Enabling smallholder farmers and rural SMEs to increase income through last-mile clean, reliable and affordable decentralized energy access

Oorja deploys smart mini-grids to power small rural businesses in the agricultural value chain, increasing productivity and creating jobs.

Photo of Clementine Chambon
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I confirm that I am fully aware of the eligibility criteria, and based on its description, I am eligible to apply to the CSV Prize 2017.

  • Yes, I'm eligible

Preferred language

  • English

Organization name

Oorja Development Solutions Limited

Year founded

2015

Initiative stage

  • Growth (the pilot has already launched and is starting to expand)

Annual budget in 2017 (USD)

  • $50k - $100k

Number of beneficiaries impacted so far

  • 500 - 1,000

Organization type

  • Social enterprise

Secondary Focus Area

  • Water

Headquarters location: Country

  • United Kingdom of Great Britain and Northern Ireland

Headquarters location: City

London

Location(s) of impact

India: Sarvantara village, Bahraich District, Uttar Pradesh

Website

www.oorjasolutions.org

Facebook URL

https://www.facebook.com/oorjasolutions/

Twitter URL

https://twitter.com/oorjasolutions

Problem: What problem is this initiative trying to address?

450 million rural BoP Indians are off-grid or lack access to reliable energy. This limits potential for businesses to run, reduces job opportunities and results in rural-urban migration crisis. SMEs and farmers spend up to 30% of income on expensive and harmful diesel for commercial power and irrigation, expected to worsen with recent deregulation of diesel prices. Grid extension is not viable and solar home systems have not been widely adopted as they can't provide uninterrupted affordable energy for productive loads.

Solution Summary: What is the proposed solution? What do you see as its most promising aspects for creating shared value?

Oorja builds and installs solar PV and hybrid solar/biomass smart mini-grids of 10–50 kW in off-grid and underelectrified rural areas to provide reliable and affordable energy to power irrigation pumps for farmers, SMEs in the agricultural value chain (grain mills, cold storages, dairy chilling), cottage industries and low-income households. We use a franchise business model, where local entrepreneurs own and operate the systems, relying on their networks within the community for market entry. We provide franchisees an easy to install and maintain containerized solution and necessary operations training. Businesses benefit from powering machinery and extending their hours while saving on diesel cost and increasing income by up to 55%. Availability of reliable power stimulates new businesses to open and creates jobs. We also provide technical and entrepreneurial training to youth and women to help them integrate into the energy value chain as system operators and small business owners.

Impact: What is the impact of the work to date? Specify both the social and the environmental impact of your work

In June 2017 we installed a 10 kW smart solar DC mini-grid in off-grid Sarvantara village, Bahraich District, India. The mini-grid powers 2 solar pumps, serving irrigation water to around 50 small-holding farmers and a few small shops, at more cost-effective tariffs than diesel. It also supplies affordable electricity for lighting, fans and phone charging to 50 low-income households (500 people) through cross-subsidy. There were 3 new jobs created as we trained youth from the village to operate and maintain the systems. Our solution is helping save $2 per month per household and $70 per month per farmer on fuel expenses. It has allowed farmers to engage in more sustainable agriculture and shops to extend business hours beyond daylight increasing their revenues; children can now study longer after sunset; women feel safer after dark and do not have to inhale fumes from burning kerosene. We have avoided 20,000 kg of CO2 emissions thus far with displacement of kerosene and diesel.

Financial sustainability plan: How is this initiative financially supported? How will you ensure its financial sustainability long-term?

We have been 100% philanthropically funded through fellowship and academic grants until now. In the short term we will continue to rely on grants from Foundations and CSR money for the roll out of next 3-4 mini-grids and to conduct training programs. In the medium term once we have fully validated the franchise business model and gained significant market traction, we will be able to attract institutional capital in the form of debt and equity from angels and impact investors. We will also avail subsidies offered by the Government of India to cover 30% of the capital cost. With the deployment of our pilot mini-grid we started generating revenues. In the long term our revenues will increase by powering business loads and we expect to break even in 5 years and become financially sustainable.

Unique value proposition: What makes your initiative innovative? How does your project differ from other organizations working in the same field?

Most competitors only serve residential users generating very low revenue and few who provide commercial power own and self-operate the mini-grids, requiring huge capital and limiting their ability to scale. Our competitive advantage is in powering productive loads employing a franchise model, where local entrepreneurs operate and maintain the mini-grids. This generates higher revenue, reduces the payback period and allows rapid scale up while stimulating the rural economy and creating new jobs.

Founding story: Share a story about the "Aha!" moment that sparked the beginning of this initiative.

The Aha moment came when co-founders, Amit Saraogi and Clementine Chambon met 2.5 years ago during a 5-week summer school aimed at developing market-driven solutions to combat climate change. Amit grew up alongside a large population living in extreme poverty without access to modern energy. After spending 15 years in consulting, finance and research with UNICEF, he felt compelled to apply his expertise to empower BoP rural communities, in India. Clementine was a PhD researcher in renewable energy generation from agricultural waste and carried a passion for bringing clean energy access to millions of underserved. They both knew the grid was not the solution as it was expensive, fossil-fuel based and required decades to build. Thus, they decided to combine their diverse skills to build a disruptive model for using decentralized energy access as a catalyst for rural economic development.

Where did you hear about the Nestlé Creating Shared Value Prize?

  • Upon recommendation from others

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