Business Growth Supports Villages’ Access to Energy

Growing his business and increasing the viability of the mini-grid: U Aye Soe’s story.

Access to reliable electricity changes lives. When a rural village gains access to electricity the streets are lit, schools and health services have power, businesses grow, and the village’s economy improves.

Solar mini-grids are often well placed to provide electricity to villages that the main grid does not, or cannot, reach, but their success hinges on several factors. Crucially, mini-grids need to be well utilised. People need to use electricity during the day, when the sun is shining most brightly, and people need to use enough electricity to ensure that mini-grids are viable and the developers do not lose money on their investment. Good utilisation of a mini-grid means villagers enjoy the economic benefits of solar energy while ensuring that developers can operate sustainably, allowing them to expand to other villages.

This changed when a local developer built a solar mini-grid on Kanti Island, where U Aye Soe lives. Techno-Hill, with support from Myanmar’s Department for Rural Development, installed a 40 Kw solar mini-grid that can provide electricity connections to each house and business in the village.

U Aye Soe operates a motorcycle workshop, a business he established 10 years ago. When Techno-Hill built the mini-grid he saw an opportunity to expand his business. He applied for a loan from Smart Power Myanmar’s Energy Impact Fund to buy an electric welding machine, air compressor, AC drill and electric grinder needed in his workshop.

His business grew quickly. His energy costs fell by 70 per cent and his earnings increased by 50 per cent.

Previously he needed to rent or borrow machinery like the welding machine and air compressor to service his clients’ motorbikes and he spent approximately MMK 35,000 (USD $23) per month on diesel to operate the machines. His monthly electricity bill now is MMK 10,000 (USD $6.6) or less, a reduction of around 70 per cent.

His bills are lower, but he is generating more business than ever. He can spend more time working now he does not need to travel to rent machinery. Before, he used to service between 12 and 15 motorcycles for customers each day. Reliable energy and electric tools have boosted his productivity, meaning that he can now provide services to between 20 and 25 customers each day. After expenses, he makes 50 per cent (USD $72) more a month than he did before. His plans do not end there: U Aye Soe would like to further expand his business to start selling spare parts for motorcycles.

With access to electric machinery, U Aye Soe’s business is doing better than ever. But his new tools are doing more than growing one business; they are also ensuring that the mini-grid succeeds through increased productive use of energy during the day.

U Aye Soe is unique, but many parts of his story are not: motorcycle maintenance shops and other small businesses can be found in every village, in every state and region, of Myanmar. By encouraging individuals to use the grid effectively, as Smart Power Myanmar and developers such as Techno-Hill do, mini-grids can effectively catalyse economic development across the country.

U Aye Soe is very happy to have access to reliable energy and be able to grow his business: “This is the next level of lifestyle! I can do whatever I want with electricity”.