What Should be the Role of a Utility Company in Africa?
If you’re reading this article most likely you have access to reliable power. You’re lucky, because more than one billion people around the world do not. Powerhive builds and operates solar mini-grids to bring clean electricity to people in East Africa who have never had an electric light in their homes. But this is just the first step.
u·til·i·ty — noun — the state of being useful, profitable, or beneficial
In the context of East Africa, we feel that a utility company should not just provide a useful service, but should work to measurably improve lives. Powerhive customers, communities living at the so-called bottom of the pyramid, are extremely grateful for the support we provide them to use electricity productively. Development Innovation Ventures (DIV) — the arm of USAID that supports “breakthrough solutions to the world’s most intractable development challenges” — awarded Powerhive a half-a-million dollar grant because they like what we’ve done over the last few years helping people in newly-electrified communities to start small electricity-based businesses to improve their livelihoods.
Powerhive’s key performance indicators for social impact track our effect on poverty, education, jobs and the environment, and our community development programs are designed to improve livelihoods while creating sustained increases in average revenue per user (ARPU) for our company. Our DIV grant is paid out as we reach agreed upon milestones such as creating the capacity to distribute affordable appliances to our customers, and recruiting local team members to train entrepreneurs and farmers on business fundamentals and agricultural productivity, for example. These initiatives provide true utility to our rural customers.
One of our most popular initiatives is our ‘Kuku Poa’ poultry program, which gives customers solar-incubated chicks to rear using electric lights and basic brooding kits. Powerhive facilitates market access for mature birds which gives participants an immediate source of income to spend on school fees, food, medicine and, of course, electricity. Even the poorest customers have the opportunity to participate and we have seen first hand the potential that our company has to increase food security and financial stability for our customers. All of the community development programs that we are implementing have the objective of reducing poverty and creating opportunities — especially for women and youth — because at the end of the day, our business will only succeed if we are able to raise standards of living in the villages where we work.
Power Brings Knowledge
After building solar mini-grid infrastructure in a remote village, it’s fairly straight forward to add the architecture for high-speed internet. As a newly licensed internet service provider in Kenya, Powerhive is developing a low-cost internet offering for our customers both in the form of distributed WiFi hot-spots and simple plug-and-play cyber cafes. We offer basic computer and internet training and are exploring with strategic partners how we can bring internet-based jobs such as freelance data entry and transcription/translation opportunities to our customers in order to boost household incomes, expand education and close the digital divide.
A key aspect of the energy access challenge is enabling impoverished households to be able to afford electricity. This requires coupling energy provision with economic opportunity, and our team is continuing to learn from and recruit experts in the fields of agricultural development and micro-enterprise as we push ahead with our mission to empower rural communities. We are also learning how to co-create ‘anchor tenants’ — regular, heavy users of power — from within our customer base, using an investment approach that is good for our customers and our bottom line. A true utility company, in our view, must do more than just sell a commodity like electricity, but must instead push the bounds of what a utility company can do to be ‘useful, profitable and beneficial’ for all stakeholders.
Stay tuned as we report on the successes and challenges of building a new kind of utility company. Do you have experiences in this field that you’d like to share? We’d love to hear from you in the comments.