Kenyan tech firms offer solar appliances on credit to low-income families

27th July 2017 Kennedy Abwao

Safaricom, a Kenyan mobile network operator, and solar firm M-KOPA have partnered to offer affordable solar lamps, radio and television sets on credit to Kenya’s rural and urban poor.

Solar lamps, radio receivers and television sets are rapidly replacing paraffin lamps and diesel-powered generators in African homes due to a surge in mobile banking. In Ghana, Nigeria and Kenya, mobile telephone companies have created platforms giving low-income earners access to affordable loans, while smartphones make clean energy and market information easier to obtain. 

“We are happy due to the transformative nature of this partnership with M-KOPA in providing clean energy. It has saved 62 million litres of fuel from its launch until now, which is a huge saving on what those consumers would have used on paraffin and other means of home lighting,” Brian Wamatu, head of M-Pesa at Safaricom, told Development Finance.

M-KOPA sells the solar home lighting systems to customers who pay a daily nominal fee of 45 cents for a year, after making an initial deposit of US$35. Safaricom records 1 million transactions every month from M-KOPA and 500,000 homes are connected to solar power with 500 new transactions daily, according to Wamatu.

Wamatu said the partnership’s biggest impact is its ability to fight climate change through a reduction in greenhouse gas emissions. School children can complete homework using better lighting while parents benefit from televisions delivering regular information and entertainment services.

The African Development Bank (AfDB) estimates that the 600 million people in Africa currently live without power can be reached more easily through solar off-grid electricity.

AfDB’s vice president for energy, Amadou Hott, says the bank’s key development objectives to power and feed Africa are directly linked to energy access, as well as increased agricultural output.

The Abidjan-based bank hopes to provide the funding to connect 75 million users to off-grid electricity, which according to Hott is a “unique opportunity” for Africa to leapfrog into a new era of development.

The AfDB has set aside US$100 million to fund off-grid electricity solutions. It has also created a US$400 million fund to facilitate energy access by providing local currency guarantees to companies borrowing internationally for energy investments.

Davidi Vortman, co-founder of LUMOS, a London-based solar energy firm, says renewable energy and off-grid solutions could easily solve Africa’s energy crisis. Vortman said AfDB’s financial leverage has a better chance of bringing more renewable energy players to the market.

LUMOS provides 80-watt solar panels to consumers in Nigeria to light up four-roomed homes, as well as 37-inch television sets and radios as part of its efforts to eliminate oil-powered generators.

“I call on all investors to put money in off-grid energy solutions and telecos. They are one of the best delivery models. OPIC has invested US$50 million in our project in Nigeria. This is a message to the financial community,” Vortman told Development Finance.

Vortman works with T-Mobile and MTN in Nigeria through a solution, where users pay 4,500 Nigerian naira (US$14) a month to use the service, usually by buying mobile airtime recharge.

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