Nov 7, 2019
Quadrupling sales through reliable electricity access
Electricity access has a powerful ripple effect in rural communities: it allows businesses to enjoy stable electricity supply to grow their operations and stay open longer; and it allows households to power lights, fridges, fans and other appliances and charge phones. Yet approximately 28 million people in Myanmar — more than a half of the population — still don’t have reliable access to electricity. They rely on sources such as diesel-powered generators, small solar panels and micro hydro systems as well as wood and charcoal, to meet their basic energy needs. In conjunction with the Department for Rural Development, our Founding Members, GIZ and many others, Smart Power Myanmar partners with private companies to provide affordable and reliable electricity access in rural communities through decentralised mini-grids, supporting the government’s plan to achieve universal electrification by 2030. In our recent publication, we calculated that as many as 10 million people, about a third of the total that don’t get reliable power, could be reached through a network of thousands of mini-grids.
Yet one of the main risks for mini-grid developers and energy service providers in rural areas is low utilisation of their power plants. Customers served by mini-grids often consume only a small amount of electricity because many can’t afford the large up-front payments for connection fees, appliances and equipment. Smart Power Myanmar — in close coordination with an ecosystem of partners — is reducing this risk by supporting the growth of rural electricity demand and consumption. We provide technical assistance as well as low-cost financing through our Energy Impact Fund (EIF), to grow rural businesses utilising electricity supplied from decentralised mini-grids. Our objective is to assist productive end-use businesses to convert to using electricity or purchase new electric appliances that would increase economic output of rural villages and improve livelihoods for the communities.
Khin Cho Wint, who was featured in this recent story on Forbes, runs a small store in Than Pyar Chaung village in Magway Region of Central Myanmar. Her story is a compelling example of a rural Myanmar entrepreneur who has linked her business to the mini-grid to grow her income base.
Before having access to electricity, Khin Cho Wint would sell five bottles of petrol a day on average and make a small profit of MMK 30,000 (US$20) per month. With interest-free financing of 1 million MMK (roughly US$660) from Smart Power Myanmar’s EIF, Khin Cho Wint connected to the 39 kW solar mini-grid that was installed by Pro Engineering, one of Smart Power Myanmar’s partners, purchased an electric fuel dispenser to boost her sales. She now sells approximately 20 litres of petrol per day, quadrupling her profit to over MMK 120,000 (US$80) a month. Her business is attracting new customers from surrounding villages, providing her with a stable income. Thanks to the electricity-enabled fuel dispenser, community members are also benefitting: they can now easily buy petrol for their motorbikes — the main mode of transportation in rural Myanmar — at any time of day. Khin Cho Wint also plans to expand her business and buy an additional dispenser for diesel so she can serve more customers and further increase her income.
Khin Cho Wint’s story shows impactful results that can be achieved in rural villages connected to mini-grids. She is only one of 43 rural entrepreneurs who have received business support from Smart Power Myanmar to increase rural energy demand. These entrepreneurs help to create viable mini-grid business models that spell hope for Myanmar’s energy future. To transform the lives of the remaining 28 million people who are still not connected to the main power grid and to inspire positive change throughout the country, scaled efforts will need to be facilitated by numerous agencies and private companies working in the energy access space. This means partnerships and significant resources will be needed to deploy demand stimulation, which require buy-in and financial support from the many development actors that are already working in the energy-agriculture-water space. Through integrated approaches, thousands of unelectrified communities in Myanmar will be able to benefit from rural electrification, leading to higher economic activity, unlocking GDP growth throughout the country.
