Bold steps that launched
20 years after a group of friends launched solar
power panels in rural Sri Lanka
The trio first met in Toronto, 20 years ago and
the relationship blossomed into entrepreneurship; chasing an idea
together, convinced it would work and committed to its sustenance.
Result: solar powered panels for mostly, un- electrified
rural homes that triggered a revolution in the use of this energy
source. From virtually a few dozen solar panels installed in rural
homes before 1996, the industry – thanks to the conviction
of this trio – has grown to over 100,000 units, today.
|installing the system
When Viren Perera and Lalith Gunaratne, two cousins,
completed their university studies in Canada, they were bitten by
the travel bug and wanted to travel for the next two years.
“We planned to go to London to Australia,
work there for a year and then return to Canada to settle down,”
recalled Perera. Pradip Jayawardene was working in Toronto at the
But seven months into their good-time holiday
in Sri Lanka changed all that – and their future too. In Colombo
they cottoned on the idea of putting together a solar powered motor
pump. It was mid-1985.
“There was a lot of sun, lot of people didn’t
have electricity and this idea had potential and scope. We first
thought of mobile solar water pumps for farmers mainly for irrigation
but with a secondary use for lighting,” Perera said. They
discussed plans with legendary inventor Ray Wijewardene who put
them in touch with P. Sumanasekera, founder of Vidya Shilpa, which
was manufacturing scientific and lab equipment for schools and also
dealing with solar PV modules and systems.
Says Gunaratne: “He was a pioneer in providing
electricity to CEB. He took us under his wing and helped us to make
the first prototype solar powered motor pump.”
The young ‘drifters’ sensing a business
opportunity and a national urgency to provide an easy solution to
electrify rural homes, changed plans to visit Australia and went
back to Canada.
|One of the first few panels
Together with Jayawardene, they set up Power &
Sun Pvt. Ltd and in Canada worked on sourcing parts to manufacture
the panels in Sri Lanka. At that point they learnt about a USAID
programme to help small business and made a request for a feasibility
study to be undertaken on the potential for solar power.
“These two guys wearing shorts walked into
our office in April 1985 and I was then asked by our senior partner
to study their project,” recalled Thilan Wijesinghe, then
a rookie consultant for Coopers & Lybrand management consultants.
Wijesinghe was himself raw in the field of management, having just
returned from the US after completing studies in management &
planning, accountancy and economics.
Coopers looked at the proposal but found that
the internal rate of return (IRR – the international yardstick
for a financially viable project) was below the accepted seven percent.
It was not financially viable.
Luck however turned in favour of the trio. Wijesinghe
was dropping off a USAID visiting consultant, who was also involved
in the study, at the Galadari Hotel after a late evening working
session when they bumped into Perera and Gunaratne in the lobby.
The duo had come to the night club
“We then told them that it was not financially
viable and planned such a recommendation,” Wijesinghe said
but Perera and “Lefty” (Gunaratne) didn’t take
no for an answer.
“They were absolutely convinced this would
work and asked us not to look at this plan in terms of just numbers
but as a national project. They were very convincing and persuasive,”
he said. Perera, happy-go-lucky and fun-loving, then changing the
conversation persuaded Wijesinghe and his foreign colleague to join
them in the night club. “We were all single,” laughed
Wijesinghe, who was impressed by the duo’s determination.
The next morning, the ‘refreshed’
Cooper’s team looked at the figures again, reworked it with
some new data and – hey presto – came up with a better
IRR and a more financially viable project.
Twenty years down the road the solar project has
proved to a successful business and social enterprise, a model for
other countries when it came under the Shell wing, and financially
The Coopers feasibility study on the potential
for solar power was the only research of its kind at the time and
was carried out in 1,500 households in various districts.
It found that a few rural households used car
batteries to generate power with the head of the household taking
the battery on his motor cycle and charging it every 3-4 weeks.
One of the most interesting discoveries was that the bigger demand
for solar panels came from towns and villages that already had access
to electricity, not those that didn’t have this precious commodity.
In towns where the power lines were all over the
cost of getting electricity however to one’s house was too
high while in the villages without power, they didn’t have
a clue about power and cost and relied on politicians who had promised
Thus residents who were aware about the need to
get power and the prohibitive cost of getting power from the nearest
lamp post, realized that solar power could cost much less.
Power & Sun eventually set up the factory
with funding from DFCC and NDB and started operations in 1988 but
almost immediately ran into a major problem – the JVP insurrection.
The first panels under the brand name SUNTEC were
launched on July 10 and at the end of the month there was absolute
anarchy in the country. The company sold 150 units in August but
never bettered that mark for many years due to the unrest.
Nevertheless the company had 23 teams going across
the country organizing demonstrations and promotion on the use of
Lessons for entrepreneurs
Says Gunaratne; “the JVP insurrection was the problem but
one of the ways we tackled restrictions on doing business was to
come up with innovative methods of reaching the village.”
Power & Sun placed an advertisement in newspapers
announcing the new technology and asked young people to send an
essay on how this technology could benefit their village. There
were 600 responses, and the interest “just blew us away,”
The company ran 3-day training programmes with
20 participants at a time, and gave them a low down on solar power
and its impact. The youth visited their factory and “we felt
among them would have been sympathizers or even JVPers. So we were
able to break barriers in the village and continue to do business.”
But the uncertainty was killing the business and
the banks were not willing to plough in more funds into a venture
that was turning out to be a losing proposition.
|The new range of products
Jayawardene, getting into the conversation as the
three happily went down memory lane in an interview with The Sunday
Times FT at the Colombo Swimming Club, said at the time solar power
was popular in most countries. “We too felt it would work
in Sri Lanka.”
The trio brought together an interesting combination
of economics (Perera), engineering (Gunaratne) and marketing (Jayawardene)
into the business but none had any theoretical knowledge of solar
“It was new experience but a lot was based
on common sense and what we thought was right,” said Perera.
No one at that time realized solar power had a
captive market. There were 2.5 million homes in Sri Lanka without
electricity in 1986 and Power & Sun projections for 2000 found
that at the current rate of power expansion, then, there would still
be two million homes without electricity, providing a tremendous
opportunity for an alternate low-cost energy source. The opportunities
were actually unlimited and still are for solar power, probably
the cheapest amongst other options. With the rapid growth in housing
the expansion in national grid power is unable to keep pace with
the number of new housing. Power & Sun projections found that
if in 1986 there were three million homes, that number was seen
rising to five million by 2000.
There are now 14 companies in the same business,
with Jayawardene’s own firm – Suriyavahini Ltd –
among the biggest. The potential and target in coming years for
the industry is to reach 600,000 households with solar panels.
Initially the company sold the solar panel for
Rs 7,000 while the customer separately obtained the lights and battery.
A basic unit has five light points and power for the radio and a
black and white TV. (Now a total package is offered by solar companies).
Subsequently the World Bank came into the picture
after the three directors lobbied with the government for support.
By that time however, the company was losing money
rapidly and at this point Perera and Gunaratne, the one-time drifters,
decided to seek their fortunes elsewhere while remaining shareholders
in the company. “We felt it was a drain on the resources for
all three to remain. Jayawardene continued to run the business,”
Perera together with Wijesinghe, who was earlier
coaxed to join the trio as a director at Power & Sun, moved
on the launch Asia Capital which stunned the business world by acquiring
majority stakes in the Oberoi Hotel and Trans Asia. The main investor
in this alliance was Malaysian businessman Azmi Wan Hamza who –
in a little known fact - also took a 50 percent stake in the troubled
Power & Sun to bail out the firm. The company was then re-named
Solar Power & Light Co.
The World Bank entered the picture with a funding
mechanism for solar units through SEEDS, the economic arm of Sarvodaya.
Shell entered the scene in 1999-2000 and acquired the company with
Jayawardene moving on to be managing director of the Shell-run solar
power firm. Jayawardene says Shell invested two million US dollars
in the project and the solar power industry took off with Sri Lanka
being the biggest solar power market in world in terms of per capita
except for Bangladesh which had a slightly higher share.
The Sri Lanka project was well run and became
a model for emulation by many countries with officials from Brazil,
Africa, Indonesia, Nepal and the Philippines visiting here to learn
about its success.
Jayawardene says the industry, with Sri Lanka
strapped for inexpensive energy, is now looking at the urban market
which never came into the picture before. “There are some
two billion people in the world who have access to solar power.
In 2025, 16 percent of the global energy needs will come from solar
– the same as hydropower today,” Jayawardene says
Any regrets for starting a business that almost
failed? “Absolutely not,” says Perera. “This was
a major, major step that shaped our lives.”
Gunaratne, now into management consulting and
also a solar industry specialist who has presented many papers abroad,
said if they didn’t take this step, they would be in Canada
leading an ordinary suburban life with a mortgage to boot.
Any comeback by the trio to set off another revolution?
Perera, who runs an eco-resort described as the best yoga retreat
in the world, laughs in response: “then it was the right combination
of knavish, energy and enthusiasm. We don’t have that anymore.”
Light moments and anecdotes
Though Perera, Jayawardene and Gunaratne
went through tough times in the initial years of this project
there were also the light moments and the joy of working in
|Pradip, Viren and Lalith
handover a panel 20 years ago
One of Power & Sun’s first agents
who is still with Jayawardene at Suriyavahini today sold a
solar unit to a couple whose little son was born with some
kind of defect. A lot of phlegm is produced in the brain and
has to be sucked out through a small hole in the throat by
a machine. The solar power system was essentially purchased
to power the machine.
“The child is now about two years
old and the agent visits them regularly and ensures the machine
is running perfectly. If there are repayment arrears of the
solar power system, the agent takes care of it himself,”
In another instance, Pradip Jayawardene,
most active in the industry than the other two, was given
a sheaf of paddy as a blessing when he quit Shell to start
his own company. “This is traditionally given to the
gods after the first harvest, but he gave it to me because
his child had passed the exams with the help of solar power,”
Viren Perera recalls that at Power &
Sun, things always went wrong. There were always problems
but lessons were learnt and suggestions valued so much so
that when he launched Asia Capital, “issues that would
freak others were nothing to me as we had gone through crises
after crises on a daily basis with one worst case scenario
following another at Power & Sun.” His keyword now
in problem-solving is “common sense.”
Even when the JVP crisis blew up in their
faces, life went on and the trio had a great time. “In
the worst of times when everything was virtually caving in
-- we’ll put things on ice and go to the club for a
drink … have a whale of a time – return home at
5 in the morning and come back to the office on time.”
They had a glass partition in the office
which separates the directors and the rest of the 20-odd staff
at the factory.
“At the beginning we were conscious
in keeping a straight face despite our troubles and the staff
would watch us to gauge our reaction. Invariably we would
talk about the previous night and end up howling with laughter
– then we come up with a crazy idea that becomes a solution,”
Perera says, adding that the staff would see us and probably
think that the “company may not be in a bad shape as
The three directors also did everything
themselves along with the workers – that meant unloading
goods or sweeping the floors.
When Jayawardene worries over a business
problem, he goes to the field, meets customers, gets rejuvenated
and returns to office, refreshed.
Lalith Gunaratne recalls how his car would
be filled with rice and food from rural folk whenever they
visited. “You feel bad about this hospitality.
“Here we were selling them a solar
system and they treat us as if we brought them light and a
miracle to help their kids.”