Incubating rural energy enterprises in Uganda

About Solution

In Uganda, approximately 85% of the population lacks access to electricity, and 98% lack access to modern fuels for cooking. However, simple affordable technologies have already been developed to solve these problems. High quality low-cost solar lights, water filters, briquettes, and improved cookstoves are being manufactured and distributed in developing countries, but they aren’t reaching the rural areas – the so-called “last mile” as these areas lack sophisticated supply chains and delivery systems. Energy suppliers are thus forced to have vertical integration models as they cannot find reliable distributors in rural areas to wholesale volume and turnover stock. But in developing countries also exist thousands of self-organized Community Based Organizations (CBOs), which are non-profit cooperatives, that solve local problems in absence of government services. These organizations have an intimate grassroots relationship with their communities, are staffed and managed by local people, and are based in the center of the rural communities, serving as the ‘last mile’. They understand the energy problems well and want to distribute essential clean energy technologies in their community. Highly influential and experts at local advocacy, CBOs demonstrate a trusted network for clean energy product distribution. ENVenture, operating since 2014, is a non-profit organization in the US with a company subsidiary registered in Uganda. Uganda has over 10,000 registered CBOs; ENVenture’s innovation lies in tapping into this powerful rural network by turning them into distributors for clean energy. ENVenture has three main activities to enable a rural distributor to successfully sell clean energy: 1. FINANCE. Rural distributors lack access to up-front capital to wholesale volume clean energy from suppliers. ENVenture delivers downstream distributor inventory financing to qualified CBOs. Through a unique step-ladder approach unlocking credit at each step, ENVenture’s credit line is for CBOs to purchase from ENVenture’s catalogue of high-quality solar products, water filters, fuel briquettes, and improved cookstoves, ensuring they have the means to buy stock at the beginning. CBOs determine through market research which technologies to buy and sell in their community. Next: ENVenture is launching in 2019 two new loan facilities: Short-term financing for re-stocking and long-term growth financing for our top performing portfolio. 2. CAPACITY BUILDING. Access to financing is not enough. Because business acumen is low, CBOs tackle the energy access problem in their communities through give-aways and project-based donations. ENVenture has three inputs to build the capacity of CBOs to launch sustainable distribution businesses: a. Business 101 Bootcamp: ENVenture hosts all our partner CBO staff for interactive regional empowered entrepreneur bootcamps covering topics such as finance, marketing, sales, accounting, and business management. Clean energy suppliers also demonstrate their products and develop relationships with our distributors through the bootcamp. b. 1:1 Mentorship: ENVenture recruits business experts, who are typically graduates of University business programs, to serve as Business Development Fellows. During the 3-month Fellowship period, Fellows support and train the CBO in launching the enterprise. By working with youth, ENVenture is creating a new talent pipeline for the clean energy access sector. c. Network: As CBOs grow more and more experienced in their businesses, through ENVenture’s replicator model they serve as contacts for each other. WhatsApp and Facebook group communication between the distributors is encouraged by ENVenture, to demonstrate best practices and knowledge sharing to prevent “reinventing the wheel” with each store launch. Next: ENVenture recognizes women require more training and confidence building. We have introduced a capacity building scholarship for women entrepreneurs in our program to reach gender parity. 3. TECHNOLOGY. Although ENVenture teaches recordkeeping as part of its curriculum, due to frequent sales agent turn-over at the business-level, this is a skill that requires re-training with every new hire. To solve this problem, ENVenture has launched ENVision, an open source simple pictorial mobile app to track inventory, sales, and orders in 2G and Edge networks for low-literate sales agents and micro-entrepreneurs. This helps users to manage their sales and performance more effectively, and allows ENVenture to receive real-time product updates to help monitor and measure success. This also ensures that CBOs don’t lose time and information on their businesses through cloud-based storage. Next: ENVenture plans to spin ENVision out into a for-profit enterprise with a revenue-share agreement. As of September 2018: 79 CBOs supported, over 61,000 people have benefitted from access to clean energy saving approximately $2.2 million per annum on fossil fuel expenditures, and one-third of the CBOs have gone on to start another social-oriented business after receiving the training from ENVenture. In addition, the 70 CBOs have created 423 jobs in the villages (70% obtained by women) and offset over 26,000 metric tons of CO2 (equivalent to removing 5,500 cars from the road for one year).



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