Masters Students Tackle Energy Finance Issues in Bangladesh with the World Bank
In April 2014, a group of eight Master of Finance and MBA students from the University of Maryland's Robert H. Smith School of Business participated in a one-week mission to Bangladesh with the World Bank:
- Swapna Arora, MBA
- Rohit Chowdhury, MBA
- Qifan Gu, MFin
- Yingmei Liu, MFin
- Rodrigo Velasquez, MBA
- Tao Wang, MFin
- Menglin Wang, MFin
- Walid Zaman, MFin
During their trip, the group explored the possibility of expanding the provision of electricity to rural communities through solar energy micro-grids. Based in Dhaka, the students worked with Solaric, a company whose vision is to provide affordable renewable energy for Bangladeshi communities off the grid, using innovative technology and a decentralized billing process. As part of a World Bank feasibility study, the team was charged with putting together a set of possible financing strategies that would take the micro-grid model to scale.
Site Visits in Bangladesh
In order to construct the valuation model that would underpin their recommendation, the team set out to understand Solaric’s product, customers and stakeholders. They began by visiting Kapasia, Solaric’s pilot village, where the students were introduced to the product and its benefits for the first time – including the reduction of the local poultry factory’s electric bill by over 50 percent. In meetings that followed with Solaric’s executives in charge of finance, operations and marketing the students were able to get to know the company in detail, its business model and its goals for the future. As a key stakeholder, the World Bank’s in-country senior energy finance specialist also provided the students with a full briefing on the renewables landscape in Bangladesh.
“What makes [Solaric’s] business model innovative is that they would be moving from solar home system products to a community-based grid that would require less initial capital expenditures from end consumers,” says MBA student Rodrigo Velasquez.
Throughout the trip, the group met with a series of other organizations which could provide feedback on Solaric’s strategies and the students’ project in particular. These organizations included BRAC, the world’s largest NGO; the International Finance Corporation (IFC); Infrastructure Development Company Limited (IDCOL), a government owned financing institution; and the Yunus Center, the Nobel Laureate Muhammad Yunus’ organization.
"We were all very excited to meet [Nobel Laureate] Dr. Yunus. It is a precious experience for us to meet the most celebrated personnel in Bangladesh," said Tao Wang, a 2014 MFin candidate. “With the fame of Nobel Prize and the devotion in helping the rural areas, Dr. Yunus’ insights will be a shining add-on to our project.”
In order to understand the regulations of the renewable energy industry, the students also met with the government’s ministry of power, energy and mineral resources, before a final sit-down with Solaric’s CEO Didar Islam to discuss elements of their valuation models. For a more detailed overview of the group’s time in Bangladesh, team members Mandy Liu and Menglin Wang have documented the project through daily activity logs available on the Smith website.
Next Steps for the Project
On May 20, 2014, the students have final presentation with the South Asia energy specialist team at the World Bank, where they will present their findings and the various possible financing schemes to fit the solar micro-grid business model. From this proposal, the World Bank will be holding a meeting in the next month to discuss the nature of its involvement in the solar micro-grid project.
“The World Bank experiential learning project (ELP) has been an incredibly transformative experience for our entire student team. Not only were we enabled to directly assess the ongoing challenge of rural energy access with a site visit to Bangladesh, but we were also privileged to support the initiative with developing an applicable business model that can be replicated in other countries with low electrification indexes," said Velasquez.
This graduate student project was made possible by the World Bank, in particular, team leaders Sandeep Kohli and Gunjan Gautam. Stephen Wallenstein, Professor of Practice and director of the Director’s Institute at the Smith School, was the sponsoring faculty member.
Andrew Kneale, MBA Candidate 2015, Office of Marketing Communications