In many Sub-Saharan African countries, the rural electrification rate is still below ten percent. Many of these rural areas are not likely to be connected to the grid in the near future. Off-grid, decentralized solutions serve as a viable alternative for millions of people, especially in countries with an underserved population and difficult terrain. Off-grid companies utilize innovative technology systems from pay-as-you-go technology to complex mobile applications to enable clean energy access to consumers. One advantage of these financing and payment models has been the increase in the affordability of off-grid systems.
In this interview with Chioma Agogo, General Manager for West & Central Africa Partnerships at Greenlight Planet, she shares insight with BusinessDay’s Endurance Okafor on the role telecommunications play in enhancing off-grid energy access in the continent, the challenges consumers face and ways to accelerate the deployment of these solutions across the continent. Excerpts:
How have telecommunications-based services helped to improve energy access in rural Africa?
While 43% of the African continent has access to electricity, in rural Africa, only 10% of individuals have access to the electrical grid. There is a disparity between grid access and access to electricity giving room for decentralized energy systems to close this gap. The idea of decentralized energy systems is now commonly and more consciously embraced in Africa.
Decentralized energy systems include systems like mini-grids, microgrids, solar home systems and so on. The growing adoption of these systems has allowed manufacturers in the sector to develop affordable, sustainable clean energy products that meet rural consumers’ needs. At Greenlight Planet, we have a range of solar home system products (Sun King) that are embedded with the pay-as-you-go (PAYG) technology that allows customers to make daily payments in instalments for their solar energy system over a period of time, making them affordable. A huge upfront sum is not needed to be paid for the continued availability of energy, you can pay for it over time at your convenience.
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The use of mobile money and USSD codes have played a huge role in the success of PAYG solar. With the PAYG platform, mobile integrations and the increase of mobile money adoption, telecom services can be leveraged to help Africans with increased access to healthy sources of light, clean energy for long hours of study time and invariable productivity in the long run for households and businesses.
Do you work with mobile service providers to identify areas or communities for off-grid service deployments?
We have different partnership models with telecom operators. One is the direct distribution model where the telecom operators distribute off-grid solar products directly to the customers through their shops, channel partners, and agents.
Another way is where we are provided access to the customer base of the telecom operator and then we deploy Sun King solar systems to these customers ourselves as a value-added service. This model has been popular with large consumer-based operators who provide their consumers with access to clean energy using Sun King products through the use of the mobile money application on their phones. Customers just have to use these applications to indicate interest in buying the solar home system while we deliver the product and process their payment through the mobile money service.
What can be done to accelerate the deployment of these PAYG systems in rural areas? What more should be done and who should do more?
The key to unlocking access to electricity in these areas is a collaborative effort of all stakeholders within the industry and sectors that work to serve the underserved population. For instance, financing is a big requirement for PAYG solar deployment. As a manufacturer, you are giving the product to the consumer with an option to pay overtime or even as a distributor you have bought the product from a manufacturer like us, giving the consumer an option to pay for their solar home system over time. In these scenarios, the manufacturers and distributors bear the credit brunt and associated risks in deploying PAYG solar home systems, mini-grids, or macro grids to the end consumer. Financing is incredibly important for scale, especially when reaching completely off-grid customers in hard-to-reach communities. The PAYG solar industry needs financing in the form of debt, equity, grants etc, from different financial channels to work with product developers, manufacturers and distributors to provide electricity to the underserved communities. Without financing, reaching the SDG7 electrification goal in Africa becomes a blurred reality.
As a continent, we need to devise sustainable and financially viable ways to distribute these sustainable products to the consumer at affordable prices. As mentioned earlier, all stakeholders need to be actively involved in this process. In Nigeria, the government has made positive leaps in providing more affordable, decentralised products in the country by providing a form of duty exemption for the clean energy sector and access to finance through a collaborative effort of the Central Bank of Nigeria, the Ministry of Power and the Rural Electrification Agency of Nigeria. For Nigeria to hit its electrification goals of 90% by 2030, there is an urgent need to make affordable decentralised energy systems a core of the electrification strategy by providing complete duty and tax exemptions and easier access to finance by removing bottlenecks. More rural communities will be electrified at an affordable rate if we can implement these measures. Likewise, if other governments in Africa adopt such strategies to create enabling environments for the distribution of decentralised energy systems in hard-to-reach communities, either independently or in collaboration with major financiers like the World Bank, we would make giant strides in the sector.
Telecommunication companies have recently been contributing to the distribution of off-grid solar solutions in unconnected rural communities in Africa in large numbers, thereby influencing the increase of mobile usage and electrification rates.
Telecom operators with an on-ground presence who see value in distributing electricity to consumers can make a remarkable difference in the country’s electrification progress and consumer’s financial inclusion journey through mobile telephonic infrastructure, especially within hard-to-reach communities. Telecom operators have in-depth knowledge about unconnected areas where people require access to electricity and mobile phones. Hopefully, we will have more telecom players who see the opportunities in rural infrastructure investments.
Does Greenlight Planet work with the government to increase energy access within Nigeria?
While our partnerships cut across different sectors, we have been honoured to work with the government in Nigeria through the Nigeria Rural Electrification Agency (REA) to deploy solar home systems (SHS) to underserved communities in Nigeria as part of the government’s initiative to reach its electrification goal. This program is an output-based fund (OBF) secured with the support of the World Bank and African Development Bank.
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