Last month we published our Innovation Monitor survey, which showed that manufacturers are using innovation to enable them to sell into new and fast growing markets.
Today we hear from Azuri the leading provider of pay-as-you-go solar home power in sub Saharan Africa. Its award-winning Indigo technology is making power affordable to off-grid households.
1.3 Billion people around the world (around 20% of the global population) still lack access to mains electricity. In Africa alone there are some 600 Million people “off grid”, yet some 60% of adults own a mobile phone. It's ironic that mobile phone technology has moved in leaps and bounds, while the lack of basic infrastructure means that most of the population still uses candles or kerosene for lighting.
Small solar systems have been on the market for some time but their high upfront cost has stifled sales. To address this, Azuri Technologies Ltd – a recent spin off from Cambridge University - has used mobile technology to develop its ‘Indigo' Pay-As-You-Go products. Customers buy a system comprising a solar panel, 2 LED lights, and a battery/control unit which also includes a charging socket for mobile phones, for a greatly discounted price, and then each week need to buy a scratch card; using their mobile they text the number on the card to Azuri's server and get back a code which they enter into the controller of their system – switching it on for a week, during which they have clean lighting for 9 hours each day and mobile phone charging. It's the modern version of putting a coin in the meter, or hire purchase.
The customers are low income rural dwellers. While individually customers are not wealthy, as a group the substitution market for kerosene lighting is around $17 Billion pa. The impact of a small amount of energy is huge. A few watts of power can be transformative - powering lights, phone, radio or even a tablet. Using these devices, combined with the mobile network, individuals gain increasing access to the knowledge economy.
Africa is now open for business in a way it never has been before, and Azuri has identified excellent opportunities in many countries. Distributor selection and training has inevitably been a very demanding exercise, but now Azuri is established in 9 countries in sub Saharan Africa with more coming on stream.
Customer demand has always been outstanding as customers save up to 50% on their current spend on kerosene and phone charging services as well as enjoying the other benefits.
The biggest challenge to growth that Azuri has encountered is not in the market but in accessing finance. Despite the very attractive business proposition (quite apart from the social benefits) there is an extreme shortage of Venture Capital finance in the UK for this type of project.
There is a huge opportunity for private-sector businesses to address Africa's infrastructure challenges and stimulate the economy, but we need to engage mainstream finance to invest on a commercial basis to accelerate the rollout of technology. If your organisation has a solution, we would like to hear from you.