Iraq is the sixth largest oil producer globally. However, despite the country’s drilling capacity, citizens are faced with daily power outages and forced to pay high fuel costs.
Additionally, Iraq’s power grid is not structured to meet energy demands. The grid loses 40 to 50% of the power it produces, causing frequent outages. On average, Iraqi households and businesses receive six hours of power from the national power grid per day.
Power outages aren’t just inconvenient, they’re dangerous. In July and August, temperatures in Iraq average 95 degrees Fahrenheit and regularly exceed 112 degrees. When power outages occur, air conditioning units are unable to run, which significantly increases the threat of heat stress and related illnesses even while indoors. Although some individuals and businesses run private gas- or diesel-powered generators during outages, they are often noisy and expensive.
Before Vitas launched a pilot solar loan program, they conducted their own market research to gauge the impacts of weather and power outages on local businesses. Vitas surveyed 85 business owners to confirm there was interest in solar energy and that businesses were willing to take loans to finance solar products.
The majority of survey respondents were thrilled to know that such a product solution could be introduced in the market. Financing solar products fulfills a need in the difficult time Iraq is facing.”
With the market for solar power made clear, Vitas enlisted the help of the Vitas Lab to create an innovative solution. In 2020, Vitas launched the Vitas Lab as an innovation financing center focused on testing new ideas, creating new products, identifying new partnerships and driving responsible financial innovation. The Vitas Lab applies a design thinking approach to products and services at every step through conducting research, generating ideas, prototyping and testing. Specific focus is given to projects that have a social impact related to the environment, gender equity or financial inclusion.
KESK’s all-star engineering, operations and business development teams delivered over 1,000 units of photovoltaic power across 20 solar energy projects in Federal Iraq and the Kurdistan Region in 2022. The company strives to have a long-term positive impact on Iraq’s environmental and economic future by putting less stress on the national grid and providing business owners with affordable ways to access green energy. Basima said she is proud to make ‘the green way‘ the easy way for local businesses.
To prove the viability of the green loan program and their innovative partnership to IOM, the Vitas Lab tested a solar loan project. For the test project, the Vitas Lab provided a local business with financing to receive a solar-powered AC unit from KESK in May 2022. The business was monitored from August to November 2022 and saw an increase in revenue during that time.
As a result of the Lab’s proven business case, this pilot will be extended to 100 businesses receiving IOM grant-funded loans from Vitas Iraq for KESK solar products over a one-year period. By providing financial support to micro-, small and medium-sized enterprise business owners to access affordable power, this program will:·
- Create public awareness and promote the use of renewable energy in Iraq;
- Respond to the need for solar products among businesses and their demand for financing;
- Encourage wider adoption of solar products, which will reduce gas emissions that contribute to climate change and reduce stress on Iraq’s national power grid; and
- Contribute to job creation through the sale, distribution, installation and servicing of solar energy products.
Vitas has always worked to develop new products and services to serve the community and to provide the best products in the market. These loans support Iraqi businesses through offering installment plans rather than having to pay the full amount up front.”