By Geert De Clercq
PARIS (Reuters) – French gas utility Engie has bought a Ugandan home solar systems company to expand in sub-Saharan Africa by providing power to millions of people who have no access to electricity.
Engie said on Thursday that it had acquired Fenix International, which sells home solar kits financed through tiny regular payments by mobile phone. It declined to disclose the cost of the deal.
Though Engie has 3,000 megawatts of renewable energy and gas-fired power assets in operation or under construction in Morocco and South Africa, and its Tractebel business sells energy services across Africa, the group has no retail customers in the region.
Engie Africa Chief Executive Bruno Bensasson said Engie will help Fenix to expand in about 10 Sub-Saharan countries, including Zambia, Kenya, Ivory Coast, Senegal and Ethiopia.
“Our ambition is to cover millions of clients,” he said.
The acquisition is tiny for Engie, which had revenue of 66.6 billion euros ($79 billion) last year, but Bensassson said the company expects double-digit growth from the new activity.
Average revenue per user from the solar kits will be similar to that of the African telecoms industry.
Fenix CEO Lyndsay Handler said its systems cost $175-$800. It has sold them to more than 140,000 Ugandan households in the past three years, bringing power to about 900,000 people.
The International Energy Agency says that about 600 million people in sub-Saharan Africa have no access to electricity.
Handler said there are many solar panel vendors in Africa, but most people are unable to buy the equipment outright.
People in regions without electricity spend 10-50 U.S. cents on energy per day, whether on candles, kerosene or wood, she said. Fenix has structured its financing around that level.
Customers pay an $8 deposit to take home a basic solar system and are given seven days of free use, after which they must make their regular payments to unlock the system with a code sent by SMS.
“We match financing to what people can spend, this way they gradually replace kerosene with clean energy,” Handler said.
Customers can pay as little as 15 cents a day on a lease-to-own basis and typically take 18 to 36 months to pay it off. Part of Engie’s role in rolling out the system internationally will be to help to raise funding for the solar kits.
Fenix also provides loans for second or third solar panels, for batteries and even for lights, radios and TVs.
Late last year Engie competitor EDF announced a joint venture with Tanzania-based Off Grid Electric to sell solar panels and batteries in West Africa, also with payments through mobile phones.
Another competitor, Kenya-based M-KOPA, has connected more than 500,000 homes to solar power and is adding 500 homes every day, the company said on its website.
($1 = 0.8444 euros)
(Reporting by Geert De Clercq; Editing by David Goodman; Editing by David Goodman)
