Summary


Mobisol delivers a clean, affordable alternative to fossil fuels for low-income households living without reliable access to energy. The Berlin-based company was founded in 2010 by Mobisol’s CEO Thomas Gottschalk, an engineer by trade, with the aim to overcome barriers to entry and growth for the adoption of solar energy in rural areas of developing countries.

Working with an expanding team of engineers and IT specialists, the central product-service-offer was designed. Mobisol’s pilot phase in East Africa in 2012 confirmed the promise and replicability of its business model. Mobisol’s products and services have, since then, been continuously expanded and optimized, which led to a quickly expanding customer base in East Africa.

Mobisol’s products are made affordable by a rent-to-own scheme offering micro-finance loans over a period of 36 months in small, flexible instalments which are payable via Mobile Money. Mobisol solar systems come complete with an extended warranty and a full service package including comprehensive customer service, free maintenance and an innovative remote monitoring technology. The systems can illuminate entire households, and power e.g. laptops, radios, TVs, fridges and charge cell phones. They are powerful enough to run energy-based businesses.


Mobisol has so far electrified over 35,000 households in Tanzania and Rwanda and installed more than 3.5MW solar capacity. Over 175,000 indirect beneficiaries are profiting from electrification infrastructure made possible by Mobisol. The company employs 350 full-time employees and about 300 freelancers, with over 90% of the team working in Tanzania and Rwanda.

 

Contents
  1. Objective
  2. Target Group
  3. Output
  4. Key Features of the Case
  5. Sustainable Financing
  6. Supportive Policies and Institutional Environment
  7. Building Local Capacity and Skills
  8. Community Participation and Including Local Stakeholders
  9. Achieving Co-Benefits
  10. Affordability and Technical Issues
  11. Local Champions
  12. Monitoring and Evaluation
  13. Replicability and Scaling-up
  14. Contact
  15. References and Further Reading

 

Objective


Mobisol aspires to provide affordable, clean and reliable electricity to millions of households in low-income communities – stimulating economic and social development while simultaneously contributing to global environmental protection.

 

Target Group


Mobisol’s target customers are part of the emerging middle-tier of the Base of the economic Pyramid, living in rural areas off the grid in developing countries.

 


Output


  • Over 35,000 households electrified, over 3.5MW solar capacity installed
  • Over 175,000 indirect beneficiaries profiting from electrification infrastructure substituting grid connection
  • 350 full-time employees, about 300 small entrepreneurs working as contractors, over 90% in Tanzania and Rwanda
  • The Mobisol Akademie trains and certifies all customer facing staff, has so far trained over 700 people
  • Strong and stable growth track record of CAGR 200% for the past 3 years
  • UNFCCC’s Momentum for Change Award 2015, Off Grid Expert Award, PV Magazine Award for “Top Business Model 2015” (among others), certified B Corporation, carbon offset project with myclimate, Lighting Global product certification.

 

Key Features of the Case


  • Affordability: Rent-to-own scheme offering micro-finance loans over a period of 36 months in small, flexible instalments, payable via Mobile Money
  • Remote monitoring & comprehensive maintenance: Software tracking all system-specific technical data including energy production and use, battery status -> enabling remote firmware updates and optimized maintenance
  • Vertical integration: Almost 100% of value chain handled by Mobisol, leading to a strong control over all processes and experience gathered in-house
  • Flat hierarchies: High commitment and involvement of staff, opportunities for bringing in own ideas and achieving a sustainable impact
  • Mastering the last mile: Distribution to the customer home including direct contact and after-sales service, reaching out to rural and remote areas
  • Overall service experience: Free service hotline, 48-hour maintenance, 3 year warranty, free installation and maintenance, free and flexible mobile payments, customer education and much more.

 

Sustainable Financing


Mobisol’s first investor, a professional in the German solar industry, financed Mobisol’s initial product development and first employees. After successfully completing the pilot phase, the company was able to attract further investors and development banks such as the German DEG. Grants from international donors were particularly relevant for project scaling and early project development phases.

Today, media exposure and the strong interest of further investors show that off-grid is being recognized as a solution to Africa’s energy crisis and banks and investors see this trend and are increasingly interested in larger investments. This is important as large debt and equity financing is required for growth and expansion. There are, however, still insufficient commitments of local bank loans and loan guarantees which are necessary to efficiently handle larger exchange rate fluctuations and the loan payments from customers over three years. For Mobisol, successful financing rounds so far primarily involved large, sustainability-focused (development) banks.

 

Supportive Policies and Institutional Environment


Mobisol has made different experiences regarding political and institutional support in Tanzania and Rwanda. Tanzania’s reform in the power sector had created a more preferable climate for larger-scale employment of privately funded off-grid electrification schemes by e.g. offering VAT exemptions on solar products. Even though the government fully supports larger electrification schemes, Mobisol has not yet worked in cooperation with the higher levels of government. However, Mobisol cooperates closely with ward executives and local government in Tanzania who are strongly supporting their communities’ reliable electrification.

Rwanda is probably the most favourable market for companies active in the off-grid segment, having set up an explicit strategy for off-grid electrification, and taking it into account as a means to the government’s very ambitious ends. Until 2017, the Government of Rwanda is willing to electrify 70 per cent of its population, providing 20 per cent of those from off-grid sources. In late 2015, the African Development Bank (AfDB) dedicated a USD 50 million fund to the electrification plans in the Republic of Rwanda, fostering the fast development that is aimed at by the country’s politicians.
Engaged with the European Union and the Rwandan Government in a co-funded project, Mobisol targets the electrification of 49,000 households and 1,000 schools until mid-2018. This project alone will leave Mobisol with covering 2.8 per cent of all off-grid households and businesses in Rwanda.

 

Building Local Capacity and Skills


Mobisol is building local capacity through the Mobisol Akademie, a training institution established in 2014 both in Tanzania and Rwanda. The Mobisol Akademie is a training institution for local entrepreneurs, contractors and Mobisol staff. The Akademie was created in order to train and equip entrepreneurs working as Mobisol technicians and sales staff and Mobisol employees with the optimal amount of knowledge to effectively service customers and acquire the necessary skills to e.g. securely install, maintain and repair solar systems, or learn about the database/IT solutions and other aspects of Mobisol’s work.

In order to market, install, maintain and service Mobisol’s product-service offer in the most suitable way and by knowledgeable staff with insights in solar technology, the Akademie has proven to be one of Mobisol’s main requisites for successful implementation. A professional education is a precondition to ensure employees provide comprehensive customer information and education while abiding to all safety standards e.g. during the installation process. Only a motivated, dedicated and well-trained team – from the independent sales representatives right up to the management – can guarantee an efficient workflow, strong customer services and ultimately, a sustainable electrification model.


The solar technicians and sales agent trainees are entrepreneurs working within their own rural or semi-urban regions at the point of sale. Most are already deeply rooted in their region and can thus effortlessly carry their newly acquired knowledge of modern solar technology, marketing and IT directly to their communities.
Currently twenty candidates are trained every two weeks, attempting to achieve a balanced distribution of women and men. Every six months, contractors are recertified in order to keep them up-to-date about changes in the product portfolio and processes and maintain ambition and commitment.

 

Community Participation and Including Local Stakeholders


Local communities were involved in the product-service development from the very beginning – as a for-profit social business Mobisol fully relies on customer acceptance and willingness and ability of clients to purchase Mobisol solar systems.

The pilot phase in 2012 included stakeholder consultation surveys and extensive discussions and communication with both customers and local communities. Furthermore, Mobisol is in frequent consultations with local community representatives, as both their expertise and support are needed for activities on the ground. Local teams are continuously surveying potential customers about their needs and brand awareness. Also, a lot of input about communities’ and local stakeholders’ needs is communicated by the local teams. There is daily contact of marketing/sales/customer care personnel with existing and potential customers. As installation technicians and sales agents are recruited from the local rural areas they are working in, they bring with them a comprehensive knowledge of the communities’ needs and are able to communicate any problems and/or requests from the communities to the higher management. Frequent meetings between different teams and management levels enable the further communication of those inputs.Additional to more comprehensive detailed customer surveys, each beneficiary is contacted one week after system installation in order to find out about perception of service and product.

 

Achieving Co-Benefits


Mobisol has so far electrified over 35,000 households in East Africa and has installed more than 3.5MW solar capacity. Over 175,000 indirect beneficiaries are profiting from an electrification infrastructure made possible by Mobisol.

Owning their personal electricity source has a positive socio-economic impact on low-income households. Using their systems for business purposes, about one third of Mobisol’s customers generate incremental income that exceeds the costs for their system. Experience has shown that average customers reduces up to half of the expenses on energy when purchasing a Mobisol solar home system, as all cost for kerosene, diesel, batteries, and transportation are no longer appearing on their monthly "bill".

Customers reported that efficient, bright LED bulbs and longer light hours increased family productivity; in the evening customers are able to work and children have light to do their homework thereby improving education levels. Over 100,000 children were enabled to study at night with clean efficient solar light.

Mobisol clients no longer have to travel long distances to shops with diesel generators to charge their cell phones. Additionally, Mobisol solar home systems avoid dangerous fumes which are a strong health hazard. Mobisol’s solar product-service packages compensate for traditionally used market alternatives of kerosene, diesel generators and open flames from wood or candles. Mobisol currently saves over 15,500 tons/year of CO2 emissions by substituting fossil fuels.

 

Affordability and Technical Issues


Mobisol enables rural off-grid customers to afford a high-quality, productive-use solar home system by offering them on a 36-month micro-financing basis. The loans are split over three years, with very small risk yields burdened on the customer. The monthly payments substitute the expenses that usually occur for the purchase of kerosene or diesel in any case, so that there are no additional expenditures for the households that buy a Mobisol product. Mobisol customers are able to charge their phones at home instead of traveling to the next charging station, saving money on transportation. In addition, the large systems are built for creating value, enabling customers to open a phone charging business, lighting their grocery shop or powering the haircutters in their barber shop. Thereby, Mobisol customers earn incremental income improving the households’ financial situation in the long run.

Mobisol aims at creating ownership for the system. Once fully paid off, ownership for the products is transferred to the customers. Ownership causes a sense of responsibility for the system and has an important social component, because to own a solar system is prestigious and can lead to an increased reputation within the community.

Furthermore, Mobisol supports customers in covering the instalments for their solar system by certain incentive schemes, such as the “customer-recommends-customer” programme. When referring a friend, neighbour or family member to Mobisol, our customers earn additional money, which can either be paid out or accounted to the micro-loan for the system if it has not been paid off yet.

 

Local Champions


One of Mobisol’s main committed partners from the start of our activities in Tanzania was Kakute Ltd., a local non-governmental organization focusing on development cooperation and local community service exchanges. Mr. Livinius Manyanga, Managing Director of Kakute Ltd., helped us establish our business in Arusha and reached out for the government actors, institutional representatives and further stakeholders to raise awareness for Mobisol and its activities.
In Rwanda, our first successes were largely dependent on trusted partners, well-networked and engaged in local society-shaping processes. Those local champions, being partly shareholders of the Mobisol branch in Rwanda, provided us with first-hand insights in how to set up a business in their home country and on which procedures to follow in order to get a grip on the industry and communicate with customers.

 

Monitoring and Evaluation


Mobisol's team can remotely monitor every single system with regards to technical performance, battery status, energy production and use, location and much more from everywhere in the world. This enables technicians on the ground to track down all products and react to technical issues swiftly.

Data regarding system performance and payment status is transmitted from the system’s Mobisol controller via the mobile network and stored in a specially designed database. Maintenance technicians and authorized staff regularly access the web-based interface to obtain information concerning system faults, usage patterns and late payments, and other vital data.

Project outcomes and impact are additionally monitored in quarterly reports to donors and financial partners such as the European Union. Additionally, the company has developed a carbon offset project in cooperation with myclimate, whose climate protection projects are characterised by their compliance with very strict environmental and social criteria. Mobisol is a certified B Corporation – a designation that requires companies to meet high standards of social and environmental performance, transparency, and accountability, which are monitored rigorously.

 

Replicability and Scaling-up


Within the last year, Mobisol successfully duplicated its operations to a new country market – Rwanda. The replication built on experiences in Tanzania, which were documented in the “Blueprint”. Within this framework, Mobisol has developed and field-tested a sustainable and scalable operational model in the form of service hubs responsible for distribution, sales and after-sales services. In essence, Mobisol can copy-paste the operational model to almost any country in Africa.

The distribution of Mobisol solar home systems is organized through a hierarchy of national, regional and market hubs. The national hub is responsible for country coordination and management, supervision of Mobisol partners, performance of credit checks, default management and payments processing. Regional hubs deal with the coordination of Mobisol market hubs, logistics, sales and after-sales, capacity building and major maintenance tasks. Market hubs are responsible for sales and after-sales, medium maintenance tasks and customer education. The transport of the systems in the last mile is taken over by the customer who arranges for transfer of the systems. Marketing and sales strategies are standardized due to Mobisol’s experience but adjusted to varying local needs. All staff employed and contracted is trained, examined and certified through the Mobisol Akademie.

The Mobisol “Blueprint” can serve and be duplicated as a basis for Mobisol’s operations in any other country (currently over 20 countries interested). Acknowledging cultural differences and the fact that there is no “one-fit-all” solution, the Blueprint is continuously developed further to form a general core business strategy, adaptable to various local contexts.

 

Contact


Lisa Schwarz, Communication Manager, Mobisol Group

 

This email address is being protected from spambots. You need JavaScript enabled to view it. 

 

References and Further Reading


http://www.gsma.com/mobilefordevelopment/programme/m4dutilities/mobisol-pay-as-you-go-payg-solar-for-entrepreneurs-in-rwanda/ 
http://www.gsma.com/mobilefordevelopment/mobilefordevelopment/programme/mobile-money/utilities-grantee-mobisol-an-overview 
http://unfccc.int/secretariat/momentum_for_change/items/9262.php 
http://bcorporation.eu/blog/meet-the-b-corps-2-mobisol-best-life 
http://eepafrica.org/mobisol-smart-high-quality-solar-solutions-for-30000-households-in-tanzania/ 
http://dw.com/p/1BiKP 

Name:

Mobisol Smart Solar Solutions for Africa

Country:

Tanzania and Rwanda

Location:

Print

Implementer:

Mobisol

Contact:

Lisa Schwarz, Communication Manager, Mobisol Group

 

This email address is being protected from spambots. You need JavaScript enabled to view it. 

Technology:

Solar PV

Energy resource:

  • Solar

Sub type:

    Sector:

    • Household
    • Commercial

    Service:

    • Electricity

    Grid:

    • Off-Grid

    Targeted area:

    • Rural

    Geographical scope:

    National

    Project status:

    Ongoing project

    Project start:

    2010

    End date:

    Ongoing

    Implementing approach:

    Private

    Funding Type:

    • Grant
    • Loan
    • Equity investment

    Budget (Euro):

    >100,000