The Asian Development Bank (ADB) announced last week that it 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.
The CTF loan will help the company to finance an additional 75,000 solar home systems for both households and microenterprises in 2016.
Mohammed Azim Hashimi, Investment Specialist at the ADB’s Private Sector Operations Department said:
“These funds will allow Simpa Energy to offer a cost-effective offgrid power solution to the many people in rural areas that the national electricity grid does not reach, or fails to deliver power.”
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-listed Simpa Networks, had installed almost 15,000 solar home systems in India, mainly in Uttar Pradesh state which has a low electrification rate.
Paul Needham, CEO of Simpa Energy said:
“Rural India is going solar. Farmers and small shopkeepers are choosing solar as the most reliable and cost-effective solution to their electricity needs.”
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.