While small solar home systems represent an excellent opportunity to bring modern energy services to households in off-grid locations in rural Cambodia, the initial investment in a solar home system is a barrier for many rural families.
Recognising the need for a dedicated financing solution, the French Development Agency (AFD), with funding from the European Union (EU), and in partnership with SNV Netherlands Development Organisation (SNV), launched the Solar Microfinance Program to support the financing of solar home systems for Cambodian households, that are not yet connected to the electricity grid.
By partnering with four leading Cambodian Microfinance Institutions (MFIs), the program has now developed Cambodia’s first dedicated solar microcredit offer for rural households to access solar energy products. The low-interest solar microloans are now available in selected provinces, and will be available to customers nationwide in the coming months through the MFI partners’ extensive branch networks.
To ensure that rural households will be satisfied with the solar products offered, the MFI partners only promote quality products from selected solar suppliers who are accredited by the “Good Solar™ Initiative”, the first-ever accreditation and quality control scheme for solar companies and their products in Cambodia, created specifically for the Solar Microfinance Program.
With the goal of improving consumer access to finance for solar home systems, the program makes concessional loans of a total amount of USD $6m available to fund MFIs’ solar lending for 25,000 solar home system installations.
Solar microloans are now available at selected rural branch offices of Visionfund, LOLC, Kredit and Chamroeun microfinance institutions.