Selling Solar to Rural Africa is Emerging as a Hot Market

Will electricity in developing rural areas spread more like cell phones than land lines? These startups think so.

After years of fits and starts, startups and big businesses are finally starting to pay attention to the solar market in rural corners of the developing world.

Over the past few months, a number of high profile investors have backed startups selling solar panels to off-grid customers across regions like Africa, India, and East Asia. Meanwhile, big solar companies have created divisions focusing on rural customers in the same areas.

That this market is now starting to mature shows how solar is increasingly affordable to people who earn less than $2 daily. At the same time, it highlights how business can lead social development—electrification, in this case—in ways that some non-profits have failed.

For the most part, wealthy countries like the U.S. and Germany have been the ones to adopt home solar panels. Home owners typically buy their solar systems out right or lease them from a third party like SolarCity  SCTY -2.29% . These solar systems tend to plug into the broader power grid.

But in regions like rural Africa, where the power grid is lacking, an entirely new strategy has had to be developed. These new solar products have relied on new types of financing, have ridden on the back of mobile technologies, and have depended on the emergence of cheap batteries. Will this type of solar product become the norm in rural off-grid areas?

The innovators

One of the rapidly growing startups tackling this market is M-Kopa, based in Nairobi, Kenya. The company was founded nearly five years ago by Jesse Moore and Nick Hughes, who was one of the original creators of mobile payment system M-Pesa. If you haven’t heard of it, M-Pesa is one of the world’s most successful mobile payment services. By some estimates, 95% of Kenyan adults use it to buy goods and services, and a third of Kenya’s GDP flows through it every year.

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Impact investment is tranforming the landscape of charitable giving

THE CITY of London has learned a thing or two about bad press in recent years. But attention moves on, as it always does, and in 2015 it has been the turn of charities to face tough headlines.

The days of leaving the voluntary sector to get on with its work away from the glare of publicity have been disrupted. Chief exec pay has been scrutinised, and some appalling fundraising tactics have been exposed. The public examination of Kids Company, and its mismanagement of donors’ money, drags on and on.

The good news is that major charity philanthropists – city bigwigs among them – can help mend some of the damage. Nearly 300 charitable donations of £1m or more were made in 2014 according to new data from the wealth managers Coutts, up from the year before. Two-thirds came from the capital, which means that London accounted for over £1bn in these mega-donations.

A separate study of cash-giving, conducted by City Philanthropy, estimates that Londoners as a whole give more than £5.5bn each year. This is philanthropy on a staggering level. Money isn’t always given evenly across causes and regions, of course. But even taking this into consideration, charities clearly have a deep swell of financial support to help them through the bad times.

So we can ask a different, more interesting question. What does all this money actually do? Or to be more exactly, what more could the same resources achieve?

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Eight Reasons to Invest in African Tech Innovation

Astute international investors are finding promise in the African digital renaissance, where a decade of rapid economic growth is cause for consumer spending to exceed an estimated $1 trillion annually by 2020, according to Forbes.

In Africa, the middle class is growing, populations are urbanizing, IT infrastructure is improving and cell phones and mobile payments are more widely used than in most of the world. All of this has combined into a recent technology startup boom that has international investors salivating for more.

The company I founded, 3G Direct Pay, is an online payment processor servicing the African market. And we have seen the result of the mobile payment technology boom firsthand. In a region where many consumers do not have debit or credit cards, mobile payment technology has undergone drastic development in recent years, and it is continuing to advance. With providers like 3G Direct Pay, along with M-Pesa, Airtel, MTN and Tigo, among others, it is clear that the mobile payment technology sector in Africa is growing, developing and becoming an integral part of society.

Not only mobile payment technology is on the rise. Technological developments in other sectors are also becoming stronger. There are eight main reasons why African technological innovation is a wise investment:

1.    POPULATION GROWTH

While other countries, most notably Japan and Eastern Europe, are seeing a decline in population growth, Africa is home to 1.2 billion people and is growing at more than 2 percent a year.

Six of the 12 fastest-growing countries in the entire world are in sub-Saharan Africa.

2.    ECONOMIES OF SCALE

Kenya, for example, has the third-fastest growing economy in the world, behind only China and the Philippines. Kenya accounts for 40 percent of the gross domestic product of the East African Communities (EAC), and its currency is the best performing one in the region. Its nascent economy is bolstered by a highly educated, English-speaking and youthful workforce. Some 60 percent of Kenyans are 25 years old or younger.

Another great example is Nigeria, Africa’s largest economy – even ahead of South Africa – boasting telecom companies and advanced banking options. The Economist reports that its economy has been growing at an average rate of around 7 percent a year over the past decade.

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