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The African off-grid industry needs an urgent further development

The solar off-grid industry in Africa nowadays is dominated by international companies. They raise millions of grants or loans and get most awareness on conferences and publications.

Sure, sometimes you can read about investment in so called “African startups”, but if you look closer it’s often just a branch of an international company someone is talking about.

However, the establishment of local solar companies (SME), which work independently and are majority owned by domestic entrepreneurs, is important for sustainable job creation in the off-grid industry. But local companies have only low chance to raise awareness or to get funding.

The worldwide awareness for international companies who are active in the off-grid-sector in East Africa is tremendous. But did you ever hear about Anuel Energy Ltd. (Kampala) or Access to Solar Technologies Ltd. (Jinja)? Companies which are founded and led by local entrepreneurs, who have created jobs and are providing energy access for households, schools, health stations? They have the potential to become the future energy middle class in Uganda, but no investor is looking on them, no conference invites the CEOs to talk about energy access, no supplier offers them a substantial credit for growth.

Anuel Energy and Access to Solar Technologies are now fellows of Sendea, the program of the Stiftung Solarenergie to create awareness for local solar companies. Recently Sendea starts the support for two more fellows in Uganda: SunTap Ltd. (Kampala) and Sostap Ltd. (Mbarara). Subject to finance the Sendea concept will be extended to other African countries.

The Stiftung Solarenergie also offers a unique opportunity for local solar companies to search for and sell products: Mangoo Marketplace. Mangoo currenty lists more than 1,000 products. Most of the products are listed with prices of local distributors. Main target of Mangoo is to improve the market transparency about prices and availability in Africa and Asia.

Sendea and Mangoo are some of the very few existing concepts to build local SME in the African energy access sector. But these efforts need to scale up urgently otherwise the off-grid industry faces the risk to follow exactly what in earlier centuries either missionars or colonial officers did: with the intention to bring “development” to Africa they missed to strengthen the local forces.

I’m sure we all agree that there should be a significant difference between the “development” activities of past centuries and the off-grid industry in 21th century. Local small and medium enterprises (SME) are the main driver for innovation, poverty reduction, employment generation and social integration. Without a relevant SME structure in Africa, we will miss the crucial target to initiate the sustainable growth of a local energy economy.

Building a powerful local SME sector is a duty for all players in the off-grid market. But it’s a special responsibility for investors. In 2004, the ground-breaking idea of pay-as-you-go-finance (PAYG) started for households in Subsaharan Africa with a first project in Ethiopia. In which country will we see the start of a ground-breaking new instrument to finance local SME for energy supply?


Harald Schützeichel is editor of Sun-Connect News and Director of Stiftung Solarenergie – Solar Energy Foundation.

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