PREO extends technical assistance to non-portfolio companies to achieve greater impact
PREO extends technical assistance to non-portfolio companies to achieve greater impact

Over the past two years, PREO has delivered critical technical assistance (TA) support to 17 private sector companies, from pre-revenue start-ups to global market leaders, operating in the e-mobility, solar irrigation, cold storage, and financial services sectors across sub-Saharan Africa. As well as supporting a portfolio of PUE innovators with business model demonstration grants, PREO has provided TA to non-portfolio companies to broaden its reach and impact. The aim of TA is to address knowledge gaps, improve the business viability of the companies, and enhance potential investment performance for private investors.

A recipient of PREO’s TA is mobility as a service company eMo Bodaboda, based in Dar Es Salaam, Tanzania. PREOs technical assistance to eMo Bodaboda has been fundamental in realising the opportunity for self-employed taxi drivers to improve their livelihoods by avoiding the high fuel and maintenance costs of internal combustion engines (ICE). At the same time, through the reduction of air pollutants and greenhouse gas emissions, electric motorcycles bring further local and global gains for the environment. In this piece, we outline how PREOs’ technical assistance to enterprises and organisations such as eMo Bodaboda significantly improves their viability, productivity and wider impact.

eMo Bodaboda viability evidence building to expand their network in Tanzania

One million fossil fuel-powered two-wheelers are said to be in use across Tanzania today, presenting a vast market opportunity for e-motorcycle businesses. Founded in 2021, Tanzanian start-up eMo Bodaboda provides electric motorcycles manufactured in China and Pakistan, of a similar design to the common motorcycle models in Tanzania. eMo Bodaboda has tested selling to several market segments, but is focused on motorcycle-taxis, which currently make up the vast majority of the fleet in Tanzania typically driving roughly 100 km per day.

eMo Bodaboda has been piloting their single-battery electric motorcycles in Dar es Salaam since August to develop their business case for expansion. For founder Erick Mome Morro, electric motorcycles represent a major opportunity for self-employed taxi drivers to improve their livelihoods by avoiding the high price of fuel and regular maintenance costs of motorcycles with internal combustion engines.

Whilst eMo Bodaboda’s pilot received positive customer feedback the company needed more in-depth and robust data to develop a business case. PREO’s technical assistance in economic and emissions modelling has been pivotal in enabling eMo Bodaboda to better understand the comparative costs and benefits of their electric motorcycle versus regular motorcycles with combustion engines. This exercise has helped the company in building a strong body of evidence to attract partners and the funding needed to expand its fleet and secure a share of the fast-growing e-mobility market.

How PREO built eMo Bodaboda’s economic and emissions modelling tool

Electric motorcycles are a CAPEX-intensive business, so to deliver at scale and to attract potential investors, eMo Bodaboda requires a substantial capital injection to acquire a fleet of vehicles, build out its team and develop stronger charging and maintenance infrastructure. To build evidence around the optimal business model for the company, financial modelling was required to evaluate the potential cost savings for the typical taxi driver seeking to save on operational expenses by converting to electric motorcycles.

When PREO was approached by eMo Bodaboda, their focus had been on the day-to-day operations of running a pilot programme and exploring potential partnerships, so they had not yet developed the internal capacity for emissions and financial modelling. With its team of experienced consultants, PREO was well positioned to provide the complex evidence eMo Bodaboda needed to prove their vehicles’ benefits to investors and customers.

PREOs technical assistance fell into three main areas, emissions modelling, financial modelling and interviews with drivers to gain feedback about their experiences using the motorcycles.

Key Findings:

  • Emissions modelling – found significant improvements in pollutant emissions coming from switching from an internal combustion engine motorcycle to an eMo Bodaboda electric motorcycle
  • Financial modelling – found dual-battery motorcycle-taxi’s, can make the same revenues as ICE motorcycles, yet gain a 2.5x increase in weekly take-home pay as drivers save nearly 80% on their energy costs by switching to electricity
  • Driver interviews – found significantly improved user experience as e-motorcycles meant reduced noise, exhaust, and vibrations, which made for a more pleasant driving experience

A set of key recommendations were formulated by the PREO technical team. eMo Bodaboda is now actively investigating dual-battery motorcycle models and focusing on finding a suitable partner to operate their battery-swapping stations.

PREO Programme Manager Arun Gopalan says:

We pride ourselves on providing a suite of technical, commercial, and business advisory support that are critical but not commonly available to PUE enterprises. These range from business model advisory and go to market strategy, to unit economics modelling, feasibility studies, technical design and market assessments. In many cases PREO’s TA has acted as “technical” safety net for PREO projects, preventing cost overrun, running controlled pilots to demonstrate business models, and facilitating capital raise for PUE enterprises.