BRAZIL: MICROFINANCE FOR RENEWABLE ENERGY PROJECTS…siteresources.worldbank.org/INTGENENERGY/Publications/21136131/... · BRAZIL: MICROFINANCE FOR RENEWABLE ENERGY PROJECTS:

BRASUS/World Bank: “Empowered Women Bring Solutions: Looking at Sustainable Energy through the Gender Lens, Nov. 10, 2006

BRAZIL: MICROFINANCE FOR RENEWABLE ENERGY PROJECTS: WOMEN FARMERS’

EMPOWERMENT AND RELATED ISSUES IN RURAL DEVELOPMENT

by Suzanne B. Maia, President, Brasil Sustentáável (BRASUS) and Vice President,

Advanced Engineering Associates International, Inc.

“Empowered Women Bring Solutions: Looking at Sustainable Energy through the Gender Lens”

November 10, 2006

World Bank Social Development Network Week and Learning Week


Context: Context: ““PromotingPromoting SustainableSustainable MarketsMarketsfor for RenewableRenewable EnergyEnergy inin Rural Rural RegionsRegions of of Brazil ProjectBrazil Project”” ((ProjectProject BRA/02/H01BRA/02/H01--UDP/BRZ/00/169)UDP/BRZ/00/169)

ExecutingExecuting AgencyAgency: Brasil Sustent: Brasil Sustentáávelvel––BRASUSBRASUS

SponsorsSponsors: : U.N.U.N. FoundationFoundation, , InWEnt (Germany)InWEnt (Germany)

SupportSupport: Mato Grosso : Mato Grosso StateState GovernmentGovernment, , Regional Regional

Market Manager Organizations (RMMs)Market Manager Organizations (RMMs)

TechnicalTechnical CooperationCooperation: UNDP: UNDP


PRESENTATION OUTLINE:

• Project Context• Women's participation in project activities:

- Regional Market Manager Organizations (RMMs)- Information collection/sharing and organizational- Training & capacity-building activities (technical, productive uses & non-technical)

• Revolving Fund Micro Finance Loans and Results• The GAP and Observations and Conclusions about

Gender Distinctions in Rural/Renewable Energy Markets in Brazil Project Experience


PROJECT CONTEXT: Launched in 2002, the 4-year

Project promotes a specific “Regional Market Managers

(RMM)” model and methodology to establish aggregated

renewable energy (RE) markets, carefully integrating key

elements to secure their sustainability in four distinct rural

areas of MT featuring low-income, sparsely populated and

energy-deficient populations that require energy and other

support to enable their economic, social and

environmentally sound development.


Location of 4 Project Regions: Nobres, Paranaita, Peixoto de Azevedo & Juruena/Castanheira/Cotriguaçu–MT

Lat: 9º37’30”SLong:56º22’30”W


Context - Basic concept:

Regional Market Managers (RMMs)

RMMs are consortia of local private sector entities RMMs are consortia of local private sector entities supporting renewable energy markets for local supporting renewable energy markets for local

integrated and sustainable development objectives. integrated and sustainable development objectives. They may include enterprises, NGOs, cooperatives, They may include enterprises, NGOs, cooperatives,

associations, labor unions, schools, etc. RMMs associations, labor unions, schools, etc. RMMs establish partnerships with other private and public establish partnerships with other private and public

sector organizations to meet specific project sector organizations to meet specific project objectives.objectives.


AGROPLAN Agricola Cachimbo

Cooperatives

Elétrica Paranaita

FEMA - EMPAERState Government

PJR –Rural Youth ParishRural Farmers’ Union of Paranaíta

Agroluma Ltda

Catavento Ltda

Zanete Market

Paranaíta Construções CEPLAC

Agrarian Reform Settlers

UNEMAT

Rural farmers/ranchers

Shell Solar-NG SAT

Floresta Solar

Multitécnica

Sawmills

Technical Schools

Universities

Associations

AGROLUMA

CRONO TOPOGRAFIA

UDACCONSÓRCIO ICV CRISTALINO

Municipal Prefecture

COOPARANAITA INCRA

Context: Example of RMM & Market ParticipantsEvolution in the Municipality of Paranaíta-MT

Federal/Regional AgenciesAgro-Industries

Rural Workers’ Union of Paranaíta

NGOs

Banco do Brasil

SICREDI

Financial Institutions


RE CONSUMERSRE TECHNOLOGY & SERVICE PROVIDERS

-Rural farmers/ranchers-Settlers (Agrarianreform)-Sawmills-Agro-industries-Commercial Enterprises-Associations-Cooperatives

Shell SolarFEMA - EMPAER - SICME - SEPLAN –

FETAGRIPrefecture-Agriculture Department

STATE/LOCAL GOVERNMENT

PJR – Rural Youth ParishAgroluma LtdaCatavento Ltda

Zanete Market

Paranaíta ConstruçõesRural Farmers’ and

Rural Workers’ Unions

LOCAL PARTNERS

UNEMAT

Organization of the Market and RMM dynamic evolution

CONSÓRCIO ICV CRISTALINO

CRONO TOPOGRAFIA

UDAC

Agrícola Cachimbo

AGROPLAN

Instituto Floresta de P&D

Floresta SolarElétrica Paranaita

KyoceraMultitécnica

Commercial & Other Enterprises

Schools/Research Centers

NGOs

CEFET

Eletronorte-PRODEEMRede CEMAT

BanksB. BrasilSICREDI


RE CONSUMERSRE TECHNOLOGY & SERVICE PROVIDERS

-Rural farmers/ranchers-Settlers (Agrarianreform)-Sawmills-Agro-industries-Commercial Enterprises-Associations-Cooperatives

Shell SolarFEMA - EMPAER - SICME –

SEPLAN –FETAGRIPrefecture-Agriculture Department

STATE/LOCAL GOVERNMENT

PJR – Rural Youth ParishAgroluma Ltda

Catavento LtdaZanete Market

Paranaíta Construções

Rural Farmers’ and Rural Workers’ Unions

LOCAL PARTNERS

UNEMAT

Organization of the Market and RMM dynamic evolution: Paranaita

Consórcio ICV CristalinoCRONO Topography

UDAC

Agrícola Cachimbo

AGROPLAN

Instituto Floresta de P&D

Floresta SolarElétrica Paranaita

KyoceraMultitécnica

Commercial & Other Enterprises Schools/Research

CentersNGOs

CEFET

Eletronorte-PRODEEMRede CEMAT

BanksB. Brasil

SICREDI


• Information to understand market & stimulate supply/demand: gather, organize, evaluate, use, disseminate

• Aggregate Market: integrate geographically and types of demand

• Train/Build capacity of market participants and relevant institutions in fundamental areas: market concepts/tools, organization, technology services, production techniques, etc.

• Engage pro-active partners with concrete, defined interests in regionaloutcomes for both energy & non-energy areas

• Support strong, adaptive local management model & tools (e.g., RMMs), to achieve objectives and adjust dynamically

• Ensure adequate practical financial mechanism to meet local financing/credit needs, involving local financial institutions.

Project Context: STRATEGY TO REDUCE MARKET & FINANCIAL RISKS


Context: APPROPRIATE FINANCIAL MECHANISMRevolving Fund established under BRASUS as OSCIP with initial US$200,000 in start-up capital from UNF to finance RE enterprises/projects in targeted rural regions:

1. Interest rates fixed at 6% p.a. for micro producers & enterprises, 8.75% for small producers/enterprises;

2. Up to 1 year grace period, maximum 5-year loan;3. Upper limit of R$30,000 per borrower;4. Requirement for borrower to receive and follow

technical assistance for productive area (& training);5. Technical evaluation by trained RMM to confirm

installation before payment, and approval by client6. Constant & multi-level monitoring.


Context: Typical Brazilian Low-Income Rural Lady Farmer’s Profile:-Quiet participation in meetings, with spouse taking lead, unlessalready a community leader. In side conversations among themselves, they may express their opinions more openly;

-Works garden, tends animals, gets water, meals, firewood, helps planting & harvesting, raises children;-Girls attend school longer, somewhat higher literacy;-General priorities for women: physical appearance, marriage, family-Suffers physical hardships, often physical abuse, abandoned with children to support, multiple and successive pregnancies without stable partner or provider, lack of health/social support, no conveniences in residence;


A typical Brazilian low-income rural lady farmer’s profile, cont.

-Woman does not control expenditures

-Property not usually in woman’s name, nor takes out loans in her name, unless husband has no credit (bankruptcy or defaulted loans) andtherefore puts her name onto proprietorship papers, loans, etc. But he is likely to “run”the operation;

-Property titles not cleared for years in resettlements;

-If woman abandons property, husband often leaves;

-Few women have independence or equitable partnerships, or imagine them. When they exist, the undertaking thrives.


Women’s Participation in Project ActivitiesSome Data for Mato Grosso Project

• Of 19 RMM organizations, 4 were led by women in Nobres(farmers’ cooperative), Paranaita (NGO and enterprise) and Peixoto de Azevedo (enterprise proprietor) regions.

• In over 200 local Organizational or Informational activities, involving over 2,000 persons, women’s participation overall was about 20-25%, including artisan initiative.

• Training for Productive Activities: Included irrigation, chicken breeding, pasture management, handicrafts and commercialization.


Women's participation in project activities, cont.

• Over 100 persons (11 women-11%) trained in multi-disciplinary, integrated RE market study methodology in 2002 and 2004.

• About 11 of 75 (15%) persons technically trained in RE technologies and project preparation, system installation, operation and maintenance were women.


1/40/21/5

0

Defaulted loans = 23%;W/M; women defaults=18%

217Peixoto de Azevedo

19Paranaita18Nobres014JCC

4 Loans to Women

(8%)

Total LoansRegion

Revolving Fund Loans and Results: 46 RE farming projects & 2 local RE enterprises financed & implemented with initial US$200,000. 13 of these loans have been retracted.


Dona Maria: from plastic tent and earthen floor, to shanty, to fantastic house with RE for irrigation, electric fencing, water pumping and residential comforts, and dreams of more.

Project 1 (1999). (~US$1:R$1 exchange rate at the time.) R$7.500 (est.) for 2 PV panel system (70 Wp x 2) with 2 batteries, pump, for water pumping for irrigation of watermelon and melon.R$700 Borrowed money from PROCERA program (rural producers), originally intended for 5 cows. R$ 60 - Other costs for fertilizer and seeds invested by producer.Planted 1.500 watermelon plants, each plant bore (minimum average) 3 fruits each. (She discounted melons as being insignificant.)R$13.500 Income from ~4.500 watermelons sold at R$3,00 each within 3 months. Within 3 months, she paid back her loan. The family was VERY HAPPY with the result.

CASES OF WOMEN WITH RE PROJECTS FINANCED IN THE BRASUS PROJECT REGIONS


Dona Maria Project Evolution: Crop irrigation + pumping for water troughs for livestock + electric fencing + lighting + bar (commerce) + sales outlet in Cuiaba for produce and value-added.

Project 2 (2000). (Still ~US$1: R$1 exchange rate.) Purchased an additional 8 PV panels (70 Wp) and 2 batteries for irrigation. R$2.700 - Borrowed from Ajiota (lender which charges 10%/month in interest) for hoses, seeds (2 sacks of corn seed for R$120; watermelon seeds for R$15), 3 bags of fertilizer for R$180; and a machine for planting the seeds.Planted: 1.500 watermelon plants and 1.5 hectares of corn. (Note: Rice was also planted in the irrigated area that increased its yield by 30%, but this was for self-consumption by the family, not for sale.)R$12.000 Income from corn (at R$8.000 per hectare) when sold.R$15.750-$9.450 Income (maximum/minimum) from the watermelon, with 3 fruits per plant, between 3 and 5 kg per plant, sold at R$0,70 / kg (1.500 x 3 x 3 (or 5) kg x 0,70).

CASES OF WOMEN WITH RE PROJECTS FINANCED, cont.


Dona Maria: Tech Demo, Knowledge-sharing, Training Participant, Community Leader and Entrepreneurial Dynamite (not financed by BRASUS).

Project 3. A third PV installation was made in 2004 by VEA, without a contract, price or payment terms. This installation was withdrawn by the supplier in 2005.Project 4. An electric fencing kit is now (partially) installed for pigs, goats and sheep. A training school enclosure was made to “train” the animals to respect the fencing. Estimated cost: R$2.750, which is being paid for in cash by Dona Maria from her savings from sales of chickens and eggs. Dona Maria’s family established a “farmer’s produce restaurant”in the capital city of Cuiaba, which purchases raw produce, dairy and meat from her farm as well as value-added pamonha. She also plans to establish a “bed-and-breakfast” hotel for tourists.She previously had a “bar” with lighting, refrigeration and a TV operating about 100 meters from her house, energized by wires extending from her home PV system and built with the proceeds from the crop yields/income from the irrigation projects (with PV). She discontinued the bar, where neighbors gathered to socialize, watch news and sports programs, and discuss politics.



2. The case of Ivete Aparecida: RE enterprise expansion.-Entered into RMM;-Ensured husband (operational manager) participated in all Project events and, when he “got it!” ...-Took out R$ 30.000 RE loan to expand business-Maintains 20-40 RE projects in pipeline-Attempted to lead Artisan Initiative-Husband applied principles to start up other associations for neighborhoods, handicapped (productive activities)-She entered politics as Councilwoman



3. The case of Maria Rosa (farmer): irrigation with a water wheel. Took out loan (R$2,870) to install a water wheel, but waited almost a year to install it. It is used for irrigation of crops. No complaints or issues.

4. The case of Rosimeire (farmer): Refrigeration for cheeses with PV system worked well. Loan of R$7,544. Preferred PV system even when became grid-connected, because quality of energy so poor via grid, she lost a lot of her product. However, subsequently not satisfied with technical assistance from local RE enterprise, did not make loan payment and is having system withdrawn.



5. Mrs. Job Jeronimo (farmer’s wife): This is the case of a good partnership between spouses, both serious, hard-working, honest: one or the other participated in all the available training, paid on time and expressed satisfaction with the results of their PV system used for cattle fencing, water troughs (and other pumping), and residential electrification. The loan was made for R$7,410. They work together and have improved their economic situation.

A DIFFERENT CASE OF A WOMAN WHOSE HUSBAND TOOK OUT THE LOAN FOR THE RE PROJECT


Note: Many women resist changes for “improvement”.


In this project, gender wasn’t focus, but financing option fully available to eligible women, and “low-cost RE provision and services for rural women to promote ‘off-farm’ employment” and “strengthening women’s groups” had mixed to negative results.

Observations/Conclusions of a Gender non-expert:

GAP: Policy initiatives to support better land titling process, including for women, are on target, with some “tailoring to country realities”. . . such as “macho” cultures, educational levels, transparency for documentation and legal marriage issues.

Is Gender the best focus?


Observations/Conclusions of a Gender non-expert:

GAP: For “making markets work for women” and “empowering women to compete in markets” – and men –there is a natural or logical sequence: e.g.,

Dedicated lines of credit (e.g., Banco de Mulheres) only after considerable work on organization and training for:

• productive activities,

• market development,

• business ownership/administration and

• “strengthening women’s groups”.


GAP: Though stated as beyond its scope, the macroeconomic and business contexts seem to pose the greatest obstacles and are perhaps the most influential factors for sustainable energy consumers and providers, even at rural level and even when markets for the goods are local.

Observations/Conclusions of a Gender non-expert, cont.

-- TAX REFORMSTAX REFORMS (impacts prices for consumers/vendors) (impacts prices for consumers/vendors) -- FINANCIAL SECTOR REFORMS FINANCIAL SECTOR REFORMS (impacts access and (impacts access and borrowing power for service providers and consumers) borrowing power for service providers and consumers) -- LABOR LAW REFORMSLABOR LAW REFORMS (impacts ability to do business, (impacts ability to do business, expand services, legal hires, HR development, etc.)expand services, legal hires, HR development, etc.)-- SME LEGISLATIONSME LEGISLATION (increases opportunities for local (increases opportunities for local service businesses)service businesses)-- ANTIANTI--CORRUPTIONCORRUPTION (affects costs, investor confidence)(affects costs, investor confidence)


Conclusion: As measured through the gender lens, the Brazil project showed differences in property ownership and leadership roles of rural women, due more to certain legal issues, general lack of transparency and culture/traditions.However, there were no significant distinctions in the outcome of micro finance opportunities for rural RE projects, because major challenges in context were indifferent to gender: all need education, organization, training, technical assistance, project support and only then, access to micro financing that adheres to good eligibility criteria.Finally, other contextual factors must always be well understood and worked upon in tandem with gender-sensitive initiatives.

Observations/Conclusions of a Gender non-expert, cont.

Documents

BRAZIL: MICROFINANCE FOR RENEWABLE ENERGY PROJECTS…siteresources.worldbank.org/INTGENENERGY/Publications/21136131/... · BRAZIL: MICROFINANCE FOR RENEWABLE ENERGY PROJECTS: