Mali's banks woo clients with hire-purchase solar power kits

[August 04, 2016]  By Soumaila T. Diarra

BAMAKO (Thomson Reuters Foundation) - Residents of Mali's capital, Bamako, and surrounding areas will find it easier to switch on power in their homes thanks to local banks that have begun offering credit to buy solar energy equipment.

The government's Agency of Renewable Energies (Agence des énergies renouvelables - AER), which is leading the project, says requests for the hire-purchase solar kits are coming in thick and fast.

“This project matches international climate debate priorities,” said the agency’s director-general, Souleymane Berthé, noting that a boost in clean energy use would help Mali curb its planet-warming emissions.

Berthé thinks solar power can offer a solution to Malians’ electricity problems, providing them with power in their homes – and there is no need to wait until the billions of dollars in international assistance promised at U.N. climate change negotiations are flowing more freely.

“We have to find internal resources to fund local, clean development before the resources donors announced... arrive,” he said.

Berthé said the Mali loan program, intended to jump-start household use of solar power, may qualify to sell carbon credits under the United Nations’ Clean Development Mechanism, but has yet to apply.

“One of the advantages of renewable energy loans is offering cheaper electricity to households,” said Aminata Fofana, an advisor to Mali’s energy minister.

The Malian government signed agreements with 10 local banks in June to offer solar systems approved by AER experts to customers on credit.

“If a bank can allow me to pay for a solar energy kit over time, I won’t hesitate to request a loan,” said high-school teacher Aguibou Samake, 39.

AFFORDABLE ENERGY

Mali is one of the world’s poorest countries, with around half its population living on less than $1.25 a day, according to U.N. data.

That means most families cannot afford a solar energy kit - including solar panels, batteries and lights - which can cost as much as $1,000 upfront.

“The cost of initial investment discourages many wanting to shift to solar energy,” Berthé said.

More than 100 kits have been sold under the new program so far, he added.

Each customer will pay back 500,000 CFA francs (around $848), according to a schedule set by the bank.

Gaoussou Mariko, administrative secretary of the Mali bankers’ association, believes the scheme is set for success after attracting the participation of 10 banks in just one day.

“I don’t remember a product having been accepted like that before,” he said.

In late June, bank staff received training in how to promote the new solar systems. “If you want to sell a product, you need to know it first,” said Mariko.

Interested clients register at their bank, which purchases the solar kits from a local business approved by government experts.

LARGE-SCALE SOLAR

Many Malians, like teacher Samake, complain about regular power cuts, as the national energy company, Energie du Mali (EDM), is unable to meet the country’s electricity needs.

In the past five or six years, power cuts have become frequent in periods when the sun shines most, especially from March to May, as demand rises, Samake noted.

“There is a paradox,” he said. “Why didn’t the authorities invest earlier in solar energy development?”

In the past few years, EDM has begun to add solar power capacity to reduce its dependence on fossil fuels, which provide around half the West African nation's power and can be costly due to volatile prices on international markets.

The other half comes from renewable energies, including hydroelectric dams.

Since 2011, EDM has established five hybrid solar power plants in rural areas to supply local mini-grids.

Government advisor Fofana said the country is also building two large-scale solar power plants to feed into the national grid, including one in the central region of Ségou which is slated to be West Africa's first utility-scale solar plant.

The $58-million Ségou plant is being financed mainly by the World Bank and other donors, and has planned capacity of 33 megawatts. It is expected to cover 5 percent of Mali's electricity needs, while reducing EDM's carbon emissions by 46,000 tonnes per year.

The plant is a partnership between Norwegian company Scatec Solar and the Malian government, and will generate enough electricity to meet the needs of 60,000 households.

(Reporting by Soumaila T. Diarra; editing by Megan Rowling. Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers humanitarian news, women's rights, trafficking, property rights and climate change. Visit http://news.trust.org)

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