Ahead of AfricaCom 2016, we've been chatting to some of the key speakers on the innovations, challenges and opportunities in 'Digital Africa'.
This week, we spoke to M-KOPA's Deputy CTO,
Andreas Fruhen, ahead of his
case study presentation at this year’s event. M-KOPA has been responsible for connecting near to half a million East Africans with its affordable energy solutions. We sat down with Andreas to talk about the energy ecosystem on the continent, M-KOPA's work in the region and speaking at AfricaCom 2016.
"I am betting on the transformation of mobile technology as one of the solutions to Africa’s energy poverty"
1) We look forward to welcoming you to AfricaCom next week, where you will be taking part in our Mobile Finance and Commerce stream with your case study: 'Leapfrogging Africa's electricity Grid with mobile magic'. Is mobile technology the key to solving Africa's electricity shortfall, and how so?
Definitely, I am betting on the transformation of mobile technology as one of the solutions to Africa’s energy poverty.
We believe that low cost energy connectivity will be as transformative as mobile phones are to billions of people around the world. We are obsessive about lowering the barriers to energy access and creating a world class business at the same time.
The founders of M-KOPA, Jesse Moore, Nick Hughes and Chad Larson, identified that off grid households spend $200 per year on kerosene. They believed there had to be a better way to supply light and power and so developed the M-KOPA Solar solution to work over a mobile money platform, offering off-grid customers better energy at a lower cost.
"600 million people are living off the grid in Africa alone and 4.3 million people are off the grid in Kenya"
2) How would you describe the energy or utilities ecosystem in Sub-Saharan Africa, currently?
The energy mix is characterised by a heavy reliance on traditional biomass fuels and kerosene for home energy use, as well as fossil fuels and hydropower for electricity generation. In most countries, growth population is outstripping grid connection. And if connected, they experience frequent power outages and are forced to use back-up diesel generators. This is if they can afford it.
600 million people are living off the grid in Africa alone and 4.3 million people are off the grid in Kenya. Lack of power has led to staggering losses in terms of economic potential.
Solar is turning the entire narrative on energy and development on its head. Off-grid low-income households are now able to access clean energy at reasonable price points.
Customers are looking for energy alternatives that are reliable, affordable and solutions that will help them save money. We have already connected 400,000 households in East Africa with 500 new homes daily.
3. What do you consider the major challenges to facilitating change and greater access to the grid or alternative energy sources?
At M-KOPA, one of the challenges we have encountered was the reality of selling in remote areas, where most of our customers are based. We have invested a lot of time and effort in building our own distribution network of 100 service centres and over 1,500 field agents spanning Kenya, Uganda and Tanzania. Supporting this is an industry-leading 24/7 customer care operation.
The government has generally been supportive of small-scale off-grid solar. Recently, the government through East African Community has recently reversed the tax exemptions on solar products accessories which could push up the prices of the product, thus affecting affordability.
"We are using mobile technology to provide clean energy for less than a dollar a day"
4) From a career with one of the world's largest telcos, Vodafone, what led you to shift gear into solar energy solutions?
I opted to shift into mobile technology to change lives. At M-KOPA, we are using mobile technology to provide clean energy for less than a dollar a day. We are transforming lives every day.
5) Can you explain M-KOPA's work as a solar energy provider?
M-KOPA Solar offers world-class solar energy system and collects payments in small amounts and allowing customers to choose when and how they should pay. At M-KOPA we give you a lot more light, for less, with our affordable annual payment plan. All you need is a deposit of $35 followed by 365 daily payments of 50 cents, which is paid conveniently by mobile money.
Each battery-powered 8W system comes with three lights, mobile phone-charging and a solar powered radio. Customers can now also opt for a 20W system with digital TV. On completion of payment, our customers own their device outright.
We use embedded mobile technology to remotely control the equipment, to monitor its performance, troubleshoot issues, as well as control its operational state. M-KOPA Solar can disable systems remotely if payments are missed and reactivate them when customers catch up.
Mobile money acts as the engine for customers and M-KOPA’s sales agents. To use that effectively, the company has developed a proprietary, technology platform called M-KOPAnet that organizes the management of mobile money instructions, plus the data and information required to run the M-KOPA service.
M-KOPAnet collects over 2.5 million payment records as well as 24 million solar panel, battery and device location information monthly. This rich data collection helps detect demand patterns and improve the offering in real-time.
"We have already connected over 400,000 households in East Africa"
6) In less than 3 years, you have been able to connect hundreds of thousands of homes to affordable solar power, this is an incredible feat – what has been the key to your success, would you say?
We have already connected over 400,000 households in East Africa. Getting our distribution model right has been fundamental to our success. We have also spent a lot of time in the field understanding our customers’ needs.
I think we are genuinely in touch with our customer’s lives, aspirations and pain points. We are really focused on products and services that can make a positive difference on their lives – and then responding quickly with an affordable and accessible solution.
7) Does M-KOPA look to expand its operations and reach in the near future, and how does it see its role in addressing the more than 600 million people of Sub-Saharan Africa that currently lack access to electricity?
We are now operational in Kenya, Uganda, Tanzania and Ghana. We are currently looking at other markets where mobile money is gaining ground and there are lots of people living off the grid.
8) What is next for M-KOPA, what do you see as your major priorities in the next 5 years or so?
Our focus is on providing life-changing products and services to low income homes and using mobile money and affordable asset financing to do this. Energy is clearly a huge need in these homes. We have a pipeline of products and services that we are currently working on. We are looking at other areas, including education, agriculture and technology. We have a pipeline of products and services that we are currently working on.
"It will definitely be a great experience meeting and connecting with like-minded people in the technology space"
9) What are you expecting to gain from speaking at Africa Com 2016?
AfricaCom is a good platform to present the work we are doing at M-KOPA Solar. I am looking forward to meeting partners and potential partners.
10) What are you most looking forward to at this year’s event?
It will definitely be a great experience meeting and connecting with like-minded people in the technology space. I also look forward to seeing the great work they are doing and learning a trick or two from them.
About Andreas Fruhen:
Andreas joined M-KOPA in 2015 having previously worked in the Vodafone Group. He has worked on large scale projects like telco billing, VAC Systems and Google search integrations. Andreas has over 10 years’ experience in Architecture & Design and Operation & Management of large scale IT systems.
Africa's digerati are set to converge on the annual AfricaCom event in Cape Town once again to figure out the continent's connected future, analyse the potential of 5G, identify how IoT and smart cities could play a role in Africa's digital development… and much more.
Speculation suggests Safaricom is about to strike a deal with Ethiopia's government to help introduce the M-Pesa mobile money and banking service to the country's 100 million-plus population and compete with existing player M-BIRR.