Solar the Answer to East Africa’s Energy Demand

Kenya continues to experience healthy economic growth due to increased foreign direct investments (FDI), better living standards in the urban areas, and more multi-nationals setting up base in the capital city as they seek to penetrate the regional market.

The upward trajectory in the economy has seen the construction of iconic commercial buildings as investors, local and international, seek to tap into limited office space and take advantage of the robust retail market. This competition in the property market is being driven by Nairobi’s status as an investment hub for the East and Central African region.

Devolution has also spurred more activity in the construction sector as counties seek to erect mega structures that will positively impact development in their respective areas. New buildings going up include county offices, hospitals, schools and agricultural facilities such as factories and processing plants.

The 2016 City Momentum Index (CMI) report by Jones Lang LaSalle, an investment management company specialising in real estate, points out Kenya’s booming economy as the driving force behind the development of new infrastructure and the country’s booming real estate sector. These activities, according to the report, have enabled Nairobi’s expansion as it registers among the highest levels of office and retail construction of any city globally at the moment.

FAST-GROWING DEMAND FOR POWER

All of this new construction amounts to a fast-growing demand for power, with current grid capacity sometimes struggling to meet this demand, which results in power rationing or blackouts. This interruption to business operations stifles efficiency, and therefore, profits.

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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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The state of Angel investing in Africa in 2015.

Last year, I wrote about the state of the Angel investing in Africa in 2014 , I thought it would be good to look at the same issue and look back on the state of Angel investing in Africa in 2015.

Alot has changed from an ecosystem point of view but there is still alot that need to change .

Our year in review :

At the beginning of 2015 I shared our plans with DisruptAfrica and subsequently kicked off the “MeetInvestor series” for the publication and I am very happy to see the wonderful job that Tom and Gabriel have done with that platform .

We started a series of investment dinners called #FrontierInvestorsDinner in London and it was an excellent opportunity to curate great conversations and meet some people that are shaping our world today . Please see some of the photos from the July’s dinner with the Rwanda High Commissioner to the UKhere and we are looking forward to expanding this series to 5 cities around the world in 2016 .

AngelfairAfrica that took place in Accra, Ghana was the highlight of our events calendar because we were able to directly participate as investment partners and add value . Please find the full report and pictures here

NewGenFund was also established with the aim of investing in up to 10 over the next 18 months . The objective here is to give retail investors an opportunity to witness professional angel investing in practice. Our goal is to activate 1000 angels by 2020 .

In other news :

Africa Business Angel Network came alive in 2015 and run a number of workshops across the continent ,find out more about them here

Crowdfunding adoption is still low .

Infodev reports on lessons learned through East African startups, and it makes a very interesting reading , find the full report here

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Want an Alternative to the Traditional Utility? Look at Tanzania

The future alternative to the traditional electric utility may emerge first in Tanzania.

The East African nation has developed the best system of regulating and spurring off-grid power systems anywhere in the world, according to the annual Climatescope study into energy investment trends in developing nations by Bloomberg New Energy Finance.

With more than 620 million people living without access to electricity, Africa is becoming a working laboratory for financial and technical innovations that can bring power to the masses without erecting centralized power plants and costly distribution grids. The continent already has attracted $450 million for off-grid power systems fed by renewables such as wind and solar, BNEF estimates.

“Tanzania has been a pioneer for the continent,” said Nico Tyabji, an analyst at the London-based research arm of Bloomberg LP. “Its smart policy framework for small power projects and mini-grids built up a significant project pipeline.”

The nation trumped Kenya, Uganda and 16 other Sub-Saharan countries in the Climatescope rankings for a second consecutive year. BNEF analysts evaluated the markets based on energy policy and regulations, electrification rates, project developers and private investment.

An off-grid system is a small electricity network that can range from solar-powered lanterns to rooftop photovoltaic panels to miniature grids. Power is generated and distributed independent of the country’s national grid. The technologies have been touted as an answer for lowering energy poverty, particularly in rural areas.

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