Tuesday, February 01, 2011

Funding clean energy businesses for developing countries

One of the most important needs to address when developing the world is energy. Providing energy to the under-developed world presents an extra challenge because we cannot rely on the fossil fuel technology that is used in the west. The energy needs to be clean and it needs to be very cheap so people on the bottom of the economic pyramid can afford it.

One company received a write-up today that is helping to fund clean energy solutions to the under-developed world. The company called E+Co, loans money to businesses who develop solar lamps and other kinds of green energy.

From Time Magazine, writer Bryan Walsh gives us this profile of E+Co.

In the 1990s, E+Co grew out of the Rockefeller Foundation, the venerable philanthropic organization that has funded development assistance for decades. Its philosophy is still the same: find entrepreneurs on the ground in the developing world who are ready to market clean-energy solutions, and get them the capital and support they need to get started. E+Co — which has offices in Africa, Asia and South America — works with local NGOs to support those entrepreneurs, often bypassing governments on the ground. Most of the projects they help fund are off-the-grid energy solutions — solar panels or biogas, which is produced with animal or human waste. That has another added benefit: for those parts of the developing world that aren't wired to any kind of power grid, on-site generation can be an instant solution. Solar panels remain a green luxury for citizens in rich nations — they already have access to reliably cheap power — but for those who are truly off the grid, solar might offer the only way to get electricity quickly, without waiting for a government to string power lines to a rural village.

The energy problem isn't just about electricity. E+Co has begun to move into clean cook stoves, one of the most underpublicized but important health-and-development challenges in the world. Too many of the global poor still use basic wood stoves for heat and cooking, and the resulting indoor air pollution in badly ventilated homes kills more people every year than malaria. Wood stoves also mean that someone in a developing world family — almost always a woman or girl — needs to spend long hours gathering firewood, sacrificing time that could be spent in a school or business. The clean cook stoves E+Co is supporting — which often run on biogas — can help change that. "This is a very real health threat that can be fought with the right investment," says Singer. "This really is a win-win."

There's ample funding available for clean energy projects around the world — after all, Europe and Japan are still operating under the Kyoto Protocol and need to purchase carbon credits to meet their emissions reduction targets. Billions of dollars worth of investment run through the U.N.'s Clean Development Mechanism (CDM), which verifies the soundness of projects and issues carbon credits. But most of that money flows to major industrial projects in high-emission countries like China, which gets more than 60% of what's available, while Africa and South America (aside from Brazil) are barely on the map. That's because there's little incentive for funders to seek out small community projects; investors get more carbon credit for their buck helping one major Chinese factory become more efficient than finding dozens of small-scale solar projects of the sort E+Co funds. "We have to queue up and they always take someone bigger," says Singer. "We're never at the top of the list on CDM."

Read more: http://www.time.com/time/health/article/0,8599,2045426,00.html#ixzz1Ci82wJCs

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