Board Talk — Lassi Noponen
Loudspring
11

Dear Lassi, could not agree more with your position on policy driven versus private market driven approaches in the Solar Space. I have been involved in Solar since 1996 all over the world in International Senior level positions. I started in Solar working in Africa, and actually although I have transitioned into new ventures, like advising early stage startups in Spain and also did some consulting, fundraising for US Solar companies for a while. For me Africa has the need, and a market which is huge, but TAM is not SAM. There is however some great success stories, in DG, and that for me is very satisfying, but no matter how many commitments to fund Africa’s lack of electricity, I still see, long beaurocratic cycles, true DFI’s have become more agile, but still at the pace of deployments 10–15 years from now I am sure to hear what I always heard in the 200o’s “there is 1.2bn without access to electricity” about 400mn in Africa (depending in the sources the numbers vary). There is physically no way that by 2040 400 million Africans will gain access to electricity mainly off-grid solar. That would require connecting 17 million people per annum. It took M-KOPA 2 years to reach 200,000 households which could represent 1 million people. 20 PAYG companies have served 600.000 households (after periods between 2–5 years), or 2.4 million people. Estimates by Bloomberg New Energy reports off grid market trends 2016 estimate that by 2020 90 million households will be electrified with off grid DG solutions. IMHO the numbers do not add up with the reality. And then you have the promising Mini/Micro grids. But deployment is very low. Nigeria estimates that half their population have diesel generators, with Microgrids being economic where there is no grid why isn’t this taking off? How did mobile success in Africa occur, large investments driven by policy (licenses for operators) but private investments in the billions. SO I think there is a financing GAP, and I only see partnerships between new startup entrants and corporates, now it’s with Telco companies but some Utilities have invested in PAYG. Policy sometimes works against the same commitments made by African nations in COP 22. 17 billion is spent by the off grid customers a year (2014) today that figure is likely to be be closer to 20–25 billion$ (includes kerosene, candles, mobile charging, pico solar, lanterns) and yet some countries heavily subsidies kerosene, have not implemented tariffs, import duties, to promote more private investment. Insightful piece Lassi and congrats on your successes

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