NDF - Financing for climate change and development projects

NCF 7: Solar Housing Systems for Malawian Farmers

Photo: M-PAYG
Photo: M-PAYG
Photo: M-PAYG
7.09.2018
This project addresses the challenge of energy poverty in Malawi by building an innovative Business-NGO partnership for providing M-PAYG’s decentralised, off-grid solar housing systems on a pay-as-you-go basis, giving at least 18,000 Malawians in rural farming communities’ access to clean and affordable solar energy.

Vietnam
Solar Housing Systems for Malawian Farmers
Ref: NDF C96

Nordic Partner: M-PAYG APS
Local Partner: Total LandCare Malawi
Other Local Partner: TLC Enterprises Ltd
Total Project Cost: EUR 1,320,496
NCF Financing: EUR 382,851
Agreement Signed: 22 June 2018
Project type: Mitigation
Duration:  24 months

Description
 
Smallholder farmers in Malawi suffer from a remarkably low electrification rate of 11% in the cities and a rural share of less than 1%. Modern energy services, such as solar lamps and solar housing systems, developed for off-grid communities, are difficult to purchase in remote areas due to poor distribution networks. Furthermore, the high upfront cost makes sustainable energy solutions inaccessible to poor, unbanked smallholder farmers.
 

M-PAYG is a leading Danish off-grid solar company, who develops plug-and-play 85-100W decentralised, solar housing systems with pay-as-you-go technology. The systems are sold on a lease-to-own basis with small-scale mobile payments that allows the total cost to be broken into affordable chunks. This makes the solution radically affordable for low-income, rural households who for the first time can access sustainable solar energy. The systems are furthermore compatible with solar-powered appliances as lamps, TVs, hair clippers, irrigation, mini fridges, etc. that enable basic electricity needs and support additional income-generation.

M-PAYG and its local partners Total LandCare, one of the largest NGOs in Malawi, and its subsidiary social enterprise, TLC-Enterprises leverage the strengths of the private and the NGO sectors to improve quality of life, climate mitigation, and productivity in rural Malawi. The partners combine local market experience and world-class technology development to make M-PAYG’s decentralised solar solution accessible to Total LandCare’s existing network of 250,000 rural smallholder farmers. The project mitigates climate change by eliminating environmentally degrading energy solutions such as kerosene and torches for at least 4,000 low-income households over a two-year period.

Objective
 
The main objective of the project is to tackle energy poverty by building a partner-based last-mile distribution model to make affordable, clean solar energy that meets the need of low-income smallholder farmers accessible in rural communities. The partners test the demand for M-PAYG’s solar housing system and the pay-as-you-go model by building a distribution model where Total LandCare and TLC-Enterprises’ existing agent network provides training and sells the systems and compatible products to effectively reach the beneficiaries. The initial goal is to reach 4,000 farming households, meaning eliminating energy poverty and improving livelihoods with renewable solar for 18,000 Malawians.
 
Expected key results
 
  • Building local awareness of sustainable energy sources, its uses and advantages.
  • Providing at least 18,000 low-income Malawians access to clean and affordable energy in rural farming communities.
  • Enhancing Malawian human capital with at least 20 new direct jobs – at least 10 are for women - and at least 2000 new income-generating opportunities are enabled through access to solar energy.
  • Reducing greenhouse gas emissions, CO2e, by at least 2730 tons by 2020
  • Building local capacity to exponentially scale the distribution of solar systems over the next five years, essentially allowing the partners to reach 90,000 households and enabling access to energy for 405,000 low-income Malawians by 2022.