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“The sun rush” – Off-grid solar power companies in East and West Africa

By Diligencia
17 October 2018

Sub-Saharan Africa is one of the sunniest places in the world but despite this abundance of natural resource, it ranks amongst the most reliant upon fossil fuels for the production of electricity. Moreover, access to electricity via the national grid is typically limited to 43% of the population, but in rural areas this figure is closer to 25%. This is despite efforts by African governments to develop their national grid coverage; these have included privatisation initiatives in Kenya and public-private partnerships (PPP) like the one in Cote d’Ivoire, between the State and Korhogo Solaire, a subsidiary of the Moroccan based Nova Power.

Solar power start-ups are increasingly stepping into this gap, taking advantage of new technologies and often operating independently of any national grid. These energy solutions are popular because they can provide reliable and affordable services to both rural and urban populations. So-called off-grid solar energy companies (OGSCs) offer home systems for individuals or households via solar panels and batteries, and mini-grid systems which can generate and distribute electricity to larger groups or communities. They are tackling more than just the impact of dirty fuels; off-grid energy generates social, educational and security benefits, ultimately supporting economic growth.

OGSCs in East Africa include Kenya-based M-KOPA Solar and Tanzania-based Off Grid Electric (OGE). These were the first to offer off-grid solar solutions combined with a pay-as-you-go mobile money system. The sector is gaining momentum and expanding into West Africa where companies such as ZEGHA in Ghana and Cote d’Ivoire-based ZECI, product of an EDF-OGE joint-venture, are also offering household solar power kits. Other OGSCs include Nigeria-based Rensource Distributed Energy Ltd and Arnergy.

In Francophone Africa, Senegal-based Oolu, was established in Dakar in 2015, to provide solar home systems and has since opened offices in Mali, Burkina Faso and Nigeria. Netherlands-based Lumos Global, has established a presence in Abidjan (Lumos Cote d’Ivoire) and also in Nigeria (Lumos Nigeria), providing solar solutions from mobile money transfers, in partnership with telecommunications giant MTN Group Ltd. Cote d’Ivoire-based Solarpak offers a solar pad, LED lamp and battery intended for students who can then have power at night to do their homework. Station Energy Cote d’Ivoire offers an “Eco Infrastructure Electricité” product together with a renting solution known as “Invest in”. Ghana-based PegAfrica also provides credit for SHS, with plans to expand into Cote d’Ivoire.

The emergence of off-grid solar technology, and an associated need for upfront finance, has struck a chord in a region which was the birthplace of mobile money initiatives, such as M-Pesa. Its popularity with both customers and investors is rising so fast that both the World Bank and Partech Ventures include off-grid technology among its top 3 trending sectors for investors. A sunny outlook indeed.

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Diligencia

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Diligencia provides specialist business intelligence and due diligence services based exclusively on primary sources in the Middle East & Africa.

More about what we do