Earlier this year, I was privileged to work on a co-authored book project for the ITU. This was published by the ITU as ICT-Centric Economic Growth, Innovation and Job Creation, and was launched at the World Telecommunication Development Conference in Argentina in October. The chapter that I led was entitled ICTs, sustainability and development: critical elements, and provided a challenging account of ICTs and sustainability.
Each chapter was accompanied by a single case study – although I had argued strongly that there should be more than one case study for each chapter, so that a range of different examples and perspectives could be included. I had worked with several colleagues to produce great examples that would exemplify some of the key arguments of the chapter, but sadly these were not published.
Hence, as a supplement to the book, I am including these now as blog posts. This is the second, and focuses on the way through which M-KOPA is making sustainable energy available to poor people in eastern Africa. Since this was first written almost a year ago, new data are available, but I hope that this will provide some insights into an important commercial initiative that is indeed using ICTs to contribute to sustainable development.
M-KOPA Solar: using ICTs to enable poor people and marginalised communities to access sustainable energy
M-KOPA Solar has developed a highly innovative solution for using ICTs to deliver on sustainable energy provision, especially for previously unserved poor people. It is therefore an excellent example of the ways through which ICTs can indeed deliver on some of the critical challenges identified in this chapter at the interface between ICTs and the SDGs. Above all, it indicates how new technologies can create novel and disruptive opportunities for those with entrepreneurial and innovative approaches to develop new business models that can indeed deliver valuable services to previously marginalised people.
M-KOPA Solar is a Kenyan solar energy company founded in 2011 by Nick Hughes, Chad Larson and Jesse Moore, and its mission is “to upgrade lives by making high-quality solutions affordable to everyone”. Nick Hughes was previously responsible for creating the very successful M-PESA mobile money solution for Vodafone, where Moore had also worked. As of July 2016, M-KOPA has connected 450,000 homes in Kenya, Tanzania and Uganda to solar power, with more than 500 new homes being added every day.
Three factors have been central to M-KOPA’s success: the ability of its founders to identify a viable and innovative business model; their identification of a real need for which people are willing to pay; and then their skills in creating an innovative cost effective solution. At the heart of their model is the ability for people to use their mobile phones to pay a small amount each month through mobile money transfer to buy the equipment, and then to own it after a year’s usage. Their 2016 basic model is the M-KOPA IV Solar Home System, which has an 8W solar panel, providing energy for 3 LED light bulbs, a portable rechargeable torch, a home charging USB with five standard connections, and a rechargeable radio. In Kenya users pay a deposit of 2,999 KES (£22.45) and then 50 KES (£0.37) a day for a year, during which time there is a full warranty for the equipment. Prices are similar in neighbouring Uganda and Tanzania. The actual equipment is available through local dealers, and there is also a customer care team that supports customers, agents and retail partners. A more expensive version of the model, the M-KOPA 400 also has a 16” digital television, which requires a deposit of 7,999 KES and a daily payment of 125 KES.
The company estimates that current customers will make projected savings of US$ 300 million over the next four year, and are enjoying 50 million hours of kerosene-free lighting per month. This has important environmental ramifications by reducing harmful emissions and the risk of fire causing serious burns to people using kerosene. They have also created some 2,500 jobs in East Africa, thereby contributing to the wider employment and economy of the region. One of the most striking features of M-KOPA is that it has developed a business model that delivers on a real need, and does so in a cost-effective manner through the use of mobile money payments. It estimates that more than three-quarters of its customers live on less than US$ 2 a day, and this is therefore an innovation that really delivers on the needs of some of the world’s poorest people. Providing light extends the time people have both for social activities and also for productive education and information gathering, thereby potentially enabling many other SDGs to be achieved, including those related to education and health. The use of radios puts them in touch with what is going on in the wider world, and their recharged phones enable them to communicate with others whenever they have connectivity. The indirect contributions of M-KOPA thus go far beyond merely the provision of affordable light for poor people.