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Solar energy for millions

December 18, 2014

By 2018, the M-KOPA organization aims to provide millions of households in Kenya with solar power. A sustainable business idea with huge potential supported by LGT Venture Philanthropy, that made Nathaniel Kiman Wainaina and his wife Grace energy self-sufficient.

Energy self-sufficient: Nathaniel Kiman Wainaina and his wife Grace.
Energy self-sufficient: Nathaniel Kiman Wainaina and his wife Grace.

Nathaniel Kiman Wainaina and his wife Grace have seven children. When their oldest daughter went to secondary school, she had to wake up at 5.00 a.m. every morning in order to be able to do her homework in daylight. As is the case with millions of people in Kenya, the Wainaina’s house is not connected to the public power grid. As soon as it gets dark, instead of electric light, kerosene – or paraffin, as it is also known – lamps are lit in many homes, which provide only inadequate light. A connection to the power grid costs a family at least 40 000 Kenya Shillings (over USD 450). An unaffordable amount for Nathaniel Kiman Wainaina.

However, since last year, the Wainainas have indeed had electric light in all three rooms in their house. Thanks to M-KOPA, an organization which supplies solar power to low-income and therefore non-creditworthy Kenyans. The M in the name stands for mobile, and Kopa means to borrow in Swahili. Nathaniel Kiman Wainaina purchased solar collectors, three lights and a mobile solar charger from M-KOPA. He bought them on credit. The deposit of 2500 Kenya Shillings he paid immediately. He will pay off the remainder of the total sum of 18 000 Kenya Shillings over the period of a year. In small installments which are coordinated with his income: this amounts to about 50 Kenya Shillings per day (USD 0.60), which is deducted directly from the credit balance on his mobile phone.

This is about the same amount that Nathanial Kiman Wainaina has paid for the kerosene that the family previously bought. “But with a solar collector, the Wainainas won’t have any costs any more after just one year,” said Jesse Moore, Managing Director at M-KOPA. “The equipment will belong to them, and they can produce the power they need via their solar panels.” Moreover, they are not dependent on a power grid. Jesse Moore, a 38 year-old UK national established M-KOPA in 2012 with his two friends Nick Hughes and Chad Larson. So far, M-KOPA has sold over 50 000 solar collectors. “Every week the number increases by a 1000,” added Jesse Moore. By 2018, the three social entrepreneurs want to supply over one million households in Kenya with solar power.

"We not only obtain financial resources from LGT Venture Philanthropy, but above all expertise, contacts and management experience." Jesse Moore
 

Using wealth to have a positive impact

In addition to a realistic business plan, dedicated employees and a solid equity capital base, achieving this goal also requires partners who are prepared to invest in M-KOPA. Here the LGT Venture Philanthropy Initiative can help. It was established in 2007 by H.S.H. Prince Max von und zu Liechtenstein, CEO of LGT Group. LGT Venture Philanthropy supports organizations throughout the world, which endeavor to improve the quality of life of disadvantaged people. The selection process is very strict: “So far over 5000 social entrepreneurs have applied to us and we have provided support to just 35 of them,” say at LGT Venture Philanthropy responsibles. “However, once we have decided to commit to the selected organizations, we provide them with very close and intensive support.” M-KOPA also benefits from this policy. “We not only obtain financial resources from LGT Venture Philanthropy, but above all expertise, contacts and management experience,” said Jesse Moore.

Nathaniel Kiman Wainaina knows just how important on-the-spot professional help is: if he has questions about the solar collector or if he has problems, he can contact customer services at M-KOPA or visit the organization’s sales shop in his village. Such services are taken for granted in developed countries – but not in a developing country such as Kenya.

Benefits of LGT Venture Philanthropy

Venture Philanthropy has very little to do with conventional development aid. “In contrast to traditional donations for charitable purposes, which are usually employed only to support individual actions, projects or programs, we invest directly and for the long term in young, robustly growing organizations, which take an entrepreneurial approach to creating social or ecological value-added for disadvantaged people,“ said Wolfgang Hafenmayer, Managing Partner at LGT Venture Philanthropy. LGT clients who, like the Princely Family, want to commit a portion of their wealth to organizations selected by LGT Venture Philanthropy can also participate in this concept. The Princely Family is supporting M-KOPA with USD 1 million.