The Inter-American Development Bank (IDB) will provide a US$3 million loan to establish a microcredit scheme to fund household solar photovoltaic systems, thus making this technology available for low-income households.
27 October 2011: The Inter-American Development Bank (IDB) will provide a loan of up to US$3 million to establish credit lines to buy solar power systems for Central American families in isolated rural communities with no access to the electricity grid.
The loan will provide technical assistance to develop dedicated microfinance instruments to finance the purchase of solar photovoltaic systems tailored for household use in Honduras, El Salvador and Belize. It will also support the development of a network of solar power suppliers that promote the use of solar systems through community-based methodologies, as well as provide quality post-sales service and maintenance, including a program to recycle rechargeable batteries, as well as training and dissemination on how to best use such systems. The project is expected to benefit up to 6,000 families and reduce indoor pollution produced by the use of kerosene to generate electricity.
Fundación Covelo will promote partnerships between suppliers and microfinance institutions in the region to foster the sale of solar power systems packages, which will use the systems themselves as collateral for the microloans. It will also require a commitment by suppliers to provide the necessary maintenance as well as retrieve the equipment in the event of default, thus closing the gap between the ability to pay of low-income families and the cost of these solar power systems. [IDB Press Release]