Zero repayment default rate validates our strategy – Odebunmi, AllBase Energy CEO

Kunle Odebunmi, the CEO of renewable energy firm AllBase Energy has said the company’s record of zero repayments default after its first year of operation has provided a validation for the company’s strategy to drive new solar installations in underserved urban cities employing technology.

“I have a thesis that when default happens, it is based on two things. One, if you choose the wrong customer sets, two if you deploy a product that does not meet the customer needs, then customers tend to default,” he told BusinessDay, in a virtual interview.

“It suggests to us that our flagship product, which was designed for the working middle class and small business, was tailored to them, that’s why we have zero default up till date,” he said.

According to Odebunmi, an accountant whose passion for the renewable energy sector led to the formation of AllBase, a company that received $100,000 funding from Shell-seeded All On, an impact investment firm for off-grid solar energy solutions mostly in the Niger Delta and the Rockefeller Foundation.

Odebunmi said he founded All-Base to improve energy access for millions of Nigeria and take advantage of the market opportunity in the country estimated at over $14 billion.

“Based on that assumption, we believe that the future of energy is digital and we try as much as possible to create what we call an operating system for distributed energy infrastructure,” he said.

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Founded during the pandemic, the company has had to battle headwinds including regulatory uncertainty, supply chain challenges, and the business-limiting impact of a deadly pandemic.

Odebunmi said the company has seen growth in terms of revenue and the number of deployments over the course of the year with about 37.2 kilowatts of solar and 96 kilowatts of battery installations.

“We have unique products, most of our customers love those unique products. We are looking forward to next year, in rolling out the actual distributed energy infrastructure, which is an IoT-based solution that we have. We believe that by the first quarter of next year, we’ll be able to roll that out.

According to Odebunmi, the biggest challenge facing the business is the global supply chain issues which has elongated shipping orders from three weeks to several months.

“Since the pandemic started we are seeing those three weeks being expanded to almost two months in production. So, I will take an instance, From China to Lagos, typically, once they load a container it will get to Lagos within 33 days or maximum 35 days but what we are seeing is that such container is now taking an average of three or four months to get to Lagos.

Port delay adds another one month to the order time and the challenges of clearing goods and taking them out of the Apapa ports further erodes business margins.

Odebunmi called on the Nigerian government to show that improving energy access for its people is a priority by easing the process of clearing solar energy equipment and removing fiscal barriers in terms of Value Added Taxes imposed on components as it contradicts the government’s stated priority.