Zembo is a Ugandan pioneering startup, specialising in eco-friendly e-mobility solutions tailored to the African market. In Uganda, more than 700,000 petrol-fuelled motorcycle taxis, known locally as ‘boda bodas,’ serve as a vital source of convenient transportation and livelihoods for thousands. However, their ubiquity comes at a cost as these vehicles significantly contribute to Kampala’s alarming pollution levels, ranking among the highest worldwide.
In response to this challenge, Zembo launched a fleet of electric motorcycle taxis in 2018 to boost boda boda riders’ earnings while contributing to a reduction in carbon emissions. The company takes pride in local assembly of its vehicles and offers a rent-to-own model, which enables low-income boda boda riders to gradually own them after a two-year lease. The e-motorcycles can be recharged at any of Zembo’s 27 swap stations conveniently located across Kampala, ensuring a swift and hassle-free battery exchange process. With a fleet of over 250 e-motorcycles on the road, transporting 800 passengers daily, Zembo and handles an impressive 10,000 battery swaps each month.
In April 2021, Zembo received a grant from PREO to test the viability and scalability of solar-powered off-grid stations in peri-urban areas, starting from the 120km corridor that links Kampala and the southwestern town of Masaka – the first route for e-vehicles beyond the capital. The same grant also enabled the company to assess the integration of solar power into some of its existing grid-connected charging and battery-swap stations in Kampala, with the aim of reducing energy costs and enhancing service quality.
As the project ended in 2023, PREO interviewed Elissa Ferron, V.I.E. at Zembo to gain deeper insights into the company’s pioneering pilots and valuable knowledge that can benefit the e-mobility sector.
Q: What were your original objectives for investing the funding from PREO, and were you able to realise them as you had intended?
Our primary objective was to explore and assess various sustainable energy solutions to support Zembo’s growth. To achieve this, we embarked on two key projects as part of the same PREO-funded initiative: testing of off-grid stations and implementing solarisation solutions for on-grid stations. These projects were instrumental in evaluating the feasibility and potential benefits of these concepts for our business model.
Testing off-grid peri-urban stations: The first project involved deploying and evaluating the potential off-grid battery swapping stations designed to serve peri-urban areas outside Kampala. The goal was to determine whether this approach could provide a sustainable and financially viable solution for expanding our operations into regions with limited access to electricity. To do that, with funding from PREO and GIZ (German development agency), Zembo deployed four solar-powered off-grid charging stations at intervals of 30 kilometres along the Kampala-Masaka intercity corridor. This allowed us to assess the technical feasibility of setting up and maintaining off-grid stations, considering factors such as equipment reliability, maintenance requirements, scalability, and client satisfaction. Additionally, it enabled us to track the financial performance of these stations, including revenue generation and operational costs, in order to assess the profitability and sustainability of the expansion project.
We quickly managed to expand our client base along the peri-urban corridor, but we soon realised that these stations had limited power-generation capacity. This prompted the need for integration with the main grid to meet the increasing energy demand with a more reliable and scalable power source.
Solarisation of urban stations: The second project involved hybridising grid-connected battery-swap stations by integrating solar panels at five of our facilities. The aim was to assess whether this approach could reduce energy costs, increase energy provision, and enhance overall operations.
To measure the impact of this pilot, we closely monitored metrics, including energy cost savings, operational performance, and energy reliability. We also assessed the long-term return on investment (ROI) of the solar installations by tracking reductions in energy bills and the payback period for the initial investment. Hybridising swap stations led to over 50% reductions in electricity costs and significantly improved operational efficiency and reliability.
Q: What were the operational challenges of establishing the off-grid station network and how did you resolve them?
Rolling out the off-grid network connecting Kampala and Masaka presented substantial differences and challenges, compared to building and operating grid-connected stations in urban areas.
Operating the four stations along the Masaka corridor was more challenging, given the distance from our Zembo HQ in Kampala. To address this, we hired a dedicated technical engineer to oversee operations in this area. When the original technical engineer left, we faced staffing issues but decided to train one of the station swappers to acquire mechanical skills for maintenance, reducing our dependence on external engineers.
Another issue we grappled with was the decreased energy generation capacity of the solar systems during the rainy season, which affected the performance of the off-grid stations and motorcycle operations. Moreover, finding suitable space for installing and maintaining solar panels and off-grid charging stations became an issue, especially in more densely populated areas along the intercity corridor. To overcome this, we opted to connect the swap stations to the grid, thereby reducing capital expenditure (CAPEX) and space requirement.
With regards to attracting and scaling demand, the most significant hurdles we faced were the lack of awareness regarding off-grid charging stations and resistance to change among potential customers. People were accustomed to existing transportation methods and can be hesitant to adopt new technologies. We addressed this by undertaking proactive field marketing campaigns. A team of six salespeople distributed flyers and showcased the motorcycle prototype, effectively raising awareness and building trust among potential clients. Zembo also tailored its offerings with special pricing models for lower-income boda boda riders along the Kampala-Masaka corridor.
Q: From both a technical and financial perspective, are off-grid charging stations a viable option? What would you advise your peers to ensure successful implementation?
Off-grid stations, while technically feasible, presented scalability challenges for Zembo due to their reliance on sunlight for energy generation. Each station’s 15 kWp solar capacity allowed battery charging primarily during daylight hours on sunny days, significantly limiting daily charging capacity. If we consider an average battery usage of 2.4 kWh per charge and an energy demand of 300 swaps on average, each being charged at around 70%, the total daily energy demand would amount to 504 kWh per day. The limited energy generation capacity of the off-grid stations made it difficult to consistently meet this high daily demand for charged batteries.
From a financial standpoint, the CAPEX required for the off-grid stations would have placed a substantial burden on Zembo’s resources if undertaken independently. This is where the PREO grant came into play as a pivotal support for the project, providing the necessary financial backing to kickstart the project and overcome the initial investment hurdle.
Nonetheless, financial viability was demonstrated through a notable reduction in electricity expenses. The synergy of the 15 kWp solar capacity coupled with efficient batteries utilisation led to a considerable reduction in energy costs, cutting expenses by over 50%. These results underscored the positive financial outlook of the concept, making it more economically sustainable for Zembo in the long run.
the PREO grant came into play as a pivotal support for the project, providing the necessary financial backing to kickstart the project and overcome the initial investment hurdle.
Q: How economically beneficial would you consider the solarisation of grid-connected stations in Kampala?
Solarising grid-connected stations in Kampala has emerged as an economically attractive proposition for Zembo, bringing about substantial cost benefits driven by a few key factors. First and foremost, the high electricity costs, with a tariff of 750 UGX per kWh (including VAT), were placing a substantial burden on Zembo’s operational budget, affecting overall profitability. The decision to invest approximately 15,000 USD per station in solarisation has allowed Zembo to tap into solar energy as an auxiliary power source, reducing reliance on expensive grid electricity. Preliminary results indicate that this shift can lead to monthly cost savings of around 500 USD per station, significantly improving the company’s financial health. Zembo anticipates recouping its solarisation investment in approximately 2.5 years, marking a relatively short period for covering the initial investment through reduced electricity costs. This demonstrates the economic viability and financial advantage of solarising grid-connected stations for the long term.
Q: What were the key takeaways from this project, and what lessons would you share with the sector as a whole?
Our project experience has resulted in a number of insights that may be valuable to the broader sector:
Scalability of off-grid stations: While off-grid stations initially appear attractive for reaching underserved areas, they are not easily scalable due to specific constraints like space requirements, high capital expenditure and the logistical challenge of remote operation. Our experience underscores the importance of careful planning for companies in the sector. It is essential to thoroughly evaluate the scalability of off-grid solutions and explore integration with larger energy infrastructure, such as mini-grids, to ensure sustainability and unlock growth potential.
Hybrid solar-grid solution for stability and cost efficiency: The projects showed that combining solar and grid electricity generation is the most effective way to achieve a stable and cost-efficient energy source. Solar energy significantly reduces electricity costs and provides a reliable power source, while grid connection offers a consistent supply. Adopting hybrid energy solutions enhances stability and reduces costs.
Focus on existing demand vs. creating new corridors: The project underscored the importance of prioritising areas with existing demand rather than attempting to create entirely new demand corridors. Investing in areas with demonstrated need is a more cost-effective and efficient strategy, allowing for faster growth and profitability. Creating new corridors can be resource-intensive and may not yield a favourable return on investment.
Q What are Zembo’s future ambitions, and how do you envision the evolution of charging infrastructure in Africa?
Thanks to PREO and following the demand of existing customers, we have opened a new grid-connected corridor to Entebbe, which is much closer to Kampala (approximately 40 kilometres southwest). As the site of Uganda’s international airport and a thriving tourist destination, Entebbe hosts a more diverse economy and, consequently, residents with potentially higher average incomes. This aspect could significantly influence the affordability and demand for services such as electric mobility.
In the future we are exploring the possibility of creating of additional corridors, for instance, in Jinja, depending on demand and specific conditions such as space for solar infrastructure, local energy demand, and appetite for electric mobility.
Furthermore, Zembo aspires to expand into other East African countries with a high concentration of boda boda riders and a green energy mix. This last point is important for us as we believe that grid stations and electric mobility must make sense from an environmental point of view.
In a wider context, we anticipate that more market players will open their customised charging stations until industry standards are established, allowing for flexibility and innovation. While this approach can create a diverse charging ecosystem, it may also present interoperability challenges. Establishing standards eventually can ensure compatibility and encourage collaboration among industry players.