Service over Technology: Defining the Role for Mobile in Energy Access January 2013 GSMA Community Power from Mobile Service over Technology: Defining the Role for Mobile in Energy Access 2
Contents
Foreword 3 Lesson 2: Emergence of Enhanced Utility Access 19 The GSMA Community Power from – Introduction by Dr. Robert Hope, Mobile Team and Acknowledgements 4 Oxford University 20
Welcome Note 5 Lesson 3: Different Business Models Exist in Different Settings 26 Introduction 6 – Introduction by Pepukaye Bardouille, IFC 27 Launching Mobile Enabled Community Services 8 Lesson 4: Financing is still a struggle 33 – Introduction by Jigar Shah, 2012: Marking a Year of Growth, Jigar Shah Consulting 34 Milestones and Trail-blazers 12 Appendices Organisations that Leverage Mobile – Regional Profile: Sub-Saharan Africa 42 Technology and Infrastructure to Deliver Improved Energy Services 13 – Regional Profile: Latin America 44 – Regional Profile: South Asia 45 Lesson 1: Challenges working with MNOs 14 – Failure Modes 46 – Q&A with Sairam Prasad, – 2011 Report Card 47 CTO of Bharti Infratel 17 – 2012 Lessons Learned 48 – Q&A with Mike Lin, CEO of FENIX International 18 GSMA Community Power from Mobile Service over Technology: Defining the Role for Mobile in Energy Access 3
Foreword 3 utilization of mobile phone base stations as “anchor tenants” in The GSMA Community Power from Foreword micro-utility applications, at the same time extending energy services Mobile Team and Acknowledgements 4 by Richenda Van Leeuwen, Executive Director for Energy Access, to nearby communities. Equally, a number of energy companies are Welcome Note 5 United Nations Foundation drawing on the strong capacity of mobile money solutions to enable Introduction 6 “pay as you go” micro-transactions for the rental or purchase of small Launching Mobile Enabled Sustainable energy service provision in developing countries both Community Services 8 solar lighting and charging solutions in their homes and communities, benefits and can benefit from an increasing tie-in with mobile 2012: Marking a Year of Growth, rather than having to incur the cost and inconvenience of sending Milestones and Trail-blazers 12 communications. Its role as a critical enabler for development in areas the phone for charging to a nearby town with power from the grid Organisations that Leverage Mobile from improved health to increased income and gender equity is now or a car battery. The utilization of SMS enabled service requests Technology and Infrastructure to well recognized globally. A broad global coalition of public and private as a mechanism to improving service for customers should also be Deliver Improved Energy Services 13 sector stakeholders has been established to work in this sector towards encouraged as a means to provide better after sales service, which Lesson 1: Challenges working with MNOs 14 achieving universal energy access, improving global energy efficiency remains a weak point in many parts of the sector. – Q&A with Sairam Prasad, and promoting the utilization of renewable energy solutions, through CTO of Bharti Infratel 17 the UN Secretary-General’s Sustainable Energy for All Initiative. – Q&A with Mike Lin, The application of renewable energy services for communities is not CEO of FENIX International 18 inherently new. Well established companies like SELCO-India and Lesson 2: Emergence of Enhanced As the GSMA have shown in their reports, mobile penetration and Grameen Shakti have led the way on off-grid solar PV home system and Utility Access 19 the services it enables such as the use of mobile money, support small scale solar thermal applications, and micro-hydro project finance – Introduction by Dr. Robert Hope, of “mobile health” applications as well as access to new markets are is generally well understood. But the increasing application of renewable Oxford University 20 of significant benefit to communities in developing countries. energy solutions, in particular the decrease in cost of solar PV modules Lesson 3: Different Business Models Exist in Furthermore, the ability to charge mobile phones as well as have access Different Settings 26 over the last several years, the increasing availability of small scale to improved lighting is highly sought after by customers, constrained – Introduction by Pepukaye Bardouille, IFC 27 charging and lighting solutions, and the increasing ability to support Lesson 4: Financing is still a struggle 33 predominantly by the ability to pay up front capital costs for the solution hybrid applications has created a resurgence of interest in micro-grids. – Introduction by Jigar Shah, set, and the availability of dependable solutions in the local market. This can be with a view to eventual grid connectivity, or operating on Jigar Shah Consulting 34 a standalone basis serving small industrial and community purposes, Appendices At the UN Foundation we host an almost 1,000 member strong Energy with emphasis on the ability to back out the use of diesel as solar PV – Regional Profile: Sub-Saharan Africa 42 Access Practitioner Network – a diverse network of energy services moves towards grid parity in a number of markets. Maintenance still – Regional Profile: Latin America 44 companies bringing off-grid solutions to developing country customers remains a challenge and the rigor for energy companies in contracting – Regional Profile: South Asia 45 and communities in support of the Sustainable Energy for All’s focus with base station operators should help to ensure that communities – Failure Modes 46 on achieving universal energy access by 2030. Among our membership, can also benefit from improved service over time. – 2011 Report Card 47 we are seeing the emergence of new business models drawing – 2012 Lessons Learned 48 on the many synergies between the energy and telecommunications The GSMA in this report has captured some key emerging lessons that sectors, particularly focusing on the service aspects of delivery to will prove valuable as the energy access sector seeks to scale further in non-traditional customers. the coming few years towards reaching the 2030 universal access goal.
One area where there is increasingly strong interest among both Richenda Van Leeuwen is the Executive Director for Energy Access at the practitioners and investors is in the use of “micro-grids” as one United Nations Foundation. She has more than 20 years of experience in energy in an array of configurations at the community level for providing access, sustainable development, micro and SME operations, as well as venture electricity on a sustained basis. This is being tested through the capital renewable energy investment experience in developing countries. GSMA Community Power from Mobile Service over Technology: Defining the Role for Mobile in Energy Access 4
Foreword 3 The GSMA Community Power from The GSMA Community Power from Mobile Team Mobile Team and Acknowledgements 4 Welcome Note 5 Introduction 6 Launching Mobile Enabled Community Services 8 2012: Marking a Year of Growth, Milestones and Trail-blazers 12 Organisations that Leverage Mobile Technology and Infrastructure to Deliver Improved Energy Services 13 Lesson 1: Challenges working with MNOs 14 – Q&A with Sairam Prasad, Areef Kassam Charlotte Ward Mary Roach Michaël Nique Abirami Birrell CTO of Bharti Infratel 17 Programme Director Programme Manager Business Development Strategy Analyst Projects Manager – Q&A with Mike Lin, Manager CEO of FENIX International 18 Lesson 2: Emergence of Enhanced Our Green Power for Mobile Colleagues Utility Access 19 – Introduction by Dr. Robert Hope, Oxford University 20 Lesson 3: Different Business Models Exist in Different Settings 26 – Introduction by Pepukaye Bardouille, IFC 27 Lesson 4: Financing is still a struggle 33 – Introduction by Jigar Shah, Jigar Shah Consulting 34 Appendices – Regional Profile: Sub-Saharan Africa 42 Ferdous Mottakin Satish Kumar Ali Imron – Regional Profile: Latin America 44 – Regional Profile: South Asia 45 Programme Manager Africa Project Manager Asia Project Manager – Failure Modes 46 – 2011 Report Card 47 – 2012 Lessons Learned 48 Acknowledgements Course Director at Oxford University), Pepukaye Bardouille (Global Energy Advisor at the IFC) and Jigar Shah (CEO of Jigar Shah Consulting As part of our commitment to support the development of a thriving and an investor into KMR Infrastructure). In addition we are grateful for ecosystem, our annual report includes contributions from sector experts the input from our colleagues at Invested Development, the African working across energy access, energy investment, the mobile industry, Enterprise Challenge Fund, Acumen Fund and Monitor. start-up communities and academia. Recognition and thanks are owed to the following guest writers for providing their key insights and Thanks is also offered to the Community Power interns – Lavan expertise: Richenda Van Leeuwen (UN Foundation, Executive Director Thasarathakumar, Firas Arab and Caitlin Egan – who provided of Energy Access), Sairam Prasad (CTO at Bharti Infratel), Mike Lin invaluable contributions during 2012 whilst the team was spread out (CEO at Fenix International), Robert Hope (Senior Research Fellow and across the globe. GSMA Community Power from Mobile Service over Technology: Defining the Role for Mobile in Energy Access 5
Foreword 3 The GSMA Community Power from Welcome Note Mobile Team and Acknowledgements 4 Welcome Note 5 2012 has been marked by growth, major milestones and the emergence Last year we expressed that the opportunity for the mobile industry Introduction 6 of strong champions. The UN International Year of Sustainable Energy extended beyond excess power from mobile towers; in 2012 this has Launching Mobile Enabled for All in 2012 brought with it an increased focus and better understanding proven to be true. Our thinking has also evolved on the role that Community Services 8 of the role that energy plays in the development agenda of every mobile technology, including payments, but increasingly voice, SMS 2012: Marking a Year of Growth, country. The question was often posed: How can energy access leapfrog and machine-to-machine technology can play in supporting the Milestones and Trail-blazers 12 the same way the mobile industry did a decade ago? Our point of view sustainability of off-grid systems. What was a mere mention of an Organisations that Leverage Mobile Technology and Infrastructure to is that the answer is in the question: energy access can leverage the opportunity in our 2011 paper has its own section in this annual report, Deliver Improved Energy Services 13 strength of the mobile industry. The presence of mobile services in with two further comprehensive reports on “enhanced utilities” Lesson 1: Challenges working with MNOs 14 off-grid areas provides an opportunity to develop solutions by published in early 2013 2,3. – Q&A with Sairam Prasad, addressing common failure modes of decentralised systems1. CTO of Bharti Infratel 17 The lessons and recommendations from 2011 expressed in – Q&A with Mike Lin, In October 2012, the GSMA published a ground breaking piece of “Harnessing the Full Potential of Mobile for Off-grid Energy” have CEO of FENIX International 18 research which for the first time attempted to identify not only the led to the development of new conclusions. Additional lessons we Lesson 2: Emergence of Enhanced Utility Access 19 number of global GSM connections, but the actual number of discuss and consider in this report include; Different business models – Introduction by Dr. Robert Hope, subscribers. In doing so, the research showed that in many emerging make sense in different markets; Working with the mobile industry Oxford University 20 countries access to mobile phone services still remains a challenge, can be challenging; Financing still remains an issue, not only at the Lesson 3: Different Business Models Exist in and highlighted the difficulties for mobile operators across these seed stage but also when graduating businesses across different Different Settings 26 countries to develop bankable business models in areas of low Average financing blends and risk profiles; Enhanced utilities are playing – Introduction by Pepukaye Bardouille, IFC 27 Revenue Per User (ARPU). With over 500 million off-grid connections a more significant role in supporting the sustainability of Lesson 4: Financing is still a struggle 33 (one in ten within emerging markets) and the lengths off-grid mobile not only the energy sector but water access as well. – Introduction by Jigar Shah, Jigar Shah Consulting 34 subscribers go to in keeping their mobile phone charged, delivering Appendices access to basic energy services should be a core business activity. We welcome the support of the UK Government for the launch of the – Regional Profile: Sub-Saharan Africa 42 Mobile Enabled Community Services (MECS) programme. Drawing – Regional Profile: Latin America 44 The lessons and recommendations we made last year are still relevant, on the strong foundations of Community Power from Mobile, MECS – Regional Profile: South Asia 45 but with an additional year of experience we are able to provide further helps to improve access to both energy and water services leveraging – Failure Modes 46 nuance. In each of the three CPM channels identified in the 2011 White mobile infrastructure and technology. The programme includes over – 2011 Report Card 47 Paper, we have proof of a commercial trial with a mobile industry player. £2 million in grants to fund research and innovation, to help reduce – 2012 Lessons Learned 48 one of the major roadblocks we have observed in the sector and deliver The theme for this year’s report is Service over Technology. While tangible trials from which the industry can build from. technology underpins the business models of Community Power from Mobile, ultimately the quality of the service to the customer is what We look forward to the year ahead - to working with new and creates success from the business model. This holds true whether established partners, to learning from the innovators, to assisting an energy service company is a third party energy provider delivering the mobile industry identify opportunities and to better understanding to the mobile industry or a product provider selling solar home systems the challenges of delivering sustainable community services. 1 S ee Table 1 in the Appendix section of this report for the Impacts of the mobile industry on failure modes of current decentralised energy and water projects to rural dwellers: good technology is not enough. While the mobile 2 www.gsma.com/mobilefordevelopment/new-gsma-report-on-sustainable- channel can provide a path to scale, improve sustainability and Regards, access-to-energy-water-through-m2m-connectivity affordability, ultimately it is a tool which needs to be used properly Charlotte Ward 3 www.gsma.com/mobilefordevelopment/a-look-at-m-kopa-an-interview-with- nick-hughes and effectively to deliver real results. GSMA Community Power from Mobile Service over Technology: Defining the Role for Mobile in Energy Access 6
Foreword 3 The GSMA Community Power from Introduction Mobile Team and Acknowledgements 4 Defining Community Power from Mobile Welcome Note 5 Introduction 6 Over 1.3 billion people lack access to electricity. In many emerging Since the launch of the programme in November 2010 the evolution Launching Mobile Enabled markets mobile network operators have become adept at generating of the original concept – that excess power from mobile towers is used Community Services 8 their own off-grid power as mobile penetration has outpaced the to provide energy services to surrounding communities – has given 2012: Marking a Year of Growth, growth of the electricity grid. Community Power from Mobile (CPM) way to the definition of three channels for the delivery of services that Milestones and Trail-blazers 12 works to leverage the scale of mobile technology and infrastructure leverage strengths of the mobile operator. These three channels are Organisations that Leverage Mobile Technology and Infrastructure to to improve the case for off-grid telecoms and provide millions of depicted in the Figure 1 below: Deliver Improved Energy Services 13 underserved people access to vital energy services. Lesson 1: Challenges working with MNOs 14 – Q&A with Sairam Prasad, CTO of Bharti Infratel 17 Figure 1: Mobile can provide energy access through three channels – Q&A with Mike Lin, 2. CPM from retail distribution network CEO of FENIX International 18 ■ Leveraging extensive rural sales dealer/retail network for distribution or sale of charging/lightning devices through Lesson 2: Emergence of Enhanced commercial partnerships Utility Access 19 – Introduction by Dr. Robert Hope, Oxford University 20 1. CPM from BTS infrastructure Lesson 3: Different Business Models Exist in ■ (i) Outsourse power solution to ESCo who sells community Different Settings 26 energy services or ■ (ii) Sell power from over-capacity of BTS power – Introduction by Pepukaye Bardouille, IFC 27 Lesson 4: Financing is still a struggle 33 – Introduction by Jigar Shah, Jigar Shah Consulting 34 Energy Hub Appendices – Regional Profile: Sub-Saharan Africa 42 – Regional Profile: Latin America 44 – Regional Profile: South Asia 45 3. CPM from payment technology ■ Opportunity for micropayments: high volumes – Failure Modes 46 of small payments for affordable off-grid domestic – 2011 Report Card 47 & small business energy – 2012 Lessons Learned 48
Mini Grid GSMA Community Power from Mobile Service over Technology: Defining the Role for Mobile in Energy Access 7
Foreword 3 The wide adoption of mobile services by underserved populations How does GSMA work to help grow the CPM sector? The GSMA Community Power from Mobile Team and Acknowledgements 4 provides an opportunity to develop energy solutions at a large scale, The team aims to help the development of Community Power Welcome Note 5 leveraging human and physical infrastructure and innovative from Mobile initiatives worldwide with an understanding of their Introduction 6 payment technologies. geographic context. We seek to: Launching Mobile Enabled What do CPM trial and commercial deployments look like? Community Services 8 1. Raise awareness through knowledge sharing and convening, 2012: Marking a Year of Growth, Trials and commercial deployments engage mobile operators publication of case studies and business case development Milestones and Trail-blazers 12 in a variety of ways: 2. Partner with mobile network operators and tower companies Organisations that Leverage Mobile ■■ Technology and Infrastructure to Using their network of airtime vendors and partners to conduct feasibility studies and establish trials Deliver Improved Energy Services 13 to supply energy solutions to their customers 3. Develop relationships with private investors and provide technical Lesson 1: Challenges working with MNOs 14 ■ ■ Committing to be a stable ‘anchor’ client to a third party assistance for due diligence in to the rural ESCO sector by – Q&A with Sairam Prasad, energy service company powering both the base station CTO of Bharti Infratel 17 interested investors with the aim to support longer term rural and community – Q&A with Mike Lin, ESCO success. CEO of FENIX International 18 ■■ Providing excess power from their towers to the community Lesson 2: Emergence of Enhanced for small needs like charging up mobile handsets, large household Utility Access 19 batteries and rechargeable lanterns – Introduction by Dr. Robert Hope, Oxford University 20 Lesson 3: Different Business Models Exist in The potential for rural service delivery has much greater magnitude Different Settings 26 with dedicated and affordable power supply: – Introduction by Pepukaye Bardouille, IFC 27 Lesson 4: Financing is still a struggle 33 Reliable and affordable electricity supply – Introduction by Jigar Shah, Jigar Shah Consulting 34 Energy Health Agriculture Other Services Appendices – Regional Profile: Sub-Saharan Africa 42
– Regional Profile: Latin America 44 Phone charging Vaccine Agro-processing Internet and – Regional Profile: South Asia 45 Battery charging cold chaines Irrigation. computer – Failure Modes 46 Home lighting Information services Refridgeration Water sanitation. Barber – 2011 Report Card 47 Street lighting Bore hole pumping. Cinema. – 2012 Lessons Learned 48 GSMA Community Power from Mobile Service over Technology: Defining the Role for Mobile in Energy Access 8
Foreword 3 The GSMA Community Power from Launching Mobile Enabled Mobile Enabled Mobile Team and Acknowledgements 4 Welcome Note 5 Community Services Community Services Introduction 6 Launching Mobile Enabled Innovations in applying mobile technology in models for access Community Services 8 to services are not only supporting access to basic phone charging Defining the Addressable Market: the size of the opportunity 2012: Marking a Year of Growth, and lighting services, but also irrigation, water point monitoring and Milestones and Trail-blazers 12 access to water. Future potential includes support for improved levels Delivering basic utility services to the 1.3 Billion people without access Organisations that Leverage Mobile Technology and Infrastructure to of sanitation. to energy and the 783 Million without access to an improved water Deliver Improved Energy Services 13 source is made more challenging by their poverty levels and access Lesson 1: Challenges working with MNOs 14 to other services: – Q&A with Sairam Prasad, The Maintenance Challenge of Decentralised Water Infrastructure CTO of Bharti Infratel 17 The Post-Construction phase of water services represents one of the • n I 2008, 43% of the population in developing countries was living – Q&A with Mike Lin, biggest challenges as communities don’t have the tools or training on less than US$2 per day). In sub-Saharan Africa, this proportion CEO of FENIX International 18 to ensure proper maintenance and the remoteness of sites impacts reached 47%.5 Lesson 2: Emergence of Enhanced Utility Access 19 on efficient and fast repairs. With the continued expansion of mobile • n I 2010, only 23% of adults living in the developing world living on – Introduction by Dr. Robert Hope, network coverage in emerging markets and the innovation in less than US$2/day reported having an account at a formal financial Oxford University 20 technology, occurring in the domain of existing water meters and institution6. Lesson 3: Different Business Models Exist in within mobile applications, there is the potential to address several • The situation for communities living in rural areas is made worse Different Settings 26 challenges hindering the “water for all” concept.4 – Introduction by Pepukaye Bardouille, IFC 27 as these markets are very poorly served, dominated by the informal Lesson 4: Financing is still a struggle 33 economy and, as such, relatively inefficient and uncompetitive.
– Introduction by Jigar Shah, • The poor of under-served markets often pay a “poverty penalty” Jigar Shah Consulting 34 The new Mobile Enabled Community Services programme will focus spending more than wealthier communities for the same product Appendices on market facilitation to deliver the evidence, champions and trails or service. – Regional Profile: Sub-Saharan Africa 42 required to drive solutions to the next phase of maturity. It will also – Regional Profile: Latin America 44 provide challenge/seed funding, run on competitive terms, to support – Regional Profile: South Asia 45 innovation in mobile technology and business models that leverage With more than 70% of the population of emerging markets having – Failure Modes 46 mobile infrastructure for community services. The grants from the fund access to a GSM Network the mobile industry can play a significant role – 2011 Report Card 47 seek to address the following questions: in accelerating deployment of basic services. By leveraging the access to – 2012 Lessons Learned 48 • What types of mobile technologies can support community services? information through GSM networks, there is a possibility to improve • For a solution to be adopted at scale what building blocks would access to energy, water and financial institutions for millions or billions be needed? of people (See Figure 2 overleaf). • What is the social and commercial impact of delivering community services to rural mobile subscribers?
The lessons from these grants will be captured and shared with the 4 UNICEF data shows 40-80% of African hand pump installations not wider industry via the production of publications and events. functioning due to maintenance challenges 5 World Bank 2012 6 World Bank 2012 GSMA Community Power from Mobile Service over Technology: Defining the Role for Mobile in Energy Access 9
Foreword 3 Figure 2: How the access to mobile networks could impact energy, water and financial access and sanitation The GSMA Community Power from Mobile Team and Acknowledgements 4 Welcome Note 5 Introduction 6 4.18 Billion Launching Mobile Enabled Access to Community Services 8 people living in emerging markets covered by GSM networks information > 70% GSM Population Coverage in emerging markets. 2012: Marking a Year of Growth, Ability to contact doctors/relatives/family/clients Milestones and Trail-blazers 12 Organisations that Leverage Mobile Technology and Infrastructure to Development of Mobile Leverage mobile operators Remote GSM Connectivity Deliver Improved Energy Services 13 Money Services infrastructure and distribution network for increased maintenance Lesson 1: Challenges working with MNOs 14 (payments/savings) to increase Energy Access and water quality testing – Q&A with Sairam Prasad, CTO of Bharti Infratel 17 – Q&A with Mike Lin, CEO of FENIX International 18 1.3 Billion Lesson 2: Emergence of Enhanced Limited access to electricity grid without access to electricity Utility Access 19 Off grid population pays a premium price for local energy sources (ex. kerosene) – Introduction by Dr. Robert Hope, Health hazards induced by dirty energy sources Oxford University 20 Peripheral expenses due to lack of electricity (ie. phone charging services) Access Lesson 3: Different Business Models Exist in Different Settings 26 to energy – Introduction by Pepukaye Bardouille, IFC 27 Lesson 4: Financing is still a struggle 33 – Introduction by Jigar Shah, 2.47 Billion Jigar Shah Consulting 34 people lived on less Appendices 2.5 Billion than $2 a day (2008) 788 Million – Regional Profile: Sub-Saharan Africa 42 – Regional Profile: Latin America 44 people lack access to a without access to safe water formal financial institution – Regional Profile: South Asia 45 Poverty – Failure Modes 46 2.5 Billion – 2011 Report Card 47 without access to
– 2012 Lessons Learned 48 Low and irregular incomes improved sanitation Unemployment Limited access to capital, due to limited Access to Limited resilience to crisis High time spent of fetching water far from homes incomes and savings difficulties (weather & health hazards, Access (especially impacting women/girls) financial loss of incomes, theft) Limited savings to invest in education, to water Water insecurity causing health hazards entrepreneurship to pursue growth opportunities institution Limited amount of water available for daily use
Source GSMA, UN, World Bank GSMA Community Power from Mobile Service over Technology: Defining the Role for Mobile in Energy Access 10
Foreword 3 Based on the population coverage of GSM networks in emerging Figure 4: Addressable Water Market: 164 million people worldwide The GSMA Community Power from markets, the GSMA estimates that the total number of people Mobile Team and Acknowledgements 4 Source: GSMA who could benefit from the potential of mobile technologies and Welcome Note 5 infrastructure for better access to energy and water to be 411 million 120% Introduction 6 people for energy and 164 million for water. Launching Mobile Enabled 19 Community Services 8 100% 2012: Marking a Year of Growth, Figure 3: Addressable Energy Market: 411 million people worldwide 23 35 Milestones and Trail-blazers 12 80% Organisations that Leverage Mobile Source: GSMA Technology and Infrastructure to 21 120% Deliver Improved Energy Services 13 60% 66 Lesson 1: Challenges working with MNOs 14 21 – Q&A with Sairam Prasad, 100% 40% CTO of Bharti Infratel 17 Access Improved Water 11 – Q&A with Mike Lin, 80% CEO of FENIX International 18 20% Lesson 2: Emergence of Enhanced 95 7 Utility Access 19 60% 277 0% – Introduction by Dr. Robert Hope, 0 20% 40% 60% 80% 100% 120% Oxford University 20 Energy Access 40% Lesson 3: Different Business Models Exist in GSM Population Coverage Different Settings 26 South Asia MENA – Introduction by Pepukaye Bardouille, IFC 27 20% Lesson 4: Financing is still a struggle 33 Sub-Saharan Africa East Asia and Pacific – Introduction by Jigar Shah, Latin America and Caribbean Jigar Shah Consulting 34 0% 0 20% 40% 60% 80% 100% 120% Appendices – Regional Profile: Sub-Saharan Africa 42 GSM Population Coverage Considering the expected rise in both mobile coverage and population – Regional Profile: Latin America 44 with mobile connectivity, the opportunity and addressable population South Asia MENA – Regional Profile: South Asia 45 are expected to grow, unless rates of household electrification and clean Sub-Saharan Africa East Asia and Pacific – Failure Modes 46 water access increase dramatically by policy-driven measures and other Latin America and Caribbean – 2011 Report Card 47 innovative technologies. As can be seen the size of the opportunity for – 2012 Lessons Learned 48 mobile enabled community service delivery is not the same across varying geographies, depending on the current access to infrastructure per region. GSMA Community Power from Mobile Service over Technology: Defining the Role for Mobile in Energy Access 11
Foreword 3 Figure 5 helps to illustrate the size of the MECS opportunity for The GSMA Community Power from its 3 most prominent regions, taking into consideration the different Mobile Team and Acknowledgements 4 drivers that contribute to sustainable livelihoods (also included in Welcome Note 5 Appendix Regional Profiles). Introduction 6 Launching Mobile Enabled Community Services 8 Figure 5: Access to Infrastructure in Sub-Sahara Africa, 2012: Marking a Year of Growth, South Asia and Latin America Milestones and Trail-blazers 12 Organisations that Leverage Mobile Technology and Infrastructure to Sub-Sahara Africa South Asia Latin America and Caribbean Deliver Improved Energy Services 13 Access to the Electricity Grid Access to the Electricity Grid Access to the Electricity Grid Lesson 1: Challenges working with MNOs 14 – Q&A with Sairam Prasad, 100% 100% 100% Access to a Access to an Access to a Access to an Access to a Access to an CTO of Bharti Infratel 17 90% 90% 90% Financial improved Financial improved Financial improved 80% Source of Water 80% Source of Water 80% Source of Water – Q&A with Mike Lin, Institution 70% Institution 70% Institution 70% CEO of FENIX International 18 60% 60% 60% 50% 50% 50% Lesson 2: Emergence of Enhanced 40% 40% 40% Utility Access 19 30% 30% 30% – Introduction by Dr. Robert Hope, 20% 20% 20% Oxford University 20 10% 10% 10% 0% 0% 0% Lesson 3: Different Business Models Exist in Different Settings 26 – Introduction by Pepukaye Bardouille, IFC 27 Lesson 4: Financing is still a struggle 33 – Introduction by Jigar Shah, Jigar Shah Consulting 34 GSM Access to GSM Access to GSM Access to Appendices Population improved Population improved Population improved Coverage Sanitation Coverage Sanitation Coverage Sanitation – Regional Profile: Sub-Saharan Africa 42 – Regional Profile: Latin America 44 – Regional Profile: South Asia 45 – Failure Modes 46 – 2011 Report Card 47 – 2012 Lessons Learned 48 GSMA Community Power from Mobile Service over Technology: Defining the Role for Mobile in Energy Access 12
Foreword 3 2012: Marking a Year of Growth, Milestones and Trail-blazers The GSMA Community Power from Mobile Team and Acknowledgements 4 Welcome Note 5 HOW THE GSMA HAS PARTICIPATED WHAT THE INDUSTRY IS DOING Introduction 6 JAN Launching Mobile Enabled Secretary General Ban Ki-Moon December 2011: Vodacom launches International Year of Site Launch in Emfihlweni, Community Services 8 Sustainability for All South Africa 2012: Marking a Year of Growth,
Milestones and Trail-blazers 12 FEB Mobile World Congress Telecom Regulatory Authority World Bank Energy Day – Vendor Catalogue Published Seminar attended by 150 and 4 of India Green Electricity and Telecom Organisations that Leverage Mobile – included 24 vendors Technology and Infrastructure to round table sessions Regulation announced Services: Realising Synergies Deliver Improved Energy Services 13 MAR Lesson 1: Challenges working with MNOs 14 – Q&A with Sairam Prasad, CTO of Bharti Infratel 17
– Q&A with Mike Lin, CPM contributes to the Hosted a half day CPM Specific Qatar Working Group, APR CEO of FENIX International 18 mWomen blog after an India Working Group CPM Advisory Panel insightful field trip to India – 15 participants – 8 participants Lesson 2: Emergence of Enhanced
Utility Access 19 MAY Rockefeller Foundation & AREA Twenty world leading off-grid Feasibility Study with TNM Malawi Feasibility Conference – Rural clean energy entrepreneurs – Introduction by Dr. Robert Hope, Telefonica SA and Movistar Study commenced Electrification with Minigrid send letter to World Bank Oxford University 20 Nicaragua commenced Solutions Panel President asking for support Lesson 3: Different Business Models Exist in Different Settings 26 JUN Rio+20 – 1 Billion Reasons CPM contributes to the Barefoot Power wins an to Deliver clean Energy Access – Introduction by Pepukaye Bardouille, IFC 27 GPM Biannual report International Ashden Award to the Poor Lesson 4: Financing is still a struggle 33
– Introduction by Jigar Shah, JUL Safaricom Kenya Feasibility Jigar Shah Consulting 34 Study commenced Appendices
– Regional Profile: Sub-Saharan Africa 42 AUG OMC Power and Bharti Infratel – Regional Profile: Latin America 44 Launch of Azuri Technologies Partnership announced – Regional Profile: South Asia 45
– Failure Modes 46 SEP African Enterprise Challenge World Energy Forum Participated at GPM India Simpa Networks and Fund Winners: Off-grid: World Bank funds Sincronicity’s – 2011 Report Card 47 Working Group – 20 CPM Angaza Design are winners - Joined the Energy Access Electric, Azuri Technologies and Feasibility Study in Tanzania specific participants of Tech Awards – 2012 Lessons Learned 48 Advisory Board Fenix International
Participated at SOCAP12 – OCT Fenix International and M-KOPA and Article in Forbes: Clean start up Started engagement Bringing affordable energy to MTN Rwanda commercial Safaricom commercial finds poor villagers more with Vodacom the village through technology partnership announced partnership announced profitable than mobile telecoms NOV Participated at the Hosted the first CPM OMC Power and Azuri Participated at the Lighting International Off-grid Working Group in Ghana Technologies shortlisted Africa Conference in Senegal Renewable Energy Conference – 45 participants for Ashden Awards
DEC Five reasons why the off-grid Devergy releases a Article in Forbes: How to Light solar revolution will be driven documentary on their first Africa within a decade by cell phones pilot site in Tanzania GSMA Community Power from Mobile Service over Technology: Defining the Role for Mobile in Energy Access 13
Foreword 3 The GSMA Community Power from Organisations that Leverage Mobile Technology and Infrastructure to Deliver Mobile Team and Acknowledgements 4 Welcome Note 5 Improved Energy Services Introduction 6 Launching Mobile Enabled Figure 6. Role of Mobile technology and infrastructure in live trials and partnerships Community Services 8 2012: Marking a Year of Growth, Milestones and Trail-blazers 12 Channel 1: Infrastructure Channel 2: Distribution Channel 3: Enhanced Utilities Organisations that Leverage Mobile Technology and Infrastructure to Deliver Improved Energy Services 13 Anchor Client Distribution and Mobile Payments M2M Technology Used Lesson 1: Challenges working with MNOs 14 Marketing Partner Technology Used – Q&A with Sairam Prasad, Shared Solar using scratch cards & mobile money for prepaid metering, CTO of Bharti Infratel 17 monitored real time, Uganda, Mali, Haiti – Q&A with Mike Lin, Mini-Grid CEO of FENIX International 18 Devergy Pay-As-You-Go (PAYG) using scratch cards, solar mini-grid, Tanzania Lesson 2: Emergence of Enhanced Utility Access 19 OMC Power Micro power sites with Bharti Infratel – recharge & – Introduction by Dr. Robert Hope, distribute lanterns & battery boxes Oxford University 20 Energy Hub Sincro Site Watch solar + LPG Lesson 3: Different Business Models Exist in sites : study of Energy Hub with Different Settings 26 Helios Towers Tanzania – Introduction by Pepukaye Bardouille, IFC 27 Fenix International ‘Readyset’ for Angaza Design PAYG with mobile Lesson 4: Financing is still a struggle 33 kiosks and homes, multiple phone money solar lanterns , audio – Introduction by Jigar Shah, charging & lights with MTN Uganda communication turn on. Tanzania, Jigar Shah Consulting 34 & Rwanda Kenya, Zambia Appendices Azuri Technologies Indigo phone – Regional Profile: Sub-Saharan Africa 42 charging device and solar home system, – Regional Profile: Latin America 44 using scratch cards for prepayment - – Regional Profile: South Asia 45 Africa – Failure Modes 46 Solar mPower (Off. Grid: Electric): PAYG – 2011 Report Card 47 Devices solar home system, M-PESA & unique SMS key code enabled, Tanzania – 2012 Lessons Learned 48 Simpa Networks: PAYG solar home system with unique SMS key Business model for community for service energy model Business code, India
M-KOPA Solar with Safaricom in Kenya – PAYG on M-PESA, monitored real time
Mobisol using M-PESA for PAYG, monitored real time, Kenya and Tanzania with Vodafone/Vodacom support
Channel 2 and Channel 3 Channel 3: Mobile payment tech Channel 3: Mobile payments and Channel 1 only Channel 2 only (M2M and mobile money payments) only M2M Tech GSMA Community Power from Mobile Service over Technology: Defining the Role for Mobile in Energy Access 14
Foreword 3 The GSMA Community Power from Mobile Team and Acknowledgements 4 Lesson 1 Welcome Note 5 Introduction 6 Challenges working with Mobile Operators Launching Mobile Enabled Community Services 8 2012: Marking a Year of Growth, Milestones and Trail-blazers 12 Author: Mary Roach, Business Development Manager Organisations that Leverage Mobile Technology and Infrastructure to Deliver Improved Energy Services 13 Lesson 1: Challenges working with MNOs 14 – Q&A with Sairam Prasad, CTO of Bharti Infratel 17 – Q&A with Mike Lin, CEO of FENIX International 18 Lesson 2: Emergence of Enhanced Utility Access 19 – Introduction by Dr. Robert Hope, Oxford University 20 Lesson 3: Different Business Models Exist in Different Settings 26 – Introduction by Pepukaye Bardouille, IFC 27 Lesson 4: Financing is still a struggle 33 – Introduction by Jigar Shah, Jigar Shah Consulting 34 Appendices – Regional Profile: Sub-Saharan Africa 42 – Regional Profile: Latin America 44 – Regional Profile: South Asia 45 – Failure Modes 46 – 2011 Report Card 47 – 2012 Lessons Learned 48 GSMA Community Power from Mobile Service over Technology: Defining the Role for Mobile in Energy Access 15
Foreword 3 In 2012, almost 3 years since the first Community Power from Mobile Time required for building relationships: The GSMA Community Power from Paper, the opportunity the mobile industry presents to support energy Mobile Team and Acknowledgements 4 The amount of time required to build commercial relationships with access is increasingly recognised. Welcome Note 5 mobile industry players was highlighted by all ESCOs we spoke Introduction 6 to as one of the barriers to the scaling of solutions whether they are “ The opportunities for off-grid solar are just kicking off, and there will continue Launching Mobile Enabled selling a phone charging solution or providing energy services to a Community Services 8 to be synergies between the proliferation of cell phones and the mobile, mobile operators’ towers. 2012: Marking a Year of Growth, decentralized type of clean power that off-grid solar provides.” Milestones and Trail-blazers 12 Third party ESCOs can more easily identify the department and – Ryan Levison, Sun Funder, 5 reasons why the off grid solar revolution will be Organisations that Leverage Mobile stakeholders to engage with than ESCO product companies, Technology and Infrastructure to driven by cell phones, GigaOM Deliver Improved Energy Services 13 who when introducing a new concept to an operator must first identify Lesson 1: Challenges working with MNOs 14 the key decision maker. The product or service may be of interest to Yet while the opportunity is well recognised, partnerships between – Q&A with Sairam Prasad, several people sitting across different departments but the ESCO needs CTO of Bharti Infratel 17 mobile industry players and ESCOs to deliver energy access remain to navigate the organisational maze to determine which departments’ – Q&A with Mike Lin, few and far between. The mobile industry is less informed and sceptical strategy is best served by their offering. CEO of FENIX International 18 of working in an industry that they do not understand and where the Lesson 2: Emergence of Enhanced predominant view remains that energy access (even phone charging) On average, organisations we spoke with said it could take between Utility Access 19 is not core to their operations. Furthermore, many of the ESCOs are 18 and 24 months to go from initial discussion with a mobile operator – Introduction by Dr. Robert Hope, start-ups themselves and leveraging mobile to deliver energy access Oxford University 20 to a first commercial contract and the process often involves a lengthy is still a nascent and innovative approach. Lesson 3: Different Business Models Exist in pilot phase. As a result, ESCOs who seek to work the mobile industry need Different Settings 26 to balance the opportunity to scale with the need to adopt – Introduction by Pepukaye Bardouille, IFC 27 Three major challenges have been identified to improving the speed longer term horizons when considering business development. Lesson 4: Financing is still a struggle 33 of adoption of the MECS business models across emerging markets: – Introduction by Jigar Shah, Jigar Shah Consulting 34 ■■ The time required to build relationships with the mobile industry Appendices ■■ The need to have tried and tested business models – Regional Profile: Sub-Saharan Africa 42 ■■ – Regional Profile: Latin America 44 Proving the ability to scale from Day 1 – Regional Profile: South Asia 45 – Failure Modes 46 – 2011 Report Card 47 – 2012 Lessons Learned 48 GSMA Community Power from Mobile Service over Technology: Defining the Role for Mobile in Energy Access 16
Foreword 3 Tried and Tested business models: level ARPU on phone charging. While more research is underway The GSMA Community Power from Mobile Team and Acknowledgements 4 Very few mobile operators or tower companies would view energy to better understand the actual proportion of spend by off-grid Welcome Note 5 delivery as a core competence, although it is a pre-requisite for many subscribers on phone charging vs. airtime, the 50% statistic needs Introduction 6 to operate in areas of poor or no grid-availability. While operators are to be widely understood by the mobile industry. Access to energy Launching Mobile Enabled interested in energy solutions that support their off-grid customers’ has also shown to help increase opening hours of airtime and Community Services 8 access to phone charging and the provision of energy services to their mobile money agents which in turn increases their volume 2012: Marking a Year of Growth, towers, they are hesitant to trial new concepts. of transactions. Milestones and Trail-blazers 12 Organisations that Leverage Mobile ■■ Business models using mobile money platforms to support progressive Technology and Infrastructure to This is especially true of 3rd party ESCOs since problems with network Deliver Improved Energy Services 13 power and therefore uptime have an immediate impact on ARPU, payment for energy can help to drive transaction volumes for Lesson 1: Challenges working with MNOs 14 particularly in markets where customers own more than one SIM and mobile operators from poorer and less strategic customer segments. – Q&A with Sairam Prasad, can switch instantaneously to a rival network provider. While the In increasingly competitive markets, where the only untapped CTO of Bharti Infratel 17 strength of mobile operator’s off-grid presence and brand can be a great growth opportunity remains the rural unconnected, brand – Q&A with Mike Lin, tool to support energy access, they are highly guarded and protected extension and growing the number of mobile enabled services CEO of FENIX International 18 by the operator. can reduce customer churn and increase utilisation of the mobile Lesson 2: Emergence of Enhanced operator’s services. Utility Access 19 – Introduction by Dr. Robert Hope, In summary, mobile industry players are seeking partners with tried Proving the ability to Scale from Day 1 Oxford University 20 and tested business models or at least organisations that can take on Lesson 3: Different Business Models Exist in the risk. For the most part, Mobile Operators want to work with organisations Different Settings 26 that can scale quickly. This means that even before they enter into – Introduction by Pepukaye Bardouille, IFC 27 The definition of a viable business model depends significantly on discussion with ESCOs, they want to be assured that the ESCO has the Lesson 4: Financing is still a struggle 33 which of the three channels are used. management capacity and access to the capital required to deliver the – Introduction by Jigar Shah, solution at a national level. As was discussed in last year’s White Paper, Jigar Shah Consulting 34 ■ ■ For service delivery from mobile infrastructure, the operator must ESCOs are essentially stuck in the middle of operators and funders: Appendices first be open to considering energy outsourcing by a third party – Regional Profile: Sub-Saharan Africa 42 or the deployment of additional human and capital resources if ■■ Potential investors require the signed commitment of mobile – Regional Profile: Latin America 44 the mobile tower company or operator decides to deliver the service network operators before they consider investment – Regional Profile: South Asia 45 themselves. From the ESCO’s perspective business models need – Failure Modes 46 to ensure 24/7 power delivery to their anchor customers (mobile ■■ Potential MNO partners require proof of concept before they – 2011 Report Card 47 industry) and need to protect themselves from the strict Service are willing to consider partnering with ESCOs. – 2012 Lessons Learned 48 Level Agreement penalties that come with these contracts “ This leads to a lose-lose-lose scenario with passionate ESCOs without For partnerships between energy product providers using distribution funding or pilot sites, MNOs frustrated by socially leaning enterprises channels, mobile operators need to understand the challenges that and investors, and social investors without deal flow.” (reference GSMA) a lack of adequately charged phones and lights pose to their business. Across our field visits in East and Southern Africa, India and Latin America, phone charging costs range from US$0.10 to US$0.40 per phone charge and on average an off-grid subscriber spends ~50% of national GSMA Community Power from Mobile Service over Technology: Defining the Role for Mobile in Energy Access 17
Foreword 3 The GSMA Community Power from Mobile Team and Acknowledgements 4 Q &A with Sairam Prasad, CTO of Bharti Infratel Welcome Note 5 Can you describe the steps involved in selecting a new ESCO? And how long the overall process takes? Introduction 6 What is Bharti Infratel’s motivation to outsource energy? Launching Mobile Enabled Community Services 8 We operate our network in some of the toughest terrains in the When we first started there was no ready-made vendor ecosystem 2012: Marking a Year of Growth, country where telecom penetration has far exceeded electrification and we had to identify, engage in design and development of these Milestones and Trail-blazers 12 reach, specifically in remote rural areas. In the absence of reliable models with interested partners. The end-to-end process including Organisations that Leverage Mobile grid power , the Tower Infrastructure sector continues to depend model design, development, trials and testing would take around Technology and Infrastructure to a year. But once trials are successful, we can scale faster. Now that Deliver Improved Energy Services 13 on diesel generators and battery back-up to provide 24X7 Network we have done trials, the partner ecosystem is developing well and Lesson 1: Challenges working with MNOs 14 Uptime and uninterrupted Passive Telecom Network Infrastructure hopefully we can do faster deployments with vendors who already – Q&A with Sairam Prasad, to Mobile Operators. To that extent, power generation and CTO of Bharti Infratel 17 distribution is not our core competency. However, as an industry have prior experience and business knowledge. – Q&A with Mike Lin, leader, Bharti Infratel has always led landmark initiatives, which CEO of FENIX International 18 have been instrumental in setting benchmarks for the industry. What are the major challenges in selecting ESCOs? Lesson 2: Emergence of Enhanced With the ever-growing demand requirement of power supply, Utility Access 19 What criteria do you use? and the need to reduce Green House Gas (GHG) emissions, there – Introduction by Dr. Robert Hope, Some ESCO’s have good technology solutions but lack an economically was a strong need to adopt clean technologies in power generation. Oxford University 20 viable preposition. However, we require partners who have both and Keeping both of these objectives in mind, we started encouraging Lesson 3: Different Business Models Exist in are willing to put their energy and focus into this game. This requires Different Settings 26 renewable energy service companies who would offer energy services the highest levels of on-the-ground execution excellence to provide – Introduction by Pepukaye Bardouille, IFC 27 in distributed generation models using renewable sources of energy. Lesson 4: Financing is still a struggle 33 reliable 24X7 power supply to make it a win-win situation for both. – Introduction by Jigar Shah, When did Bharti Infratel start investigating the opportunity to Jigar Shah Consulting 34 Can you briefly describe the type of contractual relationships that outsource power generation to 3rd party producers and how has your Appendices you use with your 3rd party energy providers? – Regional Profile: Sub-Saharan Africa 42 strategy evolved over time? There are basically two models – Regional Profile: Latin America 44 We started engaging with RESCOS in 2009 as part of our strategy – Regional Profile: South Asia 45 to reduce our carbon foot print and improve our energy security 1 O PEX model: An OPEX fee is paid every month for providing – Failure Modes 46 & sustainability. In the initial phase, we tried and tested various end-to-end energy services at tower sites – 2011 Report Card 47 renewable energy technologies like Solar, Fuel Cells and Wind 2 R ESCO model: An Energy Meter is installed at the tower sites and – 2012 Lessons Learned 48 Energy to develop technically feasible and economically viable payment is based on units consumed and unit rate agreed models. After successful technology trials, we adopted solar power in a big way using energy service vendors and an OPEX model over the last 3 years. Further exploration in this area has also shown that Sairam Prasad is the Chief Technical Officer & Head of O&M at Bharti Infratel. As part of his role, the use of Biomass which can not only power our tower sites Mr. Prasad is also responsible for the execution of Bharti Infratel’s Green Energy and Energy Management activities. Bharti Infratel Limited is amongst India’s leading telecom tower but can provide power to nearby communities. We have developed infrastructure service providers. The company has over 34,000 towers, of which nearly 9000 are a workable model along with our partners and done trials in our in off-grid / poor grid locations, across 18 states of India. Bharti Infratel also holds a 42 per cent |sites in 2012 using biomass and solar with a RESCO model. stake in Indus Towers Limited - a Joint Venture between Bharti Infratel, Vodafone & Idea Cellular. GSMA Community Power from Mobile Service over Technology: Defining the Role for Mobile in Energy Access 18
Foreword 3 The GSMA Community Power from Q&A with Mike Lin, CEO of FENIX International How long does it generally take from the time you start a conversation Mobile Team and Acknowledgements 4 with an operator to the time you have a signed contract for a Welcome Note 5 commercial roll-out? What steps are generally involved? Fenix International is a Silicon Valley renewable energy company. Introduction 6 First incorporated in 2009, Fenix designs and manufactures new Launching Mobile Enabled In the 2 OpCo contracts we have signed with MTN, it has taken Community Services 8 power generation and energy storage solutions for off-grid mobile Fenix 12-24 months from first contact to deal signing, and then an 2012: Marking a Year of Growth, subscribers. The Fenix ReadySet is designed to empower rural Milestones and Trail-blazers 12 entrepreneurs in emerging markets to become micro-utility providers additional 6-12 months for commercial roll-out, but this is accelerating. Organisations that Leverage Mobile and deliver sustainable energy to their communities by powering Energy is a new field for the MNOs and as a result, the process often Technology and Infrastructure to mobile phones and rechargeable lanterns and torches. To date, Fenix requires extensive lab testing, multiple rounds of piloting, the ROI Deliver Improved Energy Services 13 has sold nearly 3,000 ReadySets and estimates ReadySet needs to be examined and a business case needs to be made before Lesson 1: Challenges working with MNOs 14 entrepreneurs are powering over 5 million phones each year, earning operator executive management gives the green light for – Q&A with Sairam Prasad, commercialisation. The mobile operators have a lot of moving parts, CTO of Bharti Infratel 17 more than a $1M in income for their micro-utility businesses. which is definitely part of the challenge, but also largely part of the – Q&A with Mike Lin, CEO of FENIX International 18 When did you decide that the telecom industry could be a good success of our model’s scalability. Lesson 2: Emergence of Enhanced distribution partner? What are some of the strengths of partnerships with operators? Utility Access 19 Mobile Network Operators (MNOs) were our main target distribution What are some of the challenges? – Introduction by Dr. Robert Hope, partner from the company’s founding. I had worked on power Oxford University 20 systems for the One Laptop Per Child project for two years and Lesson 3: Different Business Models Exist in Strengths Different Settings 26 realized that models of give-aways and free handouts would not be ■■ The mobile operators understand their customers, know how to – Introduction by Pepukaye Bardouille, IFC 27 the answer to sustainable or scalable distribution. Rather, we drew Lesson 4: Financing is still a struggle 33 inspiration from the mobile phone industry, a rather incredible market and distribute products, and provide after-sales service – Introduction by Jigar Shah, example of a for-profit, scalable and positively disruptive model better than any other company in most countries we work in. Jigar Shah Consulting 34 By plugging the ReadySet into the operator’s retail network, Appendices The GSMA paper “Charging Choices”, first published in 2009, helped we can reach national scale in a matter of a few months, rather – Regional Profile: Sub-Saharan Africa 42 solidify the opportunity to partner with Mobile Operators. The need than years or decades like traditional energy distribution models. – Regional Profile: Latin America 44 and opportunity were clear. – Regional Profile: South Asia 45 Challenges Can you tell us about your current partnerships with operators and – Failure Modes 46 what each party provides? ■■ Many executives understand the idea that phone charging is a – 2011 Report Card 47 problem for their off-grid customers. However, some – 2012 Lessons Learned 48 We first launched the ReadySet with MTN in Uganda and then departments and individuals within the mobile operators still recently expanded into Rwanda with MTN as well consider ARPU increases from energy to be too soft. As we roll Fenix provides the ReadySet hardware as well as sales, marketing out commercially, we are continuing to make the case for and aftersales training and support. measuring revenue data, to increase sample size and make the business case to telecoms. MTN provides logistics, warehousing and their distribution channel via their Retail Dealer network and Service Centres. MTN also Mike Lin is the founder and CEO of Fenix International. He lectured environmental engineering co-brands the ReadySet with their logo and brand color as well as and design at Stanford as well as social entrepreneurship at Yale. Mike has served on the board joint marketing such as above-the-line radio, tv and print as well as of advisors to several eco-startups, consulted for Apple on climate change and environmental toxins and worked on the “Inconvenient Truth” presentation as part of The Climate Project. below-the-line road shows, market activations and collateral. GSMA Community Power from Mobile Service over Technology: Defining the Role for Mobile in Energy Access 19
Foreword 3 The GSMA Community Power from Mobile Team and Acknowledgements 4 Lesson 2 Welcome Note 5 Introduction 6 Emergence of Enhanced Utility Access Launching Mobile Enabled Community Services 8 2012: Marking a Year of Growth, Author: Michaël Nique, Senior Strategy Analyst Milestones and Trail-blazers 12 The term enhanced utility access refers to the use of mobile technologies, either through Machine to Machine (M2M) usage and/or mobile Organisations that Leverage Mobile services. These are SMS/USSD and mobile payments, to enhance the access to energy and water for the population who lacks access to a formal Technology and Infrastructure to Deliver Improved Energy Services 13 utility connection. Lesson 1: Challenges working with MNOs 14 – Q&A with Sairam Prasad, CTO of Bharti Infratel 17 – Q&A with Mike Lin, CEO of FENIX International 18 Lesson 2: Emergence of Enhanced Utility Access 19 – Introduction by Dr. Robert Hope, Oxford University 20 Lesson 3: Different Business Models Exist in Different Settings 26 – Introduction by Pepukaye Bardouille, IFC 27 Lesson 4: Financing is still a struggle 33 – Introduction by Jigar Shah, Jigar Shah Consulting 34 Appendices – Regional Profile: Sub-Saharan Africa 42 – Regional Profile: Latin America 44 – Regional Profile: South Asia 45 – Failure Modes 46 – 2011 Report Card 47 – 2012 Lessons Learned 48 GSMA Community Power from Mobile Service over Technology: Defining the Role for Mobile in Energy Access 20
Foreword 3 The GSMA Community Power from Dr. Robert Hope, Oxford University: The potential of mobile technology Oxford University’s mobile water for development Mobile Team and Acknowledgements 4 and services for rural water service delivery (www.oxwater.co.uk) research group explicitly links science, Welcome Note 5 Living in rural Africa is often synonymous with being poor and water policy and enterprise. Global partnerships with UNICEF working Introduction 6 insecure. Around 200 million rural Africans depend on groundwater across 193 countries provide a platform to scale the model based Launching Mobile Enabled on on-going trials in Kenya. Working with mobile network operators Community Services 8 for their health and livelihoods. Handpumps are the most common opportunities to use mobile money platforms to promote financial 2012: Marking a Year of Growth, technology to pump groundwater though one in three is generally Milestones and Trail-blazers 12 broken. If a handpump breaks people often have no alternative security are being tested. This provides a unique and exciting Organisations that Leverage Mobile but to collect water from more distant and dirty water sources. prospect for a global coalition of the mobile industry to work with Technology and Infrastructure to This results in high but avoidable health, time and economic costs leading scientists specialising in the economics, institutions and Deliver Improved Energy Services 13 for women and girls who are responsible for water collection. engineering of rural development to deliver reliable water services Lesson 1: Challenges working with MNOs 14 Researchers at Oxford University have designed, tested and are now to everyone. The moral imperative is matched by the business – Q&A with Sairam Prasad, opportunity. The current handpump maintenance market is CTO of Bharti Infratel 17 deploying the world’s first ‘smart handpumps’ which are being used estimated at around US$300-450 Million per year with projections – Q&A with Mike Lin, in Kenya to improve water security. Inspired by mobile phones, CEO of FENIX International 18 the handle of a smart handpump has a small and low-cost transmitter to US$1 billion based on population growth. Major donors required Lesson 2: Emergence of Enhanced securely inserted which automatically texts (SMS) information on to achieve a ‘sustainability clause’ on public investments understand Utility Access 19 how many times the handpump is pumped every hour of every day. that improving accountability can generate value for money whilst – Introduction by Dr. Robert Hope, Managers can immediately see when and where handpumps fail guaranteeing water services to the poor. Oxford University 20 and get them fixed in days rather than weeks or months. This opens Lesson 3: Different Business Models Exist in Dr. Rob Hope is a Senior Research Fellow and Course Director of the MSc in Water Science, Different Settings 26 up new business opportunities to improve institutional performance Policy and Management at Oxford University. His research focuses on water and human – Introduction by Pepukaye Bardouille, IFC 27 to deliver reliable water services to rural areas where over 80% development in relation to policy, design, performance and impacts of ecosystem services initiatives and the sustainability of improved water supply services in developing countries. Lesson 4: Financing is still a struggle 33 of people without improved water services live globally. Rob is currently leading an interdisciplinary, cross-departmental research cluster that sets out – Introduction by Jigar Shah, to design, build and evaluate mobile technology innovations for water security called mobile/ Jigar Shah Consulting 34 water for development. The cluster has recently completed a cross-country analysis of mobile Appendices water payment innovations in urban Africa and have started the first global studies that are testing ‘smart handpumps’ in rural Kenya and Zambia. – Regional Profile: Sub-Saharan Africa 42 – Regional Profile: Latin America 44 – Regional Profile: South Asia 45 – Failure Modes 46 – 2011 Report Card 47 – 2012 Lessons Learned 48 GSMA Community Power from Mobile Service over Technology: Defining the Role for Mobile in Energy Access 21
Foreword 3 Today, 3 of every 4 new connections are occurring in the developing payments, either through mobile money services or scratch cards The GSMA Community Power from 7 Mobile Team and Acknowledgements 4 world. This means 5.12 Billion mobile connections were coming from (similar to airtime top-ups), can empower both entrepreneurs providing 8 Welcome Note 5 the developing world at the end of 2012, compared to 1.36 Billion the energy service and the consumers of this service. Most of the Introduction 6 connections in developed markets. As mobile networks have become enhanced energy solutions are for now being deployed in East Africa. Launching Mobile Enabled increasingly ubiquitous in emerging markets, more people are now Despite having the lowest mobile penetration rate in Africa (~44% Community Services 8 covered by mobile networks than they have access to energy, water or compared to 69% in average for Africa), East African countries have low 2012: Marking a Year of Growth, sanitation. The GSMA estimates that, in 2012, more than 500 Million levels of energy access, but high levels of GSM population coverage and Milestones and Trail-blazers 12 connections were off-grid. This means one in every ten mobile the highest penetration of mobile money services in the world making Organisations that Leverage Mobile connections in the developing world is made off grid. this region ideal to develop mobile enhanced energy services. Technology and Infrastructure to Deliver Improved Energy Services 13 Lesson 1: Challenges working with MNOs 14 Beyond voice telephony connecting millions of users in the developing As of 2012, the GSMA estimates that enhanced utility solutions could – Q&A with Sairam Prasad, world, machine-to-machine (M2M) connectivity enhances utility further help up to 411 Million people living in emerging markets have CTO of Bharti Infratel 17 solutions by increasing sustainability and resilience of decentralised access to clean energy solutions (see Figure 3). The addressable market – Q&A with Mike Lin, utility services. Solutions are being increasingly researched and used by is the highest in sub-Saharan Africa and South Asia, due to the CEO of FENIX International 18 entrepreneurs, charities and academic researchers, and have emerged as combination of low energy access, rising GSM population coverage Lesson 2: Emergence of Enhanced a potential disruption in the energy and water sectors. and high poverty levels. These two regions represented 90% of the Utility Access 19 total addressable market in 2012. – Introduction by Dr. Robert Hope, Oxford University 20 As stated by Dr Robert Hope, mobile technology and services also Lesson 3: Different Business Models Exist in “open up new business opportunities to improve institutional How Mobile Payments Can Lower the Affordability Barrier Different Settings 26 performance”. Mobile can be applied to enhance service delivery The “Poverty Penalty” – Introduction by Pepukaye Bardouille, IFC 27 of the micro-utilities working in underserved and rural regions, In 2008, 25% of the population in developing countries was living in Lesson 4: Financing is still a struggle 33 where mobile networks are the only infrastructure in place. extreme poverty (on less than US$1.25 per day). In sub-Saharan Africa, – Introduction by Jigar Shah, 9 Jigar Shah Consulting 34 this proportion reached 47%. The situation for communities living in If service delivery remains critical to the success of decentralised Appendices rural areas is made worse as these markets are very poorly served, utility systems, technology can surely strengthen the current – Regional Profile: Sub-Saharan Africa 42 dominated by the informal economy and, as such, relatively inefficient business models. – Regional Profile: Latin America 44 and uncompetitive. This phenomenon of “poverty penalty” often applies – Regional Profile: South Asia 45 to low income population and refers to the fact that people in these – Failure Modes 46 underserved markets have to spend more than wealthier ones for the – 2011 Report Card 47 Enhanced Energy Services same product or service. As poor households spend increasingly greater – 2012 Lessons Learned 48 shares of their income on energy, they reach a point where they begin to cut back on their energy use to minimum levels and are being deprived Maintenance of remote systems and affordability of products and of other basic goods and services needed to sustain life10. They are services have been amongst the main challenges faced by current however increasingly connected to GSM networks and own a phone (or Energy Service Companies (ESCOs). The addition of M2M connectivity, at least a SIM card, synonym of a unique phone number). for remote monitoring of systems and operations, and the use of mobile
7 Wireless Intelligence 2012 8 B ased on Wireless Intelligence surveys and estimates, the number of unique subscribers is around 2.33 Billion as prepaid mobile users are more likely to have several sim cards. 9 World Bank 2012 10 W orld Bank 2010 - Energy Poverty in Rural and Urban India: Are the Energy Poor Also Income Poor? GSMA Community Power from Mobile Service over Technology: Defining the Role for Mobile in Energy Access 22
Foreword 3 Impact of Mobile Money The GSMA Community Power from Mobile Team and Acknowledgements 4 Joint research undertaken by McKinsey, CGAP and GSMA, also showed The prepaid or Pay As You Go solutions developed by ESCOs for off-grid Welcome Note 5 that, in 2010, about 1 Billion people in emerging markets had a mobile and often the unbanked population are helping low income customers 11 Introduction 6 phone but no access to banking services. In Kenya, over the past with financing challenges by providing them with micro-loans. In the Launching Mobile Enabled five years, M-PESA has allowed people living without access to formal case of a home solar system, this business model means eliminating the Community Services 8 banking services and/or a permanent address to use a virtual mobile prohibitively high upfront costs needed to acquire a solar panel, while 2012: Marking a Year of Growth, wallet to make payments, transfer funds and build up savings12 through enabling the customer to pay for the product as they use it. As revenue Milestones and Trail-blazers 12 their mobile phone subscription. The number of M-PESA users has risen collection is a major challenge for off-grid project sustainability, the Organisations that Leverage Mobile to more 15 Million to date13 in Kenya and over 50% of the adult integration of mobile money with the energy service represents a clear Technology and Infrastructure to Deliver Improved Energy Services 13 population now use the system. disruption in the way low income people have access to affordable Lesson 1: Challenges working with MNOs 14 energy. The use of money services also allows users to send remittances – Q&A with Sairam Prasad, Pre-Paid Services to the account of their off-grid relatives helping them to pay the needed CTO of Bharti Infratel 17 Similarly to what happened in the mobile industry with the introduction instalments of such Pay As You Go solutions. – Q&A with Mike Lin, of prepaid airtime, the use of prepaid energy solutions, leveraging CEO of FENIX International 18 mobile money solutions, can further unlock access to sustainable Lesson 2: Emergence of Enhanced Utility Access 19 energy in the developing world. This pre-paid model is enabled by – Introduction by Dr. Robert Hope, the introduction of a GSM modem in the solar unit, making it possible Oxford University 20 to lock the system remotely in case the payment has not been fulfilled. Lesson 3: Different Business Models Exist in This financial monitoring component is key to increasing customer Different Settings 26 payment efficiencies. – Introduction by Pepukaye Bardouille, IFC 27 Lesson 4: Financing is still a struggle 33 – Introduction by Jigar Shah, Table 1: Pay As You Go Methods Jigar Shah Consulting 34 Solution Type Component Method Challenges Appendices – Regional Profile: Sub-Saharan Africa 42 – Regional Profile: Latin America 44 Real Time Solution GSM Module In M2M enabled units, systems are remotely monitored over the GSM networks and can Reliable GSM coverage – Regional Profile: South Asia 45 be unlocked based on user’s account credit. Payments seamlessly unlock the Cost of GSM module micro-utility unit over the air. – Failure Modes 46 Mobile Money Penetration – 2011 Report Card 47 Near Real Time Solution Handset & SMS Users buy scratch cards and send a code to a central server. An SMS code is sent back Distribution & Stock Management of Scratch cards – 2012 Lessons Learned 48 to the user who types the code on the keypad attached to the energy equipment (i.e. prepaid meter).
Audio Channel Open audio channel can communicate the customer’s payment to their product, using Quality of Audio/technology reliability specific frequency modulation. By using audio communication to leverage the customer’s existing phone hardware, additional price can be minimized – to date, Angaza Design is the only company leveraging this technology for Pay As You Go solar
RFID Key/Card Used by companies such as Grundfos Lifelink for water access – credit is transferred by Extra Cost for RFID key/Card and reader an agent to a RFID keyfob which can be swiped against a water dispenser to get access 11 B y 2012 this population would reach 1.7 billion – McKinsey, CGAP & GSMA 2010 to 20 L of water per user 12 S afaricom launched the savings service M-Shwari open to M-PESA subscriber http://www.safaricom.co.ke/personal/m-pesa/m-shwari 13 Safaricom Sustainability Report 2012 Source GSMA based on Industry Feedbacks GSMA Community Power from Mobile Service over Technology: Defining the Role for Mobile in Energy Access 23
Foreword 3 Remote Monitoring Smart water pumps The GSMA Community Power from Mobile Team and Acknowledgements 4 The active technical monitoring of Solar Home Systems installed A key area of development in the water sector is on the low cost water Welcome Note 5 on household rooftop or larger solar arrays for micro-grid projects, smart units that would connect hand-pumps to a centralized system, Introduction 6 allows ESCOs to have real time information about their on-going monitoring operations and the quality of the water fetched by the Launching Mobile Enabled operations. At regular intervals (hourly or more frequently), local population in each district of a city, a region and a country. As it Community Services 8 an embedded microcontroller sends information to a central server is estimated that 30% to 40% of rural water schemes in Africa are 2012: Marking a Year of Growth, about user’s consumption, photovoltaic energy production, non-functional,17 upgrading of tens of thousands of water pumps will Milestones and Trail-blazers 12 battery voltage. By allowing these systems to send operational data, help identify dysfunctional wells and provide information to local Organisations that Leverage Mobile Technology and Infrastructure to it diagnoses all sorts of possible system failures before they actually utilities. Several organisations, such as the Welldone Organization, Deliver Improved Energy Services 13 occur. This data is stored in a central database and can be retrieved the Sweetlab (Sustainable Water, Energy and Environmental Lesson 1: Challenges working with MNOs 14 later.14 The central server can communicate with customer cell phones Technologies Laboratory at Portland State University) and Oxford – Q&A with Sairam Prasad, and the local meters using Hypertext Transfer Protocol (HTTP) and University Mobile water for development Research Group, are today CTO of Bharti Infratel 17 SMS messaging over the GSM network. Users can then be automatically working towards the development of such a system. The recent US$ – Q&A with Mike Lin, notified by text messages about financial or technical issues, or pieces 5 Million grant received by Charity Water from Google to create CEO of FENIX International 18 of advice on their energy consumption. and install sensors on 4,000 wells across Africa by 2015, is a sign that Lesson 2: Emergence of Enhanced Utility Access 19 philanthropists are also willing to support technology enhanced – Introduction by Dr. Robert Hope, projects having a social impact. Oxford University 20 Enhanced Water Services Lesson 3: Different Business Models Exist in Added to this emerging work on smart hand-pumps, other pioneers Different Settings 26 exist in the water space: – Introduction by Pepukaye Bardouille, IFC 27 Millions of women and children spend several hours a day collecting Lesson 4: Financing is still a struggle 33 water from distant sources of varying quality. In addition, dysfunctional ■■ Grundfos Lifelink in Kenya and Sarvajal in India have built their – Introduction by Jigar Shah, water supply systems have led to a huge loss of investment (US$1.2 Jigar Shah Consulting 34 business models for purified water delivery around the integration billion for Africa15), caused by poor maintenance, limited financing Appendices of M2M connectivity in their water dispenser units, allowing for and an overall failure to address sustainability challenges in the field.16 – Regional Profile: Sub-Saharan Africa 42 remote monitoring and pay as you go payments. Enhanced water solutions are still at an early stage of development at the ■ – Regional Profile: Latin America 44 ■ Manobi based in West Africa has developed a feature phone beginning of 2013, and less mature than enhanced energy solutions. – Regional Profile: South Asia 45 application used to monitor operations of rural water sites However the opportunity and impact of enhanced water solutions could – Failure Modes 46 ■ be important. The GSMA estimates that out the total population without ■ mWater has developed low-cost water test kits to check the quality – 2011 Report Card 47 access to an improved source of water, enhanced water solutions could of water sources. They have also developed mobile phone and web – 2012 Lessons Learned 48 target 164 Million people in emerging markets covered by GSM mobile applications to make it easy to share this data online. networks (see Figure 2).
14 A Prepaid Architecture for Solar Electricity Delivery in Rural Areas, D. Soto, M. Basinger, S. Rodriguez-Sanchez, E. Adkins, R. Menon, N. Owzarek, I. Willig, V. Modi, Earth Institute at Columbia University, Advancing Energy, ICTD ACM 2012 15 E van Thomas, Zdenek Zumr, Christina Barstow, Karl Linden, “Proving Sustainability: The International Development Monitoring Initative,” ghtc, pp.164-170, 2011 IEEE Global Humanitarian Technology Conference, 2011 16 http://www.sweetlab.org/wp-content/uploads/2011/05/SWEETSenseOverview_ IEEE_GHTC_8.31.11.pdf 17 W orld Water Development Report – UN 2009 GSMA Community Power from Mobile Service over Technology: Defining the Role for Mobile in Energy Access 24
Foreword 3 The GSMA Community Power from Mobile + Water Access – Grundfos Lifelink in Kenya Mobile Operator’s Role Mobile Team and Acknowledgements 4 As of 2012, Grundfos LIFELINK installed close to 40 purified water Welcome Note 5 dispensers powered by solar energy in Kenya. The company uses There is an increasing opportunity for mobile operators to play an Introduction 6 a variation on M-PESA‘s bill-paying function, in combination with a important role partnering with entrepreneurs providing enhanced Launching Mobile Enabled Community Services 8 water key card and Grundfos dispenser, to allow rural communities utility services, either through revenue sharing, distribution or 2012: Marking a Year of Growth, to access safe water from an automated water system. Water marketing. Beyond the service delivery itself, partnerships allow to build Milestones and Trail-blazers 12 consumption and information about each installation could be viewed deeper relationships with end-users who have been left out of the access Organisations that Leverage Mobile online. According to Grundfos, the Total Life Cycle (TLC) cost could to modern services and products. Technology and Infrastructure to be as low as US$ 1/cubic meter, with service up to 10-15 years. Deliver Improved Energy Services 13 The presence of mobile networks in rural areas, the operator’s extensive Lesson 1: Challenges working with MNOs 14 distribution networks reaching remote populations and the “trust effect” – Q&A with Sairam Prasad, CTO of Bharti Infratel 17 induced by mobile operators brand are clear enablers to the success of – Q&A with Mike Lin, enhanced utility solutions. In the case of M2M enabled solutions, more CEO of FENIX International 18 than pure data delivery, the value is shifting to building data intelligence Lesson 2: Emergence of Enhanced on customer usage and payment frequency. Getting information on an Utility Access 19 unbanked customer’s payment frequency could be used to provide an – Introduction by Dr. Robert Hope, objective credit rating to financial institutions for loan allocation. Oxford University 20 At this early stage of maturity, added to the marketing and distribution Lesson 3: Different Business Models Exist in Different Settings 26 partnerships, the GSMA believes the following actions initiated by – Introduction by Pepukaye Bardouille, IFC 27 mobile operators would support the growth of enhanced utility Lesson 4: Financing is still a struggle 33 solutions: – Introduction by Jigar Shah, Jigar Shah Consulting 34 Data and Mobile Money Channels – Inexpensive data rates and access Appendices to mobile money networks would help mitigate costs and are important – Regional Profile: Sub-Saharan Africa 42 enablers to the scalability of nascent business using M2M. – Regional Profile: Latin America 44 – Regional Profile: South Asia 45 Influence on M2M TCO – Design and provisioning, including – Failure Modes 46 approvals and certification processes, represent an important part of – 2011 Report Card 47 the Total Cost of Ownership (TCO) for low-traffic M2M devices.18 – 2012 Lessons Learned 48 Fostering Innovation in Emerging Markets – Given their influence in the developing world, mobile operators could play an important role fostering innovation at the service level and support the development of compelling business models.
18 T he total cost of ownership for embedded mobile devices – Analysis Mason & GSMA 2010 GSMA Community Power from Mobile Service over Technology: Defining the Role for Mobile in Energy Access 25
Foreword 3 The GSMA Community Power from GSMA‘s Role in the Mobile Team and Acknowledgements 4 Welcome Note 5 Enhanced Utility Sector Introduction 6 Launching Mobile Enabled Low end M2M Design for Emerging Market Applications Community Services 8 2013 will be a test year for mobile enhanced utility solutions following 2012: Marking a Year of Growth, the increasing hype surrounding these new solutions. In the energy The cost of an M2M GSM module is in the range of US$13 to US$17 Milestones and Trail-blazers 12 space, larger scale deployments will be announced, new partnerships per unit based on current production volumes, while a 3G module Organisations that Leverage Mobile will be created and more ESCOs applying M2M connectivity will costs between US$35 and US$47. For entrepreneurs developing Technology and Infrastructure to emerge. In the water space, more commercial models leveraging solutions requiring energy efficient, low data bandwidth and no voice Deliver Improved Energy Services 13 mobile technology will be tested and the development of low cost smart usage, a simpler design, hence having the potential to achieve a lower Lesson 1: Challenges working with MNOs 14 hand pump equipment will mark an important milestone for the rural cost per unit, could extend the reach and affordability of enhanced – Q&A with Sairam Prasad, CTO of Bharti Infratel 17 water sector. utility solutions. – Q&A with Mike Lin, CEO of FENIX International 18 As part of our newest programme, Mobile Enabled Community Services In 2013, the GSMA will engage with the Chipset Provider community Lesson 2: Emergence of Enhanced (MECS), supported by the UK Government, the GSMA will continue to to stimulate the issuance of new guidelines for a low end M2M GSM Utility Access 19 investigate the potential of enhanced utility solutions for socio-economic module. Solution providers, such as M-KOPA, are eager to work – Introduction by Dr. Robert Hope, empowerment, in order to: with M2M module providers to develop use cases and requirements Oxford University 20 for module specifications (See GSMA report “Sustainable Access to Lesson 3: Different Business Models Exist in ■ Different Settings 26 ■ Catalyse the development of partnerships between key players: Energy and Water through M2M connectivity”). – Introduction by Pepukaye Bardouille, IFC 27 entrepreneurs, technology suppliers & mobile operators Lesson 4: Financing is still a struggle 33 ■■ Outline opportunities and addressable markets in the developing – Introduction by Jigar Shah, world for M2M based solutions for energy access, water access Jigar Shah Consulting 34 and beyond Appendices ■■ – Regional Profile: Sub-Saharan Africa 42 Support Entrepreneurship through market intelligence and – Regional Profile: Latin America 44 innovation funding – Regional Profile: South Asia 45 – Failure Modes 46 – 2011 Report Card 47 – 2012 Lessons Learned 48 GSMA Community Power from Mobile Service over Technology: Defining the Role for Mobile in Energy Access 26
Foreword 3 The GSMA Community Power from Mobile Team and Acknowledgements 4 Lesson 3 Welcome Note 5 Introduction 6 Different Business Models Exist in Different Settings Launching Mobile Enabled Community Services 8 2012: Marking a Year of Growth, Milestones and Trail-blazers 12 Author: Charlotte Ward, Programme Manager Organisations that Leverage Mobile Technology and Infrastructure to Deliver Improved Energy Services 13 Lesson 1: Challenges working with MNOs 14 – Q&A with Sairam Prasad, CTO of Bharti Infratel 17 – Q&A with Mike Lin, CEO of FENIX International 18 Lesson 2: Emergence of Enhanced Utility Access 19 – Introduction by Dr. Robert Hope, Oxford University 20 Lesson 3: Different Business Models Exist in Different Settings 26 – Introduction by Pepukaye Bardouille, IFC 27 Lesson 4: Financing is still a struggle 33 – Introduction by Jigar Shah, Jigar Shah Consulting 34 Appendices – Regional Profile: Sub-Saharan Africa 42 – Regional Profile: Latin America 44 – Regional Profile: South Asia 45 – Failure Modes 46 – 2011 Report Card 47 – 2012 Lessons Learned 48 GSMA Community Power from Mobile Service over Technology: Defining the Role for Mobile in Energy Access 27
Foreword 3 The GSMA Community Power from Introduction written by Pepukaye Bardouille, evolving and it is too early to say whether there will be a winning model. Mobile Team and Acknowledgements 4 Global Energy Specialist, International Finance Corporation Still in relative infancy are mini-grid businesses that provide Welcome Note 5 “Energy access” is a nascent but rapidly-developing industry; electricity for a few hours a day to around the clock to households Introduction 6 the number of companies around the world formally selling modern and small businesses; while entrepreneurs selling power at the Launching Mobile Enabled community level using small diesel generators, micro-hydro plants and Community Services 8 energy services at the lower end of the economic pyramid has other energy sources are wide-spread, there are barely a handful of 2012: Marking a Year of Growth, multiplied in the past decade. This has largely been driven by Milestones and Trail-blazers 12 recognition that, despite their income levels, the poor are energy examples of this being done at scale, largely because the capital costs Organisations that Leverage Mobile consumers and, thus, constitute a market; declining input and are high and operating requirements complex. The legal and regulatory Technology and Infrastructure to manufacturing costs; and business model innovation. Of the various environment required for mini-grids to work successfully are generally Deliver Improved Energy Services 13 energy services, lighting appears to be commanding the most of significant importance, as is the existence of a minimum demand Lesson 1: Challenges working with MNOs 14 attention. Device companies are offering a broad range of products, or base load, ability of companies to manage plants and collect – Q&A with Sairam Prasad, payment, and availability of financing to cover equipment costs. CTO of Bharti Infratel 17 from US$3-5 hand-held dry cell battery lamps, to US$10-20 solar While several promising approaches to decentralized power – Q&A with Mike Lin, PV LED task lanterns, to U$75-150 solar kits that allow small devices CEO of FENIX International 18 such as mobile phones to be charged, to much larger, multiple-use generation can be founds globally, collectively these factors appear Lesson 2: Emergence of Enhanced rooftop/solar home systems costing anywhere from US$300-1,000. to be slowing down market development and, if not addressed, will Utility Access 19 While it is hard to generalize, most of these companies focus on a continue to hamper the take-off of the sub-sector. – Introduction by Dr. Robert Hope, few parts of the value chain, either design and manufacturing or Oxford University 20 distribution and retail, leveraging a variety of partners in areas Amongst others, the mobile sector offers potential synergies with Lesson 3: Different Business Models Exist in electrification in remote areas. Indeed, in some instances, it is Different Settings 26 from end-user financing to social marketing to establish a desirable helping to overcome some of the aforementioned challenges to the – Introduction by Pepukaye Bardouille, IFC 27 offering, get products to end-users and grow their consumer base. Lesson 4: Financing is still a struggle 33 establishment of community-level mini-grids. For example, we are – Introduction by Jigar Shah, For devices, different business models work in different markets but, seeing models emerge where base stations serve as anchor clients Jigar Shah Consulting 34 as with most products, a common thread to date has been a strong providing the requisite power demand to make a mini-grid viable; Appendices distribution network and, in some areas, good brand recognition. supplying electricity to households and small businesses in – Regional Profile: Sub-Saharan Africa 42 In certain newer technology categories, such as PV lanterns, product surrounding areas helps to ensure the secure operation of towers; – Regional Profile: Latin America 44 quality and consumer awareness of their benefits over traditional and mobile phone credit is used as (pre-)payment for electricity – Regional Profile: South Asia 45 energy options, such as kerosene lanterns or candles, has been units. It will be interesting to see how well these two industries fit – Failure Modes 46 instrumental for growth in sales and, thus, overall market penetration. together at the long-term and are replicable across geographies or – 2011 Report Card 47 For larger systems, key to success in most cases where tens of market types. – 2012 Lessons Learned 48 thousands of poor customers are being served is some degree A Global Energy Specialist with the International Finance Corporation (IFC), Pepukaye Bardouille of subsidy, an affordable way of spreading remaining capital costs leads activities on energy access, focusing on innovative, commercially-viable models to extend in small payment instalments, and the cost-effective management electricity and clean fuels to base of the pyramid markets, and providing global support to the Africa Clean Energy Advisory portfolio, which also includes grid-connected renewables. of on-going equipment maintenance. For both devices and home systems, technology particularly on the payment side, is rapidly GSMA Community Power from Mobile Service over Technology: Defining the Role for Mobile in Energy Access 28
Foreword 3 The role of the mobile telecommunications industry in business models Size and location of consumer demand (layout of the community) The GSMA Community Power from for off-grid energy access is being defined by innovative technology Mobile Team and Acknowledgements 4 A high density of many households and/ or businesses with a reliable and service companies that are seeking and securing partnerships Welcome Note 5 and continual demand for electricity may be best served via a mini-grid. with the mobile industry. It is difficult to write about what works, Introduction 6 A low density or smaller settlement may be best served via an energy where and why as it is too soon to make that judgement in a market Launching Mobile Enabled hub or household solar systems, due to the higher capital and Community Services 8 that is still so young. However, it is important to explain why there maintenance costs of a mini-grid. 2012: Marking a Year of Growth, can be no “winning” business model for mobile enabled community Milestones and Trail-blazers 12 power services. This should help activate broad investment and support Figure 7: Portrayal of a clustered community development Organisations that Leverage Mobile across the sector. Technology and Infrastructure to Deliver Improved Energy Services 13 To illustrate why different mobile-enabled business models need to Lesson 1: Challenges working with MNOs 14 exist in different setting, two key questions need attention: – Q&A with Sairam Prasad, ■■ Why do different energy service models work in different settings? CTO of Bharti Infratel 17 ■ – Q&A with Mike Lin, ■ Why do different mobile-enabled energy service models work in CEO of FENIX International 18 different settings? Lesson 2: Emergence of Enhanced Utility Access 19 Why do different energy service models work in different settings? – Introduction by Dr. Robert Hope, Oxford University 20 “Low return rates, political setting of tariffs and a weak customer base in rural Lesson 3: Different Business Models Exist in Different Settings 26 areas makes RE [Renewable Energy] unattractive… Among local barriers, – Introduction by Pepukaye Bardouille, IFC 27 most stakeholders mention poverty and low population density – the latter Lesson 4: Financing is still a struggle 33 having huge impact on both distribution and transmission costs. Despite low – Introduction by Jigar Shah, tariffs (that are financially unviable), rural customers find it difficult to afford Jigar Shah Consulting 34 connection and subsidies are often used to overcome this barrier. To find a Appendices level appropriate both for satisfying consumers and encouraging private Figure 8: Portrayal of a ribbon community development – Regional Profile: Sub-Saharan Africa 42 sector incentives in the energy sector is difficult.” – Regional Profile: Latin America 44 – Regional Profile: South Asia 45 Quote refers to Tanzania: “Drivers and barriers to rural electrification – Failure Modes 46 in Tanzania and Mozambique – grid extension, off-grid and – 2011 Report Card 47 renewable energy sources”.19 – 2012 Lessons Learned 48
The geographical and political context in which an energy services company operates will impact the success and failure of multiple aspects of its business model. It will go a long way to determining how the energy service is delivered, to what extent consumer financing could secure more customers and which technologies are most appropriate in that market.
19 World Renewalbe Energy Conference 2011, Sweden (Helene Ahlborg, Linus Hammar) http://www.ep.liu.se/ecp/057/vol10/028/ecp57vol10_028.pdf GSMA Community Power from Mobile Service over Technology: Defining the Role for Mobile in Energy Access 29
Foreword 3 Power in to the home is a sought-after service and with sufficient Incentives from government The GSMA Community Power from customers the capital costs of the infrastructure will be returned in Mobile Team and Acknowledgements 4 Subsidies or non-discriminatory tax concessions that don’t distort the an attractive timeframe for investors. Scaling up a business model Welcome Note 5 market may help facilitate the growth of new technologies and to capture operating and cost efficiencies may be best achieved with Introduction 6 community energy services. For example, grants for electrifying off-grid multiple clients or one large anchor client serviced by a single mini- Launching Mobile Enabled households in Tanzania may improve the economics of supplying the Community Services 8 utility company. The relative location and proximity of a community service so long as it’s maintained, and tax incentives for solar panels will 2012: Marking a Year of Growth, of households, small businesses and any larger industrial customers incentivise the proliferation of the technology. Milestones and Trail-blazers 12 (such as a factory, plantation, hotel or mobile phone tower) will Organisations that Leverage Mobile determine the feasibility of servicing all from one central infrastructure. The ability for customers to pay Technology and Infrastructure to The size and stability of base load demand will also determine the Deliver Improved Energy Services 13 feedstock supply required and may impact the need for fuel diversity “ More than four-fifths of the world’s poor live in rural areas and depend Lesson 1: Challenges working with MNOs 14 (such as biomass with solar power and battery as a secondary source on agriculture for livelihoods. Because of seasonal income shocks, the poor – Q&A with Sairam Prasad, CTO of Bharti Infratel 17 where electricity required continuously). who are generally poor are likely to be even poorer during a particular – Q&A with Mike Lin, agricultural season, while those who are not poor year-round may also be CEO of FENIX International 18 Traditional/ incumbent options for energy and awareness of alternatives so during that season.” Lesson 2: Emergence of Enhanced Distribution and sales of energy services requires an understanding Utility Access 19 20 of an average customer’s daily life and why they choose their current Quote taken from the Abstract to Seasonal Hunger and Public Policies – Introduction by Dr. Robert Hope, 2012, Khandker, Shahidur R.; Mahmud, Wahiduddin) Oxford University 20 fuel (like kerosene) today. What may actually make them choose a Lesson 3: Different Business Models Exist in different option tomorrow? Factors include upfront and on-going costs, Different Settings 26 the social aspects of collecting or using traditional fuels and the impacts The daily income of a household and its seasonal variability will – Introduction by Pepukaye Bardouille, IFC 27 on health? Getting a new customer requires an understanding of how determine the pricing of the energy service, the need for consumer Lesson 4: Financing is still a struggle 33 to best get their attention and with an understanding of their decision- financing to make upfront costs affordable and provide for flexibility – Introduction by Jigar Shah, making process developing that to taking action. Their level of Jigar Shah Consulting 34 in the payment patterns. awareness of technologies (like solar panels, solar lanterns and key pads) Appendices will dramatically affect the sales process and the speed of new sales. – Regional Profile: Sub-Saharan Africa 42 – Regional Profile: Latin America 44 – Regional Profile: South Asia 45 – Failure Modes 46 – 2011 Report Card 47 – 2012 Lessons Learned 48
20 http://elibrary.worldbank.org/content/book/9780821395530 GSMA Community Power from Mobile Service over Technology: Defining the Role for Mobile in Energy Access 30
Foreword 3 Why do different mobile-enabled (CPM) energy service models work Maturity of the Tower Company Market The GSMA Community Power from in different settings? Mobile Team and Acknowledgements 4 In markets where tower ownership has moved away from mobile Welcome Note 5 The market landscape and maturity of mobile operators and tower network operators and the model for tower companies managing energy Introduction 6 companies will impact the success of business models leveraging provision to the BTS is relatively mature (such as India), the benefits and Launching Mobile Enabled mobile infrastructure and technology. These include the extent motivations of mobile network operators are somewhat detached from Community Services 8 of rural off-grid penetration of mobile services and the maturity the conversation. The expansion of tower ownership or management by 2012: Marking a Year of Growth, of the tower outsourcing model, the 3rd party ESCO model and tower companies in Africa is increasing, led by West Africa. Milestones and Trail-blazers 12 mobile money services. Organisations that Leverage Mobile Figure 9: Estimated number of towers owned or managed by Technology and Infrastructure to Tower Company in Africa Deliver Improved Energy Services 13 Where mobile services are poorly servicing rural and off-grid Lesson 1: Challenges working with MNOs 14 areas, improving energy access options for both the towers IHS Africa 827 931 697 2435 720 – Q&A with Sairam Prasad, and the communities may also be a key driver to penetration. IHS Africa 827 931 697 2435 720 CTO of Bharti Infratel 17 The opportunities are specific for every market: mobile service American Tower 1908 1601 1031 – Q&A with Mike Lin, penetration is variable and can be higher or lower levels than American Tower 1908 1601 1031 CEO of FENIX International 18 market electrification rates. Helios Tower Africa 750 750 1300 Lesson 2: Emergence of Enhanced Utility Access 19 Helios Tower Africa 750 750 1300 Table 2: Penetration of mobile services (connections and subscribers) Eaton Towers 700 700 100 – Introduction by Dr. Robert Hope, Oxford University 20 and electrification rates from sampled emerging markets Eaton Towers 700 700 100 SWAP Technologies 711500 Lesson 3: Different Business Models Exist in Country Electrification Rate Penetration of % Penetration of Different Settings 26 (%) 1 Connections (%) 2 Subscribers (Market) 2 SWAP Technologies 711500 – Introduction by Pepukaye Bardouille, IFC 27 Helios Towers Nigeria 1000
Lesson 4: Financing is still a struggle 33 India 75.0% 74% 25% Helios Towers Nigeria 1000 – Introduction by Jigar Shah, 0 1000 3000 4000 5000 6000 Jigar Shah Consulting 34 Tanzania 13.9% 52% 29% 0 1000 3000 4000 5000 6000 Appendices Kenya 16.1% 69% 30% – Regional Profile: Sub-Saharan Africa 42 Cameroon Ghana Sudan and South Sudan Cote d’Ivoire Nigeria Tanzania – Regional Profile: Latin America 44 Mozambique 11.7% 34% 19% Cameroon Ghana Sudan and South Sudan DRC South Africa Uganda – Regional Profile: South Asia 45 Cote d’Ivoire Nigeria Tanzania Ghana 60.5% 90% 45% Source www.towerxchange.com TowerXchange Issue 1, December 2012 – Failure Modes 46 DRC South Africa Uganda Bangladesh 41% 67% 38% – 2011 Report Card 47 Towerco Est # of towers Acquisitions from Countries active – 2012 Lessons Learned 48 Haiti 38.5% 58% 39% IHS Africa 5610 MTN Nigeria, Cotd’Ivoire , Cameroon, Ghana, Sudan, South Sudan Cambodia 24% 129% 50% American 4540 Cell C, MTN Ghana, South Africa, Uganda
Helios TA 2800+ Millicom Ghana, DRC, Tanzania Sources: 1 IEA: World Energy Outlook 2011 Energy; 2 Wireless Intelligence 2012 Eaton 1500+ Vodafone, Orange, Warid Ghana, South Africa, Uganda SWAP 1211 Starcomms Nigeria, Ghana
Helios TN 1000+ N/A Nigeria GSMA Community Power from Mobile Service over Technology: Defining the Role for Mobile in Energy Access 31
Foreword 3 Figure 10: India Tower Company Landscape Figure 11: 3rd Party ESCO Business Model The GSMA Community Power from Mobile Team and Acknowledgements 4 Mobile Operators Welcome Note 5 Other Tower Co. 15,000 Introduction 6 15,000 ESCO – PPA ESCO – ESA ESCO – Fixed Fee Launching Mobile Enabled Community Services 8
2012: Marking a Year of Growth, BSNL Indus Tower Milestones and Trail-blazers 12 70,000 111,000 Organisations that Leverage Mobile
Technology and Infrastructure to Power Deliver Improved Energy Services 13 OPEX Savings Power Power
Lesson 1: Challenges working with MNOs 14 $ – Based on % of $ – on per kWh
– Q&A with Sairam Prasad, $ – Flat Free Payment CTO of Bharti Infratel 17 – Q&A with Mike Lin, Reliance Infratel Bharti Infratel 50,000 CEO of FENIX International 18 35,000 Lesson 2: Emergence of Enhanced Utility Access 19 GTL Infrastructure Viom Networks – Introduction by Dr. Robert Hope, 30,000 40,000 Oxford University 20 MNO/Tower Company Lesson 3: Different Business Models Exist in Source GSMA Different Settings 26 – Introduction by Pepukaye Bardouille, IFC 27 The Indian tower company landscape of approximately 366,000 towers is PPA – Power Purchase Agreement ESA – Energy Savings Agreement Lesson 4: Financing is still a struggle 33 dominated by Indus Towers holding approximately 30% of the market in Fixed Fee – Monthly Fixed payment terms of number of towers, followed by BSNL (19%) and Reliance Infratel – Introduction by Jigar Shah, Source GSMA 2012 Jigar Shah Consulting 34 (approximately 13%). Appendices – Regional Profile: Sub-Saharan Africa 42 Maturity of ESCO Model and Operators Where the 3rd party ESCO model is immature, which is still the case – Regional Profile: Latin America 44 New models of energy supply to telecom base station sites are gaining in Africa, the challenges of servicing a tower and a community – Regional Profile: South Asia 45 attention with the entry of a third party energy service company are greater since the model will be less proven and the ESCO less – Failure Modes 46 (ESCO) to the eco-system In the ESCO models, the energy service established. A challenge to the ESCO is in integrating the power – 2011 Report Card 47 company completely owns on-site power generation and supply of demands of the telecom client and that of the community without – 2012 Lessons Learned 48 power to the base station sites, thus reducing the burden of deploying impacting service levels, and delivering services at a price affordable and managing the power plant from the mobile network operator or to each party. As expressed in Chapter 1, ESCO’s need to ensure 24/7 tower company. The energy demands of the mobile industry in off-grid power delivery to their anchor customers (mobile industry) and they locations present an excellent opportunity for an ESCO to service a need to protect themselves from the strict Service Level Agreement BTS site acting as an anchor load. The demand for off-grid energy by penalties that come with these contracts. The technical challenges nearby households and small businesses, especially using cleaner fuels, can perhaps be overcome more easily than the operational challenges can be serviced by an ESCO through energy hubs or mini-grids that of integrating a telecom client and a community energy service in to a share the same power plant as the BTS site. scalable business model. GSMA Community Power from Mobile Service over Technology: Defining the Role for Mobile in Energy Access 32
Foreword 3 Proliferation of Mobile Money Services Figure 13: Number of Live Mobile Money Services for the unbanked by region The GSMA Community Power from at year end for the period 2001-2012 Mobile Team and Acknowledgements 4 The penetration of mobile money services will determine the extent 150 Welcome Note 5 to which Pay As You Go models using mobile “wallets” will be Introduction 6 successful, driven by the volume of immediate users and customers Launching Mobile Enabled that are familiar with the technology of mobile money. There could 109 Community Services 8 be an alternative business case that energy access models using mobile 2012: Marking a Year of Growth, money platforms may help to increase mobile money customers where Milestones and Trail-blazers 12 electrification is extremely poor and amongst an un-banked population 65 Organisations that Leverage Mobile that is yet to be reached by a mobile money service. Technology and Infrastructure to 36 Deliver Improved Energy Services 13 What is clear is that Mobile Money is continuing to expand around 15 Lesson 1: Challenges working with MNOs 14 4 6 7 10 1 2 2 – Q&A with Sairam Prasad, the world. Currently there are a recorded 150 deployments of mobile CTO of Bharti Infratel 17 money services across 73 countries, 40 of which were launched in 2012. 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 – Q&A with Mike Lin, Services are available in 34 of 47 sub-Saharan countries. Telecoms is CEO of FENIX International 18 driving the mobile money revolution with 72% of deployments Sub-Saharan Africa East Asia and Pacific South Asia Lesson 2: Emergence of Enhanced operationally run by a mobile operator and competition is increasing, Latin America and the Caribbean Middle East and North Africa Europe and Central Asia Utility Access 19 proven by 40 markets that have at least two mobile money services.21 – Introduction by Dr. Robert Hope, Oxford University 20 The involvement of the mobile industry cannot overcome all challenges Lesson 3: Different Business Models Exist in Figure 12: Countries where Mobile Money Deployments are available Different Settings 26 at the end of 2012 or support all critical success factors for business models, such as – Introduction by Pepukaye Bardouille, IFC 27 financing for R&D to design and manufacture cheaper technology Lesson 4: Financing is still a struggle 33 or supply chain financing (except where the partnership is to purchase – Introduction by Jigar Shah, products wholesale). Energy service providers who are full-service Jigar Shah Consulting 34 integrators and play across the value chain require a strong operating Appendices presence on the ground above and beyond others who are product – Regional Profile: Sub-Saharan Africa 42 manufacturers or distributors seeking partnership channels. This the – Regional Profile: Latin America 44 mobile industry cannot provide alone. The mobile infrastructure – Regional Profile: South Asia 45 and technology can go a long way to supporting innovative business – Failure Modes 46 models capable of scaling-up. The market is still very young with most – 2011 Report Card 47 commercial operations and partnerships less than 2 years old, so we – 2012 Lessons Learned 48 will continue to watch and see which models work well and where, and try and distinguish why. In the meantime, as expressed in other chapters of this report, the playing field could be levelled further by regulators and policy makers, a broader market support provided and financing could be made available from start-up to scaled commercial roll-out.
21 MMU Deployment Tracker http://www.gsma.com/mobilefordevelopment/ programmes/mobile-money-for-the-unbanked/tracker GSMA Community Power from Mobile Service over Technology: Defining the Role for Mobile in Energy Access 33
Foreword 3 The GSMA Community Power from Mobile Team and Acknowledgements 4 Lesson 4 Welcome Note 5 Introduction 6 Financing is still a struggle Launching Mobile Enabled Community Services 8 2012: Marking a Year of Growth, Milestones and Trail-blazers 12 Author: Mary Roach, Business Development Manager Organisations that Leverage Mobile Technology and Infrastructure to Deliver Improved Energy Services 13 Lesson 1: Challenges working with MNOs 14 – Q&A with Sairam Prasad, CTO of Bharti Infratel 17 – Q&A with Mike Lin, CEO of FENIX International 18 Lesson 2: Emergence of Enhanced Utility Access 19 – Introduction by Dr. Robert Hope, Oxford University 20 Lesson 3: Different Business Models Exist in Different Settings 26 – Introduction by Pepukaye Bardouille, IFC 27 Lesson 4: Financing is still a struggle 33 – Introduction by Jigar Shah, Jigar Shah Consulting 34 Appendices – Regional Profile: Sub-Saharan Africa 42 – Regional Profile: Latin America 44 – Regional Profile: South Asia 45 – Failure Modes 46 – 2011 Report Card 47 – 2012 Lessons Learned 48 GSMA Community Power from Mobile Service over Technology: Defining the Role for Mobile in Energy Access 34
Foreword 3 The GSMA Community Power from Introduction by Jigar Shah, CEO of Jigar Shah Consulting Good credit counterparties: Credit counterparty risk matters to Mobile Team and Acknowledgements 4 investors. In the telecom space, large mobile operators and With nearly US$200B in financing annually, the renewable telecom tower owners can be acceptable to large investors. But, Welcome Note 5 electricity business has arrived for grid-connected applications. village power and other bottom of the pyramid business Introduction 6 Technological improvements and increasing diesel fuel prices strategies are often problematic. While funding is critical to test Launching Mobile Enabled create more attractive economics for off-grid and energy access. the business models, at some point credit counterparty risk will Community Services 8 Increasingly, for governments looking at grid expansion, the stop many solutions from scaling. In the past, this was bridged 2012: Marking a Year of Growth, cost of decentralised energy solutions are less than capital costs Milestones and Trail-blazers 12 by using expensive money like microfinance. Or in the 20th of stringing power lines and building distribution grids. century, central governments guaranteed bonds – as is Organisations that Leverage Mobile Technology and Infrastructure to documented by rural electrification in the USA. There’s good news. In 2011, Indian Telcos inked contracts with Deliver Improved Energy Services 13 20-plus companies accounting for 15,000 telecom towers. With Lesson 1: Challenges working with MNOs 14 Trust: The promoters have to be trusted by customers and 200,000-plus towers globally running eight or more hours per – Q&A with Sairam Prasad, investors to deliver technology, contracts, and most importantly daily on diesel fuel, the market will require at least US$2B of CTO of Bharti Infratel 17 execution. It is execution over time that leads to large-scale capital. Applied Solar Technologies and OMC Power have raised – Q&A with Mike Lin, financing. So, new promoters without history slowly earn trust venture dollars – with an implied interest rate of 40 percent. To CEO of FENIX International 18 through demonstrated hardship. Many jump ship. But, those reach full potential, lower cost capital is needed, but with Lesson 2: Emergence of Enhanced that persevere are rewarded. While aid money is a key to the conditions. Bringing renewable energy into these projects and Utility Access 19 momentum, we must find balance. Aid money should be used receiving lower cost capital requires the following: – Introduction by Dr. Robert Hope, to cover upfront business development costs. But, companies
Oxford University 20 should be required to attract commercial finance to scale. Trusted technology: Today, solar power is fairly trusted. Lesson 3: Different Business Models Exist in Different Settings 26 However, off-grid projects using batteries generally have turned Traditionally, finance came from the private sector. But, today out to be more expensive than anticipated. This is especially – Introduction by Pepukaye Bardouille, IFC 27 with crowd funding and impact investing, there are more true when factored in are expected emerging market interest Lesson 4: Financing is still a struggle 33 options. Still certain actions to de-risk investments are critical. rates at 18%. High upfront project costs pose a financial burden – Introduction by Jigar Shah, For example, even after aforementioned tests are met, in meeting equity investor requirements for renewable energy Jigar Shah Consulting 34 mainstream investors demand returns that significantly exceed projects. Biomass, a good choice as well, has just started being Appendices inflation. With inflation in India at about 7%, for scale, we need proven for small projects. So, trust by the financial community – Regional Profile: Sub-Saharan Africa 42 the 18% equity returns expected in emerging markets. . Last, is not on par with solar PV. Mobile phone payment integration, – Regional Profile: Latin America 44 scale in this industry means thousands of local entrepreneurs village power meters, and other technologies are progressing, – Regional Profile: South Asia 45 with hundreds of companies. Over time, consolidation may but few are mainstream-capital tested. However, with on-going create large regional or even global players, but unlikely. Local – Failure Modes 46 quality tests, mainstream investor data thresholds should soon and increased competition means a healthier industry and we – 2011 Report Card 47 be met. To attract mainstream investors at the billion-dollar need the right structure of investments to ignite growth. – 2012 Lessons Learned 48 scale generally requires about 100,000 hours (12 years) of testing. Jigar Shah is currently the CEO of Jigar Shah Consulting and an investor into KMR Solid contracts: Contracts in the energy access space today are Infrastructure.,. A renowned visionary committed to renewable energy, Mr. Shah is the often weak. From village power contracts to telecom contracts, founder and former CEO of Sun Edison. Mr. Shah sits on the boards of the Prometheus few are financeable. Contracts do not include basic required Institute, Greenpeace USA and the Carbon War Room (where he served as President from 2009-March 2012). investor protections. These protections include the following: timely resolution of common reasons for non-payment (performance); inability to cancel a contract on a whim; protection from high inflation; and refusal to sell units for less than fair market value at contract end.
GSMA Community Power from Mobile Service over Technology: Defining the Role for Mobile in Energy Access 35
Foreword 3 “Innovation across multiple dimensions in order to pioneer new business State of the market: The GSMA Community Power from models serving the BoP is especially risky. In the emerging field of Mobile Team and Acknowledgements 4 Most decentralised energy access organisations can be characterised inclusive business, there are still many more unproven models than there Welcome Note 5 as small, less than 10 years old, and with relatively low capitalisation. are proven ones, so the vast majority of investment opportunities are at Introduction 6 the early stage”22 Figure 14: Growth in Enterprises That Provide Energy Services to Off-grid Launching Mobile Enabled Community Services 8 Communities in India/Africa 2012: Marking a Year of Growth, The two years GSMA has spent focussed on pushing a new model Milestones and Trail-blazers 12 for energy access has taught us quite a bit about the funding needs of Solar devices Organisations that Leverage Mobile organisations working in decentralised energy access, and the funds PAYG Technology and Infrastructure to available to them as well as the funders who are willing to interact Mini-Grid Deliver Improved Energy Services 13 in the sector. While conservative estimates suggest that US $48Billion PAYG Lesson 1: Challenges working with MNOs 14 Energy Hub per year23 is required to support universal access to electricity by 2030, – Q&A with Sairam Prasad, CTO of Bharti Infratel 17 key questions still remain unanswered on how to support the PAYG – Q&A with Mike Lin, hundreds of organisations trying to serve the 1.3B people without CEO of FENIX International 18 access to electricity. PAYG Lesson 2: Emergence of Enhanced Utility Access 19 ■■ What kind of funding is required by organisations focussed PAYG – Introduction by Dr. Robert Hope, on delivering commercially viable energy access programmes? Oxford University 20 PAYG ■ Lesson 3: Different Business Models Exist in ■ Who will be able to step in and serve each of the tranches Different Settings 26 of financing required? PAYG – Introduction by Pepukaye Bardouille, IFC 27 ■■ When will this funding be required and when will it Lesson 4: Financing is still a struggle 33 become available? PAYG – Introduction by Jigar Shah, Jigar Shah Consulting 34 2004 2006 2008 2010 2012 Appendices – Regional Profile: Sub-Saharan Africa 42 – Regional Profile: Latin America 44 – Regional Profile: South Asia 45 Examples of the more mature organisations in this sector include – Failure Modes 46 d.Light Design who has just passed the 2 million mark in sales of their – 2011 Report Card 47 solar lanterns after 5 years in operation24 and Husk Power Systems – 2012 Lessons Learned 48 who operate nearly 100 decentralised bio-gasification mini-grids. While these are great pioneering organisations it is fair to say that they alone cannot solve the energy divide. The challenge is how to fund hundreds of d.Lights and Husk Power Systems?
22 S ource: from BLUEPRINT TO SCALE; http://www.mim.monitor.com/ blueprinttoscale.html 23 www.worldenergyoutlook.org/media/weowebsite/energydevelopment/ weo2011_energy_for_all.pdf 24 www.dlightdesign.com/wp-content/uploads/2012/09/Press-Release-Ten- Million-Empowered-November-14-2012.pdf GSMA Community Power from Mobile Service over Technology: Defining the Role for Mobile in Energy Access 36
Foreword 3 What funding when? The GSMA Community Power from Debt Mobile Team and Acknowledgements 4 Companies require different types of funding at different stages of Fund raising at any stage is time consuming and securing debt Welcome Note 5 growth. This is also true for organisations focussed on energy access and investment seems to be the one of the largest challenges most Introduction 6 further complicated by the long valley of death faced by energy organisations face. The challenge with the working capital requirements Launching Mobile Enabled organisations discussed in our last white paper. Personal investments, and credit requirements of energy access organisations is that they Community Services 8 grants, angel and friends-family-fool funding can support the can be paid back over a long period of time and spread out across 2012: Marking a Year of Growth, development of proof of concept. Equity-like funding can support the Milestones and Trail-blazers 12 multiple players. Manufacturers need working capital to make product. CAPEX investment to further grow, and debt is required to support Energy access organisations need funding to buy product, support Organisations that Leverage Mobile working capital along the entire value chain. Technology and Infrastructure to inventory and in many cases extend further credit to their customer Deliver Improved Energy Services 13 “The “valley of death” is often known as the gap in financing that (either further distributors or directly to customers in the case of Lesson 1: Challenges working with MNOs 14 startups face somewhere between grant funding and commercialisation. pay-as-you-go). To be able to scale, energy access organisations will – Q&A with Sairam Prasad, 25 need to access large amounts of debt to support their growth. CTO of Bharti Infratel 17 Two studies conducted last year suggested that the valley of death was – Q&A with Mike Lin, particularly precarious for energy companies since: CEO of FENIX International 18 ■ Mobile operators and other industries are increasingly moving Lesson 2: Emergence of Enhanced ■ They maintain high variable costs even after proof of concept either in the Utility Access 19 form of building products (i.e. carrying inventory) or developing physical towards leaner “zero inventory” models. While this may not affect plants – Introduction by Dr. Robert Hope, software providers or “App” startups, energy solutions require ■ Oxford University 20 ■ They take a long time to scale: in comparison to the IT companies, physical hardware to supply the essential electricity needed to power development of clean tech product and installations takes much longer Lesson 3: Different Business Models Exist in ■ those Apps. This presents a real challenge for smaller, agile energy Different Settings 26 ■ Energy development must navigate a series of political, financial and ■ 26 innovation startups – Introduction by Pepukaye Bardouille, IFC 27 ■ Regulatory issues specific to the geography they wish to operate in.” Lesson 4: Financing is still a struggle 33 – Introduction by Jigar Shah, The role of Grants and Venture Philanthropy Jigar Shah Consulting 34 Appendices While many investors get prickly at the “G” word, it is clear that grants – Regional Profile: Sub-Saharan Africa 42 are still required to support the proof of concept of business models and – Regional Profile: Latin America 44 support innovation. To date, we have found a very limited number of – Regional Profile: South Asia 45 donors or investors capable of delivering the capital required to support – Failure Modes 46 wide scale trials and innovations. The African Enterprise Challenge – 2011 Report Card 47 Funds and USAID’s innovation grants are exceptions but even they have – 2012 Lessons Learned 48 limitations. Tying funding to pre-determined windows limits the number of applicants and their ability to apply for funding when it makes the most sense to them. Additionally the due diligence costs remain high and the total number of grants remains low. Granting mechanisms are often further encumbered by detailed definition of what is in and what is out of scope. The industry’s growing love affair for commercially viable business models often means we continue to invest more in organisations that are already doing well rather than newcomers 25 http://thebreakthrough.org/blog/Valleys_of_Death.pdf to the field. But what is the answer? 26 H arnessing the Full Potential of Mobile for Off-grid Energy (GSMA, 2011) http:// www.gsma.com/mobilefordevelopment/harnessing-the-full-potential-of- mobile-for-off-grid-energy GSMA Community Power from Mobile Service over Technology: Defining the Role for Mobile in Energy Access 37
Foreword 3 The GSMA Community Power from CASE STUDY: Shell Foundation and Husk Power Systems27 Mobile Team and Acknowledgements 4 Figure 15 chronicles the stages of development of HPS from Blueprint to Welcome Note 5 The Monitor Group and Acumen report From Blueprint to Scale Scale and the different grant and commercial funding the organisation Introduction 6 highlighted the need to provide a blend of commercial and first-loss received since its inception. Figure 16 illustrates how the grants were Launching Mobile Enabled investment along the lifetime of an investment. used over time. As is illustrated, the first Shell Foundation grants were Community Services 8 used to help build the proof of concept with the majority of the funding 2012: Marking a Year of Growth, The report defines the stages of a business as Blueprint, Validate, going towards the CAPEX requirements of setting up the decentralised Milestones and Trail-blazers 12 Prepare, and Scale. To illustrate the role that “venture philanthropy” biogas systems. In the ‘prepare’ stage, none of Shell’s grant is going to Organisations that Leverage Mobile support the CAPEX requirement and the majority of the grant is going Technology and Infrastructure to plays in supporting the development of commercially viable social Deliver Improved Energy Services 13 enterprises the report draws on the experience of Acumen with Husk to support R&D, training and an HR subsidy for its management staff. Lesson 1: Challenges working with MNOs 14 Power Systems (one of their early energy investments). The report Figure 16: Usage of Grants from Shell Foundation
– Q&A with Sairam Prasad, highlights the role that grants from Shell Foundation provided in Usage of Grants from Shell Foundation CTO of Bharti Infratel 17 helping Husk Power Systems graduate to increasingly more $442k Grant $1.88m Grant – Q&A with Mike Lin, 100% commercial funding. 1% Other CEO of FENIX International 18 13% 20% HR subsidy Lesson 2: Emergence of Enhanced 4% 80% 6% Training The Shell Foundation has been a key supporter of venture 0% Utility Access 19 HSSE philanthropy in the energy sector. Established by the Shell Group in – Introduction by Dr. Robert Hope, 24% 31% R&D Oxford University 20 2000 the Shell Foundation’s mission is to develop, scale-up and 60% Capex Lesson 3: Different Business Models Exist in promote enterprise-based solutions to the challenges arising from the Different Settings 26 12% impact of energy and globalisation on poverty and the environment.28 40% – Introduction by Pepukaye Bardouille, IFC 27 Their Excelerate programme helps bring energy to the poor by Lesson 4: Financing is still a struggle 33 53% investing grant capital in small business that provide modern energy 20% 36% – Introduction by Jigar Shah, Jigar Shah Consulting 34 services to low-income communities. 0% 0% Appendices Validate Prepare – Regional Profile: Sub-Saharan Africa 42 Figure 15: Stages of Development of Husk Power Systems. Source: Shell Foundation, Acumen Fund, Monitor Analysis – Regional Profile: Latin America 44 2007 2008 2009 2010 POST 2011 – Regional Profile: South Asia 45 – Failure Modes 46 1. Blueprint 2. Validate 3. Prepare 4. Scale – 2011 Report Card 47
– 2012 Lessons Learned 48 Savings and winnings from business plan competitions used Shell Foundation grant for capex of 8 plants to test scalability Leveraged Shell Foundation’s expertise to build to experiment and create 2 working power plants Focus on achieiving unit breakeven and not on achieving management capacity premature scale Grant funded R&D to reduce operational costs and for HSSE* Grant funding
Founders savings Business plan competitions Shell Foundation
Grant funding DFJ
Acumen Fund LGT IFC Draper Fisher Bamboo 27 S ource: from BLUEPRINT TO SCALE; http://www.mim.monitor.com/ Note: HSSE – Health Safety Security and Environment blueprinttoscale.html Source: Acumen Fund, Primary research interviews, Monitor Analysis Jurvetson Finance 28 http://www.shellfoundation.org/pages/core_lines.php?p=our_approach_ content&page=ourmission GSMA Community Power from Mobile Service over Technology: Defining the Role for Mobile in Energy Access 38
Foreword 3 Who will deliver the funding required for ESCOs to grow? The GSMA Community Power from Mobile Team and Acknowledgements 4 Welcome Note 5 The large need for investment in the energy access sector provides room Introduction 6 for several investors from multilaterals to purely commercial investors to Launching Mobile Enabled co-exist and collaborate (see figure 17). Community Services 8 2012: Marking a Year of Growth, Figure 17: Financing needs and obstacles early in the company life cycle Milestones and Trail-blazers 12 Organisations that Leverage Mobile Technology and Infrastructure to Commercial funds Investors must address the “missing middle” Deliver Improved Energy Services 13 funding needs of the sector between Concessional funds $50,000 – $100,000 and $3 – $5 million Lesson 1: Challenges working with MNOs 14 – Q&A with Sairam Prasad, CTO of Bharti Infratel 17 – Q&A with Mike Lin, Business Model Development Proof of Concent Maturity CEO of FENIX International 18 Lesson 2: Emergence of Enhanced The provision of mezzanine Utility Access 19 finacing can enable banks to – Introduction by Dr. Robert Hope, lend to projects that would Oxford University 20 not get debt financing otherwise due Lesson 3: Different Business Models Exist in Profitability to high risk. Different Settings 26 – Introduction by Pepukaye Bardouille, IFC 27 break- Lesson 4: Financing is still a struggle 33 even Technology/business model advancement – Introduction by Jigar Shah, Jigar Shah Consulting 34 Appendices – Regional Profile: Sub-Saharan Africa 42 – Regional Profile: Latin America 44 – Regional Profile: South Asia 45 – Failure Modes 46 – 2011 Report Card 47 Grant funding Grant funds can • Both concessional and Carbon prefinancing Working capital at can support help scale and commercial debt and equity has potential to commercial rates is – 2012 Lessons Learned 48 start-ups and replicate promising are required to finance the generate additional required throughout build an business models, start-up and growth capital revenue for both the business cycle. investment possibly through needs of early-stage energy cookstoves and some Double bottom line and pipeline. incubators or by access ubusinesses. mini-grids, and more commercial investors testing stuctured approaches could offer trade finance high-potential • Donors can fund expensive could help make it to groups of companies business models. R&D that shows sectorwide more accessible. in the same or related promise.w energy access spaces.
Source: From Gap to Opportunity: Business Models for Scaling Up Energy Access, IFC 2012 GSMA Community Power from Mobile Service over Technology: Defining the Role for Mobile in Energy Access 39
Foreword 3 Co-investment: reducing the pool of investors? When will these funds be required and when The GSMA Community Power from Mobile Team and Acknowledgements 4 Reviewing the list of investors of many of the leading ESCOs we know will it become available? Welcome Note 5 of and work with, we have noticed a pattern of co-investment by several Introduction 6 impact investors to the same company. The merits of co-investing At this moment organisations spend considerable amounts of time Launching Mobile Enabled are clear: risks are shared across investors and opportunities exist to competing for the little funds that are available with the risk profile they Community Services 8 leverage the strengths of the individual investors. One question that seek. Over time Acumen, a leader in the impact investment sector has 2012: Marking a Year of Growth, is less clear to us is: how do investors view their role in helping to changed its risk profile to invest in more mature and less risky ventures, Milestones and Trail-blazers 12 develop the hundreds of energy access organisations required to reduce helping to fill a funding gap for the more promising ventures and in the Organisations that Leverage Mobile the energy gap? We have heard from ESCOs that some investors believe process creating a gap for early pioneers (see figure 18): “In the first three Technology and Infrastructure to Deliver Improved Energy Services 13 that there are conflicts of interest if they invest in the same type of years of its life, Acumen Fund made 78 percent of its capital and funding Lesson 1: Challenges working with MNOs 14 company (i.e. product companies or service companies). As a result, deployment in the blueprint and validate stages, compared with 39 32 – Q&A with Sairam Prasad, what happens is that “darlings” are formed in the impact investing percent in the last three years”. CTO of Bharti Infratel 17 circle that find it easier to raise capital while other are left struggling – Q&A with Mike Lin, to raise funds. Figure 18: Acumen Fund’s deal profile evolution CEO of FENIX International 18 0% 100% Lesson 2: Emergence of Enhanced Can we crowd-source our way out of this dilemma? Scale Utility Access 19 8% Prepare – Introduction by Dr. Robert Hope, The rapid growth of crowdsourcing platforms has provided a new 22% 22% Oxford University 20 avenue for energy access organisations to raise money for innovation. Validate Lesson 3: Different Business Models Exist in 29 30 31 Blueprint Organisations such as Fenix, EarthSpark, and Angaza Design 80% 21% Different Settings 26 have been featured on traditional crowd-funding platforms. There is – Introduction by Pepukaye Bardouille, IFC 27 now an energy specific platform called SunFunder which was started 14% Lesson 4: Financing is still a struggle 33 by Ryan Levinson, a former investor at Wells Fargo. – Introduction by Jigar Shah, 60% Jigar Shah Consulting 34 39% Appendices As energy, development and technology enthusiasts we think crowd- – Regional Profile: Sub-Saharan Africa 42 funding is a great platform to raise awareness about issues and new 42% – Regional Profile: Latin America 44 innovations and to attract new investors. But can we really raise – Regional Profile: South Asia 45 the billions required via crowd-funding? How do we ensure that 40% – Failure Modes 46 the “right” projects get featured on these platforms, and that these 64% – 2011 Report Card 47 projects have impact? – 2012 Lessons Learned 48 28% Other options for delivering funding 20% With the clear lack of bankable business models it is questionable 29% whether or not we need to bring in more investors, each with their own overhead costs and due diligence processes, or whether it makes sense 11% to support the development of organisations who invest in several 0% 2001-2004 2005-2008 2009-2011 similar companies. This could produce the groundswell that is 29 http://www.kickstarter.com/projects/mikelin/readyset-solar-kit-for-ipad- Source: Acumen Fund, Monitor Analysis iphone-android-and-mor required to drive innovation, foster competition and eventually lead 30 http://www.globalgiving.org/donate/13118/earthspark-international/reports/ to consolidation. 31 http://www.sunfunder.com/projects/view/31 32 S ource: from BLUEPRINT TO SCALE; http://www.mim.monitor.com/ blueprinttoscale.html GSMA Community Power from Mobile Service over Technology: Defining the Role for Mobile in Energy Access 40
Foreword 3 In a recent article in Forbes, serial entrepreneur Xavier Helgeson, CEO Forward thinking impact investors like Invested Development are The GSMA Community Power from of Off.Grid:Electric and founder of Better World Books, suggested that looking into alternative financial mechanisms to support the working Mobile Team and Acknowledgements 4 Results Based Financing could be used to drive the growth of the sector, capital requirements of energy access companies.34 They are in the Welcome Note 5 and create a perfect role for multilateral banks and donors to support process of raising funds for the Impact Factoring Fund (IFF) to “provide Introduction 6 the private sector without distorting the market. short term liquidity and working capital to early stage, high-growth Launching Mobile Enabled Community Services 8 companies in emerging markets”. 2012: Marking a Year of Growth, How might a well-designed results-based finance program for lighting Milestones and Trail-blazers 12 “Factoring is a financial transaction where accounts receivable (the value of Africa look? It ought to have five main principles33: Organisations that Leverage Mobile payments owed to the company) are purchased at a discount in exchange for the Technology and Infrastructure to ■■ future stream of payments (the aggregated customer payments). In other words, Deliver Improved Energy Services 13 Fund Services, Not Watts – Efficiency is the name of the game when you are off the grid. An inefficient 50 watt system and an the IFF buys a start-up’s accounts receivable to inject working capital while the Lesson 1: Challenges working with MNOs 14 efficient 15 watt system can deliver exactly the same service level. customer pays back their credit at their own pace. The start-up then pays the – Q&A with Sairam Prasad, CTO of Bharti Infratel 17 Fund outcomes that can be objectively measured: lumens of light, fund (IFF) back after it has received full payments from the customer. Most hours of radio, number of phones charged, etc. – Q&A with Mike Lin, valuably, this provides the start-up with the ability to scale; it is no longer CEO of FENIX International 18 ■■ Fund Durability – It is easy to deliver a high level of service the waiting for cash during long payback periods and more customers can afford and Lesson 2: Emergence of Enhanced first time a cheap or poorly designed solar system is used. It benefit from the start-up’s products.” Utility Access 19 is much harder and more expensive to provide a system that – Introduction by Dr. Robert Hope, Figure 19: Invested Developments Impact Factoring Fund Oxford University 20 delivers at a high level for years, with service included. A strong technical analysis can identify high quality systems and reward Lesson 3: Different Business Models Exist in Accounts Receivable Different Settings 26 the investment in quality. Some funding should be reserved and only dispersed after systems are demonstrated to be functioning – Introduction by Pepukaye Bardouille, IFC 27 highly after 1-3 years. Lesson 4: Financing is still a struggle 33 Cash Product on Credit – Introduction by Jigar Shah, ■■ Only Fund on Audit-able Data – Any organization seeking Jigar Shah Consulting 34 Impact funding should provide exact data, in spreadsheet format, Factoring Lump Sum Repaid Company Cash Repayments Customers Appendices including GPS coordinates of customers and detailed system Fund – Regional Profile: Sub-Saharan Africa 42 specifications, so that a random audit can be conducted. – Regional Profile: Latin America 44 ■■ – Regional Profile: South Asia 45 Release Funding Quickly and Transparently – A well-designed Source: Invested Development 2012 – Failure Modes 46 program cannot subject entrepreneurs to a yearlong opaque process and grueling reporting requirements. It must have Ultimately, the immediate need for funding must be addressed to deliver – 2011 Report Card 47 a transparent funding protocol with rapid turnaround and the large numbers of bankable business models the world requires to – 2012 Lessons Learned 48 personalized service. deliver universal energy access. Larger pools of seed funding should be made available to organisations that excel at finding and supporting ■■ Build a broad market – No more than 20% of the fund should early stage enterprises developing the pipeline for next stage investors. go to a single company, country or organization, and funds should be distributed pro rata if there is more interest than funds Large and easy to access commitments to Results Based Financing available. This prevents one large & well-funded company from mechanisms or working capital pools will allow existing organisations swooping in and claiming a lion’s share. Special effort should be to focus more time building their businesses, and less time courting made to fund local small solar dealers as well as ambitious high- the small pool of impact investors. Ending the energy divide is possible, growth startups. but it will require the collective agreement of large bilateral and 33 www.forbes.com/sites/xavierhelgesen/2012/12/12/how-to-light-africa-within- multilateral organisations to take more risk, and support the foundation a-decade 34 http://investeddevelopment.com/iff/ of existing organisations to draw in more private and commercial funding. GSMA Community Power from Mobile Service over Technology: Defining the Role for Mobile in Energy Access 41
Foreword 3 The GSMA Community Power from Mobile Team and Acknowledgements 4 Appendices Welcome Note 5 Introduction 6 Launching Mobile Enabled Community Services 8 2012: Marking a Year of Growth, Milestones and Trail-blazers 12 Organisations that Leverage Mobile Technology and Infrastructure to Deliver Improved Energy Services 13 Lesson 1: Challenges working with MNOs 14 – Q&A with Sairam Prasad, CTO of Bharti Infratel 17 – Q&A with Mike Lin, CEO of FENIX International 18 Lesson 2: Emergence of Enhanced Utility Access 19 – Introduction by Dr. Robert Hope, Oxford University 20 Lesson 3: Different Business Models Exist in Different Settings 26 – Introduction by Pepukaye Bardouille, IFC 27 Lesson 4: Financing is still a struggle 33 – Introduction by Jigar Shah, Jigar Shah Consulting 34 Appendices – Regional Profile: Sub-Saharan Africa 42 – Regional Profile: Latin America 44 – Regional Profile: South Asia 45 – Failure Modes 46 – 2011 Report Card 47 – 2012 Lessons Learned 48 GSMA Community Power from Mobile Service over Technology: Defining the Role for Mobile in Energy Access 42
Sub-Sahara Africa South Asia Latin America and Caribbean Morocco Access to the Electricity Grid Access to the Electricity Grid Access to the Electricity Grid
100% Access to an 100% Access to an 100% Access to an Algeria Libya Access to a 90% Access to a 90% Access to a 90% Financial improved AddressableFinancial Market improved Financial improved Egypt 80% Source of Water 80% Source of Water 80% Source of Water Western Sahara Institution 70% Institution 70% Institution 70% 60% 60% 60% 50% 277M50% Addressable 50% Mauritania Mali 40% People without access to40% energy Market 40% Niger 30% but covered by GSM network30% 30% Senegal 20% 20% 20% Cameroon 10% 10% 10% The Gambia Burkina 0% 0% 0% Guinea-Bissau Faso 66M Guinea Benin People without access to Sierra Leone Côte Nigeria South Ethiopia an improved water source d’Ivoire Ghana Central African Sudan Republic Somalia but covered by GSM network Togo Cameroon Liberia Kenya Equatorial Uganda Guinea Gabon GSM Access to GSM Access to GSM Access to DR Rwanda Congo Population improved Population improved Population improved Congo Burundi Coverage Sanitation Coverage Sanitation Coverage Sanitation Tanzania Orange in Senegal, Mali and Niger Mobile Payments Appendix 1 – Regional Profile Malawi Angola ■■ Orange Community Phone Services Shared Solar in Mali of sub-Saharan Africa Gambia (Djamaa in Senegal, Karkara in Niger) are ■■ Shared Solar uses mobile payments for their based on a SIM card combined with solar Pay As You Go micro grid solution. Zimbabwe charging, allowing off network Namibia Payments are made through scratch-cards Total Addressable Market in sub-Saharan Africa communities to have access to phone Botswana Mozambique for now (and looking to integrate with a includes up to: services. mobile money service). Customers buy a • 93 Million people for energy access in West Africa Swaziland Shared Solar in Mali scratch-card from a local vendor for as low • 30 Million people for water in West Africa South Africa Lesotho Madagascar ■■ Shared Solar has installed micro-grids in as US$ 0.50. • 106 Million people for energy access in East Africa rural Mali providing power to • 29 Million people for water in East Africa approximately 170 households. The concept Water Access • 78 Million people for energy access in the is to provide PAYG micro-grid services, Manobi in Senegal, Mali, Benin, Niger connecting up to 20 families per project. ■ rest of Africa West Africa Core technology is a smart meter that ■ The mWater service uses mobile telephones • 7 Million people for water in the rest of Africa Infrastructure enables real time consumption monitoring to support billing services, record keeping and equipment operation, to improve the Orange in Niger and prepaid use with mobile phone payments. Their gateway is capable of communicating management of rural and small town water ■■ Karazomé village Community Power via SMS as well as 2G and can also be tied systems. In Mali, a total of 55 small water Project, Maradi region of Niger. In the pilot, to 3rd party mobile banking services. providers, with access to 556,000 consumers across rural Mali, have signed up to an a dispensary 100 meters from an Oryx solar Tigo/Altobridge in Ghana powered base station site is taking excess initiative in which mobile phones are used energy from the telecom site to power ■■ Tigo has partnered with Altobridge to deploy to improve their operational efficiencies. several lights, a fan and with an additional solar powered radio base stations in rural Akvo FLOW in Liberia rooftop solar panel supplied by Orange, Ghana, providing phone charging services at ■ power is supplied to a vaccine refrigerator. most of its off grid sites. 10 towers have been ■ In 2011, the Liberian government, assisted built to date, based on a partnership between by the World Bank, used Akvo FLOW to ■■ Orange has partnered with Altobridge35 to K-net, iDirect satellite communications map 10,000 water points in Liberia. Akvo 35 www.altobridge.com/2012/11/13/orange-and-altobridge-bring-first-time- deploy solar powered radio base stations, equipment, Altobridge 2G and 3G Base Station FLOW is a software tool that collects, mobile-connectivity-to-remote-communities-in-niger/ providing mobile connectivity to 50 off-grid Subsystems and Ameresco solar power manages, analyses and displays 36 www.telecompaper.com/news/k-net-altobridge-to-expand-rural-backhaul-in- village communities, covering an average of technology. K-net plans to expand to 300 geographically referenced monitoring and ghana--907594 1,200 people in each location. additional sites with private sector funding36. evaluation data using mobile phones. GSMA Community Power from Mobile Service over Technology: Defining the Role for Mobile in Energy Access 43
East and South Africa refrigeration units at 10 BTS sites in 2012. Mobile Payments Azuri Technologies in South Sudan, Kenya, Uganda, An additional 100 sites are in different Shared Solar in Uganda Rwanda, Tanzania Infrastructure stages of progress, with 100 more budgeted ■ ■■ Shared Solar uses mobile payments for ■ Azuri Technologies provide small Solar for the next financial year. Vodacom Community Power Site in South Africa their Pay As You Go micro grid solution in Home Systems under a Pay as You Go ■■ Vodacom deployed its first Community Distribution Channels Ruhira Uganda. Payments are made model in several African countries. through scratch-cards for now (and looking Users are able to buy prepaid electricity, Power site in December 2011 at Emfilhweni, MTN Uganda & Rwanda and Fenix International a rural area in Kwazulu-Natal province. to integrate with a mobile money service). using their mobile phone and buying ■■ weekly scratch cards for 1USD. The Indigo The Solar plant built by Vodacom is Fenix International partnered with MTN M-KOPA in Kenya powering the BTS, a local school equipped Uganda in 2011 and MTN in Rwanda in 2012 to scratch card is validated using SMS from ■ with computers donated by Vodacom & a sell their ReadySet renewable energy systems ■ M-KOPA users are paying for energy, by daily a mobile phone and the resulting one-off water pump. A small solar panel and a in MTN shops. Fenix products are focused on instalments, using the M-PESA platform. passcode entered into the Indigo unit which causes it to operate for a period of phone charging equipment was donated to creating micro-utility business opportunities, Mobisol in Tanzania the local shop, so users can charge their allowing entrepreneurs to charge local mobile time (typically a week). ■ mobile phone for free. Vodacom is currently phones. MTN has co-branded the ReadySet ■ Users pay for their electricity using the Water Access Vodacom M-PESA platform. looking for more sites in South Africa and its with their logo, and is leveraging their sales, Grundfos Lifelink in Kenya other operating companies in Africa where marketing, distribution and after-sales service Devergy in Tanzania network to extend the reach of Fenix with the ■■ Grundfos Lifelink provides clean water community power sites can be established. ■■ goal of powering over 1M subscribers by 2014. Devergy is building small micro-grids in service in rural Kenya, based on the Shared Solar in Uganda MTN Group has sold over 2,000 ReadySet rural Tanzania, providing solar power to combination of a solar powered submersible households and businesses. Each household ■■ Shared Solar has installed solar powered energy systems across East Africa to date. water pump and embedded mobile connected to the micro-grid are equipped micro-grids in eight different points in connectivity in the pump, allowing for Safaricom and M-KOPA in Kenya with an energy meter allowing a pay-per- Ruhiira Millennium village in Uganda. remote monitoring and mobile payments. ■■ use approach: each user tops up his credit SharedSolar households now spend on M-KOPA partnered with Safaricom in 2012 to by buying a scratch-off card and sending an Oxford University Water Project in Kenya and Zambia average 12,000 UGX (approx. 5 US$) on their sell their GSM enabled pay-as-you-go solar 37 SMS obtaining a credit code to the Devergy ■ 40 energy needs per month . Four schools solutions through Safaricom’s network. ■ Researchers from Oxford University have payment system. have also been connected to the solar The M-KOPA units embed Safaricom enabled started piloting projects in drought prone scheme. SharedSolar was looking to install sim cards and users pay for energy access by Off Grid Electrics in Tanzania areas in Kenya and in Zambia, where they systems in an additional 40 households and daily instalments of Kshs.40 via M-PESA installed low-cost data transmitters on hand ■■ Off grid Electrics provides Pay As You Go businesses in Ruhiira in 2012. for a period of one year. As of October 2012, pumps. These smart hand pumps automatically M-KOPA had 1,000 customers in Kenya. solar home systems in rural Tanzania. 38 send SMS messages to the district and Energize the Chain in Zimbabwe M-KOPA is currently available at more than Customers sign up for the service through national water managers. The data sent by the agents’ smartphone application. Credit ■■ Energize the Chain seeks to improve the 100 Safaricom’s shops across Kenya. SMS also provide water output estimates is purchased through M-PESA or other efficiency of vaccine storage and delivery that show fluctuations in daily to seasonal Econet Solar in Burundi, Lesotho and Zimbabwe mobile money accounts. Unlock codes are systems in Zimbabwe by supplying energy demand levels. ■ sent via SMS to unlock power system for efficient vaccine-storage refrigerators to ■ In September 2012, Econet Wireless specified time. Welldone Organization Project in Kenya rural clinics with limited access to reliable Zimbabwe launched their Green Kiosk ■ 41 power supply, and leveraging electricity initiative, selling Econet mobile phone Grundfos Lifelink in Kenya ■ The WellDone organization will soon start accessories, airtime, EcoCash mobile money piloting their prototype of GSM enabled generated at telecom towers to power ■■ Grundfos Lifelink users are able to pay for vaccine-storage refrigerators. In June 2011, services and allowing Econet customers to remote monitoring units for water pumps in charge their mobile phones for free using their daily water using the M-PESA platform. the first quarter of 2013. Their goal is to help Energize the Chain partnered with Econet They can transfer money from their M-PESA Wireless in Zimbabwe and has deployed solar energy. The Green Kiosks are operated local utilities operate their water network by independent individuals. Econet was directly to their personal RFID key fob, based on increased data availability and planning to roll out a minimum of 5,000 which will be swiped against Grundfos water projects accountability. 37 http://www.millenniumvillages.org/field-notes/solar-power-lights-up-new- 39 Lifelink units to deliver 20L of water per user business-in-uganda-village units countrywide by end of February 2013 . 38 http://energizethechain.org/content/econet-wireless-zimbabwe-%E2%80%93- energize-chain-program-zimbabwe 39 http://www.techzim.co.zw/2012/09/econet-solar-green-kiosks-the-launch/ 40 Oxwater Project - http://oxwater.co.uk/ 41 Welldone Organization - http://www.welldone.org/about-us/ GSMA Community Power from Mobile Service over Technology: Defining the Role for Mobile in Energy Access 44
Sub-Sahara Africa South Asia Latin America and Caribbean Addressable Market Access to the Electricity Grid Cuba Access to the Electricity Grid Access to the Electricity Grid Dominican 100% Access to an Haiti Republic 100% Access to an 100% Access to an 7M Access to a 90% Jamaica Access to a 90% Access to a 90% People without access to energy Financial Mexico Belize improved Financial improved Financial improved 80% Source of Water 80% Source of Water 80% Source of Water but covered by GSM network Institution 70% Honduras Institution 70% Institution 70% Guatemala60% 60% 60% El Salvador50% 50% 50% Nicaragua 40% 40% 40% Addressable 30%Costa Rica 30% 30% 20% 20% 20% Market 10% Panama Venezuela Guyana10% 10% 0% 0% Suriname 0% Colombia French Guiana 35M People without access to an improved water source Ecuador but covered by GSM network
GSM Access to GSM Access to GSM Access to Population improved Population improved Population improved Coverage Sanitation Coverage Sanitation Coverage Sanitation Peru Brazil Appendix 2 – Regional Profile Infrastructure Mobile Payments Digicel and Earthspark in Haiti Quetsol in Guatemala Bolivia of Latin American Mobile ■■ Digicel Haiti partnered with Earthspark ■■ Quetsol is a Guatemala based PV Enabled Community Services International to develop a mini-gird for Installation Company dedicated to the community of Les Anglais. Using excess delivering energy solutions to off-grid Chile Paraguay power from an off-grid Digicel tower site communities. Quetsol was expected Earthspark is providing electricity access to launch a pilot of a pay-as-you-go solution to 14 households42. As a 2nd phase of in the last quarter of 2012 for a roll-out development, Earthspark hopes to integrate in Q1 201344. a 150kW of solar and battery story to serve 400 households using a smart meter 43 Water Access Uruguay designed for the BOP market . Argentina Water.org in Haiti Distribution Channels ■■ Water.org partnered in 2012 with Digicel on Digicel & Solengy in Haiti a pilot program that will offer Port-au-Prince ■ residents information on clean water sources ■ Digicel Haiti has partnered with Solengy nearby through their mobile phones. to install over 400 solar powered street lamps and phone charging stations across Haiti. Each station is operated by an airtime vendor who sets up shop below the street light and manages the phone charging service.
42 http://haitirewired.wired.com/profiles/blogs/earthspark-uses-micro-grid-pre-pay- electricity-to-power-homes-in 43 http://earthsparkinternational.org/blog/ 44 http://unreasonableinstitute.org/wp-content/uploads/2010/12/Quetsol- Guatemala-UI-2-Pager1.pdf GSMA Community Power from Mobile Service over Technology: Defining the Role for Mobile in Energy Access 45
Sub-Sahara Africa South Asia Latin America and Caribbean Addressable Market Access to the Electricity Grid Access to the Electricity Grid Access to the Electricity Grid
Bhutan 100% Access to an 100% Access to an 95M100% Access to an Pakistan Access to a 90% Access to a 90% PeopleAccess to without a access90% to energy Financial improved Financial improved Financial improved Nepal 80% Source of Water 80% Source of Water but covered by GSM80% network Source of Water Institution 70% Institution 70% Institution 70% 60% 60% 60% 50% 50% 50% 40% 40% 40% India Myanmar30% 30% 30% Addressable (Burma) 20% 20% 20% Market Bangladesh 10% 10% 10% 0% 0% 0% 21M People without access to an improved water source but covered by GSM network
GSM Access to GSM Access to GSM Access to Sri Lanka Population improved Population improved Population improved Coverage Sanitation Coverage Sanitation Coverage Sanitation
Appendix 3 – Regional Profile Applied Solar Technologies in India Grameenphone in Bangladesh embedded solutions and the mobile network ■■ AST is a 3rd party energy service company ■■ Grameenphone partnered with the to ensure high quality water purification of South Asian Mobile providing hybrid energy as a service for University of Oslo to build a solar powered and service. Sarvajal has over 193 franchisees Bharti Infratel, Indus Tower and Idea mini-grid to provide power to the village of providing purified water to 90,000 people. Enabled Community Services Telecom at over 2000 site locations. AST has Paharpur, a remote community in the Sylhet Ossian Agro Automation in India recently launched a community power pilot region of north eastern Bangladesh where ■■ Infrastructure providing a dedicated power source to a 20,000 people live without power. The pilot In 2008, the Ossian Agro Automation Group, launched Nano Ganesh, a mobile-enabled Bharti Infratel – OMC Power in India water service provider and to charged project provides 136 households with battery and lantern services in one of their electricity from 5.pm. to 12.a.m. daily45. remote control device for water pumps. The ■■ Tower company Bharti Infratel has entered communities. Nano Ganesh allows for remote monitoring into a 10-year partnership with OMC Power Smart Power for Environmentally-sound Economic Mobile Payments and control of the water pump allowing for powering its off-grid and poor grid Development (SPEED) Rockefeller Foundation in India rural farmers in India to turn on and off Simpa Networks in India their water pumps, check the power supply telecom tower sites in rural areas. OMC ■ Power builds Micropower Plants with ■ The Rockefeller Foundation has made a ■■ Simpa sells home solar systems using a and be alerted in case of tampering. Ossian renewable energy sources providing power three year commitment to demonstrate the progressive purchase model. Customers Agro Automation has sold over 10,000 units. to mobile towers and a home delivery service potential for significantly expanding make a small initial down payment and WaterAid in India of changed lanterns and battery boxes to the decentralized renewable energy provision then pre-pay for the energy service, topping ■■ surrounding rural communities. As of the in rural India, by leveraging the rapidly up their systems in small user-defined Water Aid has been using mobile-enhanced end of 2012, OMC Power has 10 Micropower expanding cellular telephone tower network increments using a mobile phone. Each maintenance in India, resulting in over 70% Plants in operations in Uttar Pradesh. as an anchor customer. Partner payment for energy also adds towards the of hand pumps being repaired in 24 hours. organisations include: DESI Power, final purchase price. They are currently seeking more information Vodafone Essar in India Confederation of Indian Industry - Green on the potential of mobile tools for their projects. ■ ■ At each of the 93 USO Fund’s sites managed Business Center, Johns Hopkins University, Water Access Grameenphone and HYSAWA in Bangladesh Prayas, Sambodhi Research and by Vodafone in the Vidarbha region of Sarvajal in India ■■ HYSAWA, an international NGO has Communication, Technology and Action for Maharashtra, there is a single socket power ■ installed approximately 30,000 tube wells to Rural Advancement. The programme is ■ Sarvajal builds water systems in India and point that can be used for phone charging. ensure safe water supply for approximately currently working in 10 district clusters recruits local entrepreneurs to sell water 10 million rural inhabitants. To support the across Uttar Pradesh, Bihar, Jharkhand, to their communities using a combination of initiative Grameenphone has introduced an Chhattisgard and Madhya Pradesh. embedded solutions and mobile payments. Their solar powered Water ATM allow SMS-based service that enables the wells 45 www.millenniumvillages.org/field-notes/solar-power-lights-up-new-business- customer to pre-pay for purified water. The caretakers to send a text message when a in-uganda-village ATMS are remotely monitored using tube well is not working directly to the HYSAWA head office. GSMA Community Power from Mobile Service over Technology: Defining the Role for Mobile in Energy Access 46
Foreword 3 Appendix 4: Failure Modes The GSMA Community Power from Mobile Team and Acknowledgements 4 Failure Mode Solution Welcome Note 5 Introduction 6 Resilience of Decentralised Systems Mobile industry provides 24/7 capability Launching Mobile Enabled • M obile operators through their subcontractors have become adept at delivering highly reliable power to off-grid base stations Community Services 8 • M obile towers are often the best piece of serviced infrastructure in off-grid areas with the help of highly skilled technical staff 2012: Marking a Year of Growth, • M obile operators are incentivised to establish good-will with off-grid communities to reduce diesel theft and site vandalism. Milestones and Trail-blazers 12 Up to 20% of total diesel consumed by the telecom industry is pilfered. Organisations that Leverage Mobile Technology and Infrastructure to Scale of Solutions The mobile industry is unique in the number and geographic reach of its distribution channels and vendor penetration, that can scale-up responsively to the needs Deliver Improved Energy Services 13 of the community Lesson 1: Challenges working with MNOs 14
– Q&A with Sairam Prasad, Payments Scratch-card and mobile money products can be used to deliver consumer financing and pay-as-you go solutions for the flexible purchase of basic utilities CTO of Bharti Infratel 17 – Q&A with Mike Lin, CEO of FENIX International 18 Reporting & Maintenance The presence of the mobile network reduces the challenges of rural service delivery Lesson 2: Emergence of Enhanced • V oice and text messages can be used by community members to support on-going operation & maintenance of decentralised solutions Utility Access 19 • E mbedded mobile solutions can support remote real time monitoring and the development of pay-as-you go solutions – Introduction by Dr. Robert Hope, Oxford University 20 Lesson 3: Different Business Models Exist in Different Settings 26 – Introduction by Pepukaye Bardouille, IFC 27 Lesson 4: Financing is still a struggle 33 – Introduction by Jigar Shah, Jigar Shah Consulting 34 Appendices – Regional Profile: Sub-Saharan Africa 42 – Regional Profile: Latin America 44 – Regional Profile: South Asia 45 – Failure Modes 46 – 2011 Report Card 47 – 2012 Lessons Learned 48 GSMA Community Power from Mobile Service over Technology: Defining the Role for Mobile in Energy Access 47
Foreword 3 Appendix 5: Report Card The GSMA Community Power from Mobile Team and Acknowledgements 4 Recommendations in 2012 Actions 2012 Experience Welcome Note 5 Introduction 6 Develop rigorous models for CPM Collect and disseminate business models Completed 4 feasibility studies from infrastructure Launching Mobile Enabled Adapt models with changing tower infrastructure ownership Visited 16 energy access organisations to document their business models Community Services 8 Assist mobile operators in Identify ways to leverage telecom supply chains and human Completed 4 feasibility studies 2012: Marking a Year of Growth, developing CPM strategies infrastructure Milestones and Trail-blazers 12 Held 2 half day and full day CPM specific days with mobile industry players bringing together over 100 people Map deployment opportunities Organisations that Leverage Mobile Technology and Infrastructure to Correlate accessible and affordable energy access with phone usage Deliver Improved Energy Services 13 Conduct research to inform Understand the demand for priority energy services and their impact More information has been collected in this area. Staff have spent over 120 days in rural areas, Lesson 1: Challenges working with MNOs 14 innovative service providers on MNOs visiting communities during the day and night to fully appreciate their energy need – Q&A with Sairam Prasad, Identify potential obstacles and opportunities posed by rural energy More work is required and we are actively looking to leverage the experience of other organisations. CTO of Bharti Infratel 17 and communication policies – Q&A with Mike Lin, CEO of FENIX International 18 Lesson 2: Emergence of Enhanced Utility Access 19 Partner with the investor base to Engage, inform and learn from investors Built our network of investors interested in the sector, worked across investors. drive capital into the sector – Introduction by Dr. Robert Hope, Nurture a pipeline of opportunities Provided pipeline introductions to 4 investors Oxford University 20 Lesson 3: Different Business Models Exist in Different Settings 26 – Introduction by Pepukaye Bardouille, IFC 27 Lesson 4: Financing is still a struggle 33 – Introduction by Jigar Shah, Jigar Shah Consulting 34 Appendices – Regional Profile: Sub-Saharan Africa 42 – Regional Profile: Latin America 44 – Regional Profile: South Asia 45 – Failure Modes 46 – 2011 Report Card 47 – 2012 Lessons Learned 48 GSMA Community Power from Mobile Service over Technology: Defining the Role for Mobile in Energy Access 48
Foreword 3 Appendix 6: Lessons Learned The GSMA Community Power from Mobile Team and Acknowledgements 4 Lessons from 2011 Drivers Bottom Line 2012 Experience Welcome Note 5 Introduction 6 Excess Power is less of a reality Understand site load requirements Energy service business models need to be developed that provide OMC Power is the first to do this Reducing dependency on diesel mutual benefits to the mobile network operator and the community 2012 Feasibility studies with operators prove the opportunity Launching Mobile Enabled and provide for the long term maintenance of its services Community Services 8 for CPM across markets in Africa R&D capital is still required 2012: Marking a Year of Growth, Milestones and Trail-blazers 12 Organisations that Leverage Mobile Off-grid market is complex Challenges in last mile delivery Companies delivering energy products and services to off-grid customers We have seen the growth of both product and services companies Technology and Infrastructure to and immature Rural energy market remains still remain few and far between. Bigger players are defined by their serving off-grid communities. Deliver Improved Energy Services 13 immature ability to draw investments through their path to scale. In a market of this Proof points are beginning to emerge and mobile plays an active role: size there are still no clear winners and more importantly there is plenty Lesson 1: Challenges working with MNOs 14 Lack of capital for the sector of room for competition Operational efficiencies and benefits of anchor tenants – Q&A with Sairam Prasad, Organisations improving energy access face significant challenges in Mobile payments to support consumer financing CTO of Bharti Infratel 17 raising the funds for both proof of concept and growth. Phone charging is a key selling feature of home solar products – Q&A with Mike Lin, (See Figure 11) CEO of FENIX International 18 R&D capital is required to spur innovation and to road-test Lesson 2: Emergence of Enhanced business models Utility Access 19 – Introduction by Dr. Robert Hope, CPM: More than infrastructure Towers+ In the push to increase market share and mobile penetration, mobile Proof points have emerged in using supply chains, mobile money Oxford University 20 Last Mile delivery supply chains operators are unintentionally helping to lower the barrier to off-grid and mobile infrastructure. energy electrification. At the heart of this opportunity is the realisation Lesson 3: Different Business Models Exist in Mobile Payments and Scratchcards The mobile channel is increasingly being used for remote monitoring Different Settings 26 that a mobile customer is also an energy customer and without affordable and operation of systems. Payment technology is being trialled energy, cannot participate in the mobile economy for other energy services (water access and irrigation) but it is still – Introduction by Pepukaye Bardouille, IFC 27 early days. A Lot of opportunity for innovation exists in this sector Lesson 4: Financing is still a struggle 33 – Introduction by Jigar Shah, More than Pilots are required for CPM delivers social value To move CPM from one-off CSR activity to a viable opportunity to engage In 2012, 4 feasibility studies were completed, Jigar Shah Consulting 34 large scale adoption Tie pilots to strategy external organisations requires deeper interactions with telecom players (summarise our program) Appendices of telecom player To become a reality, a risk ready environment needs to be created where The UK Government funding under the MECS programme provides – Regional Profile: Sub-Saharan Africa 42 3rd party financing is required good enterprises are mentored, nurtured and monitored, have access some of the R&D funding required The structure allows for the to the patient capital and test sites they require to gain proof of concept. programme to be replicated across markets with other funders. – Regional Profile: Latin America 44 – Regional Profile: South Asia 45 – Failure Modes 46 – 2011 Report Card 47 – 2012 Lessons Learned 48