ADB supported Simpa Networks (Simpa) with a USD 2M equity investment and USD 6M loan (Clean Technology Fund) that expands the company’s off-grid, pay-as-you-go (PayGo) solar energy services to more underserved households in rural India. Maanaveeya Finance and Development Ltd provided additional USD 0.6M working capital loan to Simpa as a result of ADB’s interest rate subsidy extended to Maanaveeya for energy access projects.
Simpa is an Indian-based enterprise that sells distributed solar energy solutions, mainly solar home systems (SHS), on a PayGo-based asset financing model that makes solar energy systems radically affordable to consumers at the base of the pyramid. Since 2011, it has sold over 14,000 SHS to rural customers through its 9 branches.
About 75 million rural households in India are not connected to the grid and another 80 million are underserved by electric utilities. This lack of access accentuates poverty, overburdening meager household budgets because people must pay high costs to access even simple light. Rural India is burning USD 2.5 billion worth of kerosene for lighting per year.
While India’s energy sector made reforms that prioritize energy access, it is uncertain when remote villages will be connected to the grid. The cost of infrastructure to extend electricity distribution lines and expand power generation is steep, while energy demand continues to grow. Though the energy situation is harsh, it opens opportunities innovative solutions such as Simpa’s PayGo-model.
Simpa provides a range of SHS products made affordable with pay-as-you-go pricing (lease model) and a pathway to ownership. Instead of paying the full upfront cost of the system, consumers are asked to pay only 10 -20% of the price upfront and then pay the remaining cost as energy credits. Households pay using energy credits purchased through mobile messaging payment channels at their preferred incremental until the unit has been fully paid. A controller locks the unit once the energy credits have been used up and permanently unlocks once fully paid. Customers have a buyout option through an upfront cash payment.
Simpa Networks is uniquely positioned with respect to other players in the SHS market, due to its PayGo-based asset financing model. Other players in the SHS market either arrange consumer finance from rural banks or do not offer consumer finance option at all, which forces many of them to operate on low margins to increase consumer affordability, which at times might impact the quality of the SHS supplied as well.
Between 2015 and 2019, Simpa will be expanding to 177 district in 6 states, targeting an addressable market of 51 Million households.
Pay-as-you-Go Pricing Model.
Consumers pay for electricity at an a...
Leveraging a developed communications network.
Piggybacking on the country’s well-de...
Simple Business Model.
The simplicity of the business model ...
Paul Needham, Chairman
Piyush Mathur, Chief Executive Officer
Debroto Roy, Chief Operating Officer
Sanjoy Barua, Vice President, Products
Anil Pahuja, Vice President, Revenue and Operations
Salubh Jain, Senior Director, Human Resources and Training
Bohitesh Misra, Vice President, IT and BI
Oiko Credit Maanaveeya Development and Finance Private
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Khosla Impact Fund
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