Local solar companies in developing countries often have difficulties importing solar systems at all. This is because they rarely receive sufficient loans from banks or investors at acceptable terms. So-called “Social Impact Funds” in Europe and the USA are also rarely willing to grant these solar companies a loan at acceptable conditions.
This double financing gap makes it considerably more difficult to eradicate energy-related poverty in developing countries.
Solar-Connect eG closes this double gap: We supply high-quality solar systems to selected partners in developing countries. We grant our customers a supplier credit and thus enable them to offer rural households the payment of the solar system via an instalment credit.
Dr. Gathu Kirubi, Kenya
“The work we do is my main reason for getting up in the morning”
To enable people with low income to access solar energy is the task of Sun Transfer Kenya. The products, such as lamps, water pumps, fans, televisions and radios, are sold directly to customers in rural areas without intermediaries. Solar Connect eG is one of the most important partners of Sun Transfer Kenya.
Dr. Gathu Kirubi is managing director of Sun Transfer Kenya. In 2009 he came back from the USA highly motivated after completing his studies and doctoral thesis. His goal was to use the newly acquired skills “… for his country and its people in a sustainable way.” Sun Transfer Kenya was founded.
Gathu Kirubi: “We want to improve the lives of people in Kenya – my most important experience is the difference we can make for our customers. In 2013 we started a project at a school called “One Light per Child”. We gave each child a small solar lantern which they could take home every evening and use for evening study. Of course, the parents can also use it for lighting or phone charging. The next day, they brought it back to school to recharge it. Now the parents had a good reason to send their children to school, because in the evening they expected the child to bring back a charged light. Keep in mind that these are often very remote Masai communities and sending children to school is not the highest priority. A child should look after the cows and especially girls have to fetch water and firewood, or worse, marry older men early. But now there was this little solar lamp that changed the way parents think about education and go to school.
We also started a project with a health clinic in Ol Loitokitok, the only health facility in the village, which serves up to 500 households. The nurses only worked during the day because there was no electricity at night. One of the challenges we encountered in this area was snake bites at night. In the event of a snake bite, immediate first aid is a vaccination with a counter-serum. However, if someone is bitten at night and the clinic is closed, there is an acute danger to life because the nearest clinic is up to 100 km away. The installation of solar modules allows the village clinic to be open day and night! This makes you appreciate the work you do and it gives you a reason to wake up in the morning.”
The beginning was difficult. Setbacks and a considerable indebtedness of Sun Transfer Kenya were the result of both external and internal influences. A fresh start was made in 2017, when Solar Connect eG stepped in as a partner for the delivery of goods and took a high risk. Today, Solar Connect also accompanies its Kenyan partner as a “financial and management consultant” in order to jointly set the course for the future. Christoph Roderer – CFO of Solar Connect eG is in constant contact with his partners in Kenya: “We’re not out of the woods yet, but we are confident that we will have completed our joint restructuring concept by the end of 2020. In particular, we expect to achieve sustainable growth through partnerships with two of the most important local microfinance providers. These include, in particular, KWFT – a bank that focuses primarily on women’s issues“.
Gathu Kirubi: “We feel that we have made our mistakes in business just like any other company. We have learned a lot and also had good experiences. We have built a strong infrastructure with up to 15 branches. We know our customers and their needs and we are very close to them. Our team of almost 70 experienced and passionate employees is still the most important thing – and ultimately also Solar Connect eG, as one of our most reliable and important partners“.
Joseph Omondi
Joseph Omondi is a fisherman and boat builder on Rosinga Island on Lake Victoria in Kenya. He himself does not go out on the water anymore, his boat is available to the younger men of the family. They use it – like Joseph used to – for night fishing, which is traditionally practiced on the large African lakes. For this the men need light to attract insects to the lake, which serve as food for the fish. They catch the omena, a small fish that is eaten exclusively by the local population and is considered the most important source of protein.
Some years ago, Joseph replaced his kerosene lamps with modern LED lanterns, whose batteries are recharged by the sun during the day. This saves him about one US dollar a day and has thus managed to finance a modern solar home system.
Today he also watches television in the evening and can spend the evening hours with his grandchildren. The quality of life for Joseph and his family has improved considerably – thanks to solar power.
Small business owner in Ethiopia
The lighting of small shops and kiosks with solar home systems was a breakthrough for many small businesses owners. Like here in Ethiopia, shops can now stay open longer – the day is “extended”. For customers, who often only have the opportunity to shop later, it means an improvement in their quality of life. The kiosk also becomes a meeting place for the people in the village, especially since their mobile phones can also be charged there.We are convinced that if we want to help people at the bottom of the income pyramid to improve their living conditions, we have to take them seriously as customers with their own wishes – and not as recipients of benefits. In this way, we make an important contribution to avoiding migration.
The availability of reliable, clean and affordable energy helps the people in our partner countries to improve their living conditions through their own efforts. The changes brought about by solar energy can be documented in many areas of everyday life. Here are a few examples:
- Income: Solar light makes it possible to work even after sunset and thus increases the possibility of earning a living
- Health: Solar power eliminates the need for kerosene lamps, which cause severe respiratory and eye diseases
- Education: Evening classes for children and adults are only be possible if there is sufficient electricity for light and media
- Safety: street lamps and mobile solar lamps help to increase safety at night
- Community life: Solar energy also increases the exchange within a village and thus improves social interaction
- Fire protection: Many fires are caused by falling candles or kerosene lamps. The use of solar energy prevents this
- Communication: The possibility of charging mobile phones with solar energy improves the communication of a household with the outside world
- Standard of living: refrigerator, radio, television and computer are important products to improve the quality of life of the rural population and to counteract rural exodus
Solar energy offers rural regions an opportunity for social development and economic prosperity. The need and demand for solar energy is great. According to the World Bank, households in developing countries are easily able to pay off a solar system by means of an installment loan – if they were supplied with a solar system.
In order to ensure a sustainable supply of reliable, clean and affordable energy for populations in off-grid areas, local solar companies are needed that not only advise customers and carry out installation, but also provide reliable maintenance and service.
It is almost impossible for these small and medium-sized solar companies to obtain loans from banks to finance solar products for their customers. Solar-Connect eG supports the solar companies with supplier credits and provides them with support and advice in their work.
In this way we create permanent jobs and strengthen the development of small and medium-sized commercial enterprises.