Some of the biggest efforts all over the world consist of finding innovative ways to provide basic services like water, sanitation, health and energy to the bottom-of-the-pyramid. Around 18% of world’s population, nearly 1.3... [ view full abstract ]
Some of the biggest efforts all over the world consist of finding innovative ways to provide basic services like water, sanitation, health and energy to the bottom-of-the-pyramid. Around 18% of world’s population, nearly 1.3 billion people, don’t have access to electricity and more than 2.6 billion people rely on the traditional use of biomass for cooking (IEA, 2013). In the 21st century, millions of people still lack affordable and sustainable access to energy.
Energy is a key factor for economic development and social progress. Quality of life closely relates to the availability of modern sources of energy, especially electricity. Many studies have pinpointed the close relationship between the lack of access to energy and poverty poverty (Pacahuri and Spreng, 2003; Modi et al., 2005; Laufer and Schäfer, 2011). The United Nations Development Program observes that energy is central to sustainable development and poverty reduction efforts (UNDP, 2014a).
The rural electrification projects aim to provide a sustainable and affordable source of electricity to those without any expectation to have it due to geographic and socio-economic factors. These factors make organizational aspects key in the sustainability and success of the projects. Consequently, those communities live in exclusion and often suffer from severe poverty, being normally considered as people living at the bottom of the pyramid (Prahalad, 2005). Rural electrification projects have been implemented in all regions of the world with different technological, managerial and institutional approaches. However, there is a clear lack of models that tackle the problem of sustainability (in economic, social and environmental dimensions) in different contexts (Wilson et al., 2012).
Consequently, the lack of sustainable rural electrification models discourages financers to invest in these kinds of projects. Therefore, institutions and experts (Bellanca and Wilson, 2012) have called to rethink organizational models in order to accelerate the progress in universal access to energy. Among the new organizational models proposed in recent years to fix societal problems is the social enterprise model. It uses a market-based approach to pursue a social mission, presenting two important traits for rural electrification projects: focus on economic sustainability and the creation of a collaborative ecosystem.
With this approach, ACCIONA Microenergía Foundation (FUNDAME for its Spanish acronym) funded ACCIONA Microenergy Peru in 2009 as a social microenterprise to implement an energy delivery model based on SHS and a fee-for-service scheme.
This paper combines a theoretical and practical approach. The case has been documented by interviews, group meetings and field visits carried out in Cajamarca from 3-17 July 2013 and, in Lima, from 7-9 July 2013. The goal of the paper is to explain the innovative strategy of ACCIONA Microenergía Foundation in which they designed and built a social enterprise to supply electricity service with a solar energy project in the isolated rural region of Cajamarca (Peru).
The Solar Home Systems have brought different opportunities to 3,000 low-income families in rural Cajamarca: more productive hours at home, time to study during at night for children and the possibility to charge their mobile phones (Stott et al, 2014). AMP is a case study that shows that social enterprise is a convenient model for projects aiming to provide access to basic services for different reasons. The social enterprise model has helped AMP:
• To rely on an income formula instead of traditional subsidies based NGO approaches and enabling the project to achieve financial sustainability and to limit the dependence on external supports.
• To gain legitimacy and trust because of its “social condition” (Sovacool, 2013).
• To leverage valuable resources from different sectors by building a collaborative ecosystem.
• To ensure a long-term effect by considering a participative or inclusive approach.
