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Last Updated: Sunday, 29 April 2007, 20:43 GMT 21:43 UK
Solar loans light up rural India
A shop using a solar powered lamp (Image: Selco India)
Solar power is good for businesses and people's health, the UN says
More than 100,000 people in rural India have benefited from an innovative loan scheme that helps families buy home solar power systems, the UN has said.

The $1.5m project, led by the UN Environment Programme (Unep), supports Indian bankers who offer finance to people who want to purchase a unit.

The sunlight-powered systems are used to light homes and shops instead of expensive and polluting kerosene lamps.

Officials hope to expand the scheme to Tunisia, China, Ghana and Indonesia.

Since the project began in 2003, there has been a 13-fold increase in the number of the solar power units being financed within the scheme's pilot area in southern India.

A system capable of powering two to four small appliances, or lights, costs about $300-$500.

Before the UN project was set up, purchases were predominately cash only - making the devices too expensive for most people.

The Indian Loan Programme helps its bank partners offer lower interest rates, longer payback periods and smaller deposits.

"This project removes one of the main barriers to the shift to solar power - lack of financing," said Jyoti Painuly, a UN senior energy planner.

"Asking customers... to pay cash for solar systems meant asking them to pay upfront an amount equal to 20 years of electricity bills."

Leading light

Project workers have credited solar powered lighting with helping schoolchildren achieve higher grades, and better productivity for cottage industries.

The project underlines the multiple benefits accruing from providing clean and renewable energy in developing countries
Achim Steiner,
Unep executive director

There are also health benefits associated with making the switch. The majority of homes in rural India are poorly ventilated, leaving the occupants exposed to harmful particles emitted by the lamps.

In terms of greenhouse gas emissions, the UN says a single wick lamp each year burns about 80 litres of kerosene, which produces more than 205kg of carbon dioxide. An estimated 100 million families in India use kerosene lamps.

"The project underlines the multiple benefits accruing from providing clean and renewable energy in developing countries," said Unep Executive Director Achim Steiner.

"These range from reducing the emissions that are causing climate change to overcoming poverty and the terrible health toll taken by dirty fuels."

The scheme has led to similar projects being set up in Tunisia, which is financing loans to buy solar water heaters.

Similar UN-led "cash to credit" programmes are in the pipeline for China, Indonesia, Egypt, Mexico, Ghana, Morocco and Algeria.

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