Outright purchase frustratingly out of reach

Ivor Hanson



It seems so simple, so logical: power from the sun.
Similarly, the components used to make that alternative energy possible—the shiny solar panels, the plastic-encased copper wiring, the stubby boxy batteries—possess a corresponding simplicity and logic; the sun goes in, the energy comes out.
With its ample sunshine and far-flung villages, the Solomon Islands present a logical place for solar power to be implemented.
However, the challenges facing solar power in the Solomons are varied and complex, ranging from maintaining and repairing the systems, to the first stumbling block of simply affording this alternative source of energy.
With the World Bank pegging the Solomon Islands’ 2008 per capita income at US$730 for most of the rural villagers that comprise the majority of this archipelago’s population, outright purchasing solar power remains frustratingly out of reach.
Fortunately, the help they need, they have received.
Typically, donor countries and Members of Solomon Islands Parliament donate solar systems to communities and constituencies.
In March, for example, the Australian High Commission, through its Community Sector Programme, donated S$90,000 for two solar systems to the Kofoburasi communities of Malaita Province.
Similarly, in February, Malaitan MP Toswei Kaua arranged for his Baegu/Asifola constituency to receive solar systems worth S$300,000 that came courtesy of the Solomons government and the government of Taiwan; last December the constituency received S$56,650 worth of solar panels from the New Zealand Government, while during the same month the Vatud constituency of Temotu Province was given 299 home-lighting kits worth S$650,000 as part of the Solomon Islands Government-funded Livelihood Fund.
Now, however, two other decidedly different approaches—one backed by the World Bank, the other the brainchild of a local businessman—are at work in the Solomons, each with the goal of moving away from solar power handouts and towards making it feasible for rural villagers to acquire solar systems for themselves and their communities.
The World Bank’s “Sustainable Energy Financing Programme” is a commercial loan programme involving the Central Bank of the Solomon Islands, ANZ Bank and the local solar electric vendors, Pro-Solutions/Koconut Pacific and Willies Electrical.
What the World Bank finds attractive in this plan is that Solomon Islands’ financial institutions and businesses are involved.
In the lingo of such projects, with the Central Bank serving as the ‘executing agency’, and ANZ as the ‘PFI’, or ‘participating financial institution’, no outside organisations are necessary.
Unfortunately, at this point at least, despite a high-profile send-off at last July’s Trade Fair and subsequent check-out-the-systems ‘roadshows’, the loan programme has not made its mark, apart from a catchy radio jingle played 10 times a day on Solomon Islands Broadcasting Corporation’s airwaves.
Granted, it’s early days: just nine months into this 10-year US$500,000 programme.
Even so, while the Central Bank of the Solomon Islands had expected 100 loans to have been issued at the six-month mark, only four had been approved; indeed that remains the total number of loans approved to this date.
Why so? The short answer is lack of money – if not lack of markets.
Compared with the four other countries participating in the bank’s regional loan scheme–Papua New Guinea, Fiji, the Marshall Islands, and Vanuatu–the Solomons just doesn’t have the same number of “bankable people”, a populace that can afford a bank loan.
Coming up with 50 percent of the purchase price of the solar systems —they range in price from S$1855 for a basic 5-watt set-up to S$11,253 for 80 watts of power—then borrowing the other half at an interest rate of 11.75% is just too high a hurdle for many.
The CBSI’s Daniel Hardini adds a few more complicating variables: ‘kerosene mentality’, irregular income, a wariness of (and inexperience with) banks, difficulty in setting aside earnings, and a lack of acceptable collateral to contend with; canoes and gardens don’t cut it as security.
As ANZ’s Tony Langston, who as Head of Business Banking handles the programme in the Solomons, understandably points out, “When someone has never had a bank account, it’s difficult to assess them as loan applicant. Will they make their payments for the next five to seven years? It’s very hard to say.”
That’s where Solomon Islander David Iro’s Willies Electrical’s “Umi Solar Direct” programme comes in. Eschewing loans, collateral and interest rates, Iro’s 10-year-old company essentially pursues an indirect form of barter, whereby produce trades for solar.
First, an interested community must demonstrate its seriousness by organising a slate of villagers who will be responsible for the solar system, and by agreeing to set aside a portion of produce grown in their gardens which Willies then sells at the local markets, as well as Honiara’s Central Market. Proceeds from those sales are then deposited into Rural Banking Accounts so that those funds can purchase and—just as importantly—maintain the solar systems.
Once that community’s “Umi” account reaches 20 percent of a solar system’s purchase price—as with the World Bank scheme, the “Umi” systems range in price and power—Willies provides the community with a solar system (or works in partnership with a donor, as in the aforementioned Australian donation), satisfied that the goals of sustainability and accountability can be achieved.
Along these lines, Willies trains village youths in the ways of upkeep and sponsors a weekly SIBC-aired 15-minute radio programme in which company employees advise listeners on how to look after their systems and answer questions on repairs.
Not surprisingly, the company also publicises where their systems can be seen first-hand, a key in generating interest and sales; they end each show with Willies’ own jingle for their systems.
Now just nine months into its existence “Umi” currently has 25 solar systems operating in 10 villages in Malaita’s Baeleiea region, lighting the homes of more than 1000 people.
Having targetted that many more villages for systems by the end of 2009, the current S$50,000 “Umi” holds in its accounts is on track to increase considerably by 2010.
First funded with a ‘seed money’ grant of S$79,000 from the New Zealand’s non-governmental organisation Sol Pac, the “Umi” scheme proved so intriguing to the “Green Energy Council of Australia” that it invited Willies Electrical to Brisbane in April to discuss their approach in person.
“I’m just trying to do what I am supposed to do,” says Willies owner Iro. “I’m helping my country to stand up on its own and doing things our way.”