Intro
Powering Productivity
Demonstrating the potential for solar mini grids to light up rural Africa.
Intro
Powering Productivity
Demonstrating the potential for solar mini grids to light up rural Africa.
White Paper
Approximately 620 million people in sub-Saharan Africa lack access to the electrical grid and the associated socio-economic, environmental, and health benefits. At the same time, governments around the world are seeking to decarbonize their electricity generation. Solar mini-grids have attracted attention across the public and private sectors as a way to provide clean, affordable, and reliable electricity to rural sub-Saharan Africa. Despite this interest, a lack of proven, commercially viable projects has prevented rapid scaling of mini-grid deployments. Vulcan Inc. and SteamaCo conducted 2.5 years of data collection and analysis to understand the performance of Vulcan’s solar mini-grid portfolio in Kenya. Through our analysis, we found three strategies which, when combined, enable the portfolio to reach its target 10-year Internal Rate of Return (IRR) of 15% - a benchmark for projects to access scalable commercial financing.
White Paper
Approximately 620 million people in sub-Saharan Africa lack access to the electrical grid and the associated socio-economic, environmental, and health benefits. At the same time, governments around the world are seeking to decarbonize their electricity generation. Solar mini-grids have attracted attention across the public and private sectors as a way to provide clean, affordable, and reliable electricity to rural sub-Saharan Africa. Despite this interest, a lack of proven, commercially viable projects has prevented rapid scaling of mini-grid deployments. Vulcan Inc. and SteamaCo conducted 2.5 years of data collection and analysis to understand the performance of Vulcan’s solar mini-grid portfolio in Kenya. Through our analysis, we found three strategies which, when combined, enable the portfolio to reach its target 10-year Internal Rate of Return (IRR) of 15% - a benchmark for projects to access scalable commercial financing.
Initial Report
Initial Report
The opportunity
“I had a diesel generator before, but this minigrid electricity is much cheaper and easier. ”
'Bright Light Syndrome’ is a term often used to explain the migration of young people towards urban areas; opportunities for gainful employment are usually cited as the most important reason for leaving rural villages. With Vulcan’s minigrids, we’ve turned the bright lights on in 10 villages in rural Kenya. The arrival of power allows for entrepreneurship. The majority of new businesses in the villages we’ve electrified have been started by the younger and more tech savvy people.
We’ve learned that, as a result, fewer young people are leaving the village because of these newly available job opportunities.
The customer
Digital literacy may indicate a customer with a higher potential Average Revenue Per User (ARPU),
Customers often work their way up an energy ladder - starting with pico systems before advancing to mini grids or other larger systems.
There is significant seasonal variation in monthly revenue totals, and this should be factored into financial models. A customer mix that includes a high number of lower-ARPU customers helps hedge against the potential loss of larger, individual customers.
Paper
More than 2 billion people around the world lack reliable access to electricity. The least electrified region is sub-Saharan Africa.
The off-grid renewable energy industry is tapping into the opportunity presented by a vast market of unconnected people, resulting in the development of innovative business models and technologies.
Paper
More than 2 billion people around the world lack reliable access to electricity. The least electrified region is sub-Saharan Africa.
The off-grid renewable energy industry is tapping into the opportunity presented by a vast market of unconnected people, resulting in the development of innovative business models and technologies.