Thank you to the Honorable Minister of Rural Development, Shir Chaudhary Birender Singh and the Honorable Minister of State for Power and New and Renewable Energy, Shri Piyush Goyal, for being here. We are honored to have you join us for this exciting announcement, marking the next chapter of the long-standing partnership between The Rockefeller Foundation, the government of India, and the Indian people. It’s a partnership that stretches more than 50 years, beginning with our shared efforts to bring about a Green Revolution for India.
We built and supported local research centers, and funded fellowships for Indian scientists to work on groundbreaking studies that would dramatically improve seed varieties of rice, wheat and corn. Together, we helped to put India on a path to feed itself and export to the world. These increases in agricultural productivity helped to set the stage for the economic and social transformation India has experienced over the last half century. Indeed, the results have been extraordinary: Health expectancy has more than doubled. Literacy rates have quadrupled. In the final quarter of 2014, GDP grew by another 7.5 percent—outpacing China. And the Indian private sector is now a world class leader in innovation and entrepreneurship. As a result of this transformation, the number of households in India with assets over 60 lakh [LACK] is expected to jump ten-fold in the next five years.
But that is the story of one India. An India that is thriving, and full of opportunity. But there is another India. An India that, in the course of all this magnificent progress, is being left behind—the nearly 30 percent of Indians who still live in poverty. In this India, a single health emergency can deal a catastrophic blow to the long-term prospects of a poor family. Dreams and ambitions are limited by the harsh reality of scarce resources such as clean water, sanitation, and energy. Productivity is stifled as households struggle to meet their most basic needs.
Access to reliable, affordable electricity can make the difference between whether one lives in the India marked by its prosperity and expanding opportunity or the India still struggling with poverty and debilitating vulnerability. And just as agricultural productivity held the key to progress in the 20th century…
In the 21st century, we know that with power comes progress. We know that electricity can increase household per capita income by 39 percent. Businesses are able to operate at higher levels of productivity. Farmers can run irrigation systems and processing machines that improve their yields. Electricity also enhances safety, learning, and has less impact on the environment than dirty diesel fuel. We believe that now is the time for an energy revolution in India. Here are four reasons why:
First, demand. According to the International Energy Agency, energy demand in India is expected to more than triple in the next three decades. This presents a tremendous market opportunity for innovation.
Second, a convergence of new technologies and innovations. For example, the proliferation of mobile usage is dramatic and opens up countless of opportunities for innovation, including the innovation we are announcing tonight. This rise in innovation is also prevalent in the new alternative sources of energy, including breakthroughs in solar technologies, affordable smart meters, and more efficient battery storage.
Third is the rise of entrepreneurs who are looking for new opportunities and new markets and impact investors who want investments that generate social and environmental impact, as well as a financial return. But finally—and this is what fills me with such optimism—there is a commitment from the highest levels of leadership in the Indian government. Prime Minister Modi himself has clearly established electrification as a key part of his government’s economic development agenda. This is demonstrated by the presence of the minister of rural development and the minister of power here today.
Given these four intersecting trends, The Rockefeller Foundation sees a unique opportunity to partner with the government to unleash local innovation and entrepreneurship, just as we did with the Green Revolution, to create a Smart Power revolution. Together with our Indian partners, we have developed an innovative model of delivering clean energy via decentralized mini-grids. But it is not the technology itself that is the big innovation, but rather it is a market innovation, the bringing together of three types of customers:
- first, an anchor tenant, such as telecommunications companies that need electricity to run their mobile phone towers and are currently relying on expensive and environmentally polluting diesel…
- Second, small enterprises, such as carpenters or agri-businesses, that need electricity to operate and grow, and will pay for reliable electricity…
- And third, villagers who can pay only some small amount for electricity, which is all they need.
In this model, an anchor tenant, for example, a telecommunications company operating local cell towers, would assure a baseline level of demand, making it profitable for an energy services company operator to build a power plant. With the anchor tenant in place, the plant operator can sell electricity to other local businesses and to households, thus building demand for power, and benefitting new and future local businesses and households. We have seen through our pilot projects how the provision of power opens up opportunities for economic development in rural villages: creating more jobs and new industries, increasing productivity, and improving access to education.
In the village of Shivpura in the Balrampur District of Uttar Pradesh, the supply of reliable electricity rather than diesel fuel, has helped an owner of a sweet shop maintain a reliable freezer for the very first time. With 10 hours of predictable power, he is now able to predict daily supply and increase his sales. In the village of Tilakpur, in the Shrawasti District of Uttar Pradesh, a father is more confident in his children’s education and the safety of his village—and he plans to open a mobile repair shop on the land in front of his house to increase their incomes. And in many villages, farmers who have switched from diesel to electric power now are able to irrigate their land in half of the time, while saving about 50 percent on energy costs.
And it’s not just business opportunity and productivity that are seeing enhancements.
- 80 percent of parents surveyed in these villages believe that with reliable electrification, their children’s interest in school has improved.
- 95 percent of households have seen benefits to their health, including fewer respiratory ailments, reduced exposure to noxious fumes, and household accidents.
- 93 percent of women feel a greater sense of safety and mobility, especially at night.
And there are clear benefits for a more participatory democracy, as well. Upon her return from a recent field visit, one of our senior directors told me how she had her “Aadhar” card made in a small village in Bihar in a facility powered by a pilot project of Smart Power. Imagine! That it might be easier to get such a task done in a small village in Bihar than in Delhi!
But in seriousness… electricity access drives better governance, better economies, and better livelihoods. As of today, The Rockefeller Foundation already has agreements with 5 ESCOs to create 96 plants. 25 are currently operational, providing power to more than 1200 customers. By the end of 2015, we anticipate that we will have 150 plants up and running.
But that is nowhere near enough.
And so today, we are announcing a $75 million investment to bring this model to more villages, with an initial goal of lighting 1,000 villages, and improving the lives of one million people, in three years.
We’ll start in the regions of Uttar Pradesh and Bihar where the need is the greatest. Now, in India, 1,000 villages may not seem like great many. But we believe it is a scale large enough to catalyze a wider market, mobilize private investors, and show that minigrids can deliver benefits for tens of thousands more villages. To ensure this coordination and oversee this work, we are tonight announcing that we are funding the creation of a new organization, Smart Power India, to be headquartered in New Delhi and led by CEO Jaideep Muhkerjee. Jaideep has spent the last two and a half years as CEO of d.light, and brings 30 years in innovation and private market development to the table. Backed by The Rockefeller Foundation’s $75 million commitment, Smart Power India will have four distinct functions. First, it will assist ESCOs in accessing financing, identifying villages where they might locate, and getting the training they need to be successful.
Second, Smart Power India will facilitate the agreements with and between anchor tenants, such as telecom tower companies, and ESCOs, investors, and technology equipment providers. Third, it will work with community groups to ensure strong local-access and uptake by households and local businesses. Finally, it will work with the government to align with your policies to build an enabling regulatory environment to support the creation of market for mini-grids and opportunities for interactivity between mini-grids and the national grid. Across this work, we will look to catalyze innovations that further improve the Smart Power model. While our immediate goal is to light 1,000 villages—this is only the beginning. Ultimately, we want to prove that this model is viable not only in India, but in regions around the world where energy poverty persists. We believe India can lead the world in solving the problems of energy poverty and unleashing greater opportunities for its people.
We believe India can lead the world in reliable and cost-effective alternative energy use. And we believe that India can become one India—not rural versus urban, not wealthy versus poor, but one India, where all people have an equal shot at opportunity, at health care, at education, at employment, no matter where they live. We are so grateful that you’ve allowed us this chance to work alongside you yet again, and look forward to a partnership that could once more transform lives in this great country.