Lumos Ltd. plans to roll out its affordable solar-panel kits to East Africans living without electricity after supplying the home-power systems in Nigeria, the continent’s biggest economy, through a mobile-network operator.
East Africa is a “very exciting market opportunity,” and the Amsterdam-based company is looking for partners to help it distribute its pay-as-you-go home-solar systems, Ron Margalit, the principal for financing, said in an interview in Kenya’s capital, Nairobi. “We will come to the region in the very near future.”
Users buy the kit — an 80-watt solar panel that’s installed on a roof, an indoor power unit, phone-charging accessories and two LED lights — from a local mobile-network operator and load power using prepaid airtime. In Nigeria, Lumos rolled out the system with MTN Group Ltd., which has about 57 million subscribers in the continent’s most-populous nation. The country generates the equivalent of about a 30th of South Africa’s power for a population more than three times the size.
More than 620 million people in sub-Saharan Africa, or two-thirds of the region’s population, live without electricity, with about one in three of them residing in East Africa, according to the International Energy Agency.
MTN estimates Lumos’s potential customer base in Nigeria at as many as 10 million systems. The power provider is on track to provide 70,000 kits in the West African country by the end of the year, Margalit said. Last year, Lumos got $15 million in financing from U.S. development-finance institution Overseas Private Investment Corp. to roll out in Nigeria.
“The only competition right now for systems our size in Nigeria is diesel generators,” Margalit said, adding there are about 100 million of the devices in the country.
While Lumos’s customers use MTN’s prepaid system to buy power for their kits in Nigeria, the provider is looking to tap into the success of mobile money-transfer systems favored by East Africans.
Lumos will face competition in East Africa, where there are already pay-as-you-go companies selling solar kits paid for in small installments, a February report by Bloomberg New Energy Finance and Lighting Global showed. In Kenya alone, more than 30 percent of those who rely on off-grid electricity have a solar product at home, it said.
About 89 million people in Africa and Asia use off-grid solar products to access basic electricity services, the report shows.
Kenya Power & Lighting Ltd., the sole electricity distributor in East Africa’s biggest economy, had 3.6 million customers on its grid at June 30, 2015, its annual report showed. The country has a population of about 46 million people.