"Lighting the Bottom of the Pyramid" is an IFC project that aims to bring affordable, alternative sources of lighting to the poor through the development of the Light Emitting Diodes market.
IFC organized a seminar, "LEDs for Developing Countries: Tapping into a $40 Billion Market," during the Light Emitting Diodes (LED) 2006 Conference, in San Diego California, October 16-18.
What is "Lighting the Bottom of the Pyramid"?
The 1.6 billion people worldwide who lack electricity — rather than being isolated from the economic system — are an integral part of the lighting industry. They collectively spend $38 billion/year on fuel-based lighting or 17 percent of the global lighting market.
IFC's project in Kenya and Ghana will identify existing market forces and technological changes that yield an affordable commercial solution with high developmental impact. Products will include portable, battery-based lighting solutions.
A "Bottom of the Pyramid" Approach
"Lighting the Bottom of the Pyramid" will build extensively on a growing body of experience from "consumer product" companies in the development of commercial solutions to reach the "bottom of the pyramid." The project uses these lessons in applying an innovative market perspective to increase access to modern energy.
Moreover, by identifying the potential market size and validating the superiority of modern lighting products against fuel-based lighting, "Lighting the Bottom of the Pyramid" will mobilize the private sector's interest in finding new high-growth areas to develop this "market" commercially and bring modern lighting products to those who most need it. By engaging the lighting industry, the project will focus the expertise, creativity, and resources of established companies on meeting this important development challenge.
Why Lighting?
Lack of access to modern lighting services hinders development. Among the poorest of the poor, lighting is often the most expensive item among their energy uses. Fuel-based lighting can account for up to 50 percent of all energy expenses and up to 33 percent of total household income. Yet, while consuming a large share of scarce income, fuel-based lighting provides little in return. The low quality of the lighting provided by fuel-based devices poorly supports productive or income-generating activity. It also reduces educational performance, as children lack the opportunity to study without eye strain in the evenings.
Further, indoor pollution from fuel burning leads to health problems. Access to modern lighting products can reverse this scenario. Modern lighting technologies have lower ownership costs than fuel-based lighting, do not generate indoor pollution, and can support small scale income generating activities – fostering a virtuous cycle of development and poverty reduction.
Additional Information
For additional information, please visit the Lighting the Bottom of the Pyramid website, www.ifc.org/LED.