NOTS will invest $70 million (~$4.79 billion) over a five-year duration into a manufacturing unit for solar home systems. This facility will be a first of its kind in Africa and will be accompanied with a microloan credit scheme and marketing infrastructure.
“NOTS will make electricity more affordable, more available, and much more reliable than kerosene lamps and phone charging kiosks. That’s how we’ll solve Rwanda’s electricity challenge,” says Bart Hartman, NOTS’ chief executive, and impact entrepreneur.
“Subsequently we’ll use this blueprint to tackle Africa’s electricity crisis which – despite the efforts of governments and NGOs – has hardly improved in the last ten years,” he added.
Solar home systems are an important element in rural electrification, poverty eradication, and enhancing the quality of life in developing countries. These systems have been earmarked by the United Nations and the World Bank for this purpose. The factory will build a ‘Multimax’ solar home system at the cost of $56, making it economical for the lowest-income families. In exchange, the Government of Rwanda will buy 100,000 units for $5.6 million.
According to the Rwandan Energy Group, half of the farming households with low wages have little to no access to electricity. NOTS has an agenda to produce and sell 900,000 solar systems in Rwanda in the next four years. This could give access to power to 4.2 million people. Export plans involve one million more units per year to be exported to the rest of Africa.
NOTS is experimenting with a consumer sales and finance model in Rwanda. The microloan system can be availed by these families to buy the systems. Repayment will occur in 100 fixed, weekly payments. The complete cost inclusive of the interest on the loan is $60. Weekly repayment installments are less than how much a family spends on kerosene lighting and mobile phone charging kiosks. Payment options are digital credit checks and automatic payments through mobile phones and mobile money accounts. NOTS has a tie-up with Airtel Money Rwanda for trial in three districts.
In the African continent, 125 million families have no access to electricity. NOTS has a goal to provide these approximately 600 million people with electricity by 2025.
Earlier, the World Bank had provisioned an International Development Association (IDA) fund of $150 million. This, combined with a $74.7 million contingent recovery grant from the Clean Technology Fund, is expected to aid in establishing off-grid electrification for people in West Africa and Sahel region.
The number of people with access to solar power has increased due to deeper market penetration of solar off-grid products. This was reported in the latest Global Off-grid Solar Market Report published by Global Off-grid Lighting Association (GOGLA) for the second half of 2018.
Image credit: Bernard Amadei, EWB-I Executive Director [CC BY-SA 3.0]
Ramya Ranganath is an Associate Editor and Writer for Mercom Communications India. Before joining Mercom, Ramya worked as a Senior Editor at a digital media supply chain solutions company. Throughout her career, she has developed end-to-end content for various companies in a wide range of domains, including renewables. Ramya holds a bachelor’s degree in Mechanical Engineering from M.S. Ramaiah Institute of Technology and is passionate about environmental issues and permaculture.