Made In Africa: Off-Grid Solar Business Gathers Pace, Gets Support

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Written by Kevin Mwanza

The off-grid solar bandwagon in Africa has gather quite some steam in the last half decade and is quickly becoming a force to reckon with in some rural parts of the continent that are far off their nation’s’ electricity network.

Due to high costs and slow technology adoption, solar power was for many years inaccessible to million in Africa who saw it as a potential solution to providing electricity.

According to a devex impact report, increased investment in solar has led to cheaper products and better business models that has transformed the way the continent in powered.

The resonance of improved solar use for off grid electricity on many African economies is seen in small businesses being able to open late, students studying after dark and in some cases helping nomadic communities keep their livestock safe from wild animals at night.

“Energy access and infrastructure are fundamental to eliminating poverty and improving people’s lives,” Russell Sturm, global head for energy access at International Finance Corp. Advisory Solutions, told Devex Impact.

“Building an electric grid and having centralized power is untenable for much of the world — particularly Africa.”

It is estimated that Africa accounts for more than 600 million people of the 1.3 billion that don’t have access to electricity in the world.

It no wonder companies like California-based Off-Grid Electric are raising funds to launch in countries like Tanzania, a country of xxx million people with more than 80 percent of them not connected to the electricity network.

Such initiative that target families that  live on less than $2 a day are increasingly becoming popular in Africa. This initiatives are largely supported by the mobile money revolution that has transformed the continent’s payment system.

“We are in the midst of a solar revolution in Africa,” Xavier Helgesen, co-founder and CEO of Off Grid Electric, said in a statement after the company raised $25 million in venture capital funding to invest in Tanzania.

“The success of our pre-paid leasing model in Tanzania has global implications and demonstrates that universal energy access is achievable.”

Other companies that have also ventures into the off grid power business include M-Kopa in Kenya and Nova Lumos in Nigeria.

The US government under the Power Africa Initiative  supports solar and off grid power companies and has already funded a number of large-scale grid connections in Africa.

The success of the off grid energy eco-system has been to some extend supported by change of mind set and policy by many African governments to allow foreign investment in the energy sector.

This change released a lot of funding that has helped grow and bring attention to the industry.

“What we see is governments slowly picking up that there is more to access than grid extension,” said Koen Peters, executive director of the Global Off-Grid Lighting Association.

“The market is developing in a very dynamic way. This sector is growing but is not fully commercial yet … (they) still need public sector support. They don’t necessarily need subsidies anymore but they do need the public sector to help mobilize investment and build capacity.”