|name: Fabio Luiz de Oliveira Rosa|
organisations: STA and IDEAAS
type of activity: reduced-cost electrical distribution
Approximately 25 million people in Brazil do not have access to electricity. Fabio Rosa, a local social entrepreneur, is aiming to fill this need through low-cost rural electrification models to improve the quality of life for the rural poor and to slow urban migration.
YXC has developed an imaginary interview with Rosa, economist and lawyer, agronomist by trade, founder of a for-profit corporation, Agroelectric System of Appropriate Technology (STA) and a not-for-profit organisation, the Institute for Development of Natural Energy and Sustainability (IDEAAS). Both STA and IDEAAS have been working to bring electricity and community development to rural Brazil since the mid-1980s. YXC thanks his virtual interlocutor for this contribution.
How did your activity begin? When I was appointed Secretary of Agriculture of Palmares do Sul (a rural municipality in southern Brazil) at age 22, I realised that lack of electricity was making farming significantly less productive and causing people to flock to the cities in pursuit of a better life. I began to explore new business models that could serve the needs of the millions of potential customers that had been left without access to electricity. In fact it all started in the late 1990s, when Brazil hastily privatised its electric utilities.
The new utility owners didn't care about low-cost rural electrification because serving cities was much more lucrative. I knew my work was important because two billion people still lacked electricity. I learned that one billion of them could afford solar energy today at commercial rates - provided that they could rent it or pay it off in instalments. I became convinced that solar energy would prompt economic activity, improve education and health, decrease carbon emissions and relieve stress on overcrowded cities.
So, in 2001, I shot back with a new approach: renting solar energy to low-income people. My STA Agroeletro team and I conducted a study and found that almost 70 percent of the rural families interviewed spent at least $11 per month on non-renewable energy sources - kerosene, candles, and batteries. This was about the same amount needed for the monthly rent of a basic photovoltaic solar home system.
We made the system cost-effective by packaging it with productive tools - irrigation systems, electric fences and high-yielding organic farming methods. We obsessed over the details and studied the mistakes made by other solar-energy initiatives. We went so far as to include figures of saints on the box that contains the batteries, so that people would remember to pay attention.
What happened then? In August 2003, we launched a project called The Sun Shines for All (TSSFA), a for-profit venture to deliver solar energy to 6,100 rural families who lacked electricity but could afford to rent solar panels. Expansion to more than 775,000 properties will follow. TSSFA developed a basic photovoltaic solar home system that could be rented for US $10/month plus an initial installation fee, a little more than what people were already spending on non-renewable forms of energy.
Through a rental system, we saw that we would be able to reach more customers more quickly. Additionally, customers would be spared Brazil's oppressive sales taxes (which drive up prices by more than 50 per cent). Moreover, the idea made intuitive sense. What does it mean to buy solar panels? It means to buy energy for the next 25 years. Who buys food for the next 25 years? You buy food for the next week or month. It should be the same with electricity. This micro-leasing program allows households to rent a photovoltaic energy system with the capacity to deliver electricity to a home for less than US $10 per month.
You are the founder of two different companies. What are the respective tasks? IDEAAS is a non-profit organisation founded in 1997 to create and demonstrate models of self-sustainable development for low-income rural populations by focussing on the use of high-efficiency and low-cost technologies in the fields of renewable energy and agricultural science. The business plan that ensued was dubbed The Sun Shines for All (TSSFA) project described above.
STA performs the manufacturing and assembly of some components used by TSSFA, in addition to being the projectís home. Operations started in 2004 and TSSFA estimates that it will reach the breakeven point at the end of year four with 6,000 customers.
What are the goals of the TSSFA project? STA estimates that providing solar energy to 12,900 families (approximately 52,000 people) would save:
9 million litres of kerosene;
4.6 million kilos of liquefied petroleum gas;
46.4 million wax candles;
9.3 million radio batteries;
23.2 million litres of diesel fuel.
And your last comment for us is... A project only makes sense to me when it proves useful in making people happier and the environment more respected and when it represents a hope for a better future.