Providing electricity to Sub Saharan Africa remains one of the biggest and most intractable challenges facing humanity. Can enterprises succeed where governments, institutions and NGOs have struggled?
You’re reading this, so I can assume you’re in the fortunate position of having a charged laptop or smartphone, an internet connection, a comfortable seat, and maybe a good coffee close by. And you’ll be familiar with the challenges of keeping the batteries charged and the connection stable when you’re on the move.
If you’ve travelled off the beaten track, then you’ll know that there aren’t convenient USB sockets under every table, or mains outlets in every home. You’ll be aware that light doesn’t always come at the flick of a switch. Rationing your screen time becomes an art form. Reading by lamplight an adventure. Maybe you can find a new equilibrium in your unplugged existence. Maybe you feel that you’re missing out on nothing. But that’s a very Western perspective.
So take the leap. Imagine being born into a world where this experience was the everyday. Picture having to take half a day, twice a week, to walk or cycle 5 kms to charge your mobile phone. When you get there, you pay ten per cent of your weekly income for one charge. That kind of experience is familiar to 625 million people - around 125 million households - in Sub Saharan Africa today. They’re living life at the bottom of the economic pyramid, with the oppressive weight of the rest of society pinning them just where they are.
Maybe the kerosene lamp - or ‘agatodowa’ - makes the best metaphor for the inequality and injustice baked into a life without choices. Monthly fuel charges of around two dollars, set against a monthly income of as little as eight. That great expense generates a meagre light - though better than none - to cook by, read, do homework. And with it comes the inevitable spills, the smoke, and the near-certainty of burns to people and property.
Consequently, providing African homes with electricity is a priority for Western aid budgets, the World Bank and the United Nations, African governments and of course NGOs. Projects have been launched both for off-grid and on-grid schemes. And none of that activity, over the last 10 years, has moved the needle. In fact access to power has barely matched population growth. Why is the problem - with technology, willpower and funding all available - so intractable? And what’s the solution?
Part of the challenge is politicians’ and administrators’ love affair with big infrastructure projects, which demand heavy investment, consistent political will, foreign expertise, and patience. Too much patience. Leaving a legacy for future generations is a noble aspiration, but not at the expense of the here and now. Agile, solar-powered, off-grid technology is a remedy for that.
Another challenge is that over the long term any solution, no matter how well funded by government and institutions initially, needs to pay its way. And that means it has to be affordable by the poorest in society.
Finally, we need to consider the aspiration of humans to improve their lot in life. Here are some synonyms for affordable: attainable, realizable, possible, do-able. Read this list again. These words speak to choices. And giving people choices creates a groundswell and momentum for change, growth and scale. To borrow from the excellent Big Issue Foundation, it’s about offering ‘a hand up, not a handout’.
Free enterprise has a compelling track record of innovation and efficiency, creating wealth and choices. It’s unmatched in the history of humankind in its capacity to deliver the right goods, at the right time, and at a compelling point on a demand curve. Impact enterprise is a more socially-concerned, perhaps more benevolent version of the same model. In this case, shareholders are just one stakeholder in the business, alongside humanity and the planet. Impact businesses work to generate a fair return for all stakeholders.
Harnessing the power of entrepreneurialism, innovation and activism, impact businesses can solve the challenge of affordable electricity in Africa faster and more effectively than governments, supranational institutions, and NGOs. My goal, as an impact entrepreneur, is to ensure that all Sub Saharan homes have access to electricity by 2025. That’s an ambitious target given the lack of progress over the last 10 years. But it’s do-able. And I believe I have a blueprint.
You’ve been patient - I’ll get to it. Here is how impact enterprise solves Sub Saharan Africa’s electricity problem. If you’re of that mindset, then these are the five steps you need to take:
Your starting point is a solar home system (SHS). Per day a Tier 1 SHS provides 1,000 lumen hours of light, powers a radio for 6 hours (or anything else with a similar electrical load) and charges a mobile phone for 4 hours. That’s enough light and power to make a huge difference to living standards, and banishes the kerosene lamp and rip-off mobile phone charging.
This step requires you to build a Tier 1 SHS at a price that’s going to disrupt the status quo in the market and place it within reach of the poorest families. It’s more about technical collaboration than innovation. Impact businesses are uninhibited collaborators.
Adapt your business model to the market conditions. Pay-as-you-go SHS schemes - pre-payment for a set amount of kWh - have been tried but aren’t creating the hoped-for demand. The best option is a microloan scheme, allowing households to buy a unit over two years for a predictable amount - roughly equating to the money previously spent on kerosene and mobile phone charging. After the loan period, the household owns the unit, and power and light are free (thanks to sunlight).
Now, there is genuine innovation needed for this model to succeed. The most streamlined flow in the monetary economies of Sub-Saharan Africa is cashless mobile payments, provided by the mobile phone companies. So you will need to bring together a microfinance partner, a mobile network partner, a credit-checking partner and the consumer.
Realize that you’re not going to be selling any units on Amazon. You will need to find partners for outreach to consumers, plus distribution and fulfilment. Mobile phone company platforms again provide a vital means of outreach to households. So does community radio, as do village meetings. Much happens by word of mouth - but there are remarkably efficient networks in place that you can tap into.
Make the first impact pivot. Your shareholders are going to get a return, but there’s no mandate to maximize profit solely for them. How do you create the impact on humanity and the planet? Manufacture where the product will be sold. You will create jobs. You will save road and air miles. You might reduce your manufacturing cost and you’ll definitely boost your appeal to consumers.
Then make the final impact pivot. Understand that you’re not trying to ‘corner a market’. In fact, you’re doing the very opposite. You are pathfinding for others to follow. Because no matter how successful you are, you can’t fix the problem alone. You’re lowering barriers for other impact enterprises to join the cause. Regular companies may eventually follow too - and that’s the sign of an economic tide high enough to float those kinds of businesses.
In April 2019 NOTS Solar Lamps will start a trial with Airtel Rwanda in 24 Sectors of the country. We go to market with the Mutimax SHS, priced at $55 list. That’s at least half the list price of existing products. Purchased using a microloan over 100 weeks it costs a total of $60.
In local currency, loan payments will work out at RwF 525 per week. Typical weekly costs for kerosene are RwF 300, and mobile phone charging at least RwF 200. For further perspective the poorest in Rwanda earn on average RwF 1,875 per week.
The trial will test out demand, and the marketing and payment model, ahead of a general launch in July 2019. That’s when NOTS Solar Lamps (Rwanda) Ltd aims to begin manufacturing the Mutimax locally.
We aim to supply 1 million homes in Rwanda over the next 3 years. But to get to our overall goal - ensuring all of Sub Saharan Africa has access to electricity by 2025 - we’ll be pathfinding and partnering with every ounce of energy we possess. I am convinced we’ll get there, and I hope you’ll join us.