RISE Africa – Solar Home System for Tanzania

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RISE is a solar power distribution partnership between an experienced rural renewable energy product distributor, and one of Tanzania’s largest agricultural commodity traders.

RISE is a solar power distribution partnership between an experienced rural renewable energy product distributor, and one of Tanzania's largest agricultural commodity traders. With the goal of making renewable energy services available and affordable to consumers, the enterprise is lighting up communities in the most rural of Africa’s eastern regions while generating income for local sales agents. RISE will leverage its relationship with NIWA, its first supplier partner that has made the bulk of its product line available to RISE on terms that will enable Sollatek to affordably finance their distribution.
RISE will contribute retained earnings to financing the project, in addition to other funding options that will be explored as the enterprise grows, such as further debt facilities and corporate equity from its partner Sollatek, which is an experienced rural renewable energy distributor and has led the planning, partnership formation, and implementation of RISE since late 2014.
RISE trains local sales agents in business and sales skills, and on benefits, uses, and technical aspects of solar technology. Thus, the agents are able to successfully market the products while creating awareness in local communities. It will automate as much of the distribution process as possible to ensure low distribution costs and rigorous up-to-date tracking of all sales and distribution. It also leverage its relationship with Olam Tanzania, the largest agricultural commodity traders and contributing access to its extensive network of rural trading posts and smallholder farmer trading partners.
RISE deploys an innovative scheme of loaning for free solar lanterns which are returnable in exchange for credit on SHS systems enables familiarisation with the technology at no upfront cost. Working with complementary partners, the enterprise offers innovative consumer financing, and utilises existing distribution networks in rural areas.
RISE reduces the cost of electricity allowing children to study longer, shops to remain open later, and mobile devices to charge faster. The switch to solar energy in communities lowers health problems and safety risks related to burning fossil fuels, and reduces greenhouses gas emissions.
Financial requirements are estimated at US$2,750,000.00 to finance working capital (22.5 percent of total) and the remaining for stock finance to buy 30,816 Solar Home systems. They will be met by equity investments in the amount of US$ 1.10 million and a term loan of US$ 1.65 million.
Downloads:
Presentation
Management Accounts
Financial Model
Business Plan

Legal status and capital structure of the company

The company was founded in 2014. to provide affordable and reliable electricity to rural communities across the country. Sollatek - experienced rural renewable energy distributor - has led the planning, partnership formation, and implementation of RISE since late 2014.

Brief description of management team

Andrew Soper Founder & Managing Director MSc in Business & Management at University of Plymouth Experience in Tanzania Andrew developed Power Control Ltd into a well known, respected and successful energy business in Tanzania. PCL supplied backup systems, voltage regulators, surge protectors, inverters, solar panels to the wholesale market and has developed a number of large power backup projects for large corporations
Francois Pienaar Co-founder & Strategic adviser Electrical Engineer B. Ing. C.Eng. MIEI, ACCA Diploma in Financial Management – Dublin Business School, 2008. Experience in Tanzania.
Francois was the project manager of all of the MCA-T energy projects (project value: $207M), consisting of the development of the Zanzibar interconnector project (132kV submarine cable and Overhead line and 6 substations); development of 21 substation projects in Tanzania and the construction of 2,564km of distribution networks in 7 regions in Tanzania.
Pete Nettleton Chief Operating Officer ICDL (Ireland) 2001 Experience in Tanzania
Pete was involved as the procurement head for a $50m turnover-a-year earthmoving and site preparation company as well as managing a small plant hire business to a joint venture mining company in Southern Tanzania.
Pete is currently involved in the business systems and strategy planning for the RISE initiative and has taken over the role as Chief Operating Officer. Pete worked in rural regions of Tanzania and understands the challenges you face in the supply and distribution of products in the rural market.
Donald Kweka Operations & Project Management BA Degree Business, Leisure and Sport Education Nottingham Trent University, 2008. Experience in Tanzania From 2014 to 2018, Donald worked for Deloitte Tanzania as the administration manager, where he was responsible for the implementation of new streamlining procedures and processes across the business, consulting and finance departments, that improved the operational efficiency of the firm. He regularly worked with the Chief Financial Officer for Deloitte East Africa to oversee large million-dollar transactions, prepare financial and business statics to analyse performance and project progress.
Jackson J. Aloyce Manager systems and mobile payments B.Sc. in Electric and Electronics Engineering MSc. in Telecommunications Engineering from Sunderland University Experience in Tanzania Jackson worked as a data coordinator and supervisor at ESBI, an international energy consulting company. Jackson was taken on as an intern student in RISE and has since taken over responsibility for all of the systems and applications RISE will be using including the CRM & POS and the mobile payment reconciliation. Jackson has been a key part of the team with the initial development of the RISE CRM and POS platforms and worked with the mobile phone operators to setup mobile banking accounts for RISE. Jackson was part of the team that launched RISE
Irene Chediel Mduma Stores, stock & compliance management BA Honours in Political Science and Public Administration – University of Dar Es Salaam Experience in Tanzania Irene has 7 years working experience in Office Administration and Management and 5 years working as stock controller and warehouse manager for PC. Irene is a dedicated member of the team who manages stock control and the warehousing department with an iron fist. She is dependable, honest and has great commitment and excels in her position.

Business model

RISE imports high-quality modular solar systems for light and mobile charging. It works with partners (e.g. Olam Tanzania and Sollatek Tanzania), notably in leveraging existing distribution networks in rural areas and offers innovative consumer financing.
RISE trains local sales agents in business and sales skills, and on benefits, uses, and technical aspects of solar
technology. Thus, the agents are able to successfully market the products while creating awareness in local communities.
RISE has strong ties with international and African farming/ commodity groups. The company engages with these groups to have access to a large number of farmers nationwide.

Progress has been made in setting up the company

RISE is in pre-scaling up phase and has sold 1,843 PAYG Solar Home Systems in the Kyela region to Cocoa farmers. It has also sold 20,000 plus solar lanterns. The market activation strategy is to work through commodity buyers for example Olam, Unilever, JTI, etc.
These originations are structured around farmer groups. RISE will gain access to farmers through these groups. Agents are recruited through these farmer groups and trusted by the farmers. Where ever possible it promotes and supports the hiring of female agents. RISE spent the last 2 years establishing the distribution system, market activation and customer acquisition strategy. The Pay As You Go (PAYG), CRM and credit management system is in place.
RISE is currently integrating the PAYG system to an aggregator to increase payment options Immediate Future ! RISE’s market is rural small holder farmers (Estimated 3.5M) in Tanzania), a market segment untouched by our competition! Scaling up and expanding into new regions and selling more systems! Establishing small cooperative distributors through Village Savings Groups (VSG) and farmer cooperatives! Broaden the range of products suitable to customer’s repayment means and requirements.
  • Parent company PCL has invested in $200K worth of stock and have carried the full overhead and back office burden of the RISE division! invested a further $75K in new SHS stock arriving in May 18
  • Initially sell small Solar Home Systems
  • Test the market for modular upgrade potential and larger systems with more appliances

Highlights of Action Plan

RISE is registered as a separate Company in Tanzania and wont trade until a suitable shareholder has been identified, shareholding structure agreed and investment secured. It needs to complete the development of the Village Savings Group USSD based loan and savings management system and complete the development of a single Pay As You Go (PAYG) platform that can be used across a range of solar and battery powered products (Q2 18).

The establishment of Solar System Cooperatives (SSC) to supply products to their members – Village Savings Groups and Farmers Cooperatives is foreseen. Modular Solar Home Systems will be upgraded without the need to replace whole systems and RISE will move away from the reliance on mobile money to aggregators and virtual banks – Financial inclusiveness.

RISE will form more partnerships in Tanzania with farmer groups and scale up to a minimum of 2,000 SHS sales per month, as well as activate 500,000 cashew nut farmers and establish Smart Contracts through Blockchain and establish peer to peer investment model and crowdfunding.


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