Islamic Microfinance Products to Provide Renewable Energy Products to Off-grid Areas

This paper presents a template for a musharaka- (profit-and-loss sharing partnership) based Islamic microfinance product to provide affordable access to off-grid renewable energy in areas where it is not available and where the grid is not likely to extend, with a specific goal of targeting people living in poverty who currently rely on more costly/dirty sources of energy. People living in poverty already spend a substantial amount of their income on electricity, which does not account for the cost of adverse health effects of emissions from diesel generators, kerosene lanterns and wood-fueled stoves. Some estimates suggest that indoor air pollution, largely from these sources, causes around 100,000 deaths per month globally. The development Islamic microfinance would be advanced by developing individual- and community-based financing of renewable energy and clean lighting. For larger-scale products, this paper proposes community-owned renewable energy generation (wind, solar, biogas o