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ADB Supports Scale Up of Off-Grid Solar Power Systems in Rural India

News from Country Offices | 4 December 2015

NEW DELHI, INDIA — The Asian Development Bank (ADB) is administering a $6 million loan from the Clean Technology Fund (CTF) to help Simpa Energy India Private Ltd expand its off-grid solar home system service to underserved markets in rural India. 

“These funds will allow Simpa Energy to offer a cost-effective off-grid power solution to the many people in rural areas that the national electricity grid does not reach, or fails to deliver power,” said Mohammed Azim Hashimi, Investment Specialist at the ADB’s Private Sector Operations Department.

Simpa Energy installs its solar photovoltaic system in customers’ homes for a small initial downpayment, and then customers prepay for power on a daily basis using their cellphones. Part of each mobile payment also goes towards paying off the full cost of the system, with the customer typically able to acquire it after some 1 to 3 years. 

As of October 2015, Simpa Energy, a unit of US-based Simpa Networks, had installed almost 15,000 solar home systems in India, mainly in Uttar Pradesh state which has a low electrification rate. 

“Rural India is going solar,” said Paul Needham, CEO of Simpa Energy. “Farmers and small shopkeepers are choosing solar as the most reliable and cost-effective solution to their electricity needs.” 

The CTF loan, which will be administered by ADB, will help the company to finance an additional 75,000 solar home systems for both households and microenterprises in 2016. By the end of 2018, Simpa aims to have rolled out 225,000 systems, providing clean energy for almost a quarter of a million households and small businesses, and avoiding generation of over 75,000 tons of carbon dioxide emissions annually. Indian households without access to electricity typically rely on relatively polluting kerosene as their primary source of lighting. This investment follows an earlier $2 million equity investment by ADB in 2013. 

The CTF is a funding window of the Climate Investment Funds which provide resources to scale up the demonstration, deployment and transfer of low-carbon technologies with a significant potential for long-term greenhouse gas emissions savings. 

ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. Established in 1966, it is owned by 67 members—48 from the region. In 2014, ADB assistance totaled $22.9 billion, including cofinancing of $9.2 billion.