How A Frustrating Experience Inspired This Entrepreneur To Start A Solar Company in Tanzania. Richard Awuor had a remarkable career in the corporate world. But a frustrating experience at a Tanzanian airport in 2014 sparked an overwhelming idea and interest that led him off the corporate track into entrepreneurship.
Richard has joined Africa’s growing army of solar entrepreneurs who are using Africa’s abundant supply of clean, free and renewable solar energy to light up the continent.
According to the International Energy Agency, about 625 million people in sub-Saharan Africa do not have access to power – that’s 68 percent of the population. In some countries – like Burundi, Chad, Liberia, Malawi and South Sudan – less than 10 percent of people have access to electricity at all.
Solar energy has a huge potential in Africa. With solar, Africa can connect remote corners of the continent which could take decades to reach through the traditional route of power grids. And given its clean and renewable profile, solar energy could help to wean Africa off the path of dependence on fossil fuels.
In this interview, Richard shares his journey, challenges and aspirations for his growing solar business in East Africa.
Tell me about yourself. How did you end up in the renewable energy business?
I was born in the coastal city of Mombasa in Kenya, and had my education and early work life in Nairobi.
I came to Tanzania in 2012 as Country manager for a Heineken franchise and later moved to another company — Maritime & Mercantile International, a member of the Emirates group – that deals in fine wines and spirits. I was in charge of sales and distribution for Tanzania mainland and Zanzibar.
I’ve been interested in digital supply chain technology innovation since the time I worked for Zain (which later became Airtel) in Nairobi, especially mobile-based solutions. I believe the mobile phone is the easiest and most accessible way for the people of Sub-Saharan Africa to interact with technology and digitize the economic and social aspects of their lives.
I designed the digital supply chain process for Mobile Number Portability while at Airtel in Kenya in 2010 and was recognized (certified and rewarded) for it by the Airtel Anglophone Africa CEO at the time; that struck my nerve.
I have always found it shocking that less than 25% of East Africans are connected to main-grid electricity. More shocking is the reality that several mainstream solar companies have developed a variety of off-grid solar solutions to bridge the energy gap. Yet, after more than 7 years of active work and heavy funding, less than 5% of the addressable market has been reached with these solar home systems.
I felt there was a gap with the Pay-As-You-Go solar solutions currently used on the market, and I think it’s time to unlock the rapid scalability potential of solar energy in Africa.
What exactly is Cellulike, and what inspired you to start it?
Cellulike is a Pay-As-You-Go solar distribution company. We procure and install solar home systems in off-grid communities and our customers pay daily, weekly or monthly under fixed term credit. We do not keep books like a micro-finance institution so we track and receive payments using a PAYG platform supplied by one of our partners.
Through our solar home systems, our customers – who are mostly rural people — can light up their homes at night, charge mobile phones, and listen to the radio; all these from as low as $6 per month. And this is really changing lives!
Unlike most of the other solar solution providers, we work through village agents who do the actual installation and collect repayments from customers. This model guarantees sustainable self-employment for our growing number of agents.
The spark that planted the solar idea in my mind was an incident in 2014 in the Mtwara region, south of Tanzania. I worked for the Heineken franchise in Tanzania at the time and was making a market visit. The flight could not take off for our trip back to Dar es Salaam because the airport had no power, and this was about 7p.m. I thought to myself: “how could other parts of the country cope if an airport did not have electricity?”
How did you move from ‘idea’ to ‘action’ with the business?
After that stroke of inspiration at the airport, I teamed up with a friend and we started doing some research on the status of electrification in Tanzania. We traveled to Arusha and Mwanza to visit and learn from other companies making similar attempts at solving the energy supply problem using solar energy, and we spoke to lots of people in off-grid communities.
We also got learned quite a lot from other solar missions going on in Rwanda, Uganda and Kenya – which also face the same energy gaps.
I finally took the big leap and quit my job as Country manager for a pan-African labour outsourcing firm last year. Using my savings, I bought the first 50 units of solar home systems (at $119 each) to test the waters.
Today we’re in 3 regions of Tanzania: Dar es Salaam, Mwanza & Kagera. We have connected over 200 households with our solar home systems and another 508 with solar lanterns.
Solar power in a box — A standard kit supplied by Cellulike (includes lighting and mobile charging units)
How did you know the market would be receptive to another Pay-As-You-Go solar initiative when several others exist?
We think the PAYG solar model can be better. We actually feel the current PAYG models for distributing solar solutions face significant barriers to scalability. And this is because these models are largely dependent on mobile money and mobile apps (which need a smart phone and internet connection).
Most people in the communities we serve don’t have smartphones or an internet connection.
The PAYG solar model we piloted in Sengerema district, Mwanza region and in Ilala district, Dar es Salaam region — which is free from mobile money and at some point ran on SMS – recorded interesting successes that we want to explore further. We think we can make a lot of progress with the Unstructured Supplementary Service Data (USSD) platform.
What were the main challenges you faced (or are facing) with operating and growing the business?
Many players in the solar movement across Africa are sustained by grants, subsidies and other forms of external funding to purchase solar equipment. I don’t think any of them breaks even yet.
Local small starters like ourselves do not get much attention that would result in grants or investment funding. To create the innovative solutions required to create a viable USSD platform to run our Pay-As-You-Go solution requires funding for IT equipment and engaging good program developers.
So, I would say access to funding has been, and continues to be, our biggest challenge.
What are the top 3 things customers are saying about your product/service?
First, our customers are excited about our use of village agents to handle the customer experience – from new activations and installations up to repayment collections and customer support. This has been a key differentiator for our business because of the personal touch this model provides.
Our customers say they have had enough of call centres and prefer the personal interaction with our agents.
The second positive thing about our business is our equipment supply partners have the best product in the market with several unique functionalities, which our customers really love.
Our customers are also saying good things about our response lead-times and feedback. We perform equipment installations within 24 hours of request and attend to queries within the same day. Our customers acknowledge and appreciate our approach to customer service.
Where do you see yourself and Cellulike in the next 10 years?
Within 10 years, our team will build a digital supply chain innovation hub and use such platforms as mobile technology to collect research data. Ten years is a long time in innovation terms so I expect a very exciting future.
The Cellulike Team performing installation work at customer locations.
How can prospective customers, partners and investors reach you?
Our communication lines are open for all, thanks to our demanding customers. Anyone can reach us through any of the following channels:
Tel: +255 622 799 779 — Facebook: Cellulike TZ or Twitter: @CellulikeTZ
What’s your single most important advice to entrepreneurs who are looking to start any business?
Passion and resilience are key to surmount the challenges that come with entrepreneurship.
Many variables will impact your entrepreneurship journey, no two entrepreneurs have the exact same story, so you must embrace yours to the end.