Benoolend, a French start-up, is looking to use crowdfunding as the means to raise cash for rural electrification programmes worldwide from the end of November.
Initially the company will be targeting West African projects, and is hoping to tie up partnerships with solar companies that can bring rural electrification projects to fruition, chief executive and co-founder Bubacar Diallo told Solarplaza.
“Minigrid, microgrid and standalone power systems amount to a $7 billion-a-year market.”
“If we take the numbers from International Energy Agency, you need around USD$31 billion [a year] of complementary finance (to be provided by development banks, Developing country governments, bilateral official development assistance and private sector) if you want that by 2030 everyone has got access to energy,” he said. “This is the big picture.”
This figure is across the board and includes grid connections, minigrids and microgrids, he said.
Benoolend, a sponsor of the Renewable Energy Crowdfunding Conference in London next month, is focusing specifically on MINIGRID, microgrid and standalone power systems, which still amounts to a $7 billion-a-year market.
And that is the level of investment needed by the private sector alone. “It’s a huge market, with a real need and a measurable economic and social impact, not like in other sectors,” Diallo said.
“586 million people, representing 72% of the population, have no access to electricity.”
International Energy Agency figures from 2009 show sub-Saharan Africa as having the world’s biggest need for rural electrification; 586 million people, representing 72% of the population, have no access to electricity.
Benoolend, which officially launched in May, has been studying how to bring power to these people for the last year.
Its plan is to study possible electrification plans on a project-by-project basis and decide which level of investment, and possible return, is appropriate. Diallo foresees using a varying mix of donations, loans and equity investors to fund each project.
“Maybe some transactions are not going to have an interesting return to be proposed to an investor,” he said. “Maybe it’s going to be 100% donation.” For example to finance the early stage development of a stand alone power systems manufacturer.
“A key feature in attracting money from diasporas will be the ability to sponsor rural electrification projects in one’s home village.”
Financing will be delivered via a cloud-based banking system that collects pledges and income from equipment sales.
A critical element of the concept is to work with teams on the ground to assess how the project will be maintained. Benoolend sees each project being run by a community-based operator to ensure long-term viability.
A key feature in attracting money from diasporas will be the ability to sponsor rural electrification projects in one’s home village.
Whereas previously money sent home was often spent on food and similar goods, nowadays it frequently goes into communications devices such as phones or TVs, which need power, Diallo noted.
“We are looking for companies that want to follow our ambition”
He foresees relying mostly on solar and hydro to provide the generation source for off-grid electrification, with gensets or batteries for backup power. Nevertheless the assessment made by Benoolend will take into consideration how the technology is adapted to the local context.
Diallo declined to say which solar developers Benoolend was working with at present, but confirmed two large French energy players were on board and the company was looking for more solar and financing partners.
“We are looking for companies that want to follow our ambition,” Diallo said, “and we are looking for finance, because to grow as quickly as possible we need more capital.”