As world leaders gathered last week at the UN Climate Change Conference COP25 in Madrid to debate greenhouse gas emission reduction targets and discuss climate action plans, The Rockefeller Foundation and Tata Power, India’s largest integrated power company, were building the first of 10,000 renewable-powered mini-grids. Through their new enterprise, TP Renewable Microgrid (TPRMG), 25 million Indians will get access to reliable, renewable electricity. TPRMG will also reduce carbon emissions by 1 million tons annually, and the amount of diesel burned by 57 million liters per year.
As we approach 2020 and the final decade to achieve the UN’s Sustainable Development Goals, recent work by the Foundation has demonstrated the primacy of electricity as a driver of economic growth and major development outcomes such as health and livelihoods. Since 2016, the Foundation’s Smart Power India (SPI) initiative has brought electricity to 220 villages through decentralized renewable energy mini-grids, connecting approximately 15,000 homes and 8,000 local enterprises across the Indian states of Bihar, Uttar Pradesh, and Jharkhand. Notably included among these are a significant number of enterprises that serve a public good, including healthcare, education, water purification and agricultural processing businesses, which have been created or scaled-up thanks to power from mini-grids.
Powering access to clean water
Today, 785 million people don’t have access to clean drinking water per World Health Organization standards – 63 million in India alone. The business opportunity and potential impact of mini-grid powered water purification businesses was clear.[1] So SPI supported entrepreneurs to invest in water treatment units; in procuring materials from suppliers, and in stimulating demand for clean water through community education efforts.
… electricity has to move those who have been locked out of the modern economy onto a path toward prosperity…
The results to date have been impressive. On average, these water treatment businesses in Uttar Pradesh supply water to 250 customers daily during summer months. The benefits of safe drinking water are well documented, reduced exposure to waterborne diseases key among them. An independent impact assessment led by Sambodhi found that approximately 30% of customers who procure water from these new water treatment businesses reported fewer incidents of stomach infections among children.
In addition to the immediate health benefits, these water treatment businesses have also contributed to modest job creation and are showing signs of contributing to broader economic development in rural communities. Not only are they a stable livelihood source for entrepreneurs and their families – providing approximately $1,680 monthly income, about five-times above Indian averages[2] – but each water treatment business also creates jobs for an additional three to five people in the local community.
Powering productive agriculture value chains
Agriculture is a critical livelihood source for about half of India’s 1.3 billion people – the majority of whom are smallholder farmers.[3] Electrifying the agriculture value chain can spur productivity, feed families, and put more money into the hands of farmers.
SPI has incubated rice hulling businesses that demonstrate the impact of electricity on agriculture development. Traditionally, rice farmers either manually husk their rice paddy – a labor- and time-intensive process – or they travel great distances and pay hefty fees to have their paddy processed. For the last three years, SPI and Energy Service Companies (ESCOs) have helped entrepreneurs purchase and learn to run mini-grid-powered rice-hulling machines.
These electric rice-hulling machines process up to 300 kilograms (661 lbs) per hour – over five times more than manual hulling. Establishing rice-hulling units within villages makes these critical services accessible to rural community members, and acts as aggregation selling points for the farmers. In a couple locations, rice-hulling entrepreneurs even buy paddy directly from local farmers at market price, which would otherwise be sold to intermediaries, cutting into farmers’ often small margins.
What’s next?
Building on these learnings, next year, the Foundation will step up its existing energy access initiative in Myanmar and expand its work in the least-electrified and most clean-water scarce region in the world: Sub-Saharan Africa. The experience from India is demonstrative of the promise and potential that electricity has to move those who have been locked out of the modern economy onto a path toward prosperity. We need to fight energy poverty in precisely the places where we need to fight poverty, and the Foundation believes the tool to fight both will be the same: electrification.
[1] Drinking Water. (2019, June 14). Retrieved from https://www.who.int/news-room/fact-sheets/detail/drinking-water.
[2] Desai, S., Dubey, A., Joshi, B., Sen, M., Shariff, A., & Vanneman, R. D. (2010). Human development in India: challenges for a society in transition. Oxford: Oxford Univ. Press.
[3] Food and Agriculture Organization of the United Nations. (2018). The state of food security and nutrition in the world: building climate resilience for food security and nutrition. Rome.
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