We can revolutionise renewable energy funding in Africa

The cost of business-as-usual will not take us anywhere – so what do we need?

Africa has historically shown itself to be pioneering and innovative when it comes to problem solving. The mobile revolution is a great example of this and the energy revolution is fast becoming another one.

A cornerstone of this revolution will be technologies like blockchain and the use of the mass mobile market. I anticipate that they will provide a foundation for services that will underpin what the energy sector requires to deliver services to scale beyond the grid. But another cornerstone has to be access to funding.

Botswana, where I am based and where I develop my work, has over 50% of its population without electricity. On top of this (unlike the Northern hemisphere) Botswana does not have a support system for incubating entrepreneurs and innovations. The funding community for start-ups and entrepreneurs is non-existent as we do not have access to venture capitalists, seed capital or crowd funding opportunities like other areas of the globe and the traditional lending institutions just don’t have the experience to support new digital businesses.

Digital entrepreneurs often have to take innovation to the next level to find funding solutions.

I developed the IP for EmPowered in 2015 and it was successfully launched in 2017. EmPowered is a start-up that services the energy market in Botswana and plans are well advanced for other regions of SADC utilising mobile, cloud and blockchain technologies. It came about after extensive research that matched new technology with our local market capabilities. This mobile enabled solution works with other available technologies. Botswana (and the rest of Africa) needs to increase diversity of the current energy supply and take better advantage of the huge potential the Continent has for renewable Solar PV technology. At its most basic EmPowered is a cluster of FinTech services including a (pay-as-you-go) mobile payments platform that enables users to pay for energy services or solar equipment over pre-determined period. Blockchain provides the foundation on which both the mobile and cloud based services will be delivered.

So far it’s been a great success because of its accessible funding model and because of the fundamental need it meets.

The rise of off grid Solar PV in Africa has gained traction because of a number of factors all coming together at once:

  • Cost of Solar PV technology has dropped by 80% over last decade.
  • Rapid adoption of mobile phone technology in Africa supported by accessible payment platforms and other service provisions up from 5% to 60% in the last decade.
  • Development of mobile/cloud/blockchain-based energy management platforms enabling the management of the equipment supplied and the integration of FinTech, i.e. mobile serviced micro financing of the loans.

If Africa is to meet its Power for all target by 2030 it will need to attract billions in private investment. But this will only happen if investors can see their investments having a return. The bottom line is, we need to develop sustainable and scalable business models, similar to what the mobile communication industry has done in Africa. The successful use of blockchain and mobile tech by projects like EmPowered are a tangible way to demonstrate how effective business models can be developed in Africa, as are events like Energy Revolution Africa where funders, developers and end customers can connect and engage in order to find solutions to Africa’s energy poverty.

Our Proof of Concept project (a community Solar PV energy hub) came from a need to tangibly demonstrate how we’d linked power generation technology, power distribution models and the business models. The key outcome has most definitely been the development of new ways to attract investors into the off grid market.

  • It is clear that in Africa we have the technologies now to completely change the way power is generated and distributed. And while we are, out of necessity, revolutionising the way renewable energy is funded, we still need international support and investment to truly move the Continent forward. My biggest worry is that we will not attract the international community to invest in projects because we need governments to move out of the way and focus only on regulation and thus open up the market to energy service companies. This has worked well in other regions around the globe and if we do it here, the market will grow quickly.

The cost of business-as-usual will not take us anywhere – so what do we need?

  • Governments need to provide the regulatory framework and free up the market.
  • Corporate investment - corporates respond to market forces which impact on their bottom line and renewables now make good business sense. Individuals will also move towards renewables as they are driven by the need to secure their energy needs and new financial services will provide the access to finances required. If we can get these three factors in place – they sky is the limit.

Eunice Ntobedzi is the innovator of EmPowered FinTech API/Service and a Director of Sandico (Pty) Botswana, an energy service company. She will be one of the speakers at Energy Revolution Africa, hosted as a co-located event during African Utility Week from 16 to 18 May 2017 in Cape Town, South Africa. 

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