India is on track to be the largest democracy in the world as well as the most populated country with well over one and quarter billion people. The country is working very hard to bring more of it’s residents out of poverty and into the middle class. This means the country needs access to increasing and vast amounts of energy.
Today, India has over 400 million people that do not have access to any form or electricty. The rest of the population has access to power mostly generated from coal. The distribution system for electricity is unreliable and incredibly inefficient. It is estimated the at least 30 percent of the power generted is wasted in the distribution system.
This makes for a very unreliable electric grid and there power outages in major cities on a regular basis. So regular in fact that residents and businesses have backup diesel generators to protect themselves from the power disruptions. The scale of back of diesel generation is remarkable! In New Dehli alone there is enough diesel generator capacity to power all of the country of Australia.
All of this adds up to even more coal and diesel energy being used every year going forard if they do not do something differently. The impact on climate change will be devastating on a global scale.
India has terrific solar resources available through the continent. In reality they are working very hard to add as much solar power to the mix as they can afford. Billions ( maybe trillions ) of dollars will be needed to change the direction of the country.
Here is one company, OMC that is investing in community solar parks that homes and businesses can buy clean electricity from. OMC is a new type of power company that builds small-scale power plants with renewable sources where there is no reliable power grid today. It is a concept called micropower.
Solar micropower reduces CO2 emissions and contributes to socioeconomic development. With Micropower from OMC, children can study at night, shops can be open longer and the whole society develops.
Further Investment Is Needed For The India Solar Micropower Movement.
Recently, The Rockefeller Foundation and OMC Power closed a $4.5 million deal to finance OMC Power’s construction and retrofitting of 100 solar power plants in rural Uttar Pradesh, India to serve villages that do not have reliable access to power.
This deal is an example of a foundation engaging in impact investing—making an investment that generates social impact as well as a financial return.
The deal with OMC is particularly interesting because it was done in the context of a program called Smart Power for Rural Development (SPRD), which seeks to promote economic development via the provision of power. The SPRD program is initially focused on India—where, shockingly, nearly 250 million people lack regular access to power—and is considering expanding to countries in sub-Saharan Africa and Southeast Asia. The program utilizes both grants and impact investments to achieve its social impact goals.
By working together, whether to close an investment or electrify rural communities in India, we can generate more positive impact on the lives and livelihoods of some of the world’s most vulnerable people.
The deal with OMC is innovative, to be sure, but it didn’t come easy—it took almost two years to close, and not due to lack of effort. From the first time the Foundation met with OMC, we sensed that we were kindred organizations with the potential for collaboration. Since then, we have worked together industriously, diligently, and well, employing ninja-like strategies to obliterate the various obstacles standing in our way. But the reality is that it is very difficult for foreign nonprofits, like The Rockefeller Foundation, to make investments in India—more specifically, the strategy of foreign non-profits making impact investments is not well-understood and thus the regulatory environment is still quite onerous. It also took a lot of time to align on what constitutes positive—and sufficient—impact in the context of the SPRD program.
We are excited to be working with OMC and, in many ways, all of the work we have done to date on the financing side has only solidified our partnership. By working together, whether to close an investment or electrify rural communities in India, we can generate more positive impact on the lives and livelihoods of some of the world’s most vulnerable people.
About Gordon Smith Gordon's expertise in the area of industrial energy efficiency and alternative energy. He is an experienced electrical engineer with a Masters degree in Alternative Energy technology. He is the co-founder of several renewable energy media sites including Solar Thermal Magazine.