|Shells solar business, Worldwide benchmark
The sales business of the Shell Companies in Sri Lanka, Shell Renewables Lanka Ltd. has recorded tremendous growth, in only its second year of operation, and has been recognised as a benchmark programme within the rural solar industry worldwide, says a press release.
In its second year of existence, the companys end of year results recorded a total revenue of 2.5 million USD. The company grew from an organisation that installed just 400 solar systems in 1999, to one that installed over 5,400 systems out of a total of around 10,000 systems installed islandwide in 2001. Very few rural, direct sales operations in the world can claim to have reached similar results within these rural markets. That shell has done this in its second year of existence is a testament to the strength of the local solar business.
To grow its local business, in 2000 Shell established a partnership with the Sarvodaya Economic Enterprise Development Service (SEEDS) to provide micro-finance. With more than 180 field officers, SEEDS is able to provide credit to anyone of Shells remote rural customers, and collect the loan over a period of 6 months to 5 years at commercial rates of interest. Shell sells a range of standard home lighting kits, ranging from 5 to 13 light kits. The average system that people buy costs in the range of Rs. 45,000. Without consumer finance, this up-front cost would prove very difficult for customers.
Pradip Jayewardene, Managing Director of Shell Renewables Lanka says: "Our staff has grown exponentially in 2001, and we are incredibly proud of their hard work and dedication. They have been able to deliver sales growth of 200%, and still keep control of our costs. The results are that Shell Renewables Lanka is now doing very well, and well poised to grow a further 100% in 2002. If our rural sales and service companies do not have a profitable perspective, then they will not be able to continually drive sales and provide critical after sales service. Cooperation with SEEDS, the World Bank and the Government has been critical to the growth of our Sri Lankan operations."
Shell Renewables came into operation in September 1999, when Shell Solar signed a purchase agreement with the Solar Power and Light Company (SUNTEC) to acquire the company. Shell subsequently proceeded to invest more than two million USD in a company that takes solar power systems straight to the customers doorstep, installs it in the customers home, and provides service from any one of its 16 solar centres located throughout the island.
With growing government support both at the provincial and central government levels for solar as an alternative to more costly grid extension, the prospects for Shell in Sri Lanka and solar as an alternative for grid electricity are very bright.
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