Power Africa and Powerhive Boost Solar Energy Consumption Through Appliance Leases and Business Loans
An estimated 1.4 billion people lack access to electricity worldwide, while an additional billion live with unreliable electricity service. Many of these people currently rely on expensive, polluting fuels like kerosene and diesel for electricity, which inhibits their ability to engage in income generating activities like agriculture, agricultural processing, and manufacturing. Though electricity has the potential to catalyze development, low electricity usage can persist even after access has been extended to less developed communities.
Powerhive, a provider of off-grid utility solutions, believes this could be the result of cash-constrained customers’ inability to afford the electrical appliances they want and need. With support from Power Africa, through the Development Innovation Ventures (DIV) program, Powerhive will expand its reach in Kenya, providing an initial 20 villages with 4,000 new household and 200 business connections with uninterrupted, 24/7, mini-grid-supplied renewable AC electricity. It will also develop a Productive Use Program in Western Kenya to provide its customers with low-cost appliance leases and business loans combined with enterprise development support.
By providing electricity and thousands of affordable loans with funding from Power Africa, Powerhive will assist cash-strapped emerging market consumers who cannot afford to purchase electrical appliances and access important energy services. In addition, the “Powerhive Micro Business” program, which provides access to seed funding, financial literacy training, and business planning assistance, is expected to benefit 16,200 people. Powerhive intends to then use the revenue from this initial phase to expand to an additional 80 villages, which will result in a total of 100,000 household and business connections in three years’ time.
Powerhive was given a Stage 2 award from USAID’s Development Innovation Ventures program after demonstrating they had successfully run their pilot, which proved that there was a huge untapped demand for affordable loans for new business creation and residential appliance purchases. This award will enable Powerhive to support testing for social impact, improved outcomes and/or market viability, as well as operational refinement to build paths to sustainability and scale.
Powerhive Site Manager Absolom Onkui works to expand electricity access in his community in Kisii County, Kenya, where geographic isolation and distance from traditional grid infrastructure drive a significant demand for micro-grid technology. The first-time provision of electricity services has opened doors for his friends and neighbors.
“So many people in the rural areas have never used electricity,” he said. “And for the first time they are all connected. They were really happy because they could just touch a switch and suddenly there is light.”
— Absolom Onkui
Through extensive data collection, the initial pilot showed the cost of power from the mini-grids and the cost of borrowing from Powerhive to purchase appliances are less than those of existing alternatives. The pilot demonstrated that customers who accessed loans and business funding through Powerhive showed sustained increase in energy usage.
The project will make a significant contribution to rural populations in Kenya who lack access to clean, safe, and reliable energy for their homes and businesses, and toward achieving the Power Africa goal of adding an additional 60 million connections in sub-Saharan Africa by 2030.
Powerhive is a global technology company with an objective to provide access to clean, affordable and reliable mini-grid electricity to the millions of households and businesses across the globe that lack access. Powerhive’s Kenya subsidiary has operated four mini-grids since 2012 that have provided renewable, affordable AC electricity to around 300 households, small businesses and schools, improving life for approximately 1,800 people. Powerhive recently became the second licensed utility in the history of Kenya.
Power Africa is a U.S government led initiative, which employs a transaction- and partnership-driven model, focused on removing the barriers to power project development across sub-Saharan Africa. It has an ambitious goals of adding 30,000 MW and 60 million new connections in sub-Saharan Africa by 2030.
Development Innovation Ventures (DIV), part of the U.S. Global Development Lab, is USAID’s open competition supporting breakthrough solutions to the world’s most intractable development challenges — interventions that could change millions of lives at a fraction of the usual cost. DIV seeks to bring in new ideas for solving problems facing millions around the world — delivering more impact, for less money, with greater potential for sustainable scale.