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

Updated 25 April 2017

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.”


Oil recoups losses as OPEC, US Fed see robust economy

Updated 14 November 2019

Oil recoups losses as OPEC, US Fed see robust economy

  • US-China trade deal will help remove ‘dark cloud’ over oil, says Barkindo

LONDON: Oil prices reversed early losses on Wednesday after the Organization of the Petroleum Exporting Countries (OPEC) said it saw no signs of global recession and rival US shale oil production could grow by much less than expected in 2020.

Also supporting prices were comments by US Federal Reserve Chair Jerome Powell, who said the US economy would see a “sustained expansion” with the full impact of recent interest rate cuts still to be felt.

Brent crude futures stood roughly flat at around $62 per barrel by 1450 GMT, having fallen by over 1 percent earlier in the day. US West Texas Intermediate crude was at $56 per barrel, up 20 cents or 0.4 percent.

“The baseline outlook remains favorable,” Powell said.

OPEC Secretary-General Mohammad Barkindo said global economic fundamentals remained strong and that he was still confident that the US and China would reach a trade deal.

“It will almost remove that dark cloud that had engulfed the global economy,” Barkindo said, adding it was too early to discuss the output policy of OPEC’s December meeting.

HIGHLIGHT

  • US oil production likely to grow by just 0.3-0.4 million barrels per day next year — or less than half of previous expectations.
  • The prospects for ‘US crude exports had turned bleak after shipping rates jumped last month.’

He also said some US companies were now saying US oil production would grow by just 0.3-0.4 million barrels per day next year — or less than half of previous expectations — reducing the risk of an oil glut next year.

US President Donald Trump said on Tuesday Washington and Beijing were close to finalizing a trade deal, but he fell short of providing a date or venue for the signing ceremony.

“The expectations of an inventory build in the US and uncertainty over the OPEC+ strategy on output cuts and US/China trade deal are weighing on oil prices,” said analysts at ING, including the head of commodity strategy Warren Patterson.

In the US, crude oil inventories were forecast to have risen for a third straight week last week, while refined products inventories likely declined, a preliminary Reuters poll showed on Tuesday.

ANZ analysts said the prospects for US crude exports had turned bleak after shipping rates jumped last month.