an association of businesses, corporate bodies and major public sector agencies that support private sector growth, plus nine donor agencies. It is funded by the Rural Electrification Fund of Uganda, the World Bank (the international quasi-public bank), the United Nations Development Programme (the UN’s global development network), as well as MFIs.
Only 5% of Ugandan households have access to electricity, according to government figures and only 3% in rural areas, despite the formation of the REA in 2001. The target is to reach 10% by 2012.
So far solar power has made little headway in Uganda, as current devices are expensive, with the smallest solar lantern (5 watts) costing USD88-147 in a country where four out of 10 people live on less than a dollar a day.
Through the new scheme, private solar equipment suppliers will be encouraged to invest in rural areas, thereby meeting the ERT goal of achieving 80,000 new connections by 2010. In the past six years, the government has installed less than 10,000 solar systems.
Participating MFIs will receive credit lines from the REA, as well as direct subsidies for solar system customers (MFIs). There will also be grant advances for those wanting to enter the solar equipment market or to expand into it further. For customers there will be a one-stop application process for REA subsidies, public-private sector grants and credit from MFIs, using one consolidated application form.
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David Satterthwaite
(Visit David's Website)
David brings 10 years of experience in
microfinance management, social
entrepreneurship, non-profit
management/fund-raising and microfinance
investment research.
David is the Chairman and President of
Prisma Microfinance, Inc., a retail
“microbank” operating in Central America.
He is also Chief Editor of
MicroCapital.org, a news and information
service for the microfinance community and
its investors. Each month,
MicroCapital.org publishes the
MicroCapital Monitor, the leading industry
newspaper.
David writes and speaks frequently on
microfinance. He has been a quest speaker
at many events, including: Microcredit
Summit 5+: Panel on Private Investment,
Milken Institute Global Conference, United
Nations Year of Microcredit Symposium for
Wall Street, Chicago Conference on
Microfinance, Harvard Social Enterprise
Conference, Dartmouth’s Business
Sustainability Conference, Wharton’s
Conference on Social Entrepreneurship,
Stanford’s Social Enterprise Club,
Columbia’s Social Enterprise Program and
the Net Impact Annual Conference. Through
his work with Prisma and MicroCapital, he
has been featured or quoted in The Wall
Street Journal, the Boston Globe, “All
Things Considered,” Reuters and
SocialFunds.com. David has been
recognized with the Compaq Computer
Corporation Leadership Award, the City
Year Inspiring Leader Award and the
National Social Venture Business Plan
Competition award for Best Social Impact
Analysis.
David has supported many non-profit and
for-profit social enterprises in different
capacities, including Access Technology
Learning Center, Agora Partnerships,
Bridges to Business, City Year, Fonkoze,
Kiva and National Social Venture
Competition.
David holds a B.A. with Honors in
Political Science from Haverford College.
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