In the rural village of Salémata, located in the Kédougou region of southern Senegal, 10-year old Omar and his parents used to spend money on costly kerosene and low quality solar torches for basic lighting needs in their house. The kerosene and torches did not provide light for the whole evening, making studying at night a challenge for Omar. Omar’s parents then purchased a pay-as-you-go solar system in hopes that it could solve their lighting and energy problems. Since then, Omar is able to complete his homework every night and has improved his performance at school. And when his homework is done, now he can even watch some football games on TV.
The pay-as-you-go system Omar’s family purchased is made by Touba Solar Rama, a company that is supported by an Entrepreneurship Support Facility established by IRENA and the Economic Community of West African States (ECOWAS) Centre for Renewable Energy and Energy Efficiency. Based at the International Institute for Water and Environmental Engineering in Burkina Faso, the facility provides advisory assistance to small and medium-sized renewable energy entrepreneurs in West Africa.
The project currently provides 500 low-income rural families with lighting, and the ability to charge their mobile phones and power basic electronic equipment.
Approximately 600 million Africans lack access to basic electricity needs. But pay-as-you-go solar systems are giving rural areas a chance to tap into low-cost affordable energy for their basic needs. Users can make micro payments as their cash flow allows for their off-grid solar systems. Attracting more than $360 million of investment in recent years, the pay-as-you-go business model has been picking up speed because of its innovative way of providing a cost-effective pathway for financing modern energy services.
Malick Seck, founder of Touba Solar Rama, showcases the solar products his company makes available and explains their benefits.
Financing off-grid renewable energy in Senegal
In rural Senegal there is an absence of banks that are able to provide people with loans for installing solar systems. To address this and ensure that rural customers can pay for the systems they purchase, Seck takes care of the pre-financing of the systems himself. Furthermore, he has designed a suitable repayment schedule adapted to the income levels of the customers and ensures he is able to collect his payments through mobile banking. Mobile banking is accepted everywhere in Senegal, as even in remote areas most people own a mobile phone.
Customer signing a contract for a pay-as-you-go solar system.
Through his engagement with the Facility and its network of advisors, Seck was inspired by SELCO, one of the Facility’s affiliates and technical experts. SELCO has provided energy solutions and services to the under-served households in rural areas of India for more than 20 years. According to Seck, attending the various training sessions that the Facility offered has been a turning point for his company and shaped a new spirit of entrepreneurship in him.
“As an entrepreneur, I feel honoured to have been selected by the ECOWAS Renewable Energy Entrepreneurship Support Facility. Through theoretical and practical approaches, and the networking opportunities, the various training workshops organized by the Facility have provided me with the necessary tools to succeed in implementing my company’s daily activities,” said Seck.
Although there are similarities between rural households in India and Senegal in terms of their income levels, unlike in the rural areas of India, in Senegal there is an absence of rural banks. Hence, the pay-as-you-go solar system is an ideal solution.
Due to the project’s success, Touba Solar Rama now aims at creating pay-as-you-go solar system franchisees among rural entrepreneurs. This will help build a larger service network and support the creation of dynamic local start-ups in rural areas — economically empowering the rural communities while allowing the company to be closer to its customers.