Can crowdfunding help scale up solar power for Africa’s poor?

Updated 25 April 2017
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Can crowdfunding help scale up solar power for Africa’s poor?

NAIROBI: When Ronald Van Harten arrived in Kenya from the Netherlands in 2015, he was determined to invest in solar-powered equipment for homes across Africa, make a profit and help the rural poor get energy.
But within two years, his company EcoZoom, which sells solar lights, radios, MP3 players and other equipment to some of Kenya’s poorest residents, ran into financial difficulties.
The banks were not willing to lend him the capital he needed to stay afloat and loans available from microfinance institutions were too small.
So, like a number of new technology companies seeking to scale up their programs in Africa, he turned to a crowdfunding company.
“Few banks if any could finance a social investment project dealing with people seen as a high-risk group, and even worse banks are expensive and give conditions that are not easy to meet,” he told the Thomson Reuters Foundation, referring to high interest rates charged by banks.
TRINE, a Swedish company which raised funds for EcoZoom, has a community of about 1,000 young investors in northern Europe willing to each give a minimum of €25 ($27.14) to solar firms which aim to help the world’s poorest.
Using crowdfunding, it has raised more than €750,000 for 10 renewable energy projects since its launch last year, said Matthew McShane, TRINE’s regional manager in East Africa. The firm has invested in countries including Kenya, Zambia, Uganda, Tanzania and Senegal.
In Kenya, EcoZoom received €170,000 in February, while €160,000 went to Azuri East Africa, part of Azuri Technologies. Two solar micro-grids have also received funds.
“The majority of (our) investors can invest in many other ventures in Europe but choose to put their money in social impact projects partly because they want to touch the lives of the poor and partly because returns are slightly higher when compared to ... normal investments,” McShane said.
The returns are about 6 percent, because of the perceived higher risk associated with this market, he said.
Globally, crowdfunding provided $2.1 billion in investment in 2015, and investments in developing countries alone are predicted to exceed $96 billion a year within a decade, according to the World Bank.
It is emerging as an increasingly important means of financing new technology at scale in rural Africa, said Azuri Technologies CEO Simon Bransfield-Garth.
Unlike microfinance institutions where large investors make many small loans to firms, crowdfunding allows many small lenders to provide substantial finance to organizations with the reach and scale to deliver significant impact, he said.
“Crowdfunding is clearly no longer just for startups and has the potential to provide a new class of capital for energy access,” Bransfield-Garth said.
Azuri East Africa turned to crowdfunding when it wanted to raise cash to help its Kenyan partner, Raj Ushanga House, sell solar panels to 1,200 homes, helping 6,000 people access electricity.
Crowdfunding is one of the most progressive and innovative ways of raising money for projects, and relatively unexploited in Africa, said George Wachiuri, a leading Kenyan investment adviser and head of Optiven Ltd., a company based in Nairobi.
Crowdfunding needs to be carried out by specialized firms that are well versed with the concept, he added. “One needs a good understanding of how this type of fundraising works to be able to execute it successfully.”


Lebanon’s Hariri calls for cabinet solidarity in budget debate

Updated 34 min 27 sec ago
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Lebanon’s Hariri calls for cabinet solidarity in budget debate

  • The PM said cabinet ministers need to be united and responsible
  • Lebanon’s debt is almost 150% of its GDP

BEIRUT, June 18 : Lebanon Prime Minister Saad Al-Hariri on Tuesday called for parliament to quickly approve the country’s 2019 budget and urged his coalition government to avoid internal disputes.
The cabinet this month agreed a budget plan that shrinks the projected fiscal deficit by 4 percentage points from last year to 7.6% by cutting spending and raising taxes and other fees.
“What I want during the debate is for us to be responsible and united, and not contradictory,” Hariri said in a statement, addressing cabinet ministers as to their comportment during the parliament debate.
Parliament’s finance committee is debating the draft budget and has suggested amendments, local newspapers reported. It will then put the budget to the full assembly to ratify it.
Parliament is mostly composed of parties that are also present in the coalition government and which supported the budget there.
Since the budget was agreed there have been fierce arguments between parties in the coalition over several subjects, though these have not targeted the budget.
Lebanon has one of the world’s heaviest debt burdens, equivalent to about 150% of GDP, and the International Monetary Fund has urged it to cut spending.
“We have held 19 cabinet meetings to agree on this draft budget and these sessions were not for fun, but for deep, detailed debate over every clause and every idea,” Hariri said.
“For this reason, I consider it the responsibility of each of us in government to have ministerial solidarity...to defend in parliament the decision that we have taken together,” he added.
After the 2019 budget is agreed, the cabinet must quickly start working on the 2020 budget and on approving the first phase of a program of investments toward which foreign donors have offered $11 billion in project financing. (Reporting by Angus McDowall, editing by Ed Osmond)