VIDEO BLOG: Empowering local communities to finance their clean energy future

The efficiency of solar power cells and lower cost of storage batteries means it has become possible for isolated villages and whole islands to generate their own electricity off-grid. Indeed, in the aftermath of two hurricanes that struck Puerto Rico, Elon Musk tweeted that independent solar power linked to batteries could rebuild that island’s entire electricity system.

Across Asia and in other parts of the developing world, many villages still lack an adequate and reliable supply of electricity. Often governments cannot afford to help every isolated community and banks are reluctant to lend. But the local community might be able to put together enough seed money to kick-start a village-level energy project to improve their living standards and productivity.

Modest savings from villagers themselves, sometimes matched with domestic and overseas crowdfunding through the internet, and topped up with money raised using ADB’s new Green Finance Catalyzing Facility or other global green funds can be put into a special hometown investment trust to fund renewable power systems.

Solar panels, wind turbines, and micro hydro are small-scale, cheap, clean and do not damage the environment or relocate villagers. Power can be stored using efficient batteries to assure a steady supply of electricity.

When the local energy project is completed, villagers can use the electricity to empower their lives and introduce modern conveniences such as air-conditioned health clinics and well-equipped schools. It might also be possible for villagers to sell any excess supply to the national power company or a nearby factory to earn a profit.

See how these innovative funds for renewable energy have already worked in Japan, Germany, and other developing countries. Follow more smart ideas to use green finance, clean energy, and solar power with Sohail Hasnie.
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References:

Yoshino, N. and F. Taghizadeh–Hesary. 2017. Alternatives to Bank Finance: Role of Carbon Tax and Hometown Investment Trust Funds in Developing Green Energy Projects in Asia. ADBI Working Paper 761. Tokyo: Asian Development Bank Institute.
Yoshino, N., and S. Kaji (eds.). 2013. Hometown Investment Trust Funds. Tokyo: Springer.
Yoshino, N., and F. Taghizadeh–Hesary. 2014a. Hometown Investment Trust Funds: An Analysis of Credit Risk. ADBI Working Paper 505. Tokyo: Asian Development Bank Institute.
Taghizadeh–Hesary, F., N. Yoshino, and E. Rasoulinezhad. 2017. Impact of the Fukushima Nuclear Disaster on the Oil-Consuming Sectors of Japan. Journal of Comparative Asian Development 16(2): 113–134. DOI: 10.1080/ 15339114.2017.1298457
Yoshino, N. and F. Taghizadeh–Hesary. 2017. Hometown investment trust funds: A sustainable solution for financing green energy projects. Asia Pathways. Tokyo: Asian Development Bank Institute.
Yoshino, N. and F. Taghizadeh–Hesary. 2017. Grassroots funding boosts green energy projects in Japan. Asia’s Developing Future. Tokyo: Asian Development Bank Institute.
Fairley P. 2017. Off-Grid Electrification Financing Is Failing. IEEE Spectrum.