Solar power opens the door to banking for rural Indians

A worker cleans photovoltaic solar panels inside a solar power plant at Raisan village near Gandhinagar, in the western Indian state of Gujarat. (Reuters/File)
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Updated 04 August 2022

Solar power opens the door to banking for rural Indians

  • As India boosts its use of renewable energy in an effort to wean itself off climate-heating coal, the country is leaning heavily on solar energy to cut carbon emissions and help stabilize a grid squeezed by coal shortages

AITAWADE BUDRUK, India: Going to the bank in his home village in western India used to be a slow, frustrating process for Kiran Patil, as frequent power cuts — sometimes lasting for days — turned what should have been a quick errand into a lengthy ordeal.
The 59-year-old farmer often had to wait for hours in line at RBL Bank, his local branch in the village of Aitawade Budruk, or abandon his transaction and return the next day, wasting time he should have been spending cultivating his crops.
All that changed after the building was fitted with a set of solar panels and backup storage batteries in 2018, breaking the bank’s reliance on the power grid and giving it a steady supply of clean electricity.
“The transactions now are so smooth and fast,” Patil told the Thomson Reuters Foundation. “These days we even find time for a quick chat with the branch manager over a cup of tea, to learn of the latest services and facilities.”
A more reliable banking experience is also bringing in new customers who previously didn’t have the time for long waits or who worried about never knowing when they would be able to access their money.
Since the solar power system was installed at RBL in Aitawade Budruk, the bank has been opening 25 to 30 new accounts every month — 10 times more than before, said branch manager Sandeep Banne.
As India boosts its use of renewable energy in an effort to wean itself off climate-heating coal, the country is leaning heavily on solar energy to cut carbon emissions and help stabilize a grid squeezed by coal shortages and surging demand from a population trying to keep cool during hotter summers.
But some communities have discovered another benefit to the solar power push: greater financial system access for millions of the country’s unbanked, including the estimated 20 percent of Indian adults, who have no access to a bank account or formal line of credit.
Raghuraman Chandrasekaran, founder and CEO of E-Hands Energy, the Chennai-based firm that set up the solar unit in Aitawade Budruk, said his company has installed such systems at more than 920 rural banks across India, helping bring more than 6 million people into the formal banking system.
The company plans to install units at up to 100 more rural branches before the end of the year, he said.
“Citizens in rural areas were walking or spending their precious money to transport themselves from their villages to the nearest bank branch, then waiting (there) for hours … simply because the bank did not have electricity all day and the computers could not work,” said Chandrasekaran.
“It was all misery.”

MODERN BANKING
The three-kilowatt solar power system at the Aitawade Budruk branch — which runs everything from the fans and lights to computers and alarm systems — means the bank now has reliable power about 95 percent of the time, said Banne, the branch manager.
On cloudy days, backup storage batteries take over, he said.
Firms like E-Hands Energy, Tata Power Solar and Husk Power Systems have so far outfitted more than 2,000 banks in rural India with solar power, estimates Shyam Kumar Garg, who retired as deputy general manager at the National Bank for Agriculture and Rural Development last October.
The systems feed into India’s efforts to install 500 gigawatts (GW) of renewable energy capacity by 2030, up from about 115 GW now, more than half of which is solar.
E-Hands Energy’s manager of operations Kakumanu Prathap Sagar said the solar systems the company has installed at banks around India is helping cut about 3,000 tons of carbon emissions every year.
Going solar can cut costs, too, said Banne at RBL in Aitawade Budruk, noting that the branch now spends a fraction of what it used to for grid electricity and diesel for its backup generators.
The solar systems cost between 130,000 and 150,000 Indian rupees ($1,650 to $1,900) for installation and maintenance for four years, and pay for themselves in about four years, he added.
For villagers, the biggest benefit is finally being able to use government services they never had access to before, said Pratibha Budruk, head of the Aitawade Budruk’s village council.
When the bank suffered power cuts and frequent loss of Internet connectivity, payments of pensions, students’ scholarships, loans and insurance were often delayed, putting a strain on people who relied on the money, Budruk said.
“The changeover of rural banks to solar power … has opened the doors of modern banking facilities for our local villagers,” she said.

SOLAR POWER CHALLENGES
In a country where 65 percent of the population lives in rural areas, according to the World Bank, switching rural banks to solar power might even slow the migration of young people from villages to cities as more economic opportunities at home arise, said energy management expert Binoy Krishna Choudhury.
“Solarising banks is a good step to developing the rural economy,” said Choudhury, who teaches at the Indian Institute of Social Welfare and Business Management in Kolkata.
But projects to bring solar panels to rural banks face a raft of obstacles, said Russell deLucia, director and founder of the Small-Scale Sustainable Infrastructure Development Fund, a US-based nonprofit.
Potential hurdles include finding ways to transport and install the equipment in far flung, often off-road locations, said deLucia, whose company helps E-Hands raise funding for its solar power projects.
Once the systems are up and running, finding skilled technicians nearby to fix anything that goes wrong is another issue, he said.
Despite those challenges, Budruk, the village council head, wants to see more banks tap into solar power as a way to both improve the lives of rural communities and limit worsening climate change impacts such as extreme heat.
“Installing solar systems in the banks is like planting trees throughout the year for purifying the air we breathe,” she said.
“When the whole world is trying hard to slow global warming and the impacts of climate change, this is a small contribution from our village.”


Pakistan’s national currency continues to gain against greenback

Updated 11 August 2022

Pakistan’s national currency continues to gain against greenback

  • Pakistani rupee gained Rs3.03 to close at Rs218.88 against the greenback in the interbank market
  • Rupee in the open market also appreciated from Rs218 to Rs216 for selling during trading on Thursday

KARACHI: Pakistan’s national currency on Thursday continued its bullish trend and appreciated 1.38 percent against the United States dollar amid easing balance of payment pressure and expected inflows from the International Monetary Fund, traders and analysts said.

The Pakistani rupee gained Rs3.03 to close at Rs218.88 against the greenback in the interbank market following eight consecutive appreciation trading sessions. The rupee has recouped its value by 9.3% or Rs21 against the greenback in the continued uptrend, according to State Bank of Pakistan data.

“There are couple of reasons for the current appreciation of the Pak rupee against dollar including easing off balance of payment pressure and declining demand at home after government’s administrative measures to curtail imports,” Tahir Abbas, Director Research at Arif Habib Limited, told Arab News.  

“Declining current account deficit and price cut of oil and other commodities also eased off pressure on the rupee. The expected inflows from the IMF by the end of this month and undervalued currency are also the key reasons of rupee appreciation.”  

Following austerity measures by the government and a restriction on imports, the import bill has declined from $7.8 billion in June 2022 to $4.8 billion in July 2022, which has not only reduced the trade deficit but also eased pressure on the national currency.  

The rupee in the open market also appreciated from Rs218 to Rs216 for selling during trading on Thursday. The currency in the open market has appreciated by over 11% or Rs28 since July 29, 2022, according to the Exchange Companies Association of Pakistan (ECAP).

“There are only sellers in the market after the sentiments have changed following the measures taken by government and the central bank,” Zafar Paracha, General Secretary of ECAP told Arab News.
 
“The central bank has taken action against the banks’ treasuries departments which were involved in maneuvering of dollar in interbank market. In addition, the expected reduction in the import bill of August has also played appreciation role.”    

The pressure on the Pakistani rupee eased off after the government took steps to curtail imports and meet preconditions of the IMF for the revival of a $6 billion program signed in 2019 to stave off a balance of payment crisis.  

The IMF said last month it had reached a staff level agreement with Pakistan that would pave the way for the disbursement of $1.17 billion after its board approval later this month. Islamabad also has to convince the fund about the availability of funds for a $4 billion financing gap.

Last week, the UAE’s state news agency had reported that the country intended to invest $1 billion in Pakistani companies across various sectors, which include gas, energy infrastructure, renewable energy and healthcare.

Following the current bullish trend in the currency market, Pakistani analysts said the currency was likely to appreciate further to around Rs200 against the greenback in the near future.  

Stocks, however, on Thursday, remained bearish mainly due to profit taking that kicked off during the midsession. The benchmark KSE-100 index closed at 42,243 points, down by 251 points.

“Stocks fell sharply lower on political noise and hike in power tariff. Mid session support remained on strong rupee and falling Pakistan dollar bond yields,” Ahsan Mehanti, CEO of Arif Habib Corporation, told Arab News. “Investor concerns for weak earnings outlook played a catalyst role in bearish close.”


McDonald’s to begin reopening Ukraine restaurants

Updated 11 August 2022

McDonald’s to begin reopening Ukraine restaurants

  • The company closed all its restaurants in Ukraine and Russia in March
  • McDonald's said it was working with suppliers to get products to restaurants

DUBAI: McDonald’s Corp. said on Thursday it plans on reopening its restaurants in Ukraine over the next few months in an early sign of western businesses returning to the country, even as the conflict with Russia continues.
The company closed all its restaurants in Ukraine and Russia in March, with McDonald’s selling most of its restaurants in Russia to one of its local licensees in May.
“After extensive consultation and discussion with Ukrainian officials, suppliers, and security specialists, and in consideration of our employees’ request to return to work, we have decided to institute a phased plan to reopen some restaurants in Kyiv and western Ukraine” Paul Pomroy, McDonald’s head of international operated markets, said in a message to employees.
The company said it was working with suppliers to get products to restaurants and bringing employees back on site with enhanced safety protocols.
McDonald’s had 109 restaurants in Ukraine, but did not specify how many it planned to reopen.


Saudi Arabian Mining Co. emerges as TASI’s 5th-best performer

Updated 11 August 2022

Saudi Arabian Mining Co. emerges as TASI’s 5th-best performer

  • Analysts expect Ma’aden to maintain its solid performance throughout 2022, owing to its expansion plans

RIYADH: Saudi Arabian Mining Co., known as Ma’aden, ranked fifth among the top share price gainers this year on the Saudi stock index TASI buoyed by strong results and a thriving mineral sector.

Ma’aden’s share price in 2022 opened at SR39.25 ($10.5) and climbed to SR59 on Aug. 4, surging 53 percent.

A booming mineral industry fueled this rise in Saudi Arabia as, in recent years, the Kingdom has shifted its focus toward discovering and extracting minerals and metals to support its mining industry.

There is over $3-trillion worth of minerals to be exploited in the Kingdom, which opens huge opportunities for minerals companies, Peter Leon, a partner in Johannesburg-based law firm Herbert Smith Freehills told reporters in February.

Leon advised the Kingdom’s Ministry of Industry and Mineral Resources on drafting its new mining law.

Khalid Almudaifer, vice minister of MIMR, told Arab News earlier this year that the ministry had established the mining sector’s infrastructure, allowing the Kingdom to leapfrog in both mining and sustainable mining.

FASTFACTS

• The company’s share price in 2022 opened at SR39.25 ($10.5) and climbed to SR59 on Aug. 4, surging 53 percent.

• Ma’aden reported a 185 percent surge in profit during the first quarter of 2022, hitting SR2.17 billion.

• The mining company has a market capitalization of over SR100 billion.

As the Kingdom revealed that it could be sitting on untapped mineral deposits worth $1.3 trillion, Almudaifer added that the $1.3 trillion estimate of untapped minerals is only a starting point and that underground minerals are likely worth even more.

In March, the state-owned firm announced its plans to increase production capacity and invest in exploration to tap into $1.3 trillion mineral reserves, a reason economist Ali Alhazmi believes that made Ma’aden shares lucrative, further leading to high performance.

Speaking to Arab News, Alhazmi explained that one of the reasons could be attributed to Ma’aden turning into probability last year, reaching SR5.2 billion, compared to SR280 million in losses in 2020.

The other reason could relate to its plan to double its capital by distributing three shares to shareholders, which has attracted investors to buy Ma’aden shares.

According to Abdullah AlRebdi, CEO of Rassanah Capital, the beginning of the third line of its ammonia production also helped the company’s fortune, especially when there was a considerable shortage of raw material for fertilizer. It is worth mentioning that the ammonia plant expansion is set to add over 1 million tons of ammonia production to reach 3.3 million tons, making Ma’aden one of the largest ammonia producers east of the Suez Canal.

Ma’aden reported a 185 percent surge in profit during the first quarter of 2022, hitting SR2.17 billion, amid a jump in commodity prices.

Analysts expect Ma’aden to maintain its solid performance throughout 2022, owing to its expansion plans and gold mining projects in Mansoura and Masarrah.

“By the end of 2022, Ma’aden will achieve SR9 billion in profit, a growth of 50 percent from 2021,” Alhazmi predicted.

As one of the fastest-growing mining companies worldwide, Ma’aden has a market capitalization of over SR100 billion and is one of the Kingdom’s 10 most prominent players.

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Russian oil shipments to central Europe expected to resume

Updated 10 August 2022

Russian oil shipments to central Europe expected to resume

  • “I expect the oil shipments to resume in hours,” Slovakia’s Economy Minister said
  • Transneft cited complications due to European Union sanctions for its action on Aug. 4

BRATISLAVA, Slovakia: Oil shipments from Russia through a critical pipeline to several European countries should resume soon after a problem over payments for transit was resolved, Slovakia’s Economy Minister Richard Sulik said on Wednesday.
“I expect the oil shipments to resume in hours,” Sulik said.
Russian state pipeline operator Transneft said Tuesday it halted shipments through the southern branch of the Druzhba, or Friendship, pipeline, which runs through Ukraine to the Czech Republic, Slovakia and Hungary. The northern leg of the Druzhba pipeline, which runs through Belarus to Poland and Germany, was unaffected, Transneft said.
Transneft cited complications due to European Union sanctions for its action on Aug. 4, saying its payment to the company’s Ukrainian counterpart was refused.
Sulik said the payments would be made Wednesday by Slovak refiner Slovnaft after both the Russian and Ukrainian sides agreed to the solution.
Slovnaft is owned by Hungary’s MOL energy group.
MOL confirmed the money has been transferred.
Slovakia receives practically all its oil through the Druzhba pipeline. Sulik said the payment is worth some 9–10 million euros (up to $10.2 million).
He said his country would work on a long-term solution to the problem which he said was caused by the refusal of an unnamed bank in Western Europe to transfer the money due to the sanctions imposed by the EU on Russia for its war against Ukraine.
“I wouldn’t look for a political context behind it, there’s none,” Sulik said.
However, Simone Tagliapietra, an energy expert at the Bruegel think tank in Brussels, said Russia has weaponized natural gas heading to Europe by claiming technical issues, and “this opens questions on whether it might now do the same with oil.”
Russia has blamed equipment repairs for its decision to slash flows through the Nord Stream 1 pipeline to Germany, whose government has called it a political move to sow uncertainty and push up prices amid the war in Ukraine.
EU leaders agreed in May to embargo most Russian oil imports by the end of the year as part of the bloc’s sanctions over Moscow’s invasion of Ukraine.
The embargo covers Russian oil brought in by sea, but allowed temporary Druzhba pipeline shipments to Hungary and certain other landlocked countries in central Europe, such as Slovakia and the Czech Republic.

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Middle East investors eye London property on back of weak pound

Updated 10 August 2022

Middle East investors eye London property on back of weak pound

  • Thanks to the favorable exchange rate, a £1 million home in London that would have cost $1.7 million in 2014 currently costs only about $1.2 million
  • Exchange rate forecasts predict sterling will strengthen against the dollar between now and 2026, suggesting that now is the perfect time for overseas buyers to take the plunge

LONDON: The declining strength of Sterling has created a window of opportunity in London for investors from the Middle East, according to property consultancy JLL.

Sterling buyers are paying 35 percent more now for London properties than they were eight years ago but those purchasing in US dollars are paying 3.8 percent less.

In June 2014, a US buyer would have had to pay $1.7 million for a £1 million property in London. The weaker pound means at the end of June this year, a £1 million property in the city would have cost only $1.2 million.

Exchange rate forecasts from Oxford Economics predict the pound will strengthen against the dollar between now and 2026, suggesting that this is the perfect time for overseas buyers to take advantage of the currency-exchange benefits that are available.

Analysis of passenger arrivals at London’s Heathrow Airport show that the number of visitors from the Middle East has recovered to pre-pandemic levels. In fact, the number of passengers arriving from the region in May was 1 percent higher than the pre-pandemic average, and 2 percent higher in June.

“The weaker sterling, alongside the safe-haven status usually associated with UK real estate, is driving and will continue to drive investment here,” said JLL’s Alex Carr.

“This return of overseas demand at present is particularly apparent among purchasers from the Gulf states, who are traveling back here for the first time in two years.

“London has always, historically, been a safe haven for wealthy individuals from Gulf states who are looking to diversify their assets, being one of the most resilient and transparent property markets in the world.”

London’s upscale Kensington district reportedly has experienced a significant increase in inquiries and applications from buyers in the Middle East.

“It was evident in May that demand was building, with increased communications from prospective (Middle Eastern) buyers who were preparing for their return to the UK following two years of travel restrictions,” said JLL’s Thomas Middleditch.

“A lot of these individuals have kept in touch over the course of the pandemic to stay informed on the market, yet as most are tangible buyers they have waited until they are in a position to physically return to the UK before inquiring about specific properties.

“Kensington has always been popular among Middle Eastern buyers and considered a low-risk investment given its location and established address.”