Battery Business Brings Tanzanians Cheap Electricity

Access to electricity is critical for making substantial development gains. With steady supplies of electricity, it is possible to read and study at night, to run modern appliances, to better use the latest information technologies and to work using time- and labour-saving devices. A home with electricity literally switches the light on modern life and gives a family huge advantages compared to those without electricity.

But there are two potential obstacles to providing electricity for the poor: one is just getting access to a steady supply; the other is paying for it.

In Africa, much of the population suffers from an electricity famine. The situation is worse than on any other continent: the proportion of people in Africa still without electricity is higher – and the rate of urban electrification is lower – than anywhere else. Four out of five rural residents in Africa live without electricity. The rate of rural electrification is also lower than on any other continent and the proportion of Africans who depend on inefficient traditional energy sources is higher than elsewhere (Desertec-Africa).

EGG-energy (http://egg-energy.com) is a Tanzanian company using an innovative business model to bring affordable electricity to rural communities.

Its co-founder, Jamie Yang, said Tanzania has a huge potential market for offgrid energy services. About 85 per cent of the population lacks access to electricity, a figure that rises to 98 per cent of the rural population.

EGG-energy says it is “dedicated to helping low-income consumers in sub-Saharan Africa gain access to clean, affordable energy, using a unique strategy based around portable rechargeable batteries.” The company has eight full-time staff based in their Makumbusho office, 6 kilometres north of Dar es Salaam, the capital.

It calls its system the “portable grid,” and it works like this: customers have a power system installed in their home that runs on brick-sized, re-chargeable batteries. The batteries are re-charged at a central charging station using power from the Tanzanian power grid, and sent to local distribution centres where customers can pick them up. Customers rent the batteries for a subscription fee, and they last about five nights in a home. When the battery is empty, the customer returns it, swaps for a fresh battery and pays a small swapping fee.

It is a brilliant solution to the problem of getting power from the main Tanzanian power grid to people’s homes. According to EGG-energy, most Tanzanians live within 5 kilometres from a power grid line. Yet the majority of the population lack access to electricity.

“After researching the energy situation in Tanzania and other countries with similar electricity access problems, it became clear that one of the primary problems was a lack of last-mile distribution,” explained Yang. “The only way to get power from the source into homes and businesses were power lines, and for the vast majority of rural Tanzanians, this was very much out of reach.

We saw situations in which power lines would pass right over large populations that were still using kerosene for lighting. We also saw that distributed generation like solar was finding only very limited markets because there was no share or sell power from that source without an affordable way to distribute the electricity.”

While EGG-energy is based in Tanzania, it hopes hope to expand across the developing world.

In order to develop an effective distribution network, EGG-energy partners with local store owners and delivery businesses to help with distributing the batteries. The batteries are based on those used in the airline industry and are light enough to be held in one hand.

Yang believes marketing is critical to the success of the technology.

“Don’t underestimate the cost of sales, marketing, and distribution,” he said.

“Many companies focus on the technology and in lowering the cost of the technology, while not paying enough attention to the gaps in the distribution channels.

“We have a sales team that communicates what we do through a variety of methods, including door-to-door sales, road shows and village meetings. We also make contact with the local political leaders and offer referral awards to our existing customers. Potential customers come to our charging stations to purchase the system and to connect to EGG.”

When a customer signs up with EGG-energy, a technician is dispatched to their home to make sure the electricity system is sound and effective. The company also sells energy-efficient lights, radios and mobile phone chargers to complement the electricity system. It’s a wise business model, since having a steady and reliable supply of electricity is a great motivator for customers to purchase other electric-powered appliances.

“We have technicians that have received vocational training through the Tanzanian system and technicians that we train ourselves,” Yang said. “We have very standardized electricity installations that are easy to teach, and have more experienced technicians that we rely on for troubleshooting and support.”

EGG-energy also makes the claim it can reduce a household’s energy expenses by 50 per cent as they make the switch from traditional batteries for radios and kerosene lamps for light.

EGG-energy calls itself a “for-profit company with a social mission.” It sees the provision of affordable electricity and energy as a spur for small entrepreneurs to build their businesses, boost educational opportunities through longer study time, and help with connecting families with the outside world.

It uses regular feedback with customers to make sure their service is actually cheaper than other options – a good habit for any business looking to build a lasting customer relationship.

“One of the key deficiencies in the energy supply chain is customer support,” said Yang. “We have seen multiple solar installations given by NGOs to community organizations that are no longer functioning because the user doesn’t have someone reliable to call or hasn’t allotted a budget to maintain the system.

“Customer support is a key component of last mile distribution, and something that EGG-energy is focusing on as an energy services company with a local, physical presence.”

By David South, Development Challenges, South-South Solutions

Published: April 2012

Development Challenges, South-South Solutions was launched as an e-newsletter in 2006 by UNDP's South-South Cooperation Unit (now the United Nations Office for South-South Cooperation) based in New York, USA. It led on profiling the rise of the global South as an economic powerhouse and was one of the first regular publications to champion the global South's innovators, entrepreneurs, and pioneers. It tracked the key trends that are now so profoundly reshaping how development is seen and done. This includes the rapid take-up of mobile phones and information technology in the global South (as profiled in the first issue of magazine Southern Innovator), the move to becoming a majority urban world, a growing global innovator culture, and the plethora of solutions being developed in the global South to tackle its problems and improve living conditions and boost human development. The success of the e-newsletter led to the launch of the magazine Southern Innovator.  

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Hip-driven Pump Brings Water to Parched Fields

Finding ways to increase agricultural productivity is key to expanding food supplies and making farming pay. With the world’s population continuing to rise and becoming more urban, there is a pressing need to improve both the quantity and quality of food supplies.

The many small-scale farmers across the global South – and their high levels of poverty – demonstrates the urgent need to change the way farming is done.

Based on Food and Agricultural Organization (FAO) census data, it has been estimated that some 525 million farms exist worldwide, providing a livelihood for about 40 per cent of the world’s population. Nearly 90 per cent of these are small farms with less than 2 hectares of land (Nagayets, 2005). Average farm sizes around the world run from 1.6 hectares in Africa to 121 hectares in North America.

Small farms occupy about 60 per cent of the arable land worldwide and contribute substantially to global farm production. In Africa, 90 per cent of agricultural production is derived from small farms (Spencer, 2002).

One social enterprise is pioneering the development and selling of innovative farming tools for these small-scale farmers to increase their efficiency and make their lives better and more profitable. The MoneyMaker Hip Pump is a lightweight irrigation tool designed to be used by anyone, but aimed especially at women farmers. It helps to increase the amount of water that can be pumped into a field during the dry season. To date, the makers of the pump, Kickstart (kickstart.org), claim to have sold 190,000 pumps. It can irrigate up to 0.40 hectare of land.

Kickstart, which calls itself a non-profit promoting technology and entrepreneurism in Africa, develops and markets simple agricultural tools for Africa’s rural poor so they can improve their businesses. The company estimates it has helped 600,000 people since it was founded in 1991.

The MoneyMaker Hip Pump was launched in stores in 2006 and received a sales and marketing push in 2008. It sells for US $30 and weighs 4.5 kilograms. Kickstart says the pump’s most effective attribute is its simple pivot hinge. This pivot hinge allows the user to combine their body weight and strength from their legs with sheer momentum to power the pump rather than straining upper back and shoulder muscles – something that is very hard on farmers’ bodies and leads to repetitive strain injuries that shorten a farmer’s effective working life.

The pump can pull water from 7 metres and push water up a field for 14 metres.

Kickstart says that by early 2012, it had sold 32,037 pumps.

Reporting in a paper for the World Bank, Vincent Nnamdi Ozowa found smallscale farmers needed five things that will make a big difference to their productivity: better access to information on new methods, scientific advances and timely market updates; better education and improved literacy rates;access to credit; better marketing; and better technology that minimizes drudgery and improves efficiency.

In 2011, Worldwatch Institute’s State of the World report found small-scale agriculture could be key to tackling world hunger and poverty. It urged a move away from industrial agriculture and towards small-scale farming in sub-Saharan Africa, believing it could make big gains by being more efficient and reducing waste.

Kickstart has found communities are receptive to the idea of using the pumps and building agro businesses.

“These are people who are already entrepreneurs, so it is not like we are sensitizing them; they are people who are trying to find ways to make money,” Kickstart Tanzania’s Anne Atieno Otieno told AllAfrica.com.

“When we meet them in the communities we talk to them about the value of irrigation versus relying on rainfall. Most of them are used to having to wait for the rain. At the time we were working with the Super MoneyMaker pump, which is a bigger, more expensive pump. They asked if we could make a low entry pump, which we passed on to our tech deputy and that is how we came up with the MoneyMaker Hip Pump.”

It is part of a range of products Kickstart makes to aid small farmers become more productive (kickstart.org/products).

KickStart believes that self-motivated private entrepreneurs managing smallscale enterprises can play a dynamic role in the economies of developing countries.

These entrepreneurs can raise small amounts of capital (US $100 to US $1,000) to start a new enterprise. KickStart then helps them to identify viable business opportunities and access the technologies required to launch the new enterprises.

Kickstart also uses something called a Mobile Layaway service to make it easier for farmers to afford a pump. This service lets farmers pay off the cost of the pump in small instalments by mobile phone. The farmer can choose how large or small the instalment is according to their means.

“Speaking to the women, and going out into the field and speaking with farmers, we identified a major obstacle – purchasing power, the ability to buy the pump. In Africa, in the field, the pump is a capital item,” Otieno said.

“They really have to organize themselves to be able to save for it. And so when we were speaking to the farmers, many were asking us, ‘Can you come up with a credit facility?’ or some system whereby they could purchase the pumps, because many of them wanted the pump but they were not able to afford it.

“The program works through a mobile phone service, MPesa (http://www.safaricom.co.ke/index.php?id=250) … so the farmers are able to save money, and send money through that program.”

Kickstart recently received an award from the US State Department and the Rockefeller Foundation for “transforming agriculture for women by harnessing technology and spurring entrepreneurship.”

By David South, Development Challenges, South-South Solutions

Published: April 2012

Development Challenges, South-South Solutions was launched as an e-newsletter in 2006 by UNDP's South-South Cooperation Unit (now the United Nations Office for South-South Cooperation) based in New York, USA. It led on profiling the rise of the global South as an economic powerhouse and was one of the first regular publications to champion the global South's innovators, entrepreneurs, and pioneers. It tracked the key trends that are now so profoundly reshaping how development is seen and done. This includes the rapid take-up of mobile phones and information technology in the global South (as profiled in the first issue of magazine Southern Innovator), the move to becoming a majority urban world, a growing global innovator culture, and the plethora of solutions being developed in the global South to tackle its problems and improve living conditions and boost human development. The success of the e-newsletter led to the launch of the magazine Southern Innovator.  

Follow @SouthSouth1

Google Books: https://books.google.co.uk/books?id=6U6eBgAAQBAJ&dq=development+challenges+april+2012&source=gbs_navlinks_s

Southern Innovator Issue 1: https://books.google.co.uk/books?id=Q1O54YSE2BgC&dq=southern+innovator&source=gbs_navlinks_s

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Cooking Bag Helps Poor Households Save Time, Money

For millions of poor people around the world, life is lived on the economic margins and household and personal budgets are tight. There were 1.29 billion people in the world living on less than US $1.25 a day as of 2008 (World Bank), and 1.18 billion living on US $1.25 to US $2 per day. There was only a modest drop in the number of people living below US $2 per day – the average poverty line for developing countries – between 1981 and 2008, from 2.59 to 2.47 billion.

Since the global economic crisis erupted in 2008, the world’s poor have seen prices fluctuate wildly as the international financial system fights the effects of the turmoil. In 2008, this led to the Food and Agriculture Organization sounding the alarm about the harmful effects of rising food inflation.

Increasing hunger led to civil unrest and rioting that year.

Anything poor people can do to make their slim daily budgets go a little bit further means more money left over for better quality food and other expenses, like clothing, shelter, fuel and education. One clever invention from South Africa is trying to tackle household cooking costs and shave the cost of fuel required to prepare the family meal. The Wonderbag (http://nbwonderbag.com/) is a brightly coloured, puffy cooking bag that slow cooks a meal in a pot – be it a stew, curry, rice, soups – to save energy.

“The cost and savings per household are significant,” according to the Wonderbag’s inventor, Sarah Collins.

It has many other advantages, too: it is a time-saver, allowing people to spend the time doing something other than just tending the cooking pot. It can also reduce cooking accidents because less time is spent around the stove or fire.

It is an efficient cooking method that uses less water to cook meals. And it even avoids the risk of burning – and wasting – food.

“20 per cent of all staple food in Africa is burned, due to pots being placed on open fires and unregulated stove tops. With the Wonderbag, no burning happens,” confirms Collins.

To date, the Wonderbag has created 1,000 jobs and is looking to increase this to 7,000 jobs in the next five years.

Wonderbag bills itself as “eco-cooking that’s changing lives.”

Eco-cooking seeks to use every joule (http://en.wikipedia.org/wiki/Joule) of energy from the cooking fire or heat source to maximum effect. A pot is placed on the stove and brought to the temperature required for cooking the dish. Then the pot is placed in the Wonderbag. Since the bag is heavily insulated, it reflects back the existing heat in the dish and allows it to continue cooking for up to 12 hours. It can cook rice in one hour and lamb in two to three hours.

It works in four easy steps, summed up on the Wonderbag website: “boil it, bag it, stand it, serve it”.

The Wonderbag claims to use 30 per cent less energy than other cooking methods. According to cost breakdowns on the Wonderbag website, someone with a Wonderbag would use 2.4 litres a week of paraffin – a common fuel for cook stoves – compared to 4 litres without. This works out to a cost of US $2.40 a week with a Wonderbag and US $4.00 a week without.

The trade-off with the savings in money and energy is time – Wonderbag is not suitable for those looking for a quick meal. According to Wonderbag, meat that cooks in 20 minutes on the stove will take five hours in the Wonderbag.

Chicken that takes 15 minutes on the stove takes three hours in the Wonderbag. Vegetables that take five minutes on the stove will cook in an hour in the Wonderbag.

South African entrepreneur and inventor Collins originally developed the Wonderbag for people living in the townships of Durban (http://en.wikipedia.org/wiki/Durban). She found many of the residents spent up to a third of their income on fuel for cooking. They would either use paraffin or spend many hours gathering wood or dung.

These common fuel sources for cooking give off toxic fumes and are a health hazard if used for long periods. The Wonderbag means households spend less time inhaling fumes from a stove.

“The Wonderbag will always be a work in progress for me as I look to adapt the bag in line with my consumers’ feedback,” confirms Collins. “For example, we are now about to launch Wonderbag 2, which has an even more efficient insulator than polystyrene and is more readily available and easier to recycle following feedback earlier in the year.”

In South Africa, the bags sell for R170 (US $22) and there are discounts for the very poor. Collins estimates that a family of four could save US $80 a year if they used the Wonderbag two or three times a week.

Collins has used clever marketing strategies to get the Wonderbags out to the public, and 150,000 have been sold so far. One promotion gave away a Wonderbag with every purchase of boxes of curry powder.

Wonderbag has also partnered with local communities. Swartland Municipality (swartland.org.za) purchased 5,000 Wonderbags and distributed them to 4,700 of “the most indigent and deserving households – the poorest of the poor.”

It is also running a promotion in the United Kingdom where, for every Wonderbag bought, one is given to a family in the developing world.

The popularity and success of the Wonderbag prompted the multinational food company, Unilever – one of the world’s leading suppliers of fast-moving consumer goods – to purchase 5 million bags for distribution. According to the Wonderbag website, this could lead to savings of US $1.35 billion on fuel for the users.

“The partnership has also enabled us to scale up and test the Wonderbag in different markets,” explains Collins.

Wonderbag hope to expand to 12 or 15 developing countries in Africa in 2012.

The company says it plans to target developing countries with high poverty, fuel supply shortages, high incidence of health problems from air pollution, and high incidence of injuries from fuel fires.

And for Wonderbag’s success so far, Collins has this advice: “Immerse yourself in your product and the way of life of your consumers. Understand it and them inside out so you can be your best advert. Word of mouth is by far the best form of advertising and the truth out of your own mouth is a great start.”

By David South, Development Challenges, South-South Solutions

Published: April 2012

Development Challenges, South-South Solutions was launched as an e-newsletter in 2006 by UNDP's South-South Cooperation Unit (now the United Nations Office for South-South Cooperation) based in New York, USA. It led on profiling the rise of the global South as an economic powerhouse and was one of the first regular publications to champion the global South's innovators, entrepreneurs, and pioneers. It tracked the key trends that are now so profoundly reshaping how development is seen and done. This includes the rapid take-up of mobile phones and information technology in the global South (as profiled in the first issue of magazine Southern Innovator), the move to becoming a majority urban world, a growing global innovator culture, and the plethora of solutions being developed in the global South to tackle its problems and improve living conditions and boost human development. The success of the e-newsletter led to the launch of the magazine Southern Innovator.  

Follow @SouthSouth1

Google Books: https://books.google.co.uk/books?id=6U6eBgAAQBAJ&dq=development+challenges+april+2012&source=gbs_navlinks_s

Southern Innovator Issue 1: https://books.google.co.uk/books?id=Q1O54YSE2BgC&dq=southern+innovator&source=gbs_navlinks_s

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Help is at Hand for India’s Beleaguered Bus-riders

The website is a simple affair: a distinctive logo sits above a lean-looking booking system that allows users to enter their journey start and end destination, date and then click for available buses and prices. Its simplicity is deceptive: redBus is a smart technological solution to a very complicated problem in India: booking and buying a bus ticket. The service it offers – relief from a chaotic, frustrating and time-consuming task – is transforming the experience of travel in India.

Based in India’s technology hub of Bangalore (http://en.wikipedia.org/wiki/Bangalore), redBus (redbus.in) is a web start-up begun by young whizzes from technology companies who decided to take a risk and venture out and do something new.

Back in 2005, redBus’ three founders, all graduates of one of India’s top engineering schools, were working in Bangalore for well-known information technology companies such as IBM, Texas Instruments and Honeywell.

As they tell the story on their website, it was the difficulty of getting a bus home during the Hindu religious festival of Diwali that prompted the inspiration. The trip was a last-minute decision, and buying bus tickets proved far from easy. On top of failing to get a ticket from various travel agents, journeying around Bangalore meant encountering the city’s traffic gridlock.

This experience led to the idea of developing a service to book bus tickets over the Internet.

RedBus quickly evolved into an innovative service offering multiple options to customers. They can call a phone number and speak to a customer service representative or use a mobile phone to book a ticket. RedBus claims to have sold more than 8,000,000 tickets to date.

Tickets are also delivered to customers in major cities in advance of their travel. Even more conveniently, redBus developed a service called mTicket. It sends the ticket by SMS (mobile phone text message) straight away when a customer makes a booking. The mTicket appears on the display screen of the mobile phone and the customer just has to show their mTicket to the driver to board the bus.

RedBus uses partnerships to expand their distribution network, and this means redBus tickets can be purchased at more than 75,000 outlets. The company now works with more than 350 bus operators, allowing customers to book tickets on more than 4,500 routes across India.

The service set out to achieve two goals: create a one-stop shop for ticket purchases, and to make it possible for customers to get tickets when they needed them and not be told they have been sold out.

Indians were already having success with booking airline tickets online. But nobody else had thought of doing central, online sales for bus tickets before.

Research was behind redBus’ success. The founders interviewed bus operators, consumers and venture capitalists before setting up the business.

They then set about writing the code for the Internet service and put together a business plan and presented it to The Indus Entrepreneurs (TiE) (tie.org) – a network of mentors who help young entrepreneurs. With the support in place, they were able to leave their well-paying, secure jobs to start redBus.

Among the many challenges they faced was changing the mindset of bus operators used to dealing only with travel agents working out of sales offices.

It also took time for the concept to take off. But as word-of-mouth got around, more people started to use the website. The young team grew from just three to 50 within nine months.

Their business success, as they describe it, is the result of listening to, and soliciting feedback from their customers. They say it has helped them identify what is going wrong and fix it, and describe their business culture as “learn, implement, grow.” They also have a culture of sharing ideas and mistakes to encourage learning. It seems it is this buzzy, youthful and always-learning business culture that is behind redBus’ success.

By David South, Development Challenges, South-South Solutions

Published: April 2012

Development Challenges, South-South Solutions was launched as an e-newsletter in 2006 by UNDP's South-South Cooperation Unit (now the United Nations Office for South-South Cooperation) based in New York, USA. It led on profiling the rise of the global South as an economic powerhouse and was one of the first regular publications to champion the global South's innovators, entrepreneurs, and pioneers. It tracked the key trends that are now so profoundly reshaping how development is seen and done. This includes the rapid take-up of mobile phones and information technology in the global South (as profiled in the first issue of magazine Southern Innovator), the move to becoming a majority urban world, a growing global innovator culture, and the plethora of solutions being developed in the global South to tackle its problems and improve living conditions and boost human development. The success of the e-newsletter led to the launch of the magazine Southern Innovator.  

Follow @SouthSouth1

Google Books: https://books.google.co.uk/books?id=6U6eBgAAQBAJ&dq=development+challenges+april+2012&source=gbs_navlinks_s

Southern Innovator Issue 1: https://books.google.co.uk/books?id=Q1O54YSE2BgC&dq=southern+innovator&source=gbs_navlinks_s

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Southern Innovator Issue 3: https://books.google.co.uk/books?id=AQNt4YmhZagC&dq=southern+innovator&source=gbs_navlinks_s

Southern Innovator Issue 4: https://books.google.co.uk/books?id=9T_n2tA7l4EC&dq=southern+innovator&source=gbs_navlinks_s

Southern Innovator Issue 5: https://books.google.co.uk/books?id=6ILdAgAAQBAJ&dq=southern+innovator&source=gbs_navlinks_s

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