Background

Many different financial instruments have been used individually to promote renewable energy development in rural settings. However, taken in isolation, most of these are not financially viable for small landholdings of 1/10 hectare. 
There is a need to redefine the role of RE by its capacity to develop high-value products, rather than simply act as a substitute for another energy source, and to develop and support the entire commercial chain through financing.

Purpose

To demonstrate the value of renewable energy financing as a significant new tool for rural economic development, by using solar water pumps, solar dryers, and biodigestors to help farmers produce high-value products for local and national markets.

Main Activities

• Provide international renewable energy financing to supplement local financial support for small farmers in João Pessoa, Brazil through the REEEP-supported Energy Millennium Development Goal Financing Facility (E-MDG-F), thus creating a hybrid of two standard financing models.
• Finance RE technologies that can add value: micro-irrigation, solar pumps and storage systems, biodigestors for organic fertilizer and biogas production, and solar dryers for fruits and herbs
• Conduct studies to establish preferences for production and basic sales projections for each product
• Hold education and training programme in the communities covering agricultural, RE and commercial training. Participants become trainers themselves.
• Highlight results of the project in a Gates Foundation sponsored international expert meeting at the end of 2009.

Expected Impact

• Positioning of renewable energy as a major economic development tool amongst multilateral (Inter-American Development Bank), national (PRONAF), philanthropic (Gates and Rockefeller Foundations), and local rural development programmes.  
• Replication of the hybrid finance tool in Mozambique through the Private Advisory Financing Network, whose establishment in Mozambique is also being financed by REEEP.  
• Creation of associated commercial value chains, creating opportunities for farmers and for women entrepreneurs.