Tag Archives: pay-as-you-go

Partnerships for Women’s Economic Empowerment through Clean Energy in Senegal

Access to energy in rural areas of Senegal is a persistent issue. Electrification rates in rural areas of the country can be as low as 4%, and over 89% of the population are still reliant on biomass fuels for thermal energy uses in the home, such as cooking. However, a number of barriers exist to addressing this situation, particularly for female entrepreneurs in the region: other commitments such as domestic work can hamper the amount of time available to establish a business, and technical, financial and organisational capacity is often low. Two non-profit organisations, ENERGIA and Energy4Impact, are partnering with local women entrepreneurs in rural areas of the country to improve energy access and reduce the burdens of unsustainable fuel use on families.

Energy 4 Impact with Women Entrepreneurs in Tambacounda, Senegal. Photo: Judith Quax, July 2017

In the rural Tambacounda region of the country, ENERGIA and Energy4Impact have been training women entrepreneurs to become sales agents for small solar home systems, solar lanterns and improved cookstoves. The organisations have taken an “eco-system” approach to the training, attempting to address the wide range of business, financial, capacity and gender-related barriers to developing women’s energy entrepreneurship as a whole. This has included partnerships with local manufacturers and suppliers to enable access to technologies, as well as business and financial training for entrepreneurs, and sensitising campaigns in the local area to enable homeowners to realise the benefit of engaging with women in the energy product space.

Currently, Energy 4 Impact is supporting 160 women entrepreneurs in Tambacounda to become sales agents of improved cookstoves and solar lanterns. From 2016 to 2017, these entrepreneurs sold 1,132 solar lanterns and 822 efficient biomass cookstoves, helping over 17,000 people access clean thermal energy.

However, the engagement in Senegal by the two non-profit organisations is not solely for the purpose of entrepreneur training. Co-benefits of improved energy access in the business space are also targeted. This is particularly being realised in improved access to solar refrigeration technologies for small-scale agri-businesses. Energy4Impact are partnering with two government organisations to offer technical training for women entrepreneurs in the agri-business sector to use solar refrigeration technologies to diversify their business. The NGO also engaged with private-sector suppliers of equipment to suggest suitable technologies scaled to the size of the women’s business needs. In addition, the NGO also engaged with agri-business owners directly to design and manage credit line mechanisms for leasing solar-powered technologies that could be repaid in instalments, enabling access to technologies on a monthly credit basis applicable to the entrepreneurs’ income.

Finally, the NGOs are partnering directly with women entrepreneurs in the Tambacounda region to offer small solar home systems on an innovative pay-as-you-go basis. This is being conducted in partnership with Boabab+, a social enterprise focusing on PAYG models for solar home systems and solar lanterns. Women entrepreneurs are being trained as distribution agents for the products, and can purchase solar home systems from the enterprise with a 25% down-payment, with the remaining 75% being repaid in three fortnightly instalments with zero interest. Clients are able to access one month’s electricity upon purchase of the system, with further payments able to be made on a daily, weekly or monthly basis through mobile money systems already existing in the region. This gives consumers the flexibility to pay for energy when they need it at a price point appropriate for them, while reducing the economic barriers for entrepreneurs to enter the sector through offering this flexible credit mechanism. The system has proven fairly successful: one entrepreneur in partnership with a local women’s group sold 152 solar lamps from 2016-2017, where they ordinarily would not have had the capital to even begin investing in the technology for sale.

 

References

ENERGIA (2018) Helping women entrepreneurs scale-up rural supply chains to reach last mile markets. Available at: http://www.energia.org/helping-women-entrepreneurs-scale-rural-supply-chains-reach-last-mile-markets/ [Accessed 11th March 2018]

Energy4Impact (2018) Empowered women securing energy access in rural Senegal. Available at: https://www.energy4impact.org/news/empowered-women-securing-energy-access-rural-senegal [Accessed 11th March 2018]

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Pay-As-You-Go (PAYG) Models for Cooking Fuels – Innovation for the Poorest Consumers

Daniel Kerr from UCL writes on innovative pay-as-you-go models in use for cooking energy service provision.

In the last 2-3 years, a handful of thermal energy services companies in the developing world, specifically in Sub-Saharan African countries, have begun to take advantage of pay-as-you-go (PAYG) consumer financing models in their energy businesses. These models have significant advantages in comparison to direct purchase, hire-purchase or micro-credit models when dealing with the poorest consumers in societies, for example those living in informal settlements in urban or rural areas. Some companies are taking advantage of these models for selling clean cooking products, such as stoves themselves, whereas others are using this payment structure for cooking fuels.

One company in Kenya taking advantage of these innovations is KOKO Networks. This organisation seeks to offer an integrated neighbourhood-level clean cooking solution with smart technology, via their KOKO points, cloud-connected commerce hubs where consumers and vendors can come to refill the products on sale or make purchases. Currently the company is offering the SmartCook product at these sales points, which is a two-burner clean cookstove with an integrated fuel canister. The fuel used is marketed as Mafuta smart, which is an ethanol fuel derived from molasses manufacture.

What is particularly innovative about this system is that the sales hubs for the company have in the automated purchasing stations for the fuel for the cookstove system. These dispensers refill the provided fuel canister (known as a kibuya smart canister) with the cookstove system, and customers can refill their canister from as little as KHS30 (US$0.29) at a time, offering significant flexibility for the consumer, without the “poor people’s premium” (higher per-unit prices charged for small amounts of consumable products) seen in other commodities. The company operates on a concession business model, with interested parties either setting up their own fuel supply arrangements for the fuel to service their settlement, or purchasing equipment and fuels from KOKO themselves.

KOKO Networks KOKOPoint in store in Nairobi. Customers can purchase a stove or replacement fuel from the kiosk. Image: http://www.globalhearthworks.org/koko/

Other companies in Kenya are taking advantage of PAYG models to enable greater access to their products and services as well. In Nairobi, PayGo Energy is a distribution service for LPG fuels that is using pay-as-you-go services to bring LPG fuel access to a greater number of consumers. The service begins with the installation of an LPG stove, cylinder and smart fuel meter in the home. This smart meter is at the core of the service the company offers, as it automatically communicates to the company when the fuel level is running low, whereupon the company arranges delivery of a replacement, full cylinder to the household. In addition, the system support mobile payments and ordering of fuel replacements, allowing customers to purchase as little as a day’s worth of LPG (around US$0.50) at a time. This logistics system has been adapted to informal settlements, allowing uninterrupted supply to households in informal settlements via motorcycle.

Other organisations are beginning to see the benefits of integrating mobile payment technology with a pay-as-you-go fuel payments model for energy services. KopaGas in Tanzania are another company using smart LPG metering to minimize the challenges posed by last-mile distribution which are typical in providing thermal energy services to communities. This smart gas meter system allows the company to deliver cylinder filling services or replacement full cylinders to communities efficiently, minimising distribution costs. In addition, the company offers a pay-as-you-go service for LPG fuel, as well as offering pay-over-time services for both fuels and cooking equipment. KopaGas has been partnering with EnviroFit, an established LPG equipment and fuel distributor in East and West Africa, in order to scale their service reach.

Through these cases, the market opportunity for offering clean cooking fuels and technologies as an energy service, using innovative fuel and equipment payment models to enable access for the widest range of consumers, can be clearly demonstrated. KOKO Services and KopaGas/PayGo Energy may be using different technology options, but the commonalities in approach exist: offering consumers the ability to purchase small amounts of fuel at a time, via a convenient payment method (either via mobile, at a central filling station, or both), and in the case of the LPG companies, offering consumers the option of household delivery. Through this combination of factors, these companies are breaking the traditional barriers to household thermal energy service delivery, allowing consumers who previously would not have had the financial capacity to afford modern cooking fuels the ability to access these technologies.

– Daniel Kerr, UCL Energy Institute

References

Global Alliance of Clean Cookstoves (2017) “Pay-as-you-go” technology to boost access to cooking fuel. Available at: http://cleancookstoves.org/about/news/05-30-2017–pay-as-you-go-technology-to-boost-access-to-cooking-fuel.html

KOKO Networks Home: http://kokonetworks.com/

PayGo Energy Home: https://www.paygoenergy.org/

KopaGas Home: https://www.kopagas.com/