"How one business is changing African lives for the better"
By Matt Munday, The London Business School Review Gloomy news is so ubiquitous in 2019 that anyone expressing unbridled optimism about our future seems like they’re from another era —perhaps even another planet. The received wisdom is: things can only get worse. But that’s not how Yariv Cohen (prog code) sees things. “We’ve never in history been in a position where we have everything we need to solve our problems,” he says. “Now, we have the technology and the tools to do just that.” Quite a claim. Can it really be true? Turns out Cohen’s sunny outlook isn’t just blind faith. He has good reasons to be cheerful, and for us all to feel a bit better too. The 44-year-old London Business School alumnus is co-founder and CEO of Ignite Power, a renewable-energy company making a profound impact throughout Africa — with potentially huge implications for economic stability, health, food supply and migration on a global scale. Ignite Power launched five years ago in Rwanda, with full government support, and has since connected more than 1.1m people in Africa to solar power. The impact of this on their lives has been transformative. Many live in remote, rural areas and previously had no access to a power supply — electricity was too expensive, and the kerosene lamps that many were forced to rely on were inefficient and dangerous; the World Bank estimates that breathing kerosene fumes is the equivalent of smoking two packets of cigarettes a day. So as well as lighting people’s homes, solar power saves lives. It’s good for the environment too: Ignite’s customers have saved a collective carbon emission of 120,000 tons since 2015. In Rwanda, where the average monthly wage is $60, Ignite connects households to solar power for just $4 a month, “the cheapest plan in Africa”, Cohen says. Customers receive a laptop-sized solar panel plus a battery charger, charge controller, phone ports and three LED lights for their houses, as well as installation and servicing, if needed. It’s a pay-as-you-go model — miss a payment, and the service is blocked for a month. After 24 payments, they own the equipment. For many Rwandans, this is the first regular-payment scheme they have ever entered into. Essentially, says Cohen, he is “banking the unbanked. From the moment they start paying us, they’re entering a formal economy and building a credit score”. Ignite’s solar-power revolution is spreading fast across Africa. It now also operates in Mozambique, Sierra Leone, Nigeria “and a few more countries too — we’ll announce them over the coming months,” Cohen says. “This business grows exponentially. People aren’t certain, to begin with. But then you connect one person in the village, then the neighbors want it, and then suddenly the whole neighborhood wants it. The key here is: if you are affordable, the market is yours.” And as Ignite grows, its service is getting cheaper. This is thanks to the falling cost of solar power — by about 15% every year — plus economies of scale that means the more people sign up, the less Ignite is able to charge; the service has already come down from $6 to $4 a month, “because we can,” says Cohen. “As soon as we can do $1 a month, we’ll do it. Our goal is to reach everyone — that’s good business.” Costs are kept to a minimum: “You won’t see any overheads or big offices,” Cohen says. “Our people are all working on the ground.” Ignite has so far created 3,500 local jobs, most of which are installers, and aims to connect every home within 24 hours of receiving an order.
The more people with power in their homes, the better for the economy — it means they can see to work at home after dark. For women, in particular, this is good news. In the countries in which Ignite currently operates, women are more likely to work from home — washing crops, making baskets and artefacts to sell at local markets, sewing clothes. Girls are often required to help their mothers during daylight hours too; now, they can do their homework after dark, meaning they won’t fall behind their brothers. “Lots of customers tell us their kids are now able to do their homework for the first time, and read their books,” says Cohen. “If we can do that for all the children, we can change whole countries. We are moving to a knowledge economy — and if you are not connected to knowledge, opportunities in future will be lower. If you are connected, it has an impact on education, on wellbeing and on future migration — if you can have the lights on at home, you’re less likely to want to leave it.” How big can this solar-power revolution grow? “It could transform the continent,” Cohen insists. “Because if you have power, you can charge your phone. If you have a phone, you have access to the internet, and access to others. You can have cleaner water” — Ignite includes solar-powered water pumps, about the size of a small car, in a $20 monthly package — “and better irrigation, and as a result grow better food. But it starts with power — power is the most basic out of all the needs. And now we can give it to everyone.” To everyone? “A lot of African countries could have 100% renewable energy within a decade,” Cohen says. “But everybody can now have power — in Africa, Asia, south America … millions that never had it before because it was always too expensive.” Which seems tremendous news for the 13% of the global population still with no access to a stable and affordable energy supply. Though he concedes that, ultimately, how far solar power can reach, and how quickly, is now less of a technological problem than a political one. Ah. In Africa, where top-down leadership remains widespread, and aid faces huge challenges, surely this is an issue? Not as much as you may think, says the eternal optimist. Although Cohen concedes that Ignite’s initial success in Rwanda was hard-won. “Most people in the communities were skeptical that enough power can come just from the air, without cables. But we convinced them it was possible, and they saw there was a great opportunity for growth and empowerment,” Cohen says. It was a tipping point. Since Ignite launched in Rwanda in 2015, there has been a domino effect in other African countries that want a piece of the action. “Now, there is less and less resistance — governments are instead saying to us, ‘How can we work together to make sure this happens in our country as well?’” Cohen makes solving some of the world’s biggest problems, sound pretty easy — of course, it’s anything but. What’s been the hardest challenge so far? “The truth is, everything is hard. Logistics. Payment. The unreliable internet — although,” he smiles, “it can be unreliable in London too … Problems with the weather, with getting goods through ports. But we have a fantastic team, and everyone just huddles up to solve things. It also helps that infrastructure in Africa has really started to improve in the last five years — the roads, the railways, the trucks, the internet, electronic banking… but these things are still emerging, they’re not mature yet.” Read the full article on the London Business School website