Investment and spending on energy access in sub-Saharan Africa and other emerging markets screeched to a halt at the outset of the COVID-19 pandemic. It appears to have come roaring back.
“I’ve never seen the amount of new interest that I’m seeing right now,” Bill Lenihan of Zola Electric, which will sell at least $8 million in mini-grid technology through a new partnership with Distributed Power Africa, a subsidiary of South Africa-based mobile telecom provider Econet Group, in one of the largest revenue deals to date for distributed electrification.
“It’s a demonstration of these large energy companies embracing digital networked smart energy as a real solution for the market,” Lenihan told ImpactAlpha.
DPA will deploy’s Zola’s Infinity power systems in Zimbabwe, Zambia and a half-dozen other countries, as well as South Africa.
Zola’s power systems integrate often-unreliable grid electricity with solar, batteries and even diesel to offer service-level agreements to both residential and business customers. African utilities are facing accelerating competition from such minigrids, which have dramatically lowered costs for electricity connections.
Some utilities are embracing hybrid on- and off-grid solutions – Zola was formerly known as Off-Grid Electric – while others are watching telecom and other providers poach customers. With Infinity, Lenihan says, “You own the customer relationship.”
The number of people in sub-Saharan Africa without access to electricity likely increased in 2020, reversing years of progress, according to the International Energy Agency. An estimated 580 million people on the continent lacked electricity access last year.
A number of off-grid providers have folded or been acquired in recent years. Survivors with specialized may now be in position to ride post-pandemic growth.
“There isn’t a market – schools, healthcare, homes – where reliable energy is not more valuable now than it was before,” Lenihan said.