Transcript Document

The Small-Scale Sustainable Infrastructure Development Fund (S3IDF)
S3IDF
– A Social Merchant Bank –
S3IDF-US – Cambridge, MA, USA – a public charity under Section 501(c)(3) of U.S. tax code
S3IDF-India – Bangalore, India – a Section 25 not-for-profit company with Section 80G tax exemption
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India’s Poverty and Employment
Statistics
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300 million living below poverty in India
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About 9 million living below poverty in Karnataka state and about 35 million
in South India; majority of the poor without infrastructure services necessary
for development

India’s labour force is growing at a rate of 2.5% annually (~7 million) but
employment is growing at only 2.3%(~6.4 million); plus there are previous
back logs

60% of India work force is self-employed – many of whom remain poor;
nearly 30% are casual workers (get work only when they are able to get
jobs – remain unpaid rest of the days); only about 10 percent are regular
employees

90% of labour force employed in unorganised sector – no social/job
security; minimum wage act marginally implemented; In rural areas
agriculture workers form bulk of unorganised sector while in urban, contract
and sub-contract as well as migratory agricultural labourers

India’s Ninth Plan projects that at 7% growth rate per annum, the reduction
in open unemployment rate from 1.9% (~7.5 million) in 1996-97 to 1.47%
(~6.6 million) in 2007.
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India’s Rural Infrastructure Statistics
Infrastructure (electricity and productive end-uses, telecommunication,
transport and drinking water and sanitation) is a necessary and critical
ingredient for the economic growth and decline of absolute poverty
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18% of villages don’t have electricity and 46% of households are not covered
– leads to no lighting, no productive end uses thus minimal economic activity –
Requires Rs 1,07,823 crores for full coverage; average annual investments for
last 10 years Rs 8,800 crores

Telecommunication – 1.9 per hundred of population; 98% of villages have
public telephones but this is not sufficient; Rs 92,690 crores for full coverage;
BSNL average annual budget Rs 2,700 crores

44% of rural population not covered by road network and transportation; Rs
15, 643 crores for full coverage; average annual investments Rs 2,133 crores
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95% of rural population have access to some sort of drinking water source.
The operation and maintenance is poor due to lack of funds.
As is evident from the statistics above, the funds required to cover the demand is
way above what the government (and grants from international funding
agencies) alone can achieve. Hence the most plausible solution is for others
to participate and for alternative sources of investment.
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The Challenges Being Addressed
 Millions of poor without infrastructure
services necessary for development
 More sustainable, innovative, business like
approaches needed
S3IDF’s Approach is to reduce
poverty by…
 assisting small enterprises to
provide modern energy and other
infrastructural services
 specifically targeting poor people
 supporting financially sustainable
and environmentally responsible
MSME (micro/small/medium
enterprise)
 covering the provision of services
in electricity, water, sanitation,
transport and telecommunications
S3IDF facilitated a grass root NGO to provide lighting
and cooking services in rural areas
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Safe, Improved Lighting services to Hawkers
Reliable and
better lighting
for hawkers
transportation of
batteries
entrepreneur at the
solar charging station
For the light point projects, S3IDF arranged the business development, technology and
financial assistance to help the entrepreneurs increase their income, generate
employment and provide cost savings and improved lighting for working class hawkers.
The Small-Scale Sustainable Infrastructure Development Fund, Inc
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Low cost Lighting Services to Poor Un-electrified Hamlets
Kerosene based open
wick lamps typically used
by the poor.
The entrepreneur at the
solar charging station
LED based lights
Studying with the assistance
of LED based lights
Kerosene based lamps
replaced by LED based lights
S3IDF arranged the business development, technology and financial assistance for
accessing lower cost efficient lighting system by the households delivered at a cost
equal to the current expenditure on kerosene lighting of less than Rs 2 per day
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The Model
 S3IDF produces a stream of fundable small scale for-profit
infrastructure enterprises.
A Solar powered computer kiosk run by
entrepreneur in a rural village in Andhra Pradesh
 The owner/operator must
have some capital at risk
(even ‘sweat equity’)
 Supported by technology,
financing arrangements and
pre-investment analyses
 Cash flow to cover all
capital and operating costs.
 The business must be
explicitly pro-poor,
environmentally
responsible, and should
demonstrate a high degree
of replicability.
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Key Elements
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Business Development Services
(BDS)
Financial assistance and deal
structuring geared to facilitating local
FI co-financing
A revolving fund
(debt, equity, partial guarantees, etc)
Independent evaluation
Lesson learning and dissemination
Night Soil biogas in residential school
Implementation Challenges
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Efficient ovens in silk reeling units
Cost recovery for BDS, evaluation
and dissemination
Custom-design vs. replication with
some adaptation (not quite cookie
cutter)
Capacity Building
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Examples of S3IDF Projects
Based on market research of infrastructure-related activities that can
have a significant impact on the poor, our current priorities are:
 Lighting
 Biomass energy
 Silk production and processing
 Distribution of modern energy sources (“last mile” supply of LPG
and electricity)
 Information and communications technologies (ICT)
 Water and sanitation
 Small/micro-enterprise based infrastructure
 More than 65+ projects implemented that benefits more than 12,000
people
 100+ new projects are being examined
 Total investments of about Rs 76 lakhs done till date and this has
about Rs 33 lakhs of our money invested. Expected Rs 7 lakhs of
returns through these investments.
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LPG Access for Cooking by Poor Households
Health hazards (from smoke and
soot) from fuelwood cooking
‘Cookshop’ in use
Fuelwood collected typically
by women and children
LPG Cookshop – a ‘common kitchen’ providing poor women with clean,
convenient cooking made affordable by a pay-for-use operation.
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Energy-linked Information/Communication for Rural Schools
Kondlahalli Rural School
S3IDF’s innovative business and financial structuring helps rural
schools introduce cost-effective computer education for students.
S3IDF 11
Transport Micro-Enterprise: Bullock Cart U-Haul Partnership
S3IDF’s financing support to a grassroots NGO helps local small holders and poor
farmers rent a cart and lower the cost of transporting harvested crops.
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SME development – Areca plate and cup
manufacturing
Areca Plantations
Areca Leaf Products
S3IDF facilitates the business development, technology, financial and
market assistance to help create Areca product manufacturing SMEs.
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Telecom Services in Rural Areas
S3IDF enables local NGOs to access bank loan for the phone equipment
and facilitates leasing of the phone equipment to small shops.
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Contact us
S3IDF – US:
The Small-Scale Sustainable Infrastructure
Development Fund, Inc.
The Carriage House, 5 Hastings Square
Cambridge, MA 02139 USA
Tel: +1-617-576-0652 Email: [email protected]
S3IDF – India:
The Small-Scale Sustainable Infrastructure
Development Fund
#800, 14th Cross, 1st Phase J.P. Nagar
Bangalore – 560078
Karnataka, India
Tel: 080-65902558 Email: [email protected]
For more information about S3IDF, visit http://www.s3idf.org
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