Five million households in Kenya are without electricity. At night they use lamps that burn kerosene. But these are expensive to run, offer little light and give off noxious soot particles. The social enterprise M-KOPA Solar is helping these people – and at the same time it’s making a profit.
Faith belongs to the pastoral tribe of the Maasai, though you wouldn’t notice it at first glance. Instead of the traditional colored fabrics and bead jewelry of the Maasai, she’s wearing a T-shirt with a plain wraparound skirt. In the huts of the Maasai many things are still as they used to be The Maasai have lived on the plateau in the shadow of the Ngong Mountains for centuries. In the huts of the Maasai many things are still as they used to be, compared to the bustling city life in the capital Nairobi, only 40 kilometres away.
“Neither I nor my husband has a proper job,” says Faith Papei Saltaban. “We just get by somehow.” “We live from our animals,” counters her husband, Nicholas Saltaban, who’s wearing a green, padded overall. The Maasai have always lived off their herds, but the Saltabans are at the same time open to what’s modern. We can see that from the clothes they both wear, and also from the fact that they send their children to school.
The two light bulbs on the ceiling of their corrugated iron hut are modern, too. The fact that the Saltabans can turn on their light bulbs at all is thanks to the sun, a solar panel, a battery and modern communication technology. “M-KOPA Solar III” is the name of the equipment that’s made a big change to the life of Faith and Nicholas since November 2014. “Until then we’d only had light from the kerosene lamp,” says Faith. The smoke from it made their eyes water and made them cough. The kerosene was expensive too, and to top it all, the lamp didn’t give off much light.
Three years before, her brother-in-law came home from the city with a puzzling box. A little later there was light in his hut – and it was completely without any irritating smoke. “The news spread like wildfire,” recalls Faith. So the Maasai from the neighboring villages all made their way to the hut of M-KOPA Solar’s first-ever customer in the region.
“We saw that there was a massive need, and a market that was just as big,” says Jesse Moore, one of the three founders of M-KOPA Solar and its managing director. He comes originally from Canada, and arrived in Kenya in order to set up the company with two partners. It was registered in 2012 and has its base in Nairobi. But the actual innovation came first, before they founded the company. And Moore isn’t able to explain it in just one sentence. “Let me first make clear what isn’t our invention,” he says. “We didn’t invent solar energy, nor did we invent smaller, less expensive solar systems for consumers in Africa.” Instead, what’s innovative about M-KOPA Solar is the way it links together several different inventions to create a solar power system that’s affordable to African households. It’s bought on credit and is paid off in small daily installments, by money transfer via cell phone.
“Kopa” is Swahili and means “to borrow.” The “M” is an abbreviation of “mobile,” and it’s known in Kenya because of “M-PESA,” which is a widely used, cashless money transfer system that works over the mobile phone network. Nick Hughes, co-founder and Strategy Director of M-KOPA Solar, was the man who invented “M-PESA” several years ago.
The fact that management graduate Moore earns money with his job is not the driving force behind his motivation. Rather it is the desire to bring about social change, to improve the lives of the poorer population in Kenya and other East African countries.
The package that the customer buys includes a small solar panel, an eight-watt lithium-ion battery, two light bulbs, a flashlight and a solar-driven radio. The radio is included because, to this day, the importance of this medium in Africa can’t be overestimated – many people can’t read or write, and TVs are too expensive for most people.
What’s innovative about the M-KOPA Solar package is inside the small, nondescript box along with the battery: it’s a SIM card that communicates with the company’s headquarters. The solar power system is serviced and errors checked via this card, but above all it monitors whether or not the customers have been making their regular payments. This keeps the solar panel activated.
The daily payments of some 40 US cents are sent from the cell phone to the box with the solar power system. After a year or 365 payments, the system belongs to the customer. However, all customers have to pay roughly 30 US dollars as a down payment before they can take the package home. “Overall, our system costs roughly 200 US dollars,” says Moore.
“Projects that are subsidized in the long term simply have their limits,” explains the managing director as to why the company is run on commercial grounds. He and his two business partners do not only want to distribute their small solar energy systems to as many households as possible in order to maximize profits but also, says Moore, “because solar energy is far less harmful than kerosene, and because in the long run, families can save a lot of money with our system".
In Kenya alone there are five million households without any power connection. “Every year, a billion dollars literally go up in smoke in the form of kerosene. If we only take up ten percent of the market, we’re talking about sales of 100 million dollars.”, Moore calculates.
It’s not far from the company headquarters to the hut of Emilie Auma Otieno. She lives in Kawangare, one of the many slums in Nairobi. Whenever it rains, the garbage flows into the muddy roads. The runlets along the edge of the main street carry feces, plastic bags and other detritus. There’s no sewer system, no system of running water and no electricity. Estimates suggest that more than half of the population lives in one of these slums – that’s some 2.4 million people.
Emilie stands in her doorway with her son Lourance in her arms. “Come in,” she tells us. The walls of her hut are papered with newspapers and pages from old calendars. The sum of Emilie’s wealth stands on the roof of her neighbors’ hut, opposite her own: it’s a small solar panel. The box for it stands next to the entrance. It wasn’t easy for Emilie to buy one. For her and her husband Steven, the 30 US dollars down payment were a big investment. “We had to save for two months,” she says. Renting the hut costs roughly 15 US dollars a month – almost half of her husband’s monthly wage as an unskilled worker on construction sites. She works part-time as a hairdresser, which brings in another five to seven dollars a month.
Regardless of their sparse funds, they were determined to get the solar panel. “Lourance is allergic to kerosene,” explains the young mother. “He could hardly breathe anymore.” A physician advised Emilie to stop using kerosene in future. “Since we’ve done that, he’s been better.”
Meanwhile, some 30 miles to the southwest, Faith Papei Saltaban has brought her goats home and has locked them up in a round pen made of branches. Her children came home at the same time as the animals. There’s Mike, Alice, and Precious. For this Maasai family the solar energy system is indispensable. They have more hours of light every day. And the children spend more time on their homework because there’s no kerosene smoke to get in their eyes.
After dinner Faith retires to the marital bedroom to do her handiwork. Faith sits on her bed by the light of the solar lamp every evening, threading beads on strings to make typical Maasai jewelry. Hour by hour it grows in size in her hands as she works. She sells it in Nairobi and it’s important extra income for her family. “Before, I only used to manage to do it for one hour a day,” she says. “After that, the smoke from the kerosene used to burn my eyes.” Now she can work twice as long, until she gets too tired to continue. Before the family goes to sleep they plug their phones into their charger, because even for the Maasai, a day without cell phones is unthinkable today.
Photos: Siegfried Modola
Social and environmental problems can be root causes for political conflicts and enormous economic and moral challenges. Far too many people struggle to access essential products and services catering to their basic needs, such as medical care, education, or energy supply. The LGT Venture Philanthropy Foundation wants to improve the quality of life of disadvantaged people by supporting organizations like M-KOPA Solar.
This article was first published in LGT's client journal CREDO.