This feature is an outcome of infoDev, a multi-donor program administered by the World Bank Group, with a focus on entrepreneurs in developing economies. This piece was originally published on July 20, 2017.
Biniyam Tesfaye was working as an electrical power engineer in Addis Ababa in 2014 when he came upon a colleague one day weeping at her desk.
“What’s the matter?” he asked her, concerned.
Raising her head, the colleague explained that her mother, who lived far out in the country, was gravely ill. But they could not talk because her mother’s phone could only be charged by walking 12 kilometers to the nearest town — something not possible in her condition. The two were seemingly separated by an impassable gulf. The colleague was heartbroken.
Biniyam, touched by his colleague’s situation, used his engineering skills to design a small solar mobile charger — something that could power the mobile phones of off-grid villagers and bring them a little bit closer to loved ones elsewhere in the country. That is how his company, Winsol, got started.
Lighting Up The Country
Since then, Winsol — backed by the Ethiopian Climate Innovation Center (ECIC) with a $35,000 grant — has sold more than 15,000 solar mobile chargers and 10,000 solar home systems.
In his quest to help his colleague, Biniyam touched upon a crucial need of Ethiopian households. According to World Bank Group data from 2014, roughly 27% of the Ethiopian population has access to electricity. In a country of 100 million people, this means more than 70 million people without power in their homes. Around 80 million people in Ethiopia live in rural areas, and while a small fraction of these households is starting to power up, there is still a long way to go.
“The demand is very big,” Biniyam said in a recent interview. “Ethiopian communities are sparsely populated” making it hard to connect rural villages to the grid, he said. According to the International Telecommunication Union, there are around 42 million mobile phone users in Ethiopia — significantly more people than those with access to electricity.
The market is so big, Biniyam said, that “we can’t reach the demand [on our own] … So we need to share this market.”
Netsanet Behailu, the founder of solar lighting company NBK, is one of the ECIC-backed entrepreneurs sharing the market with Biniyam. Also an engineer by training, she worked for the government for thirteen years on power grid projects before starting her company in 2014.
NBK, also funded with a $35,000 grant from the ECIC, is one of the few Ethiopian solar lighting companies with a product designed after consulting farmer needs. In the Chacha district, north of Addis Ababa, for example, NBK conducted a need assessment and found that farmers want 10+ watt systems.
“There’s a high demand from farmers for solar home systems”, said Derese Dememe, director of the Chacha Energy Bureau. However, most of the thirteen companies the bureau work with supply small 3-5 watt solar home systems. NBK is the exception, providing 12-20 watt systems, capable, for example, of playing a radio. “Farmers want [these] larger systems,” Derese said.
Since 2015, NBK has supplied 775 units across several Ethiopian woredas, or districts. With ECIC funding, Netsanet plans to move manufacturing capacity from China to Addis Ababa, and increase production from 800 units to 1200 units annually. She’ll be adding three to four employees to her twelve-person company.
It’s a formidable feat for companies to reach the far-flung villages that make up the bulk of Ethiopia’s population. Winsol has hit upon a successful distribution strategy: The company targets the best, most well-known farmer in each village and gives them their products for free. The farmers then operate as marketers and sales agents for the company. Neighbors see their newly illuminated homes and are more likely to become customers too.
The solar home system, which replaces kerosene lighting for villagers, saves families about 5 Ethiopian birrs per day on fuel costs. Not only that, but Winsol products can become an income source: Owners of the solar mobile charging unit can ask others a small fee to charge their phones, easily recouping their initial costs.
“I wish everyone can have this system,” said a woman resident in Ada’a woreda, ninety miles south of Chacha, where Winsol has sold products for the past two years. Fire hazards from kerosene lamps are no longer an issue, villagers said, and they add productive hours to their day.
Winsol and NBK are both making headway in woredas around Addis Ababa, but there are still many more to reach. The companies face different challenges to scale their businesses.
NBK has had some issues with distribution, as well as unit maintenance. While the local energy bureau provides free maintenance services, villages are so far away that in some cases people don’t apply to get their unit fixed when it breaks. NBK faces competition from cheap, non-certified solar systems being sold in an adjacent town, so smoothing out its customer support is key.
Winsol, on the other hand, is constrained by a raw material bottleneck — it imports most of its parts, which get held up by currency exchange issues. The company has a new injection molding machine capable of churning out 5,000 lamps and 2,000 solar home system kits per day but, without enough parts, cannot meet that potential.
Nevertheless, both companies are working hard to find solutions. They have ambitious goals. Biniyam wants to build a factory capable of producing everything he needs for the Winsol kits: accessories, cables, printed circuit boards (PCB). He knows the market is there, and Winsol has the distribution channels to succeed; besides the farmer sales strategy, Winsol also has a wholesale distribution stall in the Addis Ababa Merkato market, one of the largest in Africa.
Netsanet has signed memorandums of understanding with the Ministry of Water, Irrigation, and Electricity, and regional energy bureaus to distribute her products and is working to link more farmers to these centers. She plans to scale NBK’s production capacity in Addis Ababa and grow her production and marketing workforce.
As for Biniyam’s colleague, he gave her the charger after building a first working model. “Starting from that time, she can communicate with her mom,” he said, adding: “They were happy.”
These green companies are supported by infoDev's Climate Technology Program, an initiative sponsored by the U.K.’s Department for International Development, Australia’s Department of Foreign Affairs and Trade (Australian Aid), Denmark’s Ministry of Foreign Affairs (DANIDA), Norway’s Ministry of Foreign Affairs, and the Netherlands’ Ministry of Foreign Affairs.