Oct 30, 2006 - "Lighting the Bottom of the Pyramid" is an IFC project to mobilize the private sector to develop a commercial solution to tackle a global development challenge: 1.6 billion people without access to electricity.

The project's insight is to identify market forces and technological changes in place that can be mobilized towards a commercial solution with high developmental impact. IFC realized that the 1.6 billion people lacking electricity rather than being isolated from the economic system are an integral part of the lighting industry, spending collectively US$38 billion/year on fuel-based lighting or 17% of the global lighting spending. This represents a large and attractive, yet mostly unexplored market, for modern lighting manufacturers and distributors.

IFC has closely followed technological advancements in the lighting industry, which are enabling off-grid lighting systems to be more reliable and affordable than fuel-based lighting. For instance, recent advances in solid-state lighting stand to offer high quality lighting with low energy requirements at affordable prices. Thus, IFC will mobilize the private sector, and leverage technological advances in modern lighting, particularly LEDs, to catalyze and facilitate a market-driven solution that will increase the access to and affordability of modern lighting services to the poorest of the poor — those at the "bottom of the pyramid".

Leveraging the lighting industry's motivations to break into an important new market and the exciting opportunities offered by new lighting technologies, IFC will seek to promote a market transformation that would provide the poorest of the poor — or the "bottom of the pyramid" — with greater access to reliable and affordable lighting services.

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% of all energy expenses and up to 33% 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.