Solar transforms Tanzanian village

2 Aug

The village of Sakwe is a 3 hour drive east of Mwanza in northern Tanzania. There are around 800 households scattered about. The main street is lined by small stores selling general groceries and other essentials. Sakwe is 4 km from the nearest grid connection. There is small likelihood of the grid extending here and anyway the connection fee is expensive (around $300.) People make a living growing cotton and maize, and raising livestock.

Four years ago the village had no mobile network coverage and few people owned a phone. Everyone used kerosene to light their homes. Today the villagers estimate there are as many as 3000 handsets in the village, network coverage is good, and almost every home has at least one solar lantern. ‘Kerosene is hardly sold here,’ one villager told us.  Solar is providing electricity for essential needs – one of these being phone charging.

GVEP is working with six entrepreneurs in the village who provide phone charging services, and we are about to start work with five more. Antonia Giluli was using a car battery to provide phone charging when GVEP met her last year. She was charging 6-7 phones a day and every few days the battery had to be taken into the regional town of Bariadi for charging. With GVEP’s help Antonia was able to secure a loan from Postal Bank of Tanzania and bought a 50W solar panel and other equipment. Now she charges between 25-50 phones per day. Her record books showed that on one day in June she charged 90 phones. At 200/- (12 US cents) per phone she is making $4-5 a day. Antonia used part of her loan to stock her shop with bicycle spare parts which are much in demand.

??????????

Antonia Giluli (seated) and her sister charging phones

Even with 11 phone charging service providers in the village the demand will not be fully satisfied, but competition does mean that the cost of charging a phone has fallen from 300/- to 200/-. Few homes have solar panels and the ability to charge phones at home, but most do have small solar powered task lights thanks to the local promotional activities of Sunny Money. Using schools as a  distribution platform, Sunny Money has brought quality d.light products to the community – the S2 and S20.

??????????

Two d.light S2 lights charging next to the panel used by one of the phone charging businesses

Apart from phone charging the GVEP supported entrepreneurs also provide other services such as barbershop (using electric clippers) and TV viewing. The 2014 World Cup had a big following in Tanzania  and one entrepreneur in Sakwe invested in a satellite service so he could show matches in his front yard. His neighbours paid a small fee to watch.

GVEP aims to help 550 businesses in total become established and profitable in the Mwanza region by Sept 2015. Currently there are 336 active businesses in the project and 98 more waiting to get started. Because the equipment costs around $400 some of the entrepreneurs need to borrow from a bank. This is challenging to do on their own but with GVEPs support almost 80 enterprises have secured loans with more in process. Eleven entrepreneurs – ten of them women – received their loans while I was in Mwanza recently. From the bank they went with the GVEP technology mentor to a reputable supplier Zara Solar to buy the equipment they needed.

??????????

Rebeca Maskini (left) and Pendo Mwandiki (right) with their newly purchased solar panels

It was like a party in the shop, everyone excited to be getting the equipment they know will transform their businesses. All of the entrepreneurs supported by GVEP receive business training and mentoring to ensure that by the end of the project they have the technical and business skills to prosper.

Are distributed energy service companies the future?

18 Jun

Historically the strategies of national governments in countries where people lack access to electricity have focused on grid expansion. The approach of the government of Kenya for example is primarily about lowest cost options for increasing generating capacity to feed the expanding national grid.

But alongside grid development we’re seeing a significant shift in donor thinking, with ‘off grid’ becoming an increasingly important focus. The US have a substantial ‘off grid’ component in their Power Africa programme, the UK has a new ‘green mini-grids’ programme soon to launch, the International Finance Corporation are embarking on major studies, and GIZ and KfW are supporting a range of programmes. Other funders are following suit.

Approaches differ and the paradigms are still evolving, but there is increasing interested in some quarters in the potential of commercially managed mini-grids. A recent paper by Pepukaye Bardouille and Dirk Muench from Persistent Energy describes well the potential these distributed energy service companies represent.

As Barbouille and Muench make clear DESCOs are still in their infancy. None have so far reached profitability. The business models look promising though, as GVEP can attest from our work with a number of the companies pioneering these approaches. The large amount of donor funding starting to flow into this area has the potential to help many of these businesses reach commercial scale.

Two issues which Barbouille and Muench don’t discuss in their paper are government policy and social equity. Few governments in Africa have policies which positively encourage and support DESCOs. This is not surprising considering the ‘early stage’ of the industry.

But supportive policy will be needed. Identifying suitable sites for deployment free of the risk of a competing grid extension is difficult and costly. GVEP recently commissioned studies for two sites in Tanzania which showed that a solar mini-grid could be viable. But government plans to extend the grid into the area led us to advise against a mini-grid. DESCOs need a clear national planning framework to operate within, and help with identifying good sites.

The social equity issue is a tougher one to crack. DESCOs can potentially operate on a purely commercial basis though in many African settings margins are thin. Avoiding reliance on subsidies clearly has benefits for a DESCO. But will governments support a two track electrification approach where the rural poor pay a lot more per kWh for electricity than those connected to the national grid. Fee for service models rather than a tariff are a way of avoiding direct comparison with the grid – but the underlying issue of ‘social equity’ is still there.  Why should the urban elite benefit from investments in infrastructure which are subsidised while the off-grid community receives no support?

Much work remains to be done on policy and strategy issues in individual countries before DESCOs find themselves in an environment which positively supports their growth. But there can be little doubt that this is an area where we will witness major change in the next few years.

 

Best practice in micro-grid development

14 Apr

In the last few years interest in non-grid-based options for rural electrification in has been growing. Falling solar PV prices partly account for the shift in mind set, as do advances in gasification technologies and the promise of small concentrating solar power systems. Mobile enabled applications for fee collection and system monitoring are also part of the evolving picture.

Recognising the potential, an increasing number of developing country governments are adopting policies which encourage the development of micro-grids either as permanent or temporary solutions. And the private sector is increasingly looked to as  the provider. All of this appeals to donors looking for better returns on their aid. Micro-grids, of course, have existed for decades but their deployment by for profit businesses operating at scale is new. So what’s working and where is the sector going?

Microgrids for Rural Electrification: A critical review of best practices based on seven case studies, published in February by the UN Foundation, is a useful summary of the current issues. The researchers document case studies from India, Malaysia and Haiti, including for-profit, part subsidised and fully subsidised models. A critique of existing ‘best practice’ literature is presented based on the findings. The report is by a team of US academics led by Jay Apt at Carnegie Mellon University and  Daniel Kammen at University of California, Berkeley.

As might be expected, the authors find that success factors vary from context to context. But they do identify a matrix of common factors which need to be managed by any developer of a service. Where these elements are controlled operators can create a ‘virtuous circle’ where revenue supports maintenance and enhancement of the service thereby encouraging customers to continue paying.

There is much agreement with previously published advice from bodies like the World Bank, but also some interesting new insights. Affordable, incrementally expandable micro-grids are hard to design and difficult to finance through revenues alone. This means that managing demand, including reducing losses from theft, is an important element of the economics of most micro-grids. There is no easy way of managing this currently and room for innovative new approaches.

The report questions the widely held view of many in the sector that encouraging ‘productive use’ helps improve the economics of micro-grids. The evidence suggests that having a number of anchor customers is vital, and where demand for power for commercial activity already exists this should be planned for. However, actively simulating ‘productive use’ where demand does not exist is likely to be difficult and time consuming.

The existing literature on micro-grids also puts great emphasis on the importance of involving communities, partly because much previous effort has focused on community managed facilities. The report’s authors suggest that community management models often fail and that with the growth in private business led delivery attention needs to shift towards customer education.

The report lacks examples from Africa, but the authors promise that these will be forthcoming soon.

 

Assessing the Suitability of Briquette Use for Households in Kenya

4 Dec

“I only ever heard about briquettes the day I was given some to use by GVEP” says Ruth Odhaimbo, a wife and mother of three living in Kariobangi, Nairobi.

Ball Briquettes

Ball Briquettes

Ruth is a business woman who participated in the recent research we conducted on the suitability of briquettes for use by the household market. Empirical evidence, including findings from a recent assessment of the briquette sector commissioned by GVEP, suggested that challenges exist for briquette adoption in the household market including their ability to meet consumer expectations and the availability of distribution networks. To gain a better understanding of the use of briquettes within households, a briquette suitability assessment study was carried out so as to understand how well briquettes burn in commonly available cook stoves, their suitability to common household cooking tasks and what consumers like and dislike about their use.

Interviews were conducted with stakeholders in the biomass sector including biomass briquette manufacturers, organisations that are running briquette initiatives and households that used the biomass briquettes.

Samples of briquettes were given to households in Kariobangi, a low-income residential estate in northeastern Nairobi, Kenya. It consists of both apartments and slum-type dwellings. Kariobangi area was chosen to be area of study because of the middle – lower class residents that stay there, these families are more likely to use the Portable charcoal stoves as evidenced by the numerous numbers of charcoal vendors in the area. This means that people in the area are paying for fuel and therefore there is a likely market for briquettes in the area.

The households were observed over a six-day period as they used two different types of briquettes provided for the study, that is, ball briquettes and Sausage Briquettes

The women had both positive and negative observations about the use of briquettes as summarized below:

Positives

  • The briquettes burn for long and therefore last longer
  • They have a high heat Intensity
  • They have less smoke and hence can be used inside the house
  • They do not spark and are thus clean to use in the house
  • They are economical and affordable
  • Effects to health experienced were less compared to charcoal use that causes coughing and headaches when used in areas of low ventilation.

Negatives

  • The briquettes are hard to light
  • They produce a lot of ash
  • They are not able to keep the fire going if any more are added during cook time
  • Their usage requires more time, thus they are not suitable for quick cooking tasks
A Lady shows the ash that was left after using Briquettes

A Lady shows the ash that was left after using Briquettes

The study showed that the most common types of fuel currently used in the households were charcoal and kerosene and the most common cook stove was the Kenya Ceramic Jiko. The briquette technology was not common in the area during the time of the study but the response towards it was positive. Most respondents felt that the positive aspects of the fuel outweighed the negative and they were willing to take up the technology and use it daily. A few individuals were interested in doing a briquette retail business in their neighborhood.

Based on the analysis of the findings, the assessment went on to make the following recommendations:

  • If households are to substitute more of their fuel use to briquettes, there needs to be a technological improvement on the kind of stove to be used with briquettes as the fuel. However it remains likely that briquettes will still be used in conjunction with traditional charcoal, so, a stove that burns both fuels efficiently would present the ideal option.
  • There needs to be further research to see how briquettes can be made easier to light and have lower ash content.
  • There should be improved briquette commercialization such that briquettes are advertised in various residential areas and are made available for purchase and use through the establishment of retail networks. Retail networks such as those being established by organizations like Living Goods could help to make briquettes more available to households.

Phone charging paves way for mobile banking

14 Nov

When agents for the mobile network Tigo came to the village of Mwamabaza scouting for a local representative they were directed to Nelson Gwimira as the most enterprising man in the community. Nelson runs a phone charging business and barber shop using solar power and sells airtime vouchers for the three main networks in Tanzania. The Tigo staff were looking for someone interested in offering mobile money services. Nelson signed up and will soon be enabling his neighbours to send and receive money through their phones. He will be the first person in his community to offer this service.

Nelson Gwimira outside his shop

Nelson Gwimira outside his shop

Mwamabanza is 5km from the national grid down a dirt road off the main highway east of Mwanza in northern Tanzania. It is typical of hundreds of communities in this region. People grow rice, cotton and vegetables, keep a few cows and goats. Many people in the village own phones but there is no electricity and no bank.
Nelson started charging phones last year, operating from his home with a 25W panel. When he heard of GVEP’s programme of support for solar charging businesses in the Mwanza region he applied to join. During the initial training sessions he picked up a number of ideas and immediately set about implementing them. He bought a second panel of 50W, constructed a small shop and opened up a barber shop. The electric clippers run off the battery and inverter connected to the panel. He moved his other panel to the shop and now provides the phone charging service from the there. The business has been operating successfully for four months.

One of Nelson's employees, Augustine Herbert, cuts hair while phones are charging in the cabinet behind

One of Nelson’s employees, Augustine Herbert, cuts hair while phones are charging in the cabinet behind

The day I visited there were 17 phones charging. Demand is high. Nelson told me he never charges fewer than 15 phones in a day and normally it is around 30. He has started keeping records calculating each month his profit from the business in a cashbook. He’s now building a small shop next door to the existing unit where the phone and mobile money business will operate from, leaving the existing space for hair cutting. He has built these structures on the land of a neighbour. The land is free for two years after which he will pay a monthly rent. He employs one full-time person at the shop and another part-time.
Phone charging is good business but recently competition has arisen from people who are stealing power from a nearby phone mast and running a service as 200/- a charge (US 12 cents.) Nelson has had to lower his price from the 300/- he was charging to remain competitive. The thieves of course have no costs as they get their power supply free. GVEP has reported the illegal activities at the mast to the local officials to try to get it stopped.
Nelson’s ambitions do not stop with phones and haircutting. He has applied with GVEP assistance for a loan of 1.5m Tanzanian shillings ($930) to set up a regular TV show – football, news and films. Nelson has never taken a loan before but has joined a local credit and savings cooperative from which he will be able to obtain finance. GVEP has negotiated a lower than normal interest rate for entrepreneurs it introduces. GVEP has worked with the cooperative for several years and has helped it acquire active and reliable new members.
The TV shows will be screened in the backyard of Nelson’s house, under a thatched canopy supported on wooden poles. It’s a simple structure of traditional design which can be made from locally available material at low cost. Nelson showed me some of the tree trunks and branches he has already started to gather. They are piled by a saw pit where he is cutting the wood into rough planks for seating using a handsaw. Like the mobile banking the TV shows will be a new development for the community.

Nelson in his backyard showing GVEP staff where he plans to show films and football on TV

Nelson in his backyard showing GVEP staff where he plans to show films and football on TV

‘Before I met GVEP my vision was clouded.’ Nelson said. ‘GVEP gave me many ideas, even the cabinet in which I keep the phones while they are charging to protect them from dust. I built this after the training I received. I also started keeping records. This helps me monitor the business. I can see that this week I had a lot of customers and this week less. It helps me know if we are giving good customer service.’
The opportunity with Tigo was not the direct result of an introduction by GVEP. But because of his training and enterprise Nelson was able to convince the agents he was the man to do business with.

Making a success of briquettes

3 Sep

I first visited Samson Kayzee (pronounced chaz-ee), in Kampala, Uganda, a little over three years ago. At that time he was just starting out making briquettes. He had a small manual press he had built himself and was using a mix of sawdust and newspaper. The briquettes were smoky and didn’t sell well. But I was impressed by his entrepreneurial drive.

Samson Kayzee demomnstrating mixing machine

Recently I paid a follow up visit and what a change. Samson now has an electrically powered press and mixing machines, a long wire-mesh drying rack and a new store house. His briquettes, made of charcoal dust and cassava porridge, are top quality and have just been given a stamp of approval by the Ugandan bureau of standards.

Briquette production with motorised machine, Sanson Kayzee

Production is running at 6 tonnes a month and is limited only by the lack of drying facilities. Samson took a loan to equip his business and is close to paying it off. He is negotiating a second, bigger loan, with which he plans to build more drying racks and purchase a truck. Currently the briquette press runs only 3 hours a day but with more drying space production could be doubled.

Most of the current production is sold wholesale to a single customer. But Samson has other people interested in buying. He told me: ‘There is a supermarket owner who bought my briquettes for personal use. Now he wants me to supply his supermarket.’

Briquettes drying outside on rack
Samson has been supported by GVEP for 4 years, with business coaching, technical advice, help with accessing a loan, and links to markets. He’s come a long way and will go much further I’m sure.

As small businesses like this grow and adopt more professional standards briquettes will become more widely accepted in the market.

TURNING IDEAS INTO BUSINESS REALITIES – Innovative Agricultural Drying in the Caribbean.

13 Aug
Image

Solar, wind, bio-fuel and liquid desiccant help cut energy costs of drying foods

Last year Caribbean Esco Ltd, one of eight winners of the DFID funded IDEAS 2 Contest, received a grant to develop an energy efficient foods dryer, which aims to help farmers add value to their crops through agricultural drying and desiccation. Leighton Waterman, who joined GVEP in January 2011 to oversee our work in the Caribbean region, describes how this idea is being turned into a commercial business. 

The IDEAS 2 Contest was hosted by the Inter-American Development Bank (IDB) and is funded mainly by the UK Department for International Development (UKAid). It judged applicants from 15 Caribbean countries to award grants of up to US$200,000 for projects that promote renewable energy access and efficiency. GVEP were chosen as the implementing partners for the contest, providing technical and business advice, access to finance, monitoring and marketing assistance to the winners.

Caribbean Esco won a grant of $171,182 for their agricultural foods dryer, which combines innovative solar, alternative and renewable technologies to help cut energy costs. Using electricity produced from solar panels and wind turbines in combination with heat captured from waste oil, a liquid desiccant is added which helps optimize dehydration times and the percentage humidity of the products produced. This means that raw agricultural produce can be dried and preserved at lower energy and environmental costs. The project will enable farmers to turn yields of raw fruits and spices into higher value products, as well as reducing crop wastage, creating jobs and raising awareness about energy efficiency.

Mr. Eaton Haughton, owner of Caribbean Esco and the technology’s inventor, has started work at the Seville Trade Training Centre in St Ann’s Bay, Jamaica. Having installed the equipment, GVEP is working closely with him to get a suitable business plan in place. We contacted a local business adviser to develop the plans and in May 2013, we engaged a consultant with over 20 years’ experience in the food processing sector to review the business and write a strategy document to guide its progression.

“I have visited and worked with food drying equipment in many countries and have never seen this configuration of technologies brought together in this way. Similar systems, which lack the solar thermal and desiccant stages are fairly common, but the ‘whole package’ as put together by Mr Haughton is innovative” says Adam Brett, an experienced consultant in food production and agro-processing.

Indeed, Eaton’s technology allows energy costs to be cut by over 50%. This is vital for any small business wanting to break into the food processing market, since the profit margins are generally fairly low. Decreasing power consumption, minimizing the impact of carbon pricing on operations and cutting emissions through renewable energy solutions; these all help to cut costs, but they can also gain you visibility in what is a fiercely competitive and rapidly evolving environment.

Nevertheless, innovators like Eaton often find it difficult to access the necessary funding to test and develop their ideas. Conventional sources of funds, such as banks and microfinance lenders, often shy away from financing small start-ups. Contests that support entrepreneurs to develop renewable energy initiatives are thus vital. This is especially true of the Caribbean region, where energy is produced almost exclusively from imported fossil fuels, resulting in high prices for electricity, fuel and other energy forms.

Already, there has been interest from potential customers wishing to purchase the dried food products, including a medium scale chili-sauce manufacturer who would buy a range of dried spices, and an herbal tea manufacturer who would buy dried ginger and herbs. Jamaica’s high import tariffs mean that domestic drying of raw produce and supply to local markets makes both economic and environmental sense. Eaton is also planning to develop and manufacture his own brand of dried food products to sell locally.

Findings from the consultants’ report have identified the need for further market research, as well as training for staff in food handling and production processes. Eaton was also advised to consider setting up a Management Board, who will be able to provide further advice about the scale-up and operational running of the business.

With assistance from GVEP, Eaton has started to act on some of these recommendations and is in the process of developing a business plan which is vital to obtaining both debt and equity financing. Eaton’s long term plans are to be able to replicate the processing facility across the island of Jamaica and perhaps further in the Caribbean. Work is already under way to get an international patent for the technology, and there has been some interest from existing agro-foods businesses regarding the sale and installation of the technology in their factories. Financing from a local development bank has been secured to purchase food grade equipment and plans are now set to start operating in September 2013.

Follow

Get every new post delivered to your Inbox.