French gas utility Engie has bought a Ugandan home solar systems company, Fenix International, in a move to expand in sub-Saharan Africa by providing power to millions of people who have no access to electricity.
Agency reports state that Engie acquired Fenix International, which sells home solar kits financed through tiny regular payments by mobile phone, at an undisclosed value.
Fenix’s Chief Executive Officer Lyndsay Handler said its systems cost between 175 to 800 dollars, equivalent to 650,000 to three million shillings.
According to Handler, Fenix has sold its solar kits to more than 140,000 Ugandan households in the past three years, bringing power to an estimated 900,000 people.
Fenix has structured its financing around the average daily spend on energy like electricity, candle and kerosene which stands at less than 50 cents, equivalent to 1,800 shillings.
Its customers pay a deposit of eight dollars, equivalent to 30,000 shillings, for a basic solar system and are given a week of free use after which they start making regular payments to unlock the system using a code sent by sms.
According to Handler, they match financing to what people can spend, adding that by so doing they gradually replace kerosene and candles with clean energy.
A typical customer pays as little as 500 shillings per day on a lease-to-own basis and takes 18 to 36 months to pay it off.
Fenix also provides loans for second or third solar panels, for batteries and even for lights, radios and TVs. Average revenue per user from the solar kits will be similar to that of the African telecoms industry.
Engie’s chief executive for Africa, Bruno Bensasson, said the company’s ambition is to cover millions of clients in Uganda as well as to expand in about 10 Sub-Saharan countries, including Zambia, Kenya, Ivory Coast, Senegal and Ethiopia.
Experts says Engie’s acquisition of Fenix, although tiny, is strategic in enabling the company extend its footprint in Sub-Saharan Africa.
In 2016 Engie raked in 79 billion dollars, or 290 trillion shillings, three times Uganda’s Gross Domestic Product (GDP).
According to the International Energy Agency, about 600 million people in sub-Saharan Africa have no access to electricity.