#### STICHTING BAKENS VERZET

#### 1018 AM AMSTERDAM, THE NETHERLANDS

Director,

T.E.(Terry) Manning,

Schoener 50,

1771 ED Wieringerwerf,

The Netherlands.

Tel: 0031-227-604128

Homepage: http://www.flowman.nl

E-mail: (nameatendofline)@xs4all.nl : bakensverzet

## MODEL FOR SUSTAINABLE SELF-FINANCING INTEGRATED RURAL AND POOR URBAN DEVELOPMENT FOR THE WORLD'S POOR

Incorporating innovative social, financial, economic, local administrative and productive structures, numerous renewable energy applications, with an important role for women in poverty alleviation in rural and poor urban environments.

"Money is not the key that opens the gates of the market but the bolt that bars them"

Gesell, Silvio The Natural Economic Order

Revised English edition, Peter Owen, London 1958, page 228

Edition 11: 22 November 2006

#### 05.51 DOMESTIC SOLAR HOME SYSTEMS

Home lighting in the project area is usually fuelled by petroleum lamps the average cost of which is about Euro (amount) per month, reaching Euro (amount) per month in case of shortage of fuel. This outgo constitutes a serious financial leakage from the project area which should be stopped. Some families may be able to finance the purchase of solar home systems through savings effected on the costs of petroleum and, for instance, batteries consumed for radios.

The central project management (has, may) set up a separate cooperative interest-free fund under which solar home systems can be installed and more efficient radios purchased. (An amount of Euro (give amount) has been reserved for this purpose under section 6.15, item 61501 of the budget for this purpose). This is a seed fund, to get the purchasing groups off the ground. It is enough to cover a first lot of (number) pilot installations to set an example in each (tank commission, well commission) area and launch the system. The rest of the money must come from the cooperative contributions made by the users participating. (The purchasing cooperatives will repay the funds included in budget item 61501 into the Cooperative Local Development Fund once every family in the group has a photovoltaic lighting system installed. When this repayment is made, the activities of the purchasing group will be automatically terminated.)

Users will usually set up self-terminating cooperative buying structures for the systems at tank commission or well commission level. In such cases it is expected that all families served by a given tank commission or well commission will participate in the cooperative. The well commissions will usually decide the social priorities for the gradual distribution of these systems. They may for instance decide priorities by drawing lots. In that case, the speed of the distribution of the systems will depend on the time required by the individual families to reimburse credits received. A family accustomed to paying Euro 20-30 a month for lighting and batteries will be able to repay a system from savings within about 2 years. A poorer family would need much more time. Where it is decided that all families participating make their repayments at the same rate, the rate chosen will be that affordable to the poorest family in the group. Where a more cooperative approach is taken, the rate of repayment could be variable according to the possibilities of each family.

Distribution of solar home systems is expected to commence in the last, phase 4, of the project. Various activities currently cause of financial leakage from the project area will then be taking place under the local money (LETS) systems, and it is conceivable that (some) users have more formal money available than before. Formal money funds may then be available for contributions to buying cooperatives for solar home systems. Where each family in a group formed contributes Euro 10 each month into its cooperative lighting fund, one family out of 40 to install a system each 4-6 weeks. This would mean that each family in that tank commission or well-commission area would have a solar home system installed within about 4-5 years after the start of the cooperative and the elimination of financial leakage from the project area due to lighting and radios would become a reality within 6-7 years from the start of the project.

Financial leakage through the use of inefficient battery-driven radios could also be limited or stopped by the use of high efficiency radios and/or mechanical wind-up radios. It should be possible to recover the cost of the new radios through savings on batteries within one year.

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