Article by www.howwemadeitinafrica.com
The World Bank estimates that 24% of the sub-Saharan African population doesn’t have access to electricity, with the installed generation capacity for the region (excluding South Africa) being equivalent to that of Argentina.
As a result, over 600 million people are reliant on kerosene, generators and other non-renewable energy sources to light and power their homes. These options are often expensive and can have harmful health effects, releasing toxic fumes, for example, as is the case with kerosene lighting and coal-fuelled cooking stoves.
However, a number of renewable energy companies have been popping up to address these problems – and one of these has just clinched the biggest round of equity financing in the off-grid solar industry, according to Bloomberg.
Mobisol, which launched in 2010, is a Berlin-based company that develops rooftop solar systems that can power key appliances in homes not connected to the grid. The company has installed more than 60,000 systems in Tanzania and Rwanda, and has recently expanded to Kenya. Its growth – 80% year-on-year in 2016 – caught the attention of Investec Asset Management. The firm’s African private equity arm announced this week that it has bought a “significant shareholding” in Mobisol, although its management is keeping mum when it comes to the deal’s financial specifics.
According to Mark Jennings, investment principal in private equity at Investec Asset Management, the off-grid solar industry (valued at US$700m in 2015 by Bloomberg New Energy Finance) could be as significant for Africa as mobile phones have been.
A big part of Mobisol’s success is a result of making its solar solutions financially accessible to low-income consumers, says Jennings. For example, households are allowed to make repayments over a period of three years, meaning that the amount they pay per month is no more than they would fork out for traditional lighting and energy solutions such as kerosene.
“Very few households would be able to afford a cash payment upfront that would pay for the full cost of the system. That is why the company provides this three-year payment plan – which is effectively granting credit,” notes Jennings.
Repayments can be made via mobile phones using mobile money – which has been heavily adopted in east Africa. All potential customers also undergo Mobisol’s vigorous credit vetting process, and the company can also remotely disable solar systems if a customer misses a repayment.
Read the full article at www.howwemadeitinafrica.com