In September 2012, Nikhil Jaisinghani poured over Mera Gao Power’s (MGP) records in his small office on the third floor of one of Sitapur district’s tallest buildings. From his window he could see a large portion of the Sitapur residential community in Uttar Pradesh (UP), India, just 200 miles east of Delhi. By day, the villages dotting the countryside blended seamlessly into the edges of Sitapur, but at night they revealed a stark contrast between the haves and have-nots; some homes were lucky enough to be within reach of India’s antiquated, inefficient, and unreliable electricity grid, allowing them to extend their working hours, while those beyond the outskirts of Sitapur were immersed in darkness after sunset. These observations pre-occupied Nikhil as he reviewed MGP’s records.
The week’s growth report was positive, but not by much. MGP had electrified an additional three villages with its off-grid solar system. This brought the total to 64 villages, all paying for a service no one could have imagined just a few years earlier. Though eager to grow MGP, Nikhil knew that its bank account would soon be depleted and the company would have to wait until the next disbursement of its USAID grant before expanding further.
MGP had relied on a $300,000 US AID grant to get started and funding was projected to last another three months until the end of 2012. But even then, MGP would require additional capital to bring enough villages online to offset the overhead costs of equipping and maintaining MGP rural electrification plan.
During the pilot-testing phase, MGP had demonstrated the success of its technology and operational strategies related to collection. But the main determinant of its financial performance – scaling up quickly to reduce operational costs and increase revenue – remained in question. MGP wanted to show potential investors compelling financial returns, in addition to the strong social ones. In order to quicken the repayment of the $1200 up-front investment per village solar grid, Nikhil faced tough decisions. Should he increase weekly subscription fees? Scale the number of villages serviced by each MGP hub facility? Expand into new markets? As he looked across Sitapur, Nikhil collected his thoughts and prepared for the strategy review session with his managers that would take place later that afternoon.
Ana Grajales, Byron Edwards, Eric Levine, and Bo Hopkins, "Mera Gao Power," Jackson Institute for Global Affairs Case #J12-01, September 5, 2017
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