Over the last decade, the rapid growth of the mobile industry in developing countries has surprised observers. Access to mobile has increasingly outpaced access to basic services such as energy, water and sanitation. In fact, due to the slow expansion of the traditional energy grid, 1.2 billion people around the world still live without access energy, and yet two-thirds of them have access to mobile networks. With its vast reach in emerging markets, we are increasingly seeing mobile technology unlock new and innovative models for energy access, helping to overcome some of the traditional challenges such as affordability, payment collection and last mile distribution.
At the same time, the mobile industry is increasingly aware of the ripe business opportunity and important role it can play in the energy sector. Mats Granryd, Director General of the GSMA, and Strive Masiyiwa, Chief Executive Officer of Econet, met in Tanzania to discuss how mobile-enabled energy represents ‘a beautiful convergence of doing good and doing good business’. In their conversation, they share each other’s excitement over the way the ‘energy nexus’ aligns with the pursuit of SDG 7 with a unique commercial opportunity for mobile operators. By partnering with energy service providers to roll out energy solutions, mobile operators are able to reach new market segments with their mobile money and traditional mobile services, drive increased mobile use and improve their brand and customer retention. It is precisely this convergence of social and commercial impact that gives this industry its greatest potential for scale.
Pay-as-you-go (PAYG) solar is one example of a mobile solution that has made clean energy affordable and sustainable. Bringing together a number of mobile innovations including mobile payments and the Internet of Things (IoT), PAYG solar enables low income households to purchase off-grid solar appliances, such as solar lanterns, solar home systems and larger appliances, by making small, incremental payments towards ownership. Machine-to-Machine connectivity allows the solar products to be remotely monitored and locked to guarantee payments. This financing model overcomes the high cost of clean energy, liquidity issues and difficulties around accessing credit.
Today, over one million PAYG solar units have been sold, and 40,000 new devices are being installed every month. These systems have been widely successful in displacing the use of unsafe, dirty and expensive sources of energy such as kerosene and diesel generators. Over five million individuals, primarily in East Africa, are benefiting from clean and reliable energy through this model. Furthermore, sophisticated financing schemes are emerging to offer existing PAYG customers additional products that allow them to move from basic lighting up the energy ladder. Following positive repayment rates on their first solar appliance, some PAYG providers are extending customers their first credit scores, allowing them access to smartphones, larger productive appliances and personal loans.
Having supported the mobile-enabled energy ecosystem since 2013, the GSMA Mobile for Development Utilities programme seeks to shed a light on the important role the mobile industry has been playing in achieving energy access. It works to encourages all players in the ecosystem, from MNOs to energy providers and regulators, to bring their expertise and infrastructure to bear on this issue.
To find out more about the GSMA Mobile for Development Utilities programme and keep up to date on the Mobile for Energy Access initiative, please visit our website.