At the 2017 Concordia Summit, Tamara Laine of the Karma Network spoke with Winrock’s Amit Bando, Senior Director of Clean Energy and Water, about how addressing clean energy, water, land use and environmental issues will empower the disadvantaged, increase economic opportunity and sustain natural resources across the globe. The conversation ranged from Winrock’s boots-on-the-ground approach and market creation to why Winrock and the private sector continue to pursue the goals of the Paris Climate Agreement.
Karma Network: I’m excited to talk policy, clean energy, environment and water with you. These are all the areas you specialize in. What is Winrock doing right now to help facilitate and build emerging markets?
Amit Bando: What Winrock does is very interesting. In developing markets, in communities that are part of these markets, we work through a boots-on-the-ground approach. We are there to, first, assess what the needs are at the community level and then use that as a way to move into various spheres.
For example, working with governments of various countries. We currently work in about 50 countries including the United States, because as you know, in the U.S. we have several communities in many parts of the country that have characteristics that are very similar to what you find in the developing world. But having said that, our focus is on developing countries. We work on issues related to clean energy, water, land use and environmental issues with a focus on allowing communities to improve opportunities for income generation and jobs. The fact that you have barriers that relate to lack of access to energy, water, land — we try to work with communities to assess what the needs are — then do what it takes to change laws, or more importantly the laws may be there, but institutions may not be there, financial mechanisms may be needed and markets need to be created for the kinds of services that are needed.
KN: You work on a whole array of things but I want to dig in to how you facilitate markets, because you look at what is impeding people from having time. Time for education. Time to work on their business. Because they’re so focused on essential needs. How do you do that and why does that make a difference?
AB: There’s one way of looking at a market, which is to say you have a product. For example, in the water sector it could be as simple as a water purifier. You might have a company in the United States or any part of the world that produces those water purifiers.
On one level from a company’s perspective, market creation is, how do we introduce that product and the associated services into a market in the developing world. But in our experience, that’s somewhat of a shortsighted way of looking at the market. What you often find is that the market has to be more than just introducing the product. You also have to introduce financing. You also must have supporting rules and regulations so that when products and services are introduced, they can be scaled up. Otherwise, you’re going to have limited success. And you may have enough barriers that pop up in the first few years of market entry that the market dries up. To sustain a market, you have to involve communities — not only as users but also generators of income, so they start seeing these products and services are not just valuable for themselves — they start selling that, and they are co-opted into the market system. That’s our approach.
KN: You’re building economies by giving essential needs, by helping the foundation.
AB: Exactly. In a lot of these cases you don’t have a market to begin with. We are creating the enabling environment for a market to flourish and often that takes some nudging, whether it’s access to finance, access to training and services that allow people to grow.
Sometimes it can be a matter of overall macroeconomic laws, and rules and regulations that need to be put in place. Depending on what the needs are, we work with various stakeholders, whether it’s government or a lending institution or people that are working with farmers cooperatives to train them or create awareness.
KN: You’re working on gender equality as well. In one of your projects you’ve allowed women to go back to school and train. Then that builds their economy because they have time to do that.
AB: Very much so. I’ll give an example of how we go about doing that. In Nepal, we’ve done exactly this. The finding there is that women spend so much time collecting fuel, firewood and getting clean water. Anywhere between three and six hours a day are used just for collecting firewood and clean water.
We work with them to find a way to produce clean energy such as biodigesters. We work them to provide efficient stoves. That saves them huge numbers of hours every day.
Similarly, for water. We provide purifiers which allow them to save hours per day. Plus, there are health benefits. Indoor air quality is improved when you have clean fuel. With better health, productivity improves. And on a day-to-day basis when they have more time, it creates opportunities for training to provide basic skills.
In some instances, they might need to organize themselves into small businesses in order to do the same things we introduce them to, to become service providers for the cookstoves we’re providing, for example.
Then those with the knowledge base, the early adopters, they can then sell cookstoves to others in the community. This is creating opportunities for them. Then kids have more time and they’re healthier. They can enter the school system, which allows them to become more productive. This is the virtuous cycle that we create.
KN: You work with governments to implement some of these projects. Tell me about Winrock’s work in Vietnam.
AB: In Vietnam, we’re working with the government, specifically the Ministry of Construction, to develop energy efficiency codes for large buildings — shopping centers, hospitals, hotels, etc. — and then hopefully move on to residential. We started with these larger buildings because the government has more say, and frankly, the impact of improving building codes for larger buildings is going to be larger.
Why Vietnam? Vietnam, as with a lot of countries in the developing world, particularly in Asia, is seeing rapid urbanization and economic growth. Urbanization and economic growth go hand in hand. The stock of current buildings is very energy-inefficient. There are no standards. There are no codes. When you have the anticipated demand for new construction, if you’re able to influence that and put in energy-efficient cooling, refrigeration, lighting with energy-efficient standards and codes, you’re creating a market for these products and services. But you’re also making sure that energy use does not climb as rapidly as it would with an energy-inefficient sector. That’s where the government has a key role. It has to set the rules and regulations and guidelines, and adopt appropriate standards and codes so that manufacturers and producers can step in and serve that market, but also so that national goals for climate change or energy efficiency can be met so there’s a driver for that.
KN: Sometimes clean tech can be difficult to get people to buy into. How do you go about getting governments to do this work?
AB: There’s a business case for this, even for the government. If you’re growing at this percentage rate and your energy demands are going up, where are you going to get that energy?
Either you have to build more power stations, then you have to worry about fuel sources and if you have to import that fuel, that’s costly. We say grow but grow in a more energy-efficient way. That means every unit of energy is used to generate more output. Your growth path of energy usage won’t be as high and that’s the business case for it.
KN: So you approach from the bottom line to say, “This is how it’s going to help you”?
AB: Exactly. In the long run, yes, it’s great to say we’re going to do something because it’s good for the environment, but that argument has its limits. It makes more sense, particularly in energy and water, and increasingly, land use — the evidence is quite clear. If you look at the data you can make a strong solid business case, which means financing is then easier to attract. We work with blended finance, a mixture of public and private, and impact investors, people who are looking for opportunities that may not yield a commercial rate of return but still yield a return.
Our ability to say that we are designing and implementing projects that have this goal of being economically sustainable attracts a larger pool of financing.
KN: You’re an economist. You say some of these may not have a commercial return on investment. But just building a market, even a small one where someone is selling a cookstove or a service, there’s a return there, right? Because people are spending money.
AB: Yes. When I say that there isn’t a market return that means — let’s assume you have someone who wants to invest on a purely commercial basis. They might want to go into a country like Nigeria, which has a very high rate of inflation, and they might want 25-percent returns. I’m saying that might not be available right away, but we’re building the ramp for the projects to become more commercially viable. However, in the beginning, it might be a 10-percent return. In fact, we have projects in Nigeria where we were able to attract investors through crowdsourcing. Crowdfunding allowed us to finance projects, in this case a minigrid solar project. We used a crowdfunding platform to attract investors for roughly 225,000 euros and about 300 investors that were happy with a 10-percent rate of return over seven years as opposed to a purely commercial investment, which would’ve been more like 25-percent. So that’s what I meant about how the rate of return isn’t quite there — until you start building on these. We have four such projects already that are in various stages of implementation. Once you’re able to show positive substantial returns, then I think the market creates itself.
KN: Has America’s pulling out of the Paris climate accord affected anything that you’re doing or are you concerned that it will?
AB: On one level, it always does, because one could argue that there’s value in the U.S. saying we’re behind this. But on another level, the market, particularly in the clean energy sector, is at a point where the economic returns are quite evident and there’s enough momentum in various parts of the world that I think things are happening — not because people want to do it because of climate change, but because there’s a business case for it. In that context, there’s some impact but not a long-lasting one.