The Small-Scale Sustainable Infrastructure Development Fund (S3IDF)

1
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
2
Indias Poverty and Employment Statistics

• 300 million living below poverty in India
• 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
• Indias 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
• Indias 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.

3
Indias 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
• 18 of villages dont 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
• 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.

4
The Challenges Being Addressed

• Millions of poor without infrastructure services
  necessary for development
• More sustainable, innovative, business like
  approaches needed

• S3IDFs 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
5
Safe, Improved Lighting services to Hawkers
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.
6
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
Kerosene based lamps replaced by LED based lights
Studying with the assistance of LED based lights
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
7
The Model

• S3IDF produces a stream of fundable small scale
  for-profit infrastructure enterprises.

• 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.

A Solar powered computer kiosk run by
entrepreneur in a rural village in Andhra Pradesh
8
Key Elements

• 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

• Cost recovery for BDS, evaluation and
  dissemination
• Custom-design vs. replication with some
  adaptation (not quite cookie cutter)
• Capacity Building

Efficient ovens in silk reeling units
9
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.

10
LPG Access for Cooking by Poor Households
LPG Cookshop a common kitchen providing poor
women with clean, convenient cooking made
affordable by a pay-for-use operation.
11
Energy-linked Information/Communication for Rural
Schools
S3IDFs innovative business and financial
structuring helps rural schools introduce
cost-effective computer education for students.
12
Transport Micro-Enterprise Bullock Cart U-Haul
Partnership
S3IDFs financing support to a grassroots NGO
helps local small holders and poor farmers rent a
cart and lower the cost of transporting harvested
crops.
13
SME development Areca plate and cup
manufacturing
S3IDF facilitates the business development,
technology, financial and market assistance to
help create Areca product manufacturing SMEs.
14
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.
15
Contact us

• S3IDF US
• The Small-Scale Sustainable Infrastructure
  Development Fund, Inc.The Carriage House, 5
  Hastings SquareCambridge, MA 02139 USATel
  1-617-576-0652 Email s3idf_at_yahoo.com
• S3IDF India
• The Small-Scale Sustainable Infrastructure
  Development Fund800, 14th Cross, 1st Phase J.P.
  Nagar
• Bangalore 560078
• Karnataka, India
• Tel [phone]  Email info_at_s3idf.org
• For more information about S3IDF,
  visit http//www.s3idf.org