Solar Home Systems to nomadic herders in Mongolia
Mongolia is a country of more than 1.5 million square meters where roughly a quarter of the population lives like nomadic herders. This makes it extremely difficult to connect this part of the population to the national grid. Instead, the Government of Mongolia teamed up with the World Bank and other international donors to provide portable Solar Home Systems to more than 100,000 families over a course of 12 years enabling 70% of herders to have access to modern energy. The project involved a cost-sharing mechanism in which the Government and donors subsidized the purchase of Solar Home Systems meaning that herders themselves only had to paid half the price. Also, by relying on an existing network of more than 300 local village administrators the project ensured that even the most remote areas of Mongolia were reached and equipped with Solar Home Systems. Not only have the herders been given access to modern energy, in addition, they have increased the returns from their income generating activities by making use of electronic devices such as television and mobile phones.
To provide portable Solar Home Systems to the rural population of Mongolia
Nomadic herder families
- 70% of nomadic herders now have access to electricity.
- Increased returns from income generating activities due to the use of electronic appliances made available from the access to electricity.
- Children can read and study in the evening with the help of electric light.
- Increased demand for consumer electronics has created a new market for electronic appliances and thereby spurred economic growth in local economies.
- The Government of Mongolia and international donors partnered to subsidize the purchase of Solar Home Systems so that herders only had to pay half the price themselves.
- The project made use of an existing network of more than 300 local village administrators to reach even the most remote districts of the country.
- Fifty Sales and Service Centers were established covering every district of Mongolia and providing after-sales and maintenance service while simultaneously training local people in providing this service.
Since the turn of the new millennium the government of Mongolia has greatly emphasized increasing access to electricity for the country's large rural population. With the implementation of the National 100,000 Solar Ger Electrification Program in the year 2000 the Government provided finance to help equip more than 30,000 families in rural areas with portable solar home systems over the next five years. Thereby, access to modern energy among the rural population was greatly expanded during these years due to the Government's efforts.
In 2006, the initial success was then further accelerated and supported by international donors such as the World Bank, the International Development Association, the Global Environment Facility as well as the Government of the Netherlands who provided the necessary funds to expand the reach of the program. The financing implied that by 2012 more than 100,000 families had been reached constituting 70% of the country's herders. The Government of Mongolia's continuing commitment to expanding access to modern energy is anchored in the National Renewable Energy Plan for 2005-2020 that aims for universal connectivity by 2020. Hence, it will ensure that the issue will continue to be prioritized going forward so that the remaining 200-300.000 herders without electricitiy will also obtain acces to modern energy.
The intervention was situated in an institutional context of the Government's own program for expanding electrification as well as a number of international donors among which the World Bank's Renewable Energy and Rural Electricity Access Project (REAP) was a main contributor. The overall purpose of REAP was to increase access to and reliability of electricity among the herder population in Mongolia. Apart from providing finance the REAP also helped to redesign some core aspects of the Government's program based on experiences from World Bank projects in other developing countries.
The REAP is a part of the World Bank Group's overall work on financing for power generation, transmission and distribution that focuses on least-cost options with an emphasis on renewable energy sources. The REAP assisted in building institutional capacity within Mongolia in order to strengthen national renewable energy policy development and support project implementation.
Furthermore, as another part of REAP the project helped to rehabilitate mini-grids in order to improve district electrification and also installed renewable energy technology hybrid systems to reduce the use of costly diesel.
Among other things, the World Bank's REAP contributed to institutional capacity building by assisting in the development of the National Renewable Energy Center through training, business planning and work program development. The project has trained roughly 400 people and thereby improved the capacity for implementing renewable energy projects and policies in Mongolia.
Also, fifty Sales and Service Centers covering every district of Mongolia were established as part of the project where local people were trained in selling and maintaining the Solar Home Systems. Not only did this help to anchor the program in the local community but also raised knowledge and awareness of Solar Home Systems among the prospective customers.
In a country covering an area of more than 1.5 million square km and where about a third of the population lives nomadic lives in rural areas it was absolutely vital for the success of the program to partner up with a local network of stakeholders. Therefore, the Sales and Service Centers relied on an existing network of local village administrators in 342 villages in order to reach even the most remote districts of Mongolia. The village administrators would receive and handle orders from herders for Solar Home Systems as well as store them until they could be installed at herders' gers.
The Solar Home Systems are easy for the herders to install themselves, but alternatively people from the local Sales and Service Center would assist them with this. Moreover, the owners of Centers would often go by car to the herders who lived in too remote areas to be able to visit the Centers themselves. Given the low income of most herders the owners of the Centers would even negotiate with local banks on behalf of them to help them gain cheap loans and thereby ensure more business. Thus, the local community was involved by being trained to work at the Sales and Service Centers while also working together with local government representatives to facilitate the sales and dissemination of the Solar Home Systems.
The Sales and Service Centers established in every district of Mongolia to provide after-sales and maintenance service simultaneously served as a shop offering consumer electronics and appliances such as televisions, radios and mobile phones. These products became of interest to the herder families due to the improved access to electricity. Therefore, the local market for these types of products experienced a great surge in demand.
In turn, the appliances helped the herders enhance the returns from their income generating activities. By watching weather forecasts on television the herders could more easily manage their livestock during changing weather. Further, by having a mobile phone they could easily check the most updated prices of their products such as cashmere and wool to better know when to sell these in order to gain a higher profit. In the evening the herders can now watch television or listen to the radio while children can read and study with the help of electric light. Electricity has displaced the use of candles and oil lanterns, which has helped improved the indoor climate as well.
A major cause for the success of the program was a cost sharing mechanism initially introduced by the Government of Mongolia and later prolonged by the World Bank and other international donors that subsidized the purchase of Solar Home Systems so that herders would only have to pay roughly half the price themselves. This greatly helped expand sales and make the systems affordable for the rural population who is among the lower income ranks of the country. The fifty Sales and Service Centers scattered around every district of Mongolia helped the herders to receive after-sales care and maintenance service. Furthermore, the systems were inspected for quality to make it reliable for herders to purchase.
The relatively small size of the Mongolia market and the low financing capacity of private dealers meant that an effective public-private partnership was needed in order to ensure that the Solar Home Systems could be purchase at a low price. Hence, the Government of Mongolia together with the Wolrd Bank purchased large quantities of Solar Home Systems in order to achieve economies of scale and "bulk" prices. Subsequently, the systems were sold on through the village administrators and local Sales and Service Centers.
The Government of Mongolia and local village administrators
A survey conducted after the project had terminated showed high satisfaction among herders who had purchased a Solar Home System. More than 93% were either "extremely satisfied" or "very satisfied" and the majority of survey respondents said that "increased productivity for work" was the main benefit of the system.
Also, more than 90% of respondents were found to be using mobile phones for communication needs and having a satellite TV as compared to a level of almost zero prior to the intervention. One herder described the change from before and after the project as being like night and day. Earlier the herders had to manage life with candles and oil lanterns and now they rely on solar-powered electricity.
The aspect of drawing on an existing and widespread network of local administrators has been absolutely vital for the success of reaching out to more than 100,000 families to help them get access to modern energy. By training the local community in selling Solar Home Systems and providing after-sales service as well as partnering up with local government representatives the program has ensured that even the most remote districts in an otherwise vast country has been reached.
Furthermore, the combined willingness of the Government of Mongolia and international donors such as the World Bank to subsidize the purchase of Solar Home Systems implied that the cost for herders was cut to half. This had a great impact on the number of sales by making the systems affordable to the rural population who is otherwise among the lower income earning groups of the country.
By providing modern energy to about 100,000 families the program has made it possible for these families to increase the returns from their income generating activities and, in addition, has created new local markets for products such as consumer electronics and appliances.
The partnership with international donors and the lessons learned on making use of a network of local village administrators are elements that can be replicated in other developing countries seeking to provide rural citizens with access to modern energy.
For further information please contact the World Bank or the Ministry of Mineral Resource and Energy in Mongolia.
World Bank project information:
Name:Solar Home Systems to nomadic herders in Mongolia
Ministry of Mineral Resources and Energy in Mongolia
For further information please contact the World Bank or the Ministry of Mineral Resource and Energy in Mongolia.
- Energy supply
- Productive uses
Project status:Completed project