OnePower (1PWR) is a solar power developer based in Lesotho with both on-grid and off-grid projects. 

A consortium led by 1PWR won Lesotho’s first tender for a utility scale 20MW PV plant, and 1PWR designed, built and operates the nation’s first fully licensed and privately financed minigrid at Ha Makebe in Berea district. In addition to being an independent power producer, 1PWR is also a manufacturer of key components of the solar equipment supply chain for solar power projects. Currently, the company is Africa’s only manufacturer of single axis tracking frames for solar panels designed to orient the panels towards the sun.

With support from PREO, 1PWR was able to enhance local manufacturing capacity to deliver solar PV trackers, smart meters, and mini-grid Power houses to mini-grid electrification projects underway in Lesotho, thereby reducing the country’s reliance on panel imports, while supporting local value creation and employment. In addition, by indigenising production of these critical infrastructures 1PWR is driving local value creation and demonstrating a roadmap for reducing the cost of off-grid electricity supply with results that are scalable to rural communities across sub-Saharan Africa.

As part of this project, 1PWR also collaborated with the Energy Research Centre (ERC) of the National University of Lesotho (NUL) to build internship opportunities and local technical capacity, with over 19 students participating, 13 of which were converted to full time employees.

For more information on 1PWR, visit: www.1pwrafrica.com

BURN designs, manufactures, and sells affordable and energy-efficient clean cookstoves to low-income households in developing economies.

With support from PREO, BURN expanded its range of clean cookstoves and began production of the newly designed Kuniokoa TURBO Stove at their factory in Kenya and launched distribution across rural Kenya through existing distribution partnerships. The TURBO is a forced draft biomass stove that is compatible with Pay-As-You-Go (“PAYG”) solar systems and is more efficient and cleaner-burning than their innovative Kuniokoa stove.

Independent tests have shown that the Kuniokoa, which was launched by BURN in 2017, is the most fuel-efficient and cleanest burning rocket stove in Africa. However, it has limitations, such as: reduced performance with wet wood; inability to burn agricultural waste briquettes; increased tending time compared to a 3-stone fire; and no reduction in time to boil compared to an open fire.

The TURBO aims to address these challenges with the addition of a 1.4-Watt fan, which increases mixing above and below the fuel bed, allowing the stove to burn agricultural waste briquettes, wet wood, and dry wood faster, cleaner, and more efficiently. The TURBO decreases time to boil by ~60% and decreases the tending interval by 30%, resulting in faster results and significantly less smoke and air pollution when comparing to traditional open fire solutions. The TURBO can burn wood fuel with up to 27% moisture content (wet basis) as clean as LPG. The TURBO, once launched, will be the only production household cookstove in the world that achieves ISO/IWA “Tier 4”[1] performance with agricultural waste briquettes.

BURN is assessing the potential of target markets in Kenya, and other sub-Saharan markets such as Uganda, Rwanda, and Tanzania. The company has existing distribution networks in these areas, including partnerships with key PAYG solar distributors who currently sell other BURN products including their flagship stoves Jikokoa and Kuniokoa. BURN’s innovative distribution strategy for the TURBO will leverage these partners, who provide ready customer bases and asset financing, making the TURBO available to the lowest income households. In addition to solar distributors, BURN distributes its products through a variety of outlets, the majority of which are locally owned and operated. These outlets vary from small shops and traditional retailers to larger supermarkets.

For more information on BURN, visit www.burnstoves.com


[1] International Standards Organization / International Workshop Agreement (ISO/IWA) Tier 4 level “is pegged to achievement of WHO interim indoor air quality guidelines” (www.usaid.gov, pdf, p.6)

LAGAZEL is the first company to manufacture solar lamps in Africa, providing a quality local solution to households that do not have access to electricity and contributing to the industrial and economic development of the continent.

640 million people do not have access to electricity in Africa. Having light is a vital need: without light during the night, children cannot study, adults cannot work, nurses cannot provide healthcare, etc. Many rely on flashlights or petrol lamps that are imported, fragile, dangerous to health and for the environment, and costly to use.

With support from PREO, LAGAZEL implemented a project aimed at strengthening and developing the local value generation of their manufacturing facilities while creating sustainable local jobs in Burkina Faso and Benin. LAGAZEL designs and manufactures solar equipment using metal, which is economical and recyclable, so the company is able to produce high-quality goods for the African market. The solar lamps and kits have a life expectancy of five years and come with a two-year guarantee, offering a reliable lighting solution for users.

For this project, LAGAZEL adapted their existing solar lamp business model for the solar home system product, by sourcing components from selected suppliers predominantly in Europe and Asia for its workshop in Burkina Faso (Dédougou, Boucle du Mouhoun region). Subsequently, the company expanded its operations to Benin (Porto Novo, Ouémé region), beginning the manufacture of a series of Sobox light and Sobox power solar-home-systems. Additionally, through a partnership with the research association IFSRA, it conducted an in-depth study to investigate the socio-economic impact of LAGAZEL’s activity in these areas.

LAGAZEL currently has two African workshops and plans to create five more within the next five years.

For more information on LAGAZEL, visit: www.lagazel.com

LAGAZEL in the news:

Innovex is a technology company based in Uganda focused on embedded systems, connected devices, web and software development, and wireless communication technologies.

The off-grid solar PV market in Sub-Saharan Africa is dominated by a supply chain of Chinese manufactured hardware and local distributors and retailers. In addition to purchase price elevation, this supply chain also leaves Africa without much-needed manufacturing and value creation jobs. Furthermore, the reliability of the solar PV systems is inhibited by high costs of operations and maintenance, leading to non-performing systems. Therefore, despite the ever-growing proliferation of solar PV, the access gap to affordable clean energy remains high. To address this need, Innovex developed ‘Remot’, an IoT solution for remotely monitoring and controlling solar PV systems and equipment. ‘Remot’ supports affordable PayGo acquisition of solar PV systems, solar equipment and appliances, and remote diagnosis and health monitoring of the systems by both solar companies and end-users (see Remot Video Promo – YouTube).

 ‘Remot’ hardware, comprising a Printed Circuit Board Assembly (PCBA) and a plastic casing was initially designed in Uganda, and contract manufactured in China. This process was inhibited by order lags and limited control over quality. The programming, testing, and packaging of hardware, as well as software development were undertaken in Uganda. 

With support from PREO, Innovex was able to test the viability of fully undertaking design, manufacture, programming, and testing of the PCBA, and manufacture the product casing in Uganda, creating an end-to-end local manufacturing process.

This initiative is geared towards making solar systems, solar equipment, and solar appliances in the solar-for-productive-use industry more accessible by reducing the operation and set-up cost for solar installers. In addition, new direct local jobs have been created, including process workers, machine operators, quality control and administrators.

The project was able to establish new partnerships and investments that include Iungo Capital, GAIA Impact Funds, Mazars, and China Impact Sourcing, among others.

For more information, visit: www.innovex.org

INNOVEX in the news: CNN inside Africa Uganda clean energy pioneers Innovex – YouTube

InspiraFarms cold storage solution

InspiraFarms provides agribusinesses, exporters and food distributors with solutions for handling their fresh produce, that significantly cut energy costs, reduce food losses and meet international food safety certifications. The company designs, develops and supplies modular and energy-efficient on-farm and close-to-farm cold rooms and packhouses for the horticultural sector in emerging markets, with a focus on African countries.

In Kenya there is an ever-growing demand on small-scale producers to increase the supply of fresh produce for international markets. These growers have very small plots and little access to capital loans and cannot afford their own cold storage solutions. Instead, the growers aggregate produce at central collection points, where it often sits for up to 72 hours before being collected, cooled, graded, packed and then shipped to final market. This is where most of the post-harvest losses occur.

With support from PREO, InspiraFarms set out to test a business model with corresponding technology to provide pay-per-kilo cold storage, on or near the farm, and packhouse solutions to small and medium growers of fresh produce in Kenya.

PREO interviewed Michele Bruni, InspiraFarms’ chief commercial officer, to find out which lessons were learned from this pilot project.

Q: Which challenges did you seek to address through this project and how did support from PREO help?

A: The PREO support enabled us to identify the gap in the cold chain, between production and delivery to final market, and identify a niche product that fills this gap. After several meetings with exporters and focus groups of small-scale producers, we identified the market challenges and devised appropriate client-focused, affordable solutions that meet the needs of agribusinesses, exporters and food distributors.

The horticulture export supply chains in Kenya increasingly rely on production from small scale farmers. These farmers have plot sizes as small as a quarter of a hectare and no more than 2 to 3 hectares. These growers have formed groups in their areas with central collection points for fresh produce. Produce is then sold to an exporter who has a central pack shed and cold chain infrastructure where the product is cooled, packed and exported to the UK, Europe and Middle East. Small-scale growers have very limited access to finance to invest in their own infrastructure and limited land to build on. They do, however, play an important role in the supply chain. The produce that is gathered at the collection point can wait for 24 to 72 hours before reaching the central pack shed, which is the first point at which the cold chain could be started. This means that product remains at ambient temperatures for up to 72 hours and, as a result, is exposed to high post-harvest losses (both physical and commercial). For berries and other soft fruits, every hour of delay from picking to cooling represents more than one day less shelf-life .

This means that the A-grade product is deteriorating and the growers cannot earn a revenue for their hard work. Post -harvest losses not only result in reduced revenue but losses on finance spent on inputs and labour. It was very clear that an intervention was required at the first-mile of the supply chain at the small scale grower collection points to protect the growers from these losses.

To deal with the constraints in land size and the fact that many different farming groups produce in different harvest windows, InspiraFarms designed a compact and mobile first-mile cooling solution.

The limited access to finance meant that growers themselves were not able to invest in the out-right purchase of these units. PREO’s support enabled InspiraFarms to put together an offer where cooling would be charged based on throughput. This means that cooling would become a direct cost to the supply chain and only a cost to small-scale growers during the harvest windows.

Q: Can you explain your business model of offering first-mile cooling through ‘mobile pre-coolers’? Why did you choose a B2B model over B2C?

A: Our focus is on providing cold chain infrastructure solutions, so it made sense to find a commercial partner whose core business is aggregation and marketing fresh produce. The B2B model also allows a more streamlined approach as there is just one billing party rather than trying to recover payments from 25 to 50 growers. By the end of the project, we identified and partnered with one of the largest horticulture exporters in Kenya.

Q: What were the main challenges that you faced during the project implementation phase and how did you overcome them?

A: Unfortunately, since the first mobile pre-cooling unit was installed in November 2020, no further units have been deployed. One of the main reasons for this was COVID-19 and its impact on the stability of the export supply chain. Reduced flights had a major impact on the cost of freight, which in turn led to uncertainty in affordability and demand in final destination markets. This meant potential commercial partners were reluctant to make a decision on trialling this new concept.

During the search for a committed commercial partner it became clear that the cost and long payback period could be reduced by developing a simple, functional and cost effective range of products, which could achieve the minimum standard results for cooling at the first mile. “Nice-to-have” extras such as humidifiers, remote monitoring systems and weather stations, would be marketed as “optional add-ons”.

The new units would be made from interlocking polyurethane panels and profiles (polystructures) which are light and easily transportable. Three units could be shipped in one container, reducing the shipping cost from $12,500 to $4,100 per unit. This would enable us to reduce the CAPEX cost from $66,950 to $26,076 and in turn reduce the payback period from 64.5 months to 25.1 months.

Q: What are your key achievements and impact from the project?

A: The first mobile pre-cooling unit started operating in November 2020. Since then, we’ve seen the following:

  • Buyers’ rejection rates dropped from 35% to 15% for peas and from 80% to 20% for baby corn
  • Sale price increased by 14% for peas and 50% for baby corn thanks to better quality and longer shelf life
  • Exporters witnessed an average 16% increase ($12 166) in net monthly earnings – around 11 times the lease amount
  • Large exporters have capacity to achieve maximum utilisation rates every month; 95% were witnessed in the PREO project.

Q: As well as demonstrating a B2B model for offering mobile pre-coolers, you successfully reduced the CAPEX by 60% during the project. Can you tell us how these gains were achieved, what it means for your further offerings and how it impacts the business model?

A: The unit, deployed with PREO support, allowed us to go through a “feature reduction” process. In other words, we identified a basic model offering with optional add-ons, as mentioned above. We have consolidated a more affordable range of products for smallholders with manufacturing lead times reduced from eight weeks to four to six weeks.

We focused on reducing the CAPEX for structures, reducing the mobility of the units but making the cost of rebuilding the structures, in case of relocation, comparable to the cost difference between the previous version and the current range. This refers to the change from a completely mobile container structure which can be moved by a truck with a crane to a polystructure which could be manually assembled and disassembled as needed.

Additional work was done in making some of the features (humidifiers, remote data monitoring and weather station) optional. These features add value but are not fundamental to carrying out the basic process. This way the customer can ask for additional features once the returns with the basic set of features have been generated. Lastly, by swapping the automated cooling cycle function for a manual start and stop we minimised the need for our team to create the complex automated programming to cool each different crop at different temperatures and cycle length.

Zembo has launched the first intercity e-corridor for e-motorcycles in Africa. By installing charging stations along the 120km Kampala-Masaka highway in Uganda, this one-of-a-kind project will help to prove that solar-powered e-mobility is a viable, climate-smart alternative to petrol-powered motorcycles, and will demonstrate the vast potential for expanding in off-grid Africa.

Zembo is a start-up company that provides sustainable e-mobility solutions for Africa. With the financial support of PREO and GIZ, the company has built a pioneering e-mobility corridor between the capital Kampala and the next large provincial town of Masaka – the first route for e-vehicles outside the capital. The PREO grant fund has enabled Zembo to operationalise the e-corridor by recruiting drivers, training them and financing the sale of e-bikes in the catchment area of the corridor.

In Uganda there are more than 700,000 motorcycle-taxis, commonly known as boda boda, most of which run on petrol. It is estimated that 5% of the Ugandan population relies on this business as a main source of revenue.

Zembo makes electric motorcycles, and its rent-to-own model enables low-income boda boda drivers to own their electric bike after two years. Data shows that a Zembo electric motorcycle increases profitability for boda boda riders by 60% compared with petrol motorcycle after the two-year lease period. The electric motorcycles also reduce CO2 emissions by up to 97% as well as cutting noise pollution.

Zembo’s battery swap service also makes it possible for drivers to exchange a discharged battery with a recharged one in their network of solar-hybrid charging stations in Kampala. The company operates 27 charging stations in Kampala and has more than 250 electric motorcycles on the road, transporting 800 passengers per day and seeing 10,000 battery swaps a month.

While Zembo’s stations in Kampala meet most of the needs of urban boda boda drivers, the lack of charging stations in peri-urban and rural areas has limited their working area. The new intercity corridor, made up of three solar-powered and one solar-grid hybrid charging station at intervals of 30 kilometres, will enable electric motorcycle drivers to extend their service and increase their daily income.

“This location was chosen after surveying our drivers, many of whom have village homes in Masaka area (and in towns such as Mpigi),” explains Titus Kimbowa, Director at Zembo. “It represents a good economic opportunity for them, offering the possibility to service long-haul trips to higher-paying customers.”

The new infrastructure especially impacts low-income boda boda drivers whose daily revenue is typically €5. By going from Kampala to Masaka (120km) on an electric bike, a driver will save around 3€ of petrol and 276 kg of CO2 per trip.

Following the opening of this new route, Zembo, with funding from PREO, plans to increase their fleet by six e-motorcycles per off-grid station serving the villages in the surrounding areas. This will also create 20 new battery swapper and technician jobs.

Zembo’s strategy is to position itself as a leading battery swap operator in the country. The company plans to create a nation-wide network of recharge stations, including across off-grid areas where it is challenging for drivers to find affordable fuel and even more challenging to find electricity. Solar has the advantage of being available everywhere in Uganda, making it possible to implement recharge stations anywhere. Building and operating these first off-grid stations will be key to prove that the economic operation is possible and scalable to other intercity routes beyond Uganda.

We’ve already proved that our business model is profitable in urban on-grid areas. Now, this PREO-co-funded project will give us the opportunity to prove that our solar-powered solution is viable and replicable in off-grid areas as well. We’ll then be in a strong position to unlock private investments to expand to other African countries.

Titus Kimbowa, Director at Zembo

For more information visit www.zem.bo

How PREO supported Innovex to bring its remote technology manufacturing facility to Uganda

Innovex is a Uganda-based company with a mission to transform the distribution of off-grid solar energy systems and equipment. It produces an Internet of Things (IoT) platform called Remot, which helps businesses remotely monitor and control their solar energy systems. 

The product eliminates the need for huge capital investment in last mile infrastructure such as physical branches and vehicles – users simply have to connect the hardware to their solar system. It aims to make solar systems, solar equipment and solar appliances more accessible by reducing the operation and set-up cost for installers.

This project, with support from PREO, aimed to set up a printed circuit board assembly (PCBA) and moulding manufacturing facility in Uganda, so that assembling and manufacturing the Remot technology could be carried out locally rather than in China. This would cut transport costs and delays, create jobs and boost the local economy.

We spoke to Innovex about the project, its objectives and achievements and the lessons learned.

Q: What were the key objectives of the project?

A: The main objectives of this project were to:

  • Set up a fully equipped, low-volume printed circuit board assembly (PCBA) and injection moulding manufacturing facility.
  • Identify and recruit staff 13 technical and 10 non-technical staff
  • Manufacture 1,500 remote monitoring units
  • Create and manage processes and standards
  • Report quarterly to the Carbon Trust.

What gaps and inefficiencies in local manufacturing did the project aim to address?

Before we set up the manufacturing facility for PCBAs, there was nothing of its kind in East Africa. Innovex’s product, Remot, relies on PCBA hardware. Although Innovex designed this hardware locally, we were using a contract manufacturer in China for its implementation. The PCBAs would then come back to Innovex to be assembled, programmed and tested. With local manufacturing, we could reduce product delivery times and import duty costs.

There was also a skills gap in the local workforce, which we could address by recruiting and training staff to become highly skilled in PCBA manufacturing.

And finally, the plastic casing was off-the-shelf from a local supplier, which meant the quality was variable and couldn’t be customised. The project supported local manufacturing and an improved casing design.

How did COVID-19 affect your implementation strategy?

Firstly, it affected how we went about setting up a facility because were unable to travel to China for due diligence on equipment suppliers. Instead, we sub-contracted a Chinese company to carry out the due diligence on our behalf. There was also an increase in shipping costs because of the disruption in global supply chains. Innovex addressed this by asking for a budget reallocation from PREO.

During lockdown, employees couldn’t travel to Innovex for training, so the company van, which was allowed to move, would pick up key staff from the area where they lived. Staff were also unable to travel to China for training, so we had to improvise with online training. 

The disruption also affected our third objective – to manufacture 1,500 remote monitoring units. A delay in getting 50 product samples certified meant we could not move forward with full-scale production. As a workaround, Innovex has engaged a Flemish lab, Labodenayer, to conduct testing and we are awaiting a quotation so that work can begin.

We had a problem with faulty components due to disrupted supply chains, but after a second round of procurement, this time with a focused group of suppliers, we obtained better components which we used to fix the affected hardware. We also faced delays in the procurement of components for mass production and distribution. An order for components to manufacture 500 units was yet to be fulfilled at the time of writing. However, all the plastic casings (1,500) were manufactured.

Finally, due to delays to the overall project, we had to ask for an extension for reporting to PREO. Quarterly reporting was also sometimes delayed, although the PREO team was gracious in granting us a few days’ extension when needed.

Q: What challenges did the project face, and how did you overcome them?

As well as those related to COVID-19 which we outlined above, we faced some further challenges during the project.

One was that some of the equipment manuals were in Chinese. Using online resources and support from ED&A and IMEC, the Innovex team developed its own processes and designed training on equipment operation, maintenance and concomitant manufacturing processes.

The general scarcity of chips on the external market was exacerbated by the Chinese holiday in mid-January 2022. We were expecting these components to be delivered by the end of February and will proceed to manufacture and distribute these units.

The lockdown also caused a slow-down in our usual business activity and dampened sales. This reduced Innovex’s revenue and its contribution to project costs. Innovex mitigated this shortfall by fundraising and reducing costs such as travel, negotiating pay cuts with some staff who were working from home.

Q: Which of the objectives and targets did the project achieve – for Innovex, the sector or the geography?

A: Firstly, we set up a high-tech electronics manufacturing facility in Uganda to operate the PCBA and injection moulding manufacturing lines. The PCBA line is the first in East Africa. The injection moulding line also gives us flexibility for just-in-time-manufacturing and customisations, as well as quality control of our plastic casings.

We demonstrated that local manufacturing of PCBAs is financially feasible. With the production line fully functional, Innovex manufactured 55 PCBAs. Preliminary analysis reveals a saving of at least US$10 (25%) on the baseline, based only on the cost of importing Chinese assembled PCBA vs importing components and materials.We are now working with a consultant to evaluate the cost-savings from local manufacturing, including other costs such as utilities and labour.

We created high-skilled local jobs, recruiting 17 technical and seven non-technical staff and training them in equipment operation and maintenance. The team will remain in place beyond the project timeline. We also created indirect jobs through subcontracting, including the electrical and air conditioning installation, to local companies.

We improved our products through development and testing of new firmware and design for manufacturability analysis, and we developed two new product lines: the PUMP DAVIX, in collaboration with APTECH Africa, and the cold-chain DAVIX, supported by CLASP. Fifteen pilots have been installed in Kenya and a pilot in India is in the works.

With support from our investors, we revitalised our strategy for building partnerships to support sales and the business in general. We already have more than 1,500 sales in the pipeline for 2022. Just a few of the organisations we have onboard are Village Energy, Hello World, UNCDF, Advanced Solar, Access Energy Limited and, Powerpay. We also developed 40 partnerships during the project period, including ED&A (SMT manufacturing), IMEC (SMT manufacturing and standardisation), Iungo Capital (loan), China Impact Sourcing (procurement due diligence) and Uganda Industrial Research Institute.

Q: What are the main lessons that Innovex learnt from the project?

A: The project has given Innovex huge momentum to become an industrial leader in electronics manufacturing that transforms the energy sector in Africa. Our key lessons learnt from this project are:

  • The need to continuously pursue government incentives, as evidenced by more than 40,000 in tax waivers on equipment importation.
  • The need to establish strong on-the-ground partnerships in China for equipment and component sourcing.
  • Locally manufactured hardware has enough quality to compete with that contract-manufactured in China.
  • Innovex has built competence in equipment operation and processes for both SMT and injection moulding, although further training of staff is needed. Planned training at ED&A/IMEC will help.
  • At least three months should be allowed for sourcing of components from China.
  • We need to comprehensively evaluate the cost-savings from local manufacturing, apart from the saving on components. We have procured a consultant, to undertake this.
  • More local partnerships should be identified for contract manufacturing in order to become profitable and efficiently use the installed machinery.

Q: How did PREO accelerate your success in setting up the manufacturing facility?

A: PREO provided all the funding for manufacturing equipment and supported various aspects of OPEX and human resources, including M&E and training. The PREO team were also supportive every step of the way, providing strategic guidance and support in periodic reporting. Together, we shall make sustainable energy for all a reality, in Africa and globally.

For more information visit www.innovex.org

LAGAZEL is a leading manufacturer of high-quality solar lamps and kits, and it is the first company to manufacture solar lamps in Africa on an industrial scale. The company has been making internationally certified solar lanterns in Burkina Faso since 2016, and more recently solar-home-systems, sourcing quality-controlled components from reliable suppliers in Europe or Asia, which are then assembled, tested and packaged locally.

Its mission is to industrialise the manufacturing of solar-powered products, bringing affordable and high-quality electricity solutions to African people who do not have access to energy, while also developing the local economy and creating sustainable jobs.

With support from PREO, the LAGAZEL has been working since February 2020 to increase the local added value of its manufacturing facilities in Dédougou, Burkina Faso, expand its range of products and open a new facility in Porto Novo, Benin, thereby creating more specialised jobs and training opportunities for local people.

PREO spoke to LAGAZEL about its project’s aims and achievements, the challenges it faced and the key lessons to be learnt from the project.

Q: What problems did the project aim to address? 

A: Most solar products available in African markets are imported from Asia and many of these are of poor quality. Local operations are usually limited to assembling made-in-Asia products or handmaking non-certified products.

These products are generally produced and assembled in China or India by international companies or contract manufacturers on behalf of solar product developers. The lack of local mini-grid equipment in Senegal (batteries, electronic systems) makes the systems more expensive. Other challenges relate to both R&D (a lack of consumers insight, which is needed to design products that match local needs and expectations) and manufacturing (a lack of reliable or good-quality suppliers and local manufacturing partners, as well as and limited access to growth capital to scale operations and realise costs savings).

This makes it difficult to create local jobs and develop the local economy. On top of that, based on our experience, remote suppliers can be a high entry barrier for small or medium local distributors. Often, they don’t have the funds to import containers from China, and in the downstream segment of the value chain, there are inefficient repair and after-sales services and poor recycling activities. This has a negative effect on the development of an active local entrepreneurial base in the OGE sector.

Increasing local manufacturing capacity of quality-certified products has a huge potential to generate specialised jobs, develop the economy and reduce the environmental footprint of the products.

Our approach puts local people at the heart of the project. The aim was to boost local manufacturing of solar home systems, and to support local production of a range of components and spare parts for solar products, which are currently imported from Asia.

By supporting our operations in the local upstream segment of the value chain in this way, we aimed to stimulate the off-grid electrification market in Burkina Faso and Benin; boost the development of local economy through increased productivity, professional training, skill transfer, jobs creation, and increased revenues for employees and economic partners in the value chain, including women and young people.

In addition, we sought to bring added-value in the off-grid energy value chain by developing synergies with other players in the off-grid energy sector, and the proximity of LAGAZEL to local manufacturer means that local distribution players benefit compared to importing from China. Risks of importation are limited, the proximity of production and after-sales service reassures local distributors; working capital needs are reduced, as the distributor can place various small orders instead of one big order.

Q: What did you want to achieve with this project, and how was your implementation strategy affected by COVID-19?

A: The project aimed at strengthening and developing local production at our LAGAZEL manufacturing facilities, so that off-grid products could be produced locally. This meant introducing processes, for example, that require manual rather than automated operation, such as assembling battery packs. We wanted to:

  • Expand the range of products we manufacture in Burkina Faso
  • Scale-up production of solar home systems and sub-components by replicating manufacturing operations in the Porto Novo, Ouémé region in Benin
  • Develop synergies with other players in the industry in order to reach sufficient scale and to be competitive, by providing sub-contracting manufacturing services for the off-grid energy sector.
  • Initiate R&D partnerships to co-develop a full range offer of locally made off-grid electrification products and spare parts.

Achieving these objectives involved implementing the following activities:

Phase 1: Manufacturing a first series of 250 Sobox light & Sobox power solar-home-systems (SHS) and increase production. This pre-production phase is needed in order to check quality and efficiency before increasing production and manufacturing a further 750, available for distribution in association with high quality proximity services (warranty, after-sales, proximity of stock, etc).

Phase 2: Finalising the development of components/spare parts of off-grid solar products, manufacture the first series and replicate. This range of products is aimed at distributors and installers in the OGE sector, who would then be able to source these quality products locally instead of importing them from China. The project focused on two main components: bulblights and battery packs. LAGAZEL aimed to finalise the prototypes and rate routings for both bulblights and battery packs, purchase components and train the production team to produce the first series. Once the pre-series was validated, LAGAZEL aimed to scale up by purchasing equipment, training staff, replicating in Benin, and sharing experience and best practice.

Phase 3: Conducting R&D and testing activities on new innovative products. The objective was to co-develop off-grid products that can be produced locally. During the project, LAGAZEL had regular meetings with all stakeholders in order to encourage communication between technical staff, production staff and sales team so that customers’ needs and the technical constraints of local production are taken into account.

Phase 4: Evaluating the viability of local production, impact on employability, and the direct and indirect economic and social impact. We aimed to train 20 people in the production segment of the value chain, and develop partnerships with main players in the OGE sector. Activities were conducted in partnership with local companies that comply with legal and regulatory requirements.

Q: What challenges did you face in implementing the project in Burkina Faso and Benin, and how did you overcome them?

A: The main challenge was related to the business model of local manufacturing. There’s a large number of suppliers in Europe and Asia who provide raw materials and components to Africa, making the logistics extremely complex. Lean manufacturing is difficult to implement and the model requires significant funding to meet the working capital and stock needs.

These difficulties became more pronounced in 2020 and 2021 because of the COVID-19 crisis, which led to a shortage of raw material and disrupted international transportation. One solution was to create, when possible, a buffer stock of components in France that could be sent to local facilities quickly when they needed it. In any case the COVID-19 crisis led to delays in constructing the new facility in Benin and in delivering components to both facilities, making it difficult to deliver on time.

Another challenge was insufficient commercial sales generated on the Burkinabe and Benin market. After five years of operations in Burkina Faso, we noticed that production capacity was higher than market capacity after taking into account increased competition from other solar product distributors. On top of that, LAGAZEL faced logistical and customs challenges for exportation across Africa. It is difficult for a facility in Dedougou (Burkina Faso) to sell in Senegal, for example, so targeted markets are limited to neighbouring countries.

LAGAZEL mainly sells B2B, and sales fluctuate depending on the time of year, making it difficult to secure long-term contracts for technicians.  In the future, LAGAZEL will need to diversify manufacturing activities in order to optimise material and HR resources.

Finally, the research study conducted by our partner IFSRA also highlighted some global challenges. There was strong competition at the local level from cheap, poor-quality products, and international quality certification standards do not take the specifics of local manufacturing into full consideration. The current security climate, particularly in Burkina Faso, was also a real challenge for the company to operate normally.

Q: Which objectives and targets did the project achieve – for the company, the sector and/or the geography?

A: We now have the capacity to produce locally a diversified range of quality certified solar products. We enlarged the range from simple pico PV solar lamps to more powerful solar home systems (SHS) and spare parts, such as bulblights and battery packs. Despite supply and logistics challenges, 470 Sobox SHS were manufactured and sold in Benin and Burkina Faso. We designed the tools internally for drilling and for moulding bulb metal sheets and plastic parts and a pre-series of 100 units of a new version of Sobox SHS were in progress at the end of project. We also implemented new software to improve purchase, stock and production management as well as quality and traceability.

Another big result was the opening of the second production facility in Benin. The facility was inaugurated in October 2021, creating around 10 permanent jobs. The facility is already a reference for training in solar equipment production in Benin.

We also set out to increase the local value of LAGAZEL products, and we developed our own bulblight PCB in order to increase local production. We developed prototypes of battery packs and equipped a local facility so it can assemble nude cells to produce battery packs. By the end of 2021, 950 bulblights had been manufactured in Burkina Faso and Benin.

We conducted R&D and created iterative prototypes in the field, including battery pack assembling without welding, a collective phone-charging station and power bank casing. Pre-studies and requirements specifications have also been defined for assembling PV cells with resin matter and for developing a marketing and communications unit. These two will require more funding to develop further.

Finally, through a partnership with the research association IFSRA, an in-depth study was conducted to assess the viability of local production and the project’s direct and indirect economic and social impact on the local community. The evaluation highlighted major impacts of the presence of the factories:

  • The creation of quality formal jobs with an effort to include vulnerable people
  • The creation of training opportunities at a local level, contributing to the national effort to increase qualified manpower in the solar sector
  • An improvement in living conditions for employees, retailers and end users. Replacing highly polluting and harmful products had a positive effect on health and education
  • The supply of sustainable products and quality and proximity services, including efficient after-sales and an R&D department that will help evolve the products and adapt them to local needs and problems
  • A local presence allows local demand to be met rapidly and reduces taxes and transport costs
  • Consumers are proud to buy local products, which fits perfectly into the trend for promoting “Made in Africa”
  • Replacing traditional oil or battery lamps leads to reduced CO2 emissions, less exposure to harmful fumes and fire risks and, thanks to the durability of the products, a reduction in waste.

Q. Was there anything you were unable to achieve?

A: Globally, we did not achieve the quantitative objectives we initially defined for the production of SHS, bulblights and battery packs. This was mainly down to construction and supply chain delays, but it was also because LAGAZEL produces quantities of SHS units according to demand, and demand was lower than expected. However, we are very satisfied with the qualitative results – a bigger range and better quality of products manufactured locally and a reduced production time.

Another limitation was on R&D, which was mainly conducted in France because of its proximity to our technical partners and suppliers. Testing activities in the field were reduced due to travel restrictions during the COVID-19 pandemic and feedback was mainly collected through videoconferences.

Q: What lessons have you learnt from the project implementation?

A: We learnt that local production per se is not a problem. LAGAZEL is able to produce high-quality products locally, teams are flexible and production time can be reduced (for example in Benin we have the capacity to produce more than200 SHS in five days). The challenges around local manufacturing are related to complex logistics and supply delays and exporting across Africa.

Another lesson is that conducting R&D is still a challenge when the economic and industrial environment is not favorable, as it requires regular back-and-forths between France and Africa.

And finally, the impact study highlighted some results we did not anticipate. Not only were jobs created and living conditions improved, but the study also emphasised the training opportunities that local facilities create. A significant number of trainees are regularly welcomed at both facilities. This needs to be more formalised so it can gain visibility with national and local institutions. Gaining this visibility is hugely important for the company, as, at the moment, we do not benefit from much local institutional support.

Q: How did PREO help in the success of the project?

A: PREO funding helped to launch a pre-series of new products and parts of off-grid solar products. It also contributed to the development of a new production facility in Benin and helped foster the sharing of experiences between teams from Burkina Faso and Benin. Finally, the project gave us the opportunity to conduct an external study to evaluate the impact of LAGAZEL local facilities that will be used in the future to advocate LAGAZEL’s local manufacturing model towards authorities.

The PREO funding was the only financial support we could find that was dedicated to the upstream elements of the off-grid energy value chain. As LAGAZEL is dedicated to local manufacturing, this grant was crucial to support our strategic development plan.

Q: What other transformative ideas or projects have you generated for the sector in the region? 

A: We have worked on replicating local production facilities in other geographies. In Senegal, LAGAZEL  has built the capacity of a training centre, PROMESS, to become a one stop centre for the establishment of other LAGAZEL  local assembly facilities in the region. This has been in operation since 2021 and aims to establish 50 other local stations across West Africa. In Mali,LAGAZEL is working closely with our main distributor to implement after-sales and repair services as well as local production/assembly capacities.

LAGAZEL would also like to offer sub-contracting services to other players in the off-grid energy sector for assembling or manufacturing operations locally in Africa. This topic was discussed with players including ENGIE and OffgridSun, Novea Energie and Fonroche, but no formal partnership has yet been established.

For more information visit www.lagazel.com

In 2015, all United Nation Member States pledged to end poverty and protect the planet by 2030, through a coordinated universal agenda that involved the 17 Sustainable Development goals (SDGs). Before the global COVID-19 pandemic hit, the estimated annual financing gap for meeting this agenda in developing countries alone amounted to $2.5 trillion. And, according to OECD Global Outlook 2021, this funding gap may have increased by another 70% driven by the necessity to divert financing to meet COVID-19 emergency response needs. This widening of the financing gap has highlighted the need to diversify finance flows and that by relying on public resources alone we risk failing to achieve SDG targets. There is an urgent need to attract private capital into the relatively young companies and emerging business models needed to deliver a just transition by de-risking their inflows.

Over the past two years, PREO (Powering Renewable Energy Opportunities) has demonstrated a blended financing approach in which donor capital is used to buy-down the demonstration risk associated with early-stage business models, thus lowering the investment risk and improving the risk-return profile for incoming private capital investors.

PREO is a €20 million progamme co-funded by the IKEA Foundation and UK aid via the Transforming Energy Access platform, that deploys high-risk catalytic grant capital – along with technical assistance, knowledge management, data platforms and strategic engagement advisory services – to demonstrate the viability of productive use of energy (PUE) business models in sub-Saharan Africa.

PREO has successfully used blended finance to support innovative PUE enterprises which were struggling to raise finance during their business model demonstration phase. The innovators are able to direct the PREO grant funding to cover the CAPEX of initial field units, cover operational expenses, build capacities, design information systems and generally to absorb unit-level losses to ensure financial sustainability. As a result, the innovators successfully demonstrate positive unit- economics, refine and improve the business model, and gather critical business data needed back up the business plan and attract sufficient commercial capital that would otherwise materialise far more slowly.

One of the companies that successfully went through this process is SokoFresh, a business built on the belief  that the barriers to providing accessible cold storage to smallholder farmers are not down to technology, but down to the business model. SokoFresh built a market-linkage service layer over and above the cold storage service, transporting the produce to markets and selling it through pre-agreed contracts to buyers on behalf of smallholder farmers. When SokoFresh applied for PREO funding and support in 2019, the company was just out of the concept phase and had identified the technology partners, value chains and the regions. PREO helped SokoFresh to procure the cold storage technology, build a Minimum Viable Product (MVP) for its market-linkage platform, and get the concept from paper to reality. SokoFresh onboarded around 1,500 smallholders, traded more than 110 tonnes of produce, demonstrated reduction of post-harvest losses to less than 2% vs a 30% baseline, and collected critical unit economics data.

SokoFresh

The evidence and data collected through the PREO project, enabled SokoFresh, to raise €892,676 in scale-up capital from both performance-based and private sources, generating a leverage of 5.2x on the PREO funding.

Overall, of the 12 enterprises (two of which are non-profits) that PREO supported in 2019-20 period, seven have successfully raised scale-up capital amounting to €15.6m, generating an average leverage of 7x on the €2.26 million disbursed in the form of grants.

Another big step for the 2020 cohort was in e-mobility, where PREO supported OPIBUS and MobilePower. In November 2021, OPIBUS, the largest manufacturer of electric vehicles in East Africa, raised growth capital through a $7.5 million round, which at the time was the largest fundraise ever in e-mobility in sub-Saharan Africa. Today, OPIBUS is developing products in three main sectors – electric motorcycles, electric commercial vehicles and charging solutions –, and PREO played an instrumental role in rolling out its first batch of 150 e-motorcycles. OPIBUS used PREO grants to get the e-motorcycles to the market as quickly as they could, test the user perspective of the product, build local supply chain ecosystem, invest in product design, and improve manufacturing capacities. During the project period staff headcount grew from 37 to 90 with 91% of Kenyan employees and 40% women.

OPIBUS

Within the e-mobility sector, companies supported by PREO adopted a variety of promising business models, to achieve shared goals of improving health and reducing emissions. While OPIBUS aims to become the largest manufacturer of e-vehicles in Africa, Mobile Power, is building a battery management platform that it could lease out to e-mobility companies.

MOPOMAX developed by MobilePower

With funding from PREO, Mobile Power developed a multi-purpose 1kWh battery called the MOPOMAX and successfully demonstrated its e-mobility use case in Sierra Leone by rolling out 17 e-motorcycles powered by solar in off-grid and weak-grid areas. In addition to e-mobility, MOPOMAX is gaining traction in use cases such as diesel generator replacement, energy access, and powering productive use equipment. Data gathered from the PREO project has helped Mobile Power mobilise €5.5 million in growth capital including a £1.9 million in Series A funding lead by Camco REPP and RBF from Beyond the Grid Fund for Africa (BGFA).

In addition to supporting early-stage enterprises, PREO, also supported more established businesses that sought financing for demonstration of new business models.

Simusolar

Simusolar, a Tanzania based distributor of irrigation equipment that had already sold more than 600 solar water pumps, wanted to demonstrate a business model that can catalyse the pace of customer acquisition by partnering with established players in agricultural value chains. The idea involved using a cooperative’s hubs as demonstration sites for solar water pumps and giving the hub’s staff the tools needed to convert coop members to customers. Though Simusolar faced initial challenges in the coffee value chain, it successfully set up its operations in Uganda and sold 186 solar pumps by replicating the model in horticulture, livestock, and dairy value chains. Demonstrating its ability to work with agricultural value chain partners and its capacity to scale up operations in a new market proved critical to Simusolar in raising $ 1.5 million in debt from ElectriFI.

InspiraFarms

PREO also supported InspiraFarms, a cold storage market leader with operational track record in central packhouses to rollout and demonstrate a first-mile mobile pre-cooler unit. The technology uses forced air pre-cooling to rapidly reduce the field heat in the produce, intervening immediately post-harvest, when the quality of produce drops disproportionately with time. Through the PREO project, InspiraFarms demonstrated to exporters that the use of its mobile pre-coolers can lead to a 16% increase in monthly earnings and for investors that the unit-level payback can be less than five years.

In addition to successfully blending private capital with donor capital over different transactions across different timelines, PREO is also seeing an encouraging trend in which public capital funded projects are positively influencing private capital investment decisions.

Koolboks off grid solar refrigerators for fish traders Nigeria-
Koolboks

In 2021, PREO funded Koolboks, a manufacturer of solar-powered freezers equipped with PAYG technology. Having started in 2020, Koolboks quickly expanded to 14 countries and sold more than 1,000 units but did not have a B2C sales model. Initial attempts to partner with a financial institution in Nigeria to finance the end consumers faced challenges due to lack of sufficient credit history among borrowers and the lengthy approval process. With PREO funding, Koolboks directly validated the product market fit for the B2C segment, developed a customer acquisition strategy, and started financing the sale of units from its own balance sheet. In the short span of nine months, Koolboks sold 219 units through a B2C sales channel in Nigeria and achieved a consistent on-time repayment rate of 97%. This better-than-expected pilot performance along with the demand intensity experienced among the pilot customers during the field visit encouraged private investors to catalyse their investment decision in the recently concluded $2.15 million Series A round in Koolboks. In addition, the private capital providers who were initially drawn by the B2B model have become supportive of the B2C model developed through PREO, even committing to meet follow-on financing needs and acknowledging B2C as the key growth driver for their investment.

PREO, in addition to using grants, has also deployed Technical Assistance (in-kind) across its portfolio and other companies to address knowledge gaps, to improve the business viability of the companies, and enhance potential investment performance for private investors.

By using catalytic grants and technical assistance as its instruments, PREO has attracted €20.6 million in scale-up capital primarily from commercial investors (on top of the €10m that the grantees contributed to the project demonstrations) into bankable projects that were otherwise considered too risky. In doing so, PREO has demonstrated how public capital can be deployed to attract commercial capital and how the blending can happen over different transactions, while extending the reach and effectiveness of the co-finding by the IKEA foundation and UK aid via the Transforming Energy Access platform.

M-KOPA is a Kenyan connected asset financing platform that provides underbanked customers in Africa, lacking access to formal credit for their business needs, with products such as solar lighting, televisions, fridges, smartphones and financial services.

To address some critical gaps in the market, in January 2020 M-KOPA designed a package of products consisting of an IoT-lockable smartphone powered by a solar home system, bundled with business management tools and low-cost internet connectivity for micro, small rural businesses in Kenya.

M-KOPA initially intended to use their PREO funding to support a trial of this bundled product and service offer to grow their business. However, the onset of the COVID pandemic disrupted their original plans to roll out the full package of services, as it would require a significant on-the-ground presence and face-to-face training. Instead, M-KOPA developed a new strategy that the company could implement remotely. They redesigned the product as the ‘Micro-Biz Bundle’, consisting of a solar home system (including a solar-powered TV and lights) and a smartphone coupled with an electronic voucher (e-voucher) to the value of $50.

The bundle was sold on a pay-as-you-go (PAYG) basis to small rural businesses in collaboration with an online e-commerce platform. The aim of this redesigned pilot was to enable small businesses to gain access to affordable business stock through the platform, build competitiveness through the adoption of e-commerce and unlock access to business credit and energy. The pilot targeted 100 small rural businesses and M-KOPA leveraged its existing network of sales agents to reach enterprises such as general stores, grocery shops and agribusinesses, while at the same time ensuring gender balance in ownership of the enterprises.

This was M-KOPA’s first PAYG multi-product bundle. Despite the tough business environment, M-KOPA sold over 40 Micro-Biz Bundles in four locations in Kenya. 

PREO has interviewed Rebecca Glas, Project Manager at M-KOPA, to capture the lessons learned from the implementation of the project.

Q: Could you tell us how COVID-19 led to the change in the project’s scope, design and implementation strategy?

A: The project faced initial implementation delays of several months due to the pandemic. We had to pivot away from face-to-face market research towards desk-based research and phone-based customer and provider interviews. Moreover, the original package of business management tools demanded a high level of digital skills from the customer, so the customers would have required sufficient in-person training to use them effectively, which the company was unable to provide under lockdown. We therefore decided to change the focus of our project to an e-commerce solution as this required lower-level digital skills, while also providing businesses with credit through the e-voucher that allowed them to purchase business stock from the online e-commerce platform. 

Ongoing COVID-19 restrictions meant the project also faced further difficulties in ongoing implementation. It largely prevented travel by team members and therefore limited in-market activation and engagement. As a result, we had minimal engagement with customers and sales agents which delayed customer uptake and insights gathering. It meant we also had to choose our pilot location based on where we had active team members on the ground, which was not the most suitable location for our e-commerce partner.

The economic hardship faced by Kenyan small rural businesses during COVID also had an impact on uptake, given the relative high cost of the bundle compared to what the customers could afford to pay.

Q: What challenges did the project face during the rollout of your Micro-Biz (e-commerce) Bundle?  And how did you overcome these challenges?

A: Apart from the COVID-related challenges mentioned above, the project also needed to tackle further issues:

M-KOPA systems & technical backend: this was M-KOPA’s first multi-product bundle offering on one PAYG payment plan. This meant a significant amount of set-up and troubleshooting on M-KOPA’s backend systems was needed to enable the launch of this product.

Partnership: we faced initial complications with our e-commerce partnership. We had to select Eldoret, a town in the Rift Valley region of Kenya, because we had an active team on the ground there to facilitate the pilot implementation during COVID. However, our partner did not have active operations in this location, though it was on their pipeline. We therefore had to troubleshoot by using M-KOPA’s supply chain for part of the delivery which caused some delivery delays at the start of implementation.

Location: we started the pilot in Eldoret as it’s a market where we have a strong footprint and an active team. However, the demand for solar home systems was low because most of the targeted businesses operating in Eldoret are connected to the national electricity grid. We therefore decided to expand the pilot to three additional locations that were more rural and off-grid. This strategy proved effective and uptake peaked as a result.

Pricing: Even after rolling out to more locations, sales were still slower than we had hoped. After testing the roll-out for a couple of months and conducting more research on the demand and uptake barriers, we decided to lower the upfront deposit paid by customers to enable a higher uptake. This stimulated a higher demand for the bundle across all locations.

Q: Which of the planned objectives and targets did the project achieve for M-KOPA, the small business owners and their communities?

A: We’re proud to say that despite the challenges we managed to achieve many impressive results:

Use of solar home system: the businesses primarily used the solar home system (solar TV and lights) in their own homes and not at their business premises as originally intended. However, customers found the solar TV and lights to be highly beneficial products for their whole family, providing access to information and education for them and their children, which was particularly important as schools had closed during the pandemic.

Productive use of the smartphone: The bundled smartphone was used daily for business and personal use. The main benefits are communicating with suppliers and customers, making mobile money transactions, sharing photos of products alongside the ability to access e-commerce platforms.

Access to credit via the e-voucher: The e-voucher was used to purchase household items from the e-commerce platform rather than business stock (which was the original objective). However, the e-voucher provided households with approximately 2 months of savings that could be injected back into the business, providing businesses with critical cash flow for business operations. Despite the low digital literacy levels, 88% of customers on this project used an e-commerce platform for the first time, showing the transformational impact that the e-voucher had for their businesses and households, and the potential that recurring e-vouchers could have for e-commerce serving MSMEs or households.

Q: How did PREO accelerate the success of M-KOPA in commercialising its first bundle?

A: Through PREO, M-KOPA was able to design and roll-out its first e-commerce product bundle, an innovation which wasn’t on our initial commercial feasibility pipeline due to other business priorities and constraints. It would not have been possible without PREO funding which helped us test and roll this out much sooner by de-risking the cost and allowing for more in-depth market research and testing, which was critical to designing a bundle tailored to the needs of small businesses.

Q: What is it that you were unable to achieve and why?

A: We were unable to hit our original target of 100 business customers served. This is primarily due to the project delays and complications faced caused by COVID which shortened our product launch and roll-out timeline, and meant we were not able to engage with sales agents and customers in the market as comprehensively as we would have liked.

A secondary reason is the narrow customer segment the project was targeting due to the product specificity and high cost of the bundle, which was driven by the inclusion of the solar home system. This meant our sales agents had to identify businesses that had a need for all three products in the bundle along with the available capital to afford it. This led to a slower uptake, particularly before we branched out into more areas.  The affordability barrier was compounded by the financial hardship faced by small businesses in Kenya due to COVID.

Q: Which valuable lessons has M-KOPA learned from the project implementation? Which lessons have you learned that would help you and your peers to scale the bundling of products in the sector? 

A: Findings from the Micro-Biz Bundle pilot would indicate a low demand amongst small rural businesses for solar lighting as a productive use product i.e. to extend business operational hours. However, I’m not convinced this is an accurate picture as these findings were skewed by the fact that some of the customers in the main pilot location of Eldoret already had a grid connection. In addition, all the surveyed businesses experienced COVID curfews which limited the possibility of extending business operational hours anyway. However, a PAYG bundle of smartphone plus digital financial services and e-commerce showed a stronger potential to unlock access to capital, markets and services for income generation and business growth, as long as customer digital literacy levels are improved through training.

We also found that the value customers receive from a PAYG e-commerce voucher is significant. However, many business owners will not have used e-commerce before and will need additional support and digital skills training to use it effectively and repeatedly. This upskilling should be worked into the implementation plan so that customers can unlock the full benefits of e-commerce and digital financial services.

To effectively deliver an e-commerce solution, the partnership is critical. The e-commerce partner needs to have a strong operational footprint in the active markets to enable the efficient processing and delivery of goods to the customer, and so provide the highest value and create the most impact.

We know that customers appreciate multi-product bundles because they can receive more products and benefits at once, and so feel they are receiving better value for money. However, the multi-product bundles also come with a higher overall price, as compared to other MKOPA single products, even when providing it on a PAYG model which makes it more accessible. So the product selection and price point should be carefully considered and tailored to the customer segment. A less-is-more approach would be wise, starting with bundling only two products to lower the bundle cost which is the main access barrier for first-time customers.

Q: What is the project’s potential to open e-commerce opportunities for rural retailers and suppliers?

A: The insights gained from the PREO project have been instrumental in forming M-KOPA’s approach to the future roll-out of e-commerce products. This is a particular area of interest for us since the demand for our PAYG smartphone continues to grow across our markets, and M-KOPA is exploring additional digital financial service offerings for smartphone customers.

For more information visit m-kopa.com