The Rotary Club of Melbourne, Vic, is financing solar power on Tanna Island, Vanuatu, through community micro-loans. They have done this so successfully that the Rotary Club of Arlington, Texas, US, has adapted the system for solar light conversions in Honduras, Solomon Islands.
Remarkably, the same entrepreneur is behind both the Vanuata and Solomon projects - Stewart Craine, a Sydney-based Australian who co-founded Barefoot Power for affordable solar energy in the third world. Stewart on-lends to villagers and handles the repayments.
"The funds go initially to solar-powered LED lamps in place of fire-dangerous and polluting kerosene lamps. The next stage is solar stations in villages, where locals can pay to recharge their solar lamps and mobile phones, rather than putting more costly panels on their own roofs."
The club has lent $40,000 in four tranches to Craine for Tanna Island. He's paying 5-10 per cent interest, and in 2012 paid back capital and interest on the first $10,000.He converted lamps from kerosene to solar for 500 households (2500 people). He also paid $3000 interest on the other loans.
Last year the Rotary Club of Melbourne lent him $10,000 to establish solar powered machinery to process coconut meat for oil and make cassava flour. Three of these agro-mills are now working in Vanuatu and four in PNG.
"The machines do in minutes what would take villagers hours," says the club's solar project manager, Dr Wolfgang Kissel.
The next stage will be to help Craine bring in bigger investors and put in solar lights for 10 times more Tanna Island villages, virtually freeing them from kerosene imports.
Dr Kissel says some people in the club ask, "Why loans? Isn't this risky?" He replies that developing-country entrepreneurs take risks, but also put their community reputation at stake, so they want to get it right.
This style of lending also attracts forward-looking young people to Rotary who want to help the social entrepreneurship movement.
"Two billion people today live without electricity," Dr Kissel says. "Any electricity they do get off-grid from petroleum-fuelled generation costs 20 times more per unit than what we pay. They need affordable solar power."
(Reproduced from Rotary Down Under July 2015
page 13 with permission)