AREED II in Action
A community-based organization working with local stakeholders develops a low-risk strategy for alleviating poverty through improved access to modern energy services. Following a needs assessment process, it identifies solar crop drying technology as a good means of reducing crop losses and increasing rural farmer incomes. Using its own resources, the organization installs and tests solar crop driers and trains rural farm associations to use them.
After drying their crops on site, farmers transport them to a packaging site where they are sorted, packed, and distributed throughout the country. A value-chain analysis reveals that solar crop drying technology and related interventions can increase the average monthly incomes of participating farmers by about 40%. In order to scale-up its operation to reach a larger number of farmers, however, the community-based organization requires assistance and funding to create a social enterprise that specializes in the production and distribution of solar crop dryers.
This is the kind of aid that AREED II is structured to deliver: direct project development assistance that enables social enterprises to scale-up existing clean energy ventures or start up new ones.
Technical assistance is combined with early stage financial cost-sharing (and later stage financing in some cases) to reach ultimate beneficiaries in rural areas. AREED II also provides indirect support in the form of end-user credit facilitation through local banking partners or microfinance institutions.
AREED II is:
- Enabling social enterprises to develop and implement sustainable projects that supply clean energy products and services at reasonable, affordable prices.
- Delivering enterprise development services coupled with early-stage financial cost-sharing to help start-up new (or expand existing) rural energy initiatives.
- Leveraging additional financing from local banks and microfinance institutions to rural people, so they can access modern energy equipment and services for income generating activities.
- Helping local and national government agencies develop policies that enable social enterprises to provide energy services in rural areas.
- Building awareness of the AREED II approach and support for its replication in other areas where the need and opportunity exists.