Covid-19: Helping rural Bihar and UP get free vouchers to buy green power

Smart Power India (SPI), an initiative of Rockefeller Foundation, has begun a voucher system for power consumers in 32 villages of Bihar and Uttar Pradesh

Villagers drawing power from the decentralised energy systems (DES) have seen a dent in their paying capacity, owing to the coronavirus (Covid-19)-induced lockdown.

State governments like Maharashtra, Uttar Pradesh and Haryana have taken initiatives to not charge for the fixed portion of power tariff from big customers. 

However, those connected to the DES are finding it hard to buy power packages as their income flow has reduced drastically.

To overcome this problem and prevent long-term demand destruction for energy supply, Smart Power India (SPI), an initiative of Rockefeller Foundation, has rolled out a voucher system for power consumers in 32 villages of Bihar and Uttar Pradesh. 

Besides, SPI is looking at a separate line of credit through microfinance institutions (MFIs) for customised loan of up to Rs 20,000 for rural customers.

For the three month starting June 1, SPI is issuing power purchase vouchers to customers of Energy Service Companies (ESCOs) that operate DES.

These vouchers will pay 75 per cent of their monthly power bill in June, 50 per cent in July and another 25 per cent in August.  “Collections were dropping, so we did a meeting of all mini grid operators. We said they should continue with their service whether payment is made or not and be in touch with customers telephonically,” Jaideep Mukherjee, chief executive officer (CEO), SPI, told Business Standard.

SPI conducted a survey along with its five ESCOs in the villages of eastern Uttar Pradesh and Bihar. “We recognise what happened to the rural economy. While household demand continued, businesses were badly impacted and didn’t have much cash in hand,” he said. 

The survey covered three customer segments — households, shops and commercial establishments — to understand the impact of the Covid-19 lockdown. Mukherjee said power demand from households and community centres continued. 

Even though schools and community centres were shut, 10-12 of them, of the more than 50 that get power from the ESCOs, are being used as quarantine centres. 

These facilities can accommodate around 100 people at a time. Village natives moving back from cities are housed in these centres for quarantine.

Mukherjee said there is a prioritisation which happens when people do not have money. “They may buy unreliable power (from the government grid) or do not buy power at all. So, for a three-month period, we will give this direct benefit through vouchers, which will be tied to purchase of power. It will be a supplement to their financial resources.” The voucher system will also ensure timely payments to operators so that they can sustain themselves.

The grant would be given through an electronic voucher delivery system. “We will first send them a text or Whatsapp message, followed by telephonic calls from the ESCOs and then vouchers will be sent,” he said. Mukherjee said the voucher system could benefit about 100,000 people across 30,000 establishments. Of the total establishments, about one third are small commercial enterprises like tailors, electronic repair and other shops, while the remaining are households.

The voucher redeemable for power purchase from the five ESCOs would be a grant totalling about $250,000 (about Rs 1.5-Rs 2 crore). It would come from the Rockefeller Foundation through SPI.

Apart from this, SPI was looking at a separate line of credit through MFIs for customised loans of an average Rs 20,000 for the rural market. 

“We have MFI partners who finance energy efficient appliances. We are in talks with them for a separate line of credit which will be finalised in a month,” Mukherjee said.

SPI already has a tie-up with two MFIs, Sahyog Development Services and Udyat Financial Services, for financing of energy efficient appliances.

Some of these ESCOs, run by Tara Urja, Husk, HCL Foundation, OMC and Mlinda Foundation, also supply clean RO water to villages. 

For instance, at Bheldi village in Bihar, one cycle produces 1,000 litre of RO water and uses 6 Kw of renewable power, which includes electricity for chilling (required in summers). The sale of RO jar, sold under TARAurja brand, continued to households during the lockdown period but there was no demand from commercial establishments. 

Another activity that SPI is promoting is making of masks by rural women and tailors.

The two surveys, which covered the lockdown impact from March 25 to April 15, and then from April 16 to May 20, had seen improved hygiene practices among villagers.