Off-Grid Electric customers. Image: Off-Grid Electric facebook page.
The CEO and co-founder of a firm working to electrify rural Africa through solar has told PV Tech that the key to success is proving the concept in a limited region before attempting rollout across the continent.
Xavier Helgesen’s Off Grid Electric was successful in executing a Series C funding round in October. Investment came from parties including DBL, the “social impact” VC firm which only puts capital into projects that have a positive social impact as well as strong returns. As Nancy Pfund of DBL recently told PV Tech and PV Tech Storage, the two do not have to be mutually exclusive.
The Series C round was announced from the White House last month, and was one of a number of private and public organisations committing to improving access to electricity in Africa, alongside fresh pledges at government level to the ongoing Power Africa programme. Off Grid Electric raised US$25 million from the round, while the company, along with SunEdison and others, also signed up to the Global LEAP Guiding Principles programme, encouraging governments, non-profits and private companies to “work together to scale-up commercial markets for low-cost quality assured off-grid devices”.
“I think it’s clear increasingly now that it’s viewed as a commercial opportunity but also one with a tremendous social and environmental impact and you know we’ve seen that the investors that get the most excited about the business are the ones that value both those results,” Helgesen said.
“[In terms of] the big economic opportunity, I think it’s become clear to almost everyone that whoever builds the top two or three solar brands in Africa will have fantastically valuable businesses, because it’s a solution to such a basic problem and it’s a nearly universal problem.”
However, according to Helgesen, steps to electrifying the whole continent must be taken incrementally. The timing of the investment came as Off Grid Electric had “got things really working in the business model” and was ready to scale up its operations, which have initially focused on Tanzania. The company recently also took its first steps into neighbouring Rwanda.
“We’ve been very focused not even just on one country but on certain regions in one country to prove that solar could be a mass market offering and something that everybody has in their home, not just the wealthy or the early adopters of technology,” Helgesen said.
“And so a lot of our focus has been in going out in proving this, going out to regions of the country and proving that 10%, 20% or 30% of the people will adopt solar – that it’s attractively priced and marketed and followed up with good service.”
With the obvious need for greater electrical access in Africa and greatly ramped up efforts in India from companies including flow battery maker Imergy and developer SunEdison, the off-grid and microgrid sectors appear to be in an upward trajectory around the world. Helgesen says specific circumstances drew Off Grid Electric to Tanzania, with his company co-founder previously having worked and lived there. It is also a peaceful country with a growing economy, while 85% of its population does not have grid access, and the Off-Grid Electric CEO said it seemed like the ideal place from which to “build something that would be relevant for the whole continent and build a platform that we could expand to the whole continent”. The need for electrification in landlocked Rwanda is also great, while that country’s government also appears keen to support solar, Helgesen said, making it a logical next step.
However, Helgesen said, another key to being successful and proving the concept, from a social as well as logistical standpoint, is in hiring local people with connections to the area.
“Sometimes companies are staffed entirely by ex-pat employees and that just doesn’t work for us, we need to build the local employment base and that’s where the focus is.”