When you think of countries innovating sustainable developments, Kenya might not be at the top of the list. But this African nation is utilizing the sustainable innovations of the 21st century to make massive inroads to further develop their country.
M-Kopa Solar
M-Kopa is a solar company selling pay-as-you-go solar systems throughout Kenya and neighboring Uganda to help power homes of millions in East Africa.
The start-up was founded in 2009 by Jesse More and Nick Hughes with the financial banking of micro-finance expert Chad Larson. Microfinancing is a type of banking service provided to unemployed or low-income individuals or groups who otherwise would have no other access to financial services. The term Kopa actually translates from Swahili “to borrow.”
The trio outlined three criteria they wanted to achieve when starting their business: use mobile payment technology in emerging markets, empower people’s lives, and lay the foundation to build a potential billion dollar company.
In an interview with the Financial Times, Moore said, “We didn’t see any trade-off in the pursuit of building a really strong commercial business and making lives better. What you had to do was focus on neglected customers and solve a really massive pain point for them — offer them something that’s phenomenally better.”
Over the past decade, M-Kopa has gone through numerous rounds of investing and financing. The biggest? In 2017, the company secured an $80 million dollars in financing from a group including Stanbic Bank, CDC, FMO, and Norfund.
Sustainable Capitalism
They launched commercially in 2012, with a goal to sell 1,000 units a week within three years. At the time these seemed like lofty goals. Nevertheless, M-Kopa blew past these marks and reached this achievement in the first 12 months.
Through this innovative debt financing solution, which is the largest of its kind, the company is able to fund the next wave of pay-as-you-go installations across East Africa. We are proud to be a part of this landmark transaction and the positive impact it will have on lives and communities.”
From the company’s website, Head Corporate Financing Solutions Stephen Lovell said, “We are excited to partner M-KOPA, the leader in pay-as-you-go off grid power in Africa. Off-grid solutions are set to become a much bigger source of supply – as technology and funding mechanisms become more accessible.
Delivering Impact
The company is delivering a massive impact. Just check out these stats. Their entire customer base savings as of 2019 is close to $400 million. M-Kopa successfully unlocked almost $233 million in credit for households and reduced 1.7 million tons of CO2. Furthermore, they have employed over 2500 people in East Africa, and in turn, 46% of households are creating income because of their new found electricity.
To date, M-Kopa has provided power to over 750,000 homes. The beauty of the pay-as-you-go system is as exactly as it sounds. Customers pay a small fee up front at 3,500 KES (around $35) to serve as a down payment. Then, through M-Pesa, a mobile phone based payment system, users pay around 45 cents a day.
This model allows customers to offset the large costs upfront and spread them out over a long period of time. As a result, this dramatically reducing expenses and significantly improving the quality of their electricity.
A sample M-Kopa 5 package includes:
- 1 8W Solar Panel
- 1 Rechargeable FM/USB Radio
- 1 M-KOPA 5 Control Unit with Lithium Battery
- 4 Bright 1.2W LED Bulbs
- 1 5-in-1 Phone Charge Cable
- 1 Rechargeable LED Torch
They have received numerous awards including the Bloomberg Energy Finance Award in 2014, recognized as one of the Top 50 Companies changing the world in 2015, won the Zayed Future Energy Award in 2015, and named among the global Cleantech 100 companies in 2019.
The Future
The future of developing rural areas and providing them the opportunity to serve as their own sources of electricity has definitely arrived.
Hats off to M-Kopa and their continued development. Hopefully soon we can see this type of technology and model scaled to other regions around the world.
M-Kopa serves as a powerful example showcasing how green capitalism combined with social good can deliver clean energy, reduce fossil fuel consumption, and empower lives.
