fbpx 49238-001: Off-Grid Prepaid Solar Leasing Project | Asian Development Bank

India: Off-Grid Prepaid Solar Leasing Project

Nonsovereign (Private) Project | 49238-001 Status: Active

A debt facility of up to $6 million using third-party donor capital from the ADB-administered Clean Technology Fund (CTF) to Simpa Energy India Private Limited to allow the company to expand its deployment of pre-paid off-grid solar home systems in the state of Uttar Pradesh (UP), India. Simpa is an early-stage energy-access company providing solar-based energy solutions to rural customers who either lack access to electricity or receive only a few hours of electricity from their grid connection each day. The company has received early stage funding from venture capital investors and is showing year-over-year revenue growth. In 2013, ADB made a $2 million investment in Simpa for a stake in the company.

Project Details

Project Officer
Patil, Avesh Private Sector Operations Department Request for information
Country
  • India
Sector
  • Energy
 
Project Name Off-Grid Prepaid Solar Leasing Project
Project Number 49238-001
Borrower/Company Simpa Energy India Private Limited
Country India
Location Uttar Pradesh
Type or Modality of Assistance
Loan Clean Technology Fund USD 6.00 million Approved
8298 Loan Clean Technology Fund USD 6.00 million Committed
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Drivers of Change Private sector development
Sector / Subsector

Energy / Renewable energy generation - solar

Gender Equity and Mainstreaming Some gender elements
Responsible ADB Department Private Sector Operations Department
Responsible ADB Division Portfolio Management Division, PSOD
Responsible ADB Officer Patil, Avesh
Project Sponsor(s)
Description

A debt facility of up to $6 million using third-party donor capital from the ADB-administered Clean Technology Fund (CTF) to Simpa Energy India Private Limited to allow the company to expand its deployment of pre-paid off-grid solar home systems in the state of Uttar Pradesh (UP), India. Simpa is an early-stage energy-access company providing solar-based energy solutions to rural customers who either lack access to electricity or receive only a few hours of electricity from their grid connection each day. The company has received early stage funding from venture capital investors and is showing year-over-year revenue growth. In 2013, ADB made a $2 million investment in Simpa for a stake in the company.

Simpa''s customers make a small down payment for a solar photovoltaic (PV) home system and subsequently pre-pay for daily energy service, topping up their systems in small user-defined increments via SMS. Each payment also amortizes the final cost of the system. Once fully paid (typically 2-3 years after initial purchase, depending on the payment plan) the system unlocks permanently and continues to produce electricity for the customer without any further payments (essentially a lease model). This transforms recurrent energy expenditures (that would otherwise be spent on kerosene or candles) into an asset purchase. Simpa has reached over 13,800 customers by end of July 2015 through a distribution network of 9 branches.

Objectives and Scope The project will (i) improve access to electricity in rural India, the availability of which can yield a myriad of benefits such as improved education outcomes as children can study after sunset, improved hygiene etc.; (ii) reduce greenhouse gas emissions by substituting kerosene with solar energy thereby also improving air quality and benefiting the respiratory health of household members; and (iii) have gender benefits due to female beneficiaries. Successful implementation of this off grid energy solution across India could also have a demonstration effect in neighboring Bangladesh, Nepal and Pakistan, which have chronic power shortages and a high percentage of un-electrified rural households. Further capital infusion will also give credence to the case for increasing financing for innovative off-grid renewable energy solutions in South Asia.
Status of Development Objectives The Project has started contributing to its development objectives.
Status of Operation/Construction

Out of the USD 6 mln facility, ADB had disbursed USD 1.5 mln. The remaining facility remains undisbursed as loan availability period has ended.

The company has a distribution network of about 22 branches in December 2018 in rural areas of Uttar Pradesh, Bihar and Odisha. Also, ENGIE has purchased 90% of Simpa Energy India from its parent

company, Simpa Networks, Inc., gained a controlling stake in the Indian business, and also made an investment into Simpa Energy India to accelerate further growth.

Linkage to Country/Regional Strategy The proposed financing is consistent with ADB's Midterm Review of Strategy 2020 as it relates to two of the five core focus areas of infrastructure and environment. Under Strategy 2020, ADB is committed to expanding the supply of energy in an environmentally sustainable way. The investment is also aligned with the India Country Partnership Strategy (CPS) 2013-2017 which highlights access to energy as one of key areas of ADB's engagement.
Safeguard Categories
Environment C
Involuntary Resettlement C
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects In compliance with ADB's Safeguard Policy Statement (2009), the project is classified as category C for environment, involuntary resettlement, and indigenous peoples.
Involuntary Resettlement In compliance with ADB's Safeguard Policy Statement (2009), the project is classified as category C for environment, involuntary resettlement, and indigenous peoples.
Indigenous Peoples In compliance with ADB's Safeguard Policy Statement (2009), the project is classified as category C for environment, involuntary resettlement, and indigenous peoples.
Stakeholder Communication, Participation, and Consultation
Timetable for assistance design, processing and implementation
Concept Clearance 23 Jun 2015
Credit Committee Meeting 14 Sep 2015
Approval 01 Dec 2015
Last PDS Update 28 Mar 2019

Project Data Sheets (PDS) contain summary information on the project or program. Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.

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Title Document Type Document Datesort descending
Off-Grid Prepaid Solar Leasing Project: Initial Poverty and Social Analysis Initial Poverty and Social Analysis Oct 2015
Off-Grid Prepaid Solar Leasing Project: Report and Recommendation of the President Reports and Recommendations of the President Nov 2015

Safeguard Documents See also: Safeguards

Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.

None currently available.

Evaluation Documents See also: Independent Evaluation

None currently available.

Related Publications

None currently available.


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