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After 8 years, RemitEnegy is still paving the way for energy access, turning remittances into a source of finance for sustainable energy.
With access to modern electricity services remaining a distant dream for nearly 1.3 billion people worldwide, research estimates that an annual investment of USD 52 billion is needed to achieve universal electrification. Yet, the current financial commitments to this cause drastically fall short, receiving merely USD 30 billion per year. To make matters worse, even those connected to an electricity grid consider the supply unreliable and expensive.
Tapping into remittance corridors between diaspora workers in developed countries and their families back home can pave a sustainable and empowering way to address energy poverty. The consistent rise in remittances over the years offers an unprecedented opportunity to align finances with the SDGs. Outbound migrant workers earn around USD 3 trillion each year, of which 15% is transferred back home. While 3/4 of remittance flows is utilised to meet immediate needs, the remaining savings can help secure long-term needs and build resilience against uncertainty.
In 2009, Haiti was one of the poorest countries in the world, along with the lowest coverage of electricity in the Western Hemisphere. Only 12.5% of its 8.9 million population have reliable access to electricity. At the time, over 1 million Haitians lived and worked in the USA. Moreover, Haiti received about USD 1.8 billion in remittances in 2008, which accounted for 20% of the GDP.
With the support of the Multilateral Investment Fund of the IDB, and the Clinton Bush Haiti Fund, and in partnership with Arc Finance, BASE developed a business model that enabled migrant workers from Haiti, living in Miami, USA, to allocate part of their remittance payments towards sustainable energy solutions for their communities and families in their home countries.
The business model enables migrant workers to actively purchase energy products at a remittance agent affiliated with Food Express, a partner of SogeXpress based in Miami. The products are sent directly to the receiver via the vast network of SogeXpress, a widely used Haitian money transfer organisation with 56 stores across the country, which obtains the products at a wholesale price from a local distributing partner. Other critical considerations, including consumer satisfaction and market sustainability, are taken care of by the distributor in the form of warranty fulfilment.
After conducting thorough national market assessment and feasibility studies, the business model was introduced in Haiti in April 2012. By the end of the two-year project implementation period, over 5,000 lanterns with mobile charging and mini solar home systems had been sold. The project was self-sustaining on the local market by 2016, and as a result, 82,000 clean energy products were sold, benefitting 410,000 families. The project enabled a 30% cut-back on energy costs for the beneficiaries, with nearly 0.165 megawatts of clean energy installed and 7,000 tons of greenhouse gas emissions reduced.
RemitEnergy also opened new employment opportunities in the target areas, with SogeXpress hiring 136 staff members and 601 consignment agents. The staff was upskilled on operating solar products through 11 training modules, 59% of those trained were women. Moreover, 6 million people were reached in Haiti through awareness-raising campaigns.
The pilot successfully presented remittances as a viable means to finance clean energy. Since 2009, BASE has also implemented a similar model in Bolivia with migrant workers living in Spain for the acquisition of solar water boilers and conducted feasibility studies in Central Asia.
