The Situation in Nicaragua
- 42% of the population live below the national poverty line in Nicaragua; poverty levels are most prominent in rural areas where 63% of the population live below the national poverty line.
- Nicaragua has one of the lowest electrification rates in Central America, with only approximately 78% of the population having access to electricity. This rate is much lower for the rural population, which contributes to the higher poverty rate.
- People in remote areas have to rely on off-grid solutions for power and heat generation. The Nicaraguan government considers the improvement of the energy service infrastructure to be a key factor for economic growth and poverty alleviation in rural areas. However, the task at hand is huge and the governmental infrastructure lags behind, largely because of the high costs of installing, operating and maintaining electric grids in remote areas.
- There is a lack of off-grid energy technology retailers and skilled people in the electricity sector in rural areas. Therefore clients often have to travel long distances to purchase or repair their devices with the high cost of transportation also having to be factored in.
Development Effects in a Nutshell
- TECNOSOL provides energy solutions to poor families with no previous access to power, as well as to schools and hospitals which are not connected to the main electricity grid. The Company’s operations generate significant social impact by providing people with essential, effective and affordable means to improve their everyday lives.
- The Company’s operations generate a positive environmental impact that can be quantified. Since its founding in 1998, TECNOSOL has installed more than 65,000 systems. Each home solar system replaces approximately 270 litres of kerosene per year, meaning an estimated 43,500 tons of CO2 creation is avoided each year.
- TECNOSOL contributed to the establishment of the Nicaraguan solar market, which is currently the most developed in Central America. By pioneering this new technology and constantly innovating and developing its services TECNOSOL has been the market leader in Central America’s solar sector for several years now.
- TECNOSOL is planning to develop a service for obtaining, channeling and managing the loan finance needed by their customers to purchase the solar energy systems; obtaining finance remains a challenge for the people in these underprivileged areas, despite the comparatively lower costs.
- The Company has grown from 60 employees to 106, 36% of which are women, during the investment period. TECNOSOL estimates that an additional 350 jobs were created at their suppliers’ and service providers’ level as a result of their activities. The creation of jobs in rural areas is crucial to poverty alleviation, where employment opportunities are especially scarce.
- On an ongoing basis TECNOSOL participates in training sessions at local schools, universities and technical institutes to enhance the knowledge of alternative energy solutions and also offers internships to Nicaraguan students.
MEMSOL (Micro-Emprendedores de Mantenimiento Solar - Micro-Entrepreneurs in Solar Maintenance) is a recent project developed by TECNOSOL to support young entrepreneurs in Nicaragua. The 11-month program is designed to train the young men and women to become technical specialists in Photovoltaic services as well as support their development and education as entrepreneurs.
The budding entrepreneurs are then able to become independent agents in rural communities, to sell and install photovoltaic systems, as well as provide technical assistance for existing customers in otherwise isolated areas.
Following the training program, TECNOSOL provides them with a line of credit to launch their business in solar energy. Through this project TECNOSOL increases its development in remote communities by partnering with local people.
Positive impacts of solar energy in rural areas
Solar energy has the potential to reach and benefit the most vulnerable communities, because it is cheaper, faster and safer than conventional power or heat generation. The investment required is comparatively modest, the systems are set up for individual, autonomous use and therefore not dependent on large infrastructure such as distribution grids, which are non-existent in many remote places.
Solar technology bears significant development potential as an immediate resource and practical way to enhance people’s quality of life, especially in rural areas, where decent housing, clean water, and electricity are not always available. Setting aside an oil lamp or a coal stove to use clean and renewable energy has shown direct positive impacts on people’s quality of life.
Families who have installed solar energy for their homes are finding more and more ways to put the power to productive use such as powering electrical fences for their livestock, water pumping and solar cooling.
Parents and caretakers who use solar energy help avoid harmful accidents or even death to their children and families, by replacing the flammable resources previously used to illuminate their homes. Many sad stories of children disfigured by burns can be prevented by using safe, renewable energy.
Farmers who market their products locally as well as export outside the country, have confirmed that using renewable energy for their production processes makes them more competitive and facilitates achieving international certifications.
“I have had a freezer in my shop for a year and it saves me time and money. I used to travel 100 km to buy ice and it cost me $10 a week....because of the lights I can stay open later and earn $40 more a day.” (Lesbia Sebastiana Diaz shopkeeper in El Jobito, Rama)
Data as of October 2014
Obviam has made reasonable efforts to ensure the accuracy of the data presented. A case study is made possible both through Obviam’s first-hand experience and/or the information provided by Obviam’s investment partners. Data is valid as per the date recorded.