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.

Never in the country’s history has the need for new energy solutions been more evident than now. Only 25 per cent of the Kenyan population is connected to the national electricity grid, with rural grid access at about 5 per cent. It is also estimated that there is a 300MW electricity shortfall at peak hours (6.30pm to 10.30pm), when most domestic consumers switch on electricity from the country’s total 2,282 MW capacity.

This, yet heat from the earth’s core, the wind, water, and the sun are all freely available and sustainable; harnessing them can supply an endless source of energy. Kenya has long daylight hours, making it particularly well suited to solar technology, which generates electricity even in cloudy conditions.

Recognising this, a growing number of businesses throughout East Africa are installing solar systems to generate solar electricity for powering facilities in buildings such as lights, air con and machinery.

Solar roof systems are particularly well suited to dense urban environments, where land is at a premium, and power demand is high. Solar is highly scalable and flexible, which enables it to be integrated in innovative ways. A great example is the solar carport that was constructed on the roof of the carpark at Garden City Mall in Nairobi last year. There is no better illustration to show how planning at the initial design stage of a new mega structure can easily incorporate solar, which provides a source of electricity to power the building during daylight hours, thereby reducing reliance on grid energy.

SOLAR HYBRID

Such systems, known as solar hybrid, are dispelling the common perception that solar is the preserve of households and communities with no access to grid energy. In fact, there are examples around the world of structures with solar integrated in clever ways, such is the global opportunity for solar PV.

For example, Blackfriars Bridge spans the River Thames that flows through the heart of London, England. The bridge functions as a train station and busy commuter rail link into the city. The panels meet nearly half of the train station’s annual energy needs.

The solar system at Garden City Mall comprises 3,364 solar panels; the structure not only provides 454 parking spaces and 6,000 square metres of car park shade, but also generates 1,450mWh of clean electricity annually, equivalent to powering 550 urban homes in Nairobi every year. By using solar electricity rather than grid energy, the mall will reduce carbon emissions by around 18,750 tonnes over the lifetime of the solar system.

Solar hybrid technology is a highly innovative energy solution that works alongside the power from the grid, and in combination with a diesel generator. During daylight hours, the solar panels generate solar electricity, and if the grid goes down, the system generates solar electricity alongside the diesel generator.

According to MasterCard’s African Cities Growth Index (ACGI) 2015, Nairobi is one of the cities with the highest growth potential globally, and it is expected to grow rapidly in the next five years. As a continental financial and investment hub, its commercial property sector is as robust as ever. It is commendable for new buildings to adopt environmentally friendly technologies, such as solar, in order to generate clean energy, which reduces reliance on fossil fuels.

Businesses need to take a long-term view of their energy needs – Garden City’s carport will, for instance, generate free electricity for at least the next 25 years, possibly up to 40 years. If all the shopping centres and buildings with unused roof spaces in Nairobi and other towns and cities installed solar, there would be far less need to rely on grid power and diesel energy. The amount of additional solar electricity generated by the panels could help meet the energy demand of the new and existing businesses, many of which need a secure, reliable source of energy around the clock.

By Guy Lawrence, Director, SolarCentury

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Pan-African Ecobank is partnering with Orange Cameroon to allow the telco’s customers with accounts at the bank to transfer cash between the two services. The two firms are already working together in Mali and plan to introduce the service in four other African countries.

Banks partnering with mobile companies is the latest attempt by financial firms to tap into the continent’s large populace of the “unbanked.”

In sub-Saharan Africa, only a third of adults have access to bank accounts. Compare this to Latin America, another emerging market, the figure stands at 51%, according to the World Bank. There are a lot of people whose money simply never touches the region’s financial systems.

The mobile phone revolution and the rise of mobile money, especially in east Africa with platforms such as M-Pesa, has changed this.

Mobile money is now big business in Africa. Last year, the market generated $656m in revenue and in the next four years this is expected to double to $1.3 billion, analysts say.

Until recently, financial firms ceded this space to telecom companies. But the clear growth of the sector has compelled a re-evaluation. Now banks are not only trying to compete in this space but also offer new products that promise access to banking services to those who up until this point were excluded.

So in Nigeria, for example, GT Bank are getting in business with Etisalat Nigeria, the country’s third biggest mobile operator, to create GTEasySavers, a savings account that can be opened via mobile phones. For the 57% of the country with no access to formal financial services, that’s a small step in the right direction.

And in Kenya, in 2011, only 42% of people had bank accounts. That has risen dramatically, driven by mobile money platforms.

A battle for supremacy

New mobile products coming into the market promise to deepen financial inclusion even further. Equity Bank are introducing Equitel, its telecoms unit, that will allow customers to access credit loans, perform cross border money transfers and send and receive money from other commercial banks, reports Reuters.

Equity is one of the biggest banks in east Africa and since the soft launch of Equitel in October of last year, the service has attracted a millions subscribers. The bank aims to increase that figure to 5 million by year’s end.

And the market is there. Mobile money transfers claim 85% penetrationin Kenya and $23 billion passed through the platforms in 2014 alone, according to Kenya’s central bank–equivalent to 42% of the country’s GDP.

And the dominant player in this space is Safaricom, controlling two-third market share with over 20 million subscribers generating $318 million of revenue. But with the launch of Equitel, powered by its rival Airtel Kenya, Safaricom’s number one status may finally start to get challenged.

“Competition between Equitel (banks) and Safaricom ?(telcos) will benefit end consumers and financial inclusion in general as mobile money has a platform to reach those who are not included,” Martin Warioba, a tech consultant with the World Bank, told Quartz. “As long as pricing is low enough to include the unbanked, mobile money services and healthy competition will benefit consumers and increase financial inclusion.”

With Equitel being free of charge and interoperable across banks and other mobile money services, Equity Bank could challenge Safaricom’s dominance in the market, especially since they charge a fee for the use of M-Pesa.

But the company’s CEO is not worried. “We welcome competition; it is a true indicator of the free and robust operating environment we have in Kenya,” Bob Collymore said in a statement.

Safaricom has its own partnerships, with Commercial Bank of Africa (CBA) providing M-Shwari, a platform whereby people can access banking services such as saving accounts and small loans via their mobile phones. And in March they launched KCB M-Pesa with Kenya Commercial Bank, a mobile phone-based loan repayable platform.

By Omar of Quartz Africa

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.

Moore and Hughes’ idea was to use a mobile payment system like M-Pesa as the backbone for offering credit to people who didn’t have bank accounts or full-time jobs. They decided to use it to create a pay-as-you-go financing system for solar panels, efficient lights and other appliances that piggy backed on the existing payment system, wireless networks and software.

Customers pay for the solar system, which costs about $200, with a small up-front sum followed, usually, by daily micro-payments for a year. If the customer stops paying, M-Kopa can turn the solar system off remotely.

MORE: Goldman Sachs to invest $150 billion in clean energy

Because customers can pay in small increments, it ends up making solar panels more affordable than kerosene, the traditional source of energy in rural areas. Off-grid rural home-owners have little choice but to burn kerosene indoors at night to light homes after dark, leading to respiratory problems and fires.

The average off-grid Kenyan spends $272 a year on energy, which includes $164 on kerosene, $36 on charging a cell phone (often times at charging kiosks), and $72 on batteries, as Bloomberg reported. M-Kopa says that its customers can save $750 over four years by switching to its solar kit.

M-Kopa is a financing company more than anything else. The company buys solar kits from others like startup D.Light, which in recent years has also started to focusmore on new financing methods.

They are not alone. Off Grid Electric, a startup founded in 2011 and based in Tanzania, has a similar plan to bring pay-as-you-go solar panels that run off of cell phone systems and networks to Africa as does Azuri Technologies. In India, Simpa Networks and Mera Gao Power are making a similar push.

A big business?

In recent months, investors have started to place bets on some startups that have made solid progress. Earlier this month Generation Investment Management, a London-based fund started by investors David Blood and former Vice President Al Gore, led a round of $19 million for M-Kopa. Generation has invested in energy companies like solar installer SolarCity and smart thermostat maker Nest, now owned by Google parent Alphabet.

M-Kopa’s round also included funding from Virgin’s Richard Branson and Steve Case, founder of AOL. Using the funds, M-Kopa plans to expand its business to reach 1 million homes in East Africa by the end of 2017. To date, M-Kopa has sold solar to about 280,000 homes in Kenya, Tanzania, and Uganda.

D.Light, meanwhile, has raised $40 million over its lifetime from investors including Draper Fisher Jurvetson, Omidyar Networks, Nexus India Capital, and Acumen Fund. The company has sold 10 million solar lanterns, which are stand alone solar devices that store solar energy, in contrast to the pay-as-you-go solar panels, which electrify an entire home.

Last week, Off Grid Electric announced that it had raised $45 million in debt financing from the Packard Foundation, Ceniarth, Calvert Foundation and other family offices to deploy its pay-as-you-go solar system across Africa. Off Grid Electric says the debt funding was the first of its kind to help deploy off-grid solar in Africa.

The company’s funding comes on the heels of $25 million in equity backing led by DBL Partners, which has also invested in Tesla  TSLA -1.45%  and SolarCity. Other investors in Off Grid Electric included SolarCity itself, Zouk Capital and Vulcan Capital, the fund of Microsoft co-founder Paul Allen.

It’s not just startups that are eying this emerging market. Clean energy giant SunEdison  SUNE -2.05%  earlier this year hired Cathy Zoi, a former assistant secretary of energy efficiency and renewable energy with the U.S. Energy Department. She runs SunEdison Frontier Power, a division that focuses on electricity for developing countries. Challenges remain with finding banks that will provide debt financing for rural utilities customers that are at a higher risk of default on payments, Zoi said at Fortune’s Brainstorm E event earlier this year.

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The market for solar panels in off-grid areas of developing countries is still relatively small. If M-Kopa hits 1 million customers in 2016 that will still be a tiny fraction of the 2 billion people that are estimated to need off-grid electricity.

But down the road, the power grid could be pretty helpful, too. Big cities in Africa are expanding the number of homes with electricity, transforming areas that had previously dependent on kerosene lamps.

Yet off-grid solar services like M-Kopa’s prove to be cheaper than expanding the power grid and the technology could be an example of what the future of electricity would look like in rural Africa, India and Asia. At the same time, many wonder whether these regions will bypass the power grid in the same way that many of them were connected to cell phones networks without first having landline phones.

Wireless communications was not only cheaper, but also better in many ways than wired communications. Will off-grid electricity and solar emerge the same way?

By Katie Fehrenbacher

I was reading a research report recently and I was amazed by the current state of the SME sector in Africa. While SME owners are working hard to expand their business, there is little support within the business environment in their favour.

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

Predictions for state of Angel investing in 2016.

This is a long term play so hold tight because we are just getting started as an ecosystem so this is not the time for us to start cracking champagne .Having said that we expect the following things to happen :

• More deals will be done and they will be unprecedented in size. There are a few seed funds and micro funds have been raised capital in 2015 that will need to be deployed.
• More local investors will start doing some interesting deals , as more stories emerge.
• More corporate venture capital will be made available to more startups ,Safaricom and Interswitch have led the way but more corporates will be getting involved in 2016. You can read more about Safaricom’s CVC fund known as Spark here
• More impact investors will come out and stand up to be counted , our colleagues at RenewLLC have had a fantastic year and recently announced their 7th investment in Ethiopia .
• More small size acquisitions will be done in 2016 , looking at these top 5 acquisitions done in 2015 ( mind you that there were others that were completed but not publicly announced) . I can predict that more sub $20M deals will be done throughout the year across sub-Saharan Africa and North Africa .
• The three funds that I am really excited about are:
• 1)VentureGardenGroup -Nigeria
• 2)CRE Venture Capital -Pan-African
• 3)Chanzo_Capital -Ghana
• Last but not the least ,more governments will need to take a leaf out of Rwanda’s book and put together policies that are friendly to startups and investors .

If you Want a ticket to startup heavens, Here are 4+1 reasons to become an angel investor in Africa today .

How we made it in Africa also did a great feature on NewGenAngels and our progress so far ,please find it here

Wishing you a profitable #2016 !

By Sean Obedih, Founder, Diverse Code

London-based solar systems provider BBOXX – which designs, builds, distributes and finances solar systems for Africa and other parts of the developing world – has secured a further round of funding that will enable it to increase its solar efforts in Africa.

The British solar provider has raised $15 million via a series of equity investments and debt funding into the company from a wide range of investors, including DOEN Foundation, Synergy Energy, Bamboo Finance, Ceniarth, Khosla Impact Fund and new backers ENGIE Rassembleurs d’Energies and MacKinnon, Bennett & Co.

A portion of the funding will be used as scalable working capital, and $500,000 – provided via a securitization deal with social investor Oikocredit – will finance home solar systems in Africa via Distributed Energy Asset Receivables (DEARs), the first such securitization deal of its kind seen in Africa.

In closing this securitization, BBOXX will be able to realize income from the solar payment plan sales model that it has introduced in Africa three years ahead of schedule. The additional monies also free up investments for the production of more home solar systems, thus ensuring more families and households in Africa can receive affordable solar power.

“This latest round of funding, in particular the ground-breaking securitization deal with Oikocredit, means that we can now rapidly scale-up our business model and roll-out BBOXX across our key regions in Rwanda and Kenya,” said BBOXX CEO Mansoor Hamayun.

Oikocredit renewable energy manager David ten Kroode added that by demonstrating how securitization can be used to finance home solar systems in Africa, other lenders can hopefully follow suit in order to scale-up the level of investment in Africa’s energy landscape to the levels required to lift millions out of energy poverty.

“This deal also supports our mission of improving the lives of low income people by giving them access to clean energy,” ten Kroode said.

Bu Ian Clover.

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.

Tanzania introduced a new regulatory framework at the end of last year that was implemented in March. It has a small power producer program that allocates feed-in tariffs in a tender process.

“Tanzania’s framework is the most developed and it has a transparent regulator that actually has a bit of power,” said Michael Gratwicke, head of Rift Valley Corp.’s energy platform. “The downside to working in the country is that the state utility is a bit uncooperative as our prices are lower than theirs.”

Rift Valley is building two off-grid hydroelectric projects in Tanzania with 1.5 and 3 megawatts of capacity, respectively. It has a pipeline with 15 more hydro plants and 2.5 megawatts of wind energy, Gratwicke said by phone from Zimbabwe where the company is based.

Tanzania-based developers of residential solar systems such as Off-Grid Electric and Mobisol have installed tens of thousands of their rooftop technologies. Their photovoltaic panels and batteries can power lights, a small refrigerator, a television set or radio and also charge mobile phones. Off-Grid Electric aims to electrify 1 million homes in the next three years.

By Anna Hirtenstein

This year marks the 20th year since Sub-Saharan Africa (SSA) embarked on a path of faster economic growth. Over this period, growth has averaged at 5,2% per annum, whereas the number of people on the continent reportedly living under US$1,25 a day has continued to creep up from 358 million in 1996 to 415 million in 2011; the year 2011 being the most recent year for which official estimates are available.

Can these divergent trends be explained?

The most obvious reason would be that all the benefits of growth were captured by the rich, resulting in ever-increasing inequality in each country — the rich are simply getting richer.

The data, however, doesn’t show much evidence of that. Distribution trends within African countries vary dramatically. The distribution is widening in as many countries as it is narrowing and in most countries it is not changing much at all.

It is possible that the very rich people, the top 1%, are benefiting from the share of the spoils of growth, by more than their fair share, but this is missing from the data as this rarified class tends not to participate in household surveys from which statistics and distributions are derived.

There are five other factors that can account for SSA’s alarming poverty numbers.

The first is the region’s rapid population growth of 2,6% a year. Incidentally, this correlates almost exactly to the average percentage increase of those living with less than US$1,25 per day from 1996 to 2011. While African economies are generating more income, that income has to be shared among an ever-increasing number of people.

Since the region’s income is growing faster than its population, average incomes are rising and the share of Africans living in extreme poverty is falling — from 60% in 1996 to 47% in 2011. But the rate at which poverty is falling is less than the rate at which the population is rising resulting in the number of people living in poverty continuing to grow.

In more general terms, SSA’s record of economic growth looks much less impressive in per capita terms. The World Bank has just released a revised growth forecast for the region in 2015 of 4%.

When you lop off 2,6% in population growth, you’re left with per capita income growth of only 1,4%, which in comparison to the world average where projected economic growth of 2,9% combined with population growth of 1,1% results in per capita income growth of 1,8% in 2015, is low. Africa’s growth this year, in per capita terms, is expected to be almost as much as 29% below the global average.

The second factor is the depth of Africa’s poverty compared to poverty elsewhere. In other words, poor people in Africa start further behind the poverty datum line than the rest of the world.

Therefore, even if their income is growing, it is rarely enough to push them over the US$1,25 threshold. In 2011, the average person living in extreme poverty in Africa lived on US$0,74 a day, whereas for the rest of the developing world it was 98 US cents.

The third factor is that even though inequality isn’t rising in most African countries, inequality is already at an unusually high level, making economic growth unable to deliver more poverty reduction, since the absolute increases in income associated with rising average incomes will be that much smaller for the have-nots versus the haves. Furthermore, the degree of inequality that exists on the continent is worse than it appears. The fact that Africa is divided into so many countries masks the big differences in incomes among them.

If Africa were a single country, its inequality would look much worse — worse even than Latin America. Since incomes across African people vary so widely, only a fraction of people are likely to cross the poverty line at any one time. That contrasts with India where a concentration of people immediately below the US$1,25 mark means that even a small increase in incomes can result in a sudden flood of people moving above the poverty line.

The above three factors explain why you would expect relatively little poverty reduction for a given amount of growth in Africa compared to elsewhere. These factors, nevertheless, cannot explain why the number of poor people in Africa has actually increased since the start of the century. For this, we consider the two final factors.

The fourth factor is that there is a degree of mismatch between where growth is occurring and where the poor are on the continent. Undoubtedly, the region’s growth acceleration has benefited some of its poorest countries, including Ethiopia, Mozambique and Rwanda, whereas, others such as the Democratic Republic of the Congo and Madagascar have recorded little or no growth over the past 20 years and the number of poor people in these countries has risen accordingly. As long as a handful of the region’s fragile states struggle to build and sustain economic momentum, the number of poor people in Africa will not decline.

The fifth and final factor concerns data quality. Poverty estimates are drawn from household surveys, which in most African countries are conducted infrequently. Those that do take place often suffer from operational glitches that affect the credibility of the results. In Nigeria, for example, which accounts for a quarter of the people on the continent living in poverty, there are some well-documented flaws within its most recent national survey of living standards (not to be confused with the issues concerning the country’s national accounts, which were recently rebased). When new data becomes available, one may discover that Nigeria’s poverty rate is considerably lower and has been falling at a faster pace than previously thought.

As a general rule, aggregate poverty numbers for Africa should be handled with care, and small increases or decreases should not be taken seriously.

The dissonance between Africa’s growth performance and its poverty numbers is a striking phenomenon that demands an explanation. While intuition may lead us to call into question the region’s growth — it only seems to benefit the rich, the quality of growth is deficient and growth numbers are exaggerated — the above five factors suggest that the answer can instead be found by analysing Africa’s poverty data more closely.

The same five factors can explain why this difference is unlikely to go away any time soon. The World Bank anticipates much of the same for the next few years: the number of poor people in Africa is expected to remain close to 400 million until 2020, despite a forecast of ongoing robust economic growth.

By Ritesh Anand