With a population of 180 million people, Brazil is home to extreme contrasts of wealth and poverty. This division of wealth is seen through consumption; the richest 10% consume almost 50% of the country’s resources, while the poorest 10% struggle to get by with less than 1%. Furthermore, Brazil’s poverty is mostly rural, with 80% of the rural population (over 30 million people) living below the country’s poverty line.

 

Fábio Luiz de Oliveira Rosa is a social entrepreneur who is determined to raise the standard of living for poor rural Brazilians. After taking surveys of struggling Brazilians, Rosa discovered that electricity was a top priority for those in poverty. Rosa had the unique idea to develop a low-cost rural electrification model to improve the quality of life for the rural poor and slow urban migration, which often leads to even worse living conditions in urban slums.

 

Rosa focused on electricity after determining it is a root cause of poverty in Brazil. While most urban Brazilians have access to electricity, it is more difficult for the rural Brazilians to afford. In addition, Brazil’s private electricity companies often ignore this bottom of the pyramid market segment. Rosa realized that providing electricity to the poor could lead to improvements in education, health, safety, and even productivity. Electricity can free large amounts of time and human labor, and even act as an income generating scheme for the poor.

 

With his creative idea, Rosa formed two organizations: a for profit and a not for profit. The for profit business, the Agroelectric System of Appropriate Technology (STA), sells cost-effective solar systems at an affordable price. The organization targets rural areas, and is based on microfinancing to make its products affordable. The non-profit business, the Institute for Development of Natural Energy and Sustainability (IDEEAS), provides income generating schemes for poor Brazilians. 

           

Under STA, Fabio developed the business model for his rural electrification project, which he calls The Sun Shines for All (TSSFA). Under this business model, there is a one time installation fee, and customers can choose any one of three available package deals that vary in price. This business model for rural electrification includes flexible contracts and leased equipment for the poor, and also incorporates affordable monthly payments. 

 

Rosa’s project has already demonstrated sustainable financial, social and environmental impacts. TSSFA estimates it will break even in the end of 2009, with over 6,000 satisfied customers. The model has proven to be more affordable and convenient for rural Brazilians. In addition, people are now more likely to stay within their village rather than migrating to overcrowded cities. Solar-powered electricity eliminates the need for dangerous and unhealthy lighting products, helps reduce global warming, and saves money typically spent on kerosene, candles, or batteries.

 

Rosa’s business model has proven to be a “better mousetrap” due to its strong understanding of the local communities and demographics. In addition, by providing different business models to target different segments and developing a plethora of social alliances, Rosa has been able to actually raise the standard of living for rural Brazilians in a sustainable manner. With passion, determination, and innovative ideas, Rosa is beginning to chip away at rural poverty in Brazil.

 

 

executive summary.doc--Executive summary in Microsoft Word format