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Potential of microcredit as a source of finance for development of Sri Lankan biogas industry

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Listed:
  • Tomáš Hes
  • Samuel Mintah
  • Haiyan Sulaiman
  • Tuan Arifeen
  • Petr Drbohlav
  • Ali Salman

Abstract

The study serves to clarify doubts on the potential of commercial microcredit as a strategic vehicle of implementing of small-scale biogas plants in Sri Lanka, as an alternative to subsidy-based process. The quantified sum of unsubsidized microloan interest born by the biogas users in a modeled situation of maximum potential of the biogas sector financed through microfinance institutions is compared with national technology savings on a macro level. The analysis concludes that an economic justification for the microfinance-fuelled implementation of small-scale biodigesters employing a market-based approach does exist. Annual savings on macroeconomic level surpass the annual cost expressed as a sum of unsubsidized interest. The study furthermore proposes a three-party credit contract, which prevents credit defaults caused by the lack of customary after-sales care by integrating the provision of service providers into a contractual agreement with both the user and the financing source, thus assuming part of credit responsibility.

Suggested Citation

  • Tomáš Hes & Samuel Mintah & Haiyan Sulaiman & Tuan Arifeen & Petr Drbohlav & Ali Salman, 2017. "Potential of microcredit as a source of finance for development of Sri Lankan biogas industry," Energy & Environment, , vol. 28(5-6), pages 608-620, September.
    • Handle: RePEc:sae:engenv:v:28:y:2017:i:5-6:p:608-620
    DOI: 10.1177/0958305X17714173
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    References listed on IDEAS

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    1. Gautam, Rajeeb & Baral, Sumit & Herat, Sunil, 2009. "Biogas as a sustainable energy source in Nepal: Present status and future challenges," Renewable and Sustainable Energy Reviews, Elsevier, vol. 13(1), pages 248-252, January.
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    1. Mohammad Saeed Khademalhoseiny & Mozhgan Ahmadi Nadoushan & Hadi Radnezhad, 2017. "Site selection for landfill gas extraction plant by fuzzy analytic hierarchy process and fuzzy analytic network process in the city of Najafabad, Iran," Energy & Environment, , vol. 28(7), pages 763-774, November.
    2. Mattia De Rosa, 2020. "Economic assessment of producing and selling biomethane into a regional market," Energy & Environment, , vol. 31(1), pages 60-76, February.
    3. Jeong-Ik Oh & Jechan Lee & Kun-Yi Andrew Lin & Eilhann E Kwon & Yiu Fai Tsang, 2018. "Biogas production from food waste via anaerobic digestion with wood chips," Energy & Environment, , vol. 29(8), pages 1365-1372, December.
    4. Bekchanov, Maksud & Mondal, Md. Alam Hossain & de Alwis, Ajith & Mirzabaev, Alisher, 2019. "Why adoption is slow despite promising potential of biogas technology for improving energy security and mitigating climate change in Sri Lanka?," Renewable and Sustainable Energy Reviews, Elsevier, vol. 105(C), pages 378-390.

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