Empower Generation – Providing clean energy through women entrepreneurs in Nepal

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This week I want to profile a social venture which was shared with me by a reader.  Thanks for sharing.  I hope more of you will by filling out this online form. The idea is one which was started by a couple who both had a passion for something different – one for women empowerment and the other for clean technologies.  But together they shared a passion for making the world a better place and decided to merge their ideas into one common cause.  The result was Empower Generation, a non-profit which is spreading clean energy in Nepal one woman at a time.  They are still small but growing, to date they have sold 825 solar lights reaching more than 4000 homes in Nepal. They have also been featured in Scientific American and other blogs.

WHAT IS THE BUSINESS ABOUT? 

Essentially Empower Generation is selling solar technology they call WakaWaka Light and WakaWaka Power (nice play on the popular Shakira song 2010 World Cup song) in the developed world at a mark up price which is used to finance a fund which helps finance the distribution by women entrepreneurs of the same lights to rural communities in Nepal.   The women entrepreneurs  receive low-interest 5-year start up loans used to pay for the technology which in turn they sell in their communities.  Once all of the product is sold the money is repaid to the fund which is used to pay for another woman entrepreneur in another community to buy and sell the solar technology to the people who need it most.

HOW DID IT START?  

The idea was born out of the passions of a couple which met as undergraduates at Columbia University in New York City. One was passionate about women’s issues in developing countries, particularly those vulnerable to slavery and human trafficking.  The other about how to enable widespread adoption of clean technologies in developing countries.  After a trip together throughout Asia looking for ideas they finally settled on the idea that their ideas could combine to spread clean technologies through women entrepreneurs and that a good place to start would ne in Nepal.  For more on their love story click here.  

WHAT IS THE SOCIAL NEED IT ADDRESSES?

The problem Empower Generation is trying to address is reliable access to clean energy by the poorest 20% of the world’s population living in rural parts of developing countries such as where they are focused in the Tarai region of Nepal.  In doing so they are hoping to reduce the poisonous respiratory effects caused by traditional sources of energy such as firewood and kerosene.  They are also trying to promote women as entrepreneurs to give them and their children the opportunity to access a better life.

WHAT IS THE BUSINESS MODEL?

  • Value Proposition – It seems that there are three principal customers.  There are the first world customers who buy the solar chargers/LED lights for pleasure but also who gain utility by knowing that they are helping women in Nepal and the same time.  For the women entrepreneurs they are providing them with access to a unique product and already existing financing mechanism which makes it easier for them to just focus on sales.  And for the end-user in Nepal they are providing new sources of clean and hopefully affordable energy.
  • Channels – This is the unique innovation, as there are many low-cost solar programs out there the real challenge is how to get the solar technology distributed to the people who need it most.  Empower Generation is solving this using the women entrepreneurs who essentially bring the technology into their communities on their backs and thus eliminate a huge part of the distribution challenge in countries like Nepal.
  • Revenue Streams – Revenues come primarily from the purchase of the product in the developed world, which are used to finance and subsidize prices and distribution in Nepal.  As it is a non-profit all profits are reinvested
  • Cost Structure – The technology (which I assume is purchased from a third-party) and its transportation to Nepal is principle cost. There is also I am assuming the cost of training of women entrepreneurs as sales agents and also of local maintenance    Otherwise the model has extremely low costs.
  • Key Partners – The business relies heavily on solar technology (D.Light) and microfinance partners (Microcredits for Mothers).  Without which their would not be a business.

WHAT ARE SOME CONCERNS I SEE WITH THE MODEL?

  • Technology/competition – I am by no means an expert in this technology but I do know that there are a lot of small players out there similar to Empower Generation which are trying to distribute similar products.  What makes this product different and is it the one most suitable to address the key energy needs of the final customers.  Do the solar lights and chargers provide enough energy to make a meaningful productive difference in the communities they will be used?  Or will they just be treated as gadgets?  Also will the technology continue to evolve? What happens when a better solar technology comes along?
  • Cost – I didn’t see anywhere how much the units cost the end-user in Nepal or how it compares to other sources of energy on a per dollar basis.  I am guessing the technology is expensive and relative to the meager incomes that the rural poor earn, how can they afford this technology? WIll it give the expected return on investment they need?  Sadly their primary concern is not clean energy but energy itself.
  • Maintenance – What happens when the product doesn’t work or stops working?  Is the technology something that can easily be repaired by the user?
  • Marketing – Maybe it is just me but the website, logos and explanation of the business are a bit hard to follow at first.  Especially since it is merging so many distinct but important concepts; e.g. women’s empowerment, clean energy and access to finance.  A typical customer is not going to want to spend much time reviewing the site to decide whether or not they want to buy.  I would just focus on the key messages, buy these solar chargers and you will be helping women entrepreneurs in Nepal gain access to clean energy.
  • Binding constraint – Finally I might want to know more if this solution is actually addressing the most pressing social need of the rural poor and women entrepreneurs in Nepal.  Is providing solar light and energy addressing the issue which will lift them out of poverty or would money be better spent on something else?

WHAT DO YOU THINK?

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One thought on “Empower Generation – Providing clean energy through women entrepreneurs in Nepal

  1. Empower Generation

    Hi Kusi and Giacomo!

    Thanks for featuring Empower Generation on your blog. We have a few clarifications about what you’ve covered in the article, and hope you don’t mind us outlining them below so readers have the most accurate information about why we exist, what we do, and how we do it.

    Regarding WakaWaka, Empower Generation does not work for, or sell, WakaWaka Lights and WakaWaka Power. WakaWaka is one of a number of clean energy technology products we partner with to achieve our mission. Our business model is best shown on our website: http://www.empowergeneration.org/our-work

    Once an entrepreneur sells their entire product order they are able to order more, and scale their business. Entrepreneurs are given a 5-year start-up loan. Once the principle from that loan is repaid, it is used to fund another start-up enterprise. Our pilot entrepreneur Sita Adhikari recently gained a sizeable line of credit for her business, and just ordered 18,000 solar lamps to sell through our growing, women-led distribution network.

    The social need aim to address is a number of problems (as tackling them in isolation may not have the same impact). In Nepal we increase local economic opportunities, promote gender equality, and combat the root causes of poverty (which in some cases for young Nepalese women leads to trafficking). We achieve this through providing training, inventory and capital to talented women who want a brighter future for themselves and their communities.

    In doing so they are hoping to reduce the poisonous respiratory effects caused by traditional sources of energy such as firewood and kerosene. They are also trying to promote women as entrepreneurs to give them and their children the opportunity to access a better life.

    Our value proposition (again refer to our business model) shows how we partner with energy technology suppliers and investors to facilitate the development of women entrepreneurs and customer loans. First world customers who purchase solar chargers/lights through Empower Generation’s website only did this as a temporary fundraising campaign and are contributing to the investment in our work in Nepal. We are not a retailer of solar chargers/lights in either Nepal or the US.

    For our women entrepreneurs we provide access to clean energy products, training (including marketing, accounting, business operations and sales) and financing. For their customers, we offer affordable products (through our entrepreneurs) and customer financing to overcome the upfront costs of switching from kerosene to solar.

    We should clarify that we have a very different model to a business like Tom’s Shoes. The purchase of solar products from our website has been part of a donation campaign which is now finished or another way for people to support our mission.

    Currently Empower Generation, as a registered charity in the US receives charitable funds. Our program-related revenues are from the interest we receive from the women entrepreneurs we fund and the clean energy funds we start at local microfinance cooperatives. We’re a legal structure hybrid, registered as a charity in the United States and currently trying to retain equity shares in for-profit ventures in Nepal.

    The cost of the technology is solely on the entrepreneurs themselves. EG does not buy or sell any technology. Our costs are our financial products offered and the training and support we provide to our entrepreneurs and their workforce.

    When it comes to cost structure and key partners, we do not rely heavily on one solar technology provider. We are technology neutral and work with a range of product providers. We have a range of partnerships with various clean energy providers to supply appropriate products for our entrepreneurs in Nepal. Microcredit for Mothers has yet to provide us any funding for our Clean Energy Funds. To date, Empower Generation has funded all of its microfinance itself.

    You ask about what makes this product different – here’s our thoughts:
    The productivity differences provided through solar lights far outweigh the current situation for many communities. Being able to read or study at night or work on a business after dark is a life opportunity previously not available without solar lights. We’ve been delighted to receive many customer stories of women having time to make handicrafts, cyclers strapping lights to bikes to travel home safely and children studying three hours every night – achieving better grades, and staying in school.

    Like any smart business, we aim to adapt and remain flexible to developments in the industry, along with any external and internal influences on our operations. If a better solar technology comes along we investigate it, in the best interests of our entrepreneurs and their customers. We are currently piloting a “energy as a service model” where we will be offering solar home systems or nano-grid technology.

    You also ask about cost, and this is an important area of clarification for us:
    We believe that clean energy is a primary concern, not only for it’s environmental advantages, but also as traditional energy (e.g. electricity and kerosene) continues to be unaffordable and inefficient. As it stands, 60% of Nepal’s population will never be connected to the electric grid, and the rest suffer daily power outages lasting up to 18 hours.

    Solar is extremely cost competitive with kerosene. At the moment a rural family in Nepal spends about 10% of their income just for light! The payback of purchasing a solar lamp and replacing kerosene or candles for the end user is 6-12 months. Over the 5-year lifetime of a lamp, a family will save around $170 on lighting expenses. This is extremely significant, considering the per capita income in Nepal is only $350.

    As for maintenance if the product doesn’t work or stops working, all our entrepreneurs have trained technicians who are able to repair products once the warranty period (2-year replacement warranty) is finished.

    Phew, this was a long comment! We hope it helps clarify our approach and we always welcome readers to visit our website for the latest information.

    From the team at Empower Generation!

    Reply

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