Renewable energy company with a twist in Laos

Through my travels in Laos I made contact with this company which, to mind, is a very promising exception in the jungle of companies who are trying to do the country good.

People in remote villages in Lao PDR have no access to the main power grid, and many will not have for years to come. These communities have to rely on alternative sources of energy. But for most rural households, those are out of reach due to high initial costs. Sunlabob Rural Energy Ltd, a private Lao company, manages to offer electricity at affordable prices in these remote locations.
Sunlabob has three main ways of supplying remote villages with electricity. For households with a very low income, Sunlabob rents out solar lamps that are charged at central village stations. Independent small entrepreneurs take care of the charging and servicing. All the equipment remains property of Sunlabob, and clients only pay for every hour they use the light. For households with a somewhat stable income, Sunlabob offers Solar Home Systems (SHS) on a rental base. Also here, the company owns the equipment, and rents it out to affordable prizes. The key point here is the maintenance, as only longevity of the equipment makes low rents possible. The maintenance is being taken care of by designated village technicians who are trained by Sunlabob. But the company also has contracts with franchises spread throughout the country who support these technicians and give them technical back-up. Sunlabob also trains committees in the village who rent the systems, and then sub-rent them to the households. Those ensure payment discipline and security. This whole chain of responsibilities guarantees sustainability.
The solution for bigger villages is Village Hybrid Grids. Hydro power, solar power and a generator feed into a grid that also allows for using equipment like pumps or rice mills. In that way, the villagers can use their electricity in a productive manner and further develop. In the pilot project a control unit has been installed, which automatically synchronizes the different sources of energy. This is the first time that such a system is being used worldwide.
Providing solutions for a wide range of villages without depending on outside subsidies, and yet ensuring reliable servicing, make Sunlabob’s approaches unique. The company’s operations create an excellent model of how to involve the villagers, as opposed to the traditional procedure of just supplying them with donor money or equipment. Villagers have to pay for the service they get, but this allows for commercial viability, and thus ultimately enables the company to offer electricity at affordable rents. The community collects rents and performs basic maintenance, becoming part of the efforts to improve their living conditions.
Before Sunlabob’s efforts, the supply of Lao villages with electricity mostly failed. Often they were provided with equipment which broke down after a short time due to unreliable servicing. In other cases the villagers were asked to make high investments which is not possible for most.
This is all different now: The regular rents the villagers have to pay are affordable, and cover all costs, including the maintenance they no longer have to worry about. Furthermore, they get the equipment to operate right after the first rent, and they can cancel the contract anytime and give back the equipment.
Electrification has shown to have strong effects on the well-being of villagers. For instance, there is a direct link between lighting and school-achievements of children. Besides, there are issues of equity: Electricity allows access to information. Telecommunications, for example, have a direct impact on incomes of villagers through access to better and timelier market information. But there is also a psychological factor. Once rural villagers have access to electricity, they feel that they are being able to take part in modern development efforts. This is even more the case when income generating activities become possible.
Sunlabob has a huge demand for new equipment. So far, the company has installed 1850 rental systems in 73 villages throughout Laos, and at the moment has demands from more than 8000 families. The potential for growth and replication of the company’s business model is tremendous. Sunlabob has already started work in Cambodia and Indonesia, and is exploring possibilities in Bhutan, East Timor, Uganda, Tanzania, Ecuador and Peru.
International banks like Triodos and FMO could be convinced to invest in Sunlabob’s efforts, making a further expansion possible.
Sunlabob has been recognized throughout the world. Their efforts have earned it the Development Marketplace Prize of the World Bank and the prize of the German Solar Association in 2005, and have made them one of the finalists in the BBC World Challenge 2006. Sunlabob has recently been short-listed as a finalist for the Ashden Awards.

For further information see the company’s website: www.sunlabob.com