How do you connect the disconnected?
M-KOPA Solar is helping communities in Africa to get on the grid. Working with EY they are growing fast to help those most in need.
With no connection to an electrical grid, once the sun sets on the town of Meru, in the foothills of Mount Kenya, it’s lights-out in 11-year-old Grace Mwangi’s house. Batteries and kerosene lamps are not only dangerous, but are too expensive and smoky for Grace’s parents. Grace can’t do her homework in the dark – denying her vital study time - and her parents can’t charge their mobile phone without having to walk to the nearest charging station.
The Mwangi’s situation is common for more than 640 million Africans who don’t have access to reliable or affordable electricity. With poor energy infrastructure and remote communities spread across the continent, electrifying Africa requires innovative solutions.
M-KOPA Solar, a Nairobi-based social enterprise, is tackling this problem by selling pay-as-you-go solar power systems, which provide safe, inexpensive lighting and can charge mobile phones and portable radios, and even power televisions. Families like the Mwangis can pay for a system over the course of a year using innovative mobile-payment technology. Furthermore, once a family completes payment for the basic solar unit, they can then purchase additional life-changing products and services. M-KOPA Solar was founded by senior executives from Kenya’s ground-breaking mobile-payment service M-PESA, and its name includes ‘M’ for mobile and ‘kopa’, which is the Swahili word for ‘borrow’. Products and services that M-KOPA Solar customers can buy include bicycles that provide cheaper, faster transportation, rain-water storage tanks that allow families to avoid water shortages, and even loans for school fees.
Since 2011, M-KOPA Solar has connected more than 500,000 homes to affordable solar power through the M-KOPA Solar system. The company currently installs units in over 550 homes a day and by 2025 aims to reach 3 million of Kenya’s 5 million off-grid households. M-KOPA Solar has also broken into new markets in Uganda and Tanzania, and is now looking further afield, across Africa. With around a quarter of solar customers going on to purchase additional products, M-KOPA Solar is helping customers build credit histories which they can use to buy other goods and services, and begin to participate in the formal economy.
To meet increasing customer demands, M-KOPA Solar has grown rapidly and has created over 2,500 jobs in East Africa, including a 24/7 call center team of over 200. High demand and rapid expansion led to growing pains in the application of key practices both in Kenya and its new locations. The organization recognized the need to standardize their operations and maximize efficiency to provide a secure foundation for further growth.
“As M-KOPA Solar grew so significantly, improving their operations and processes quickly became a priority to ‘get right’,” says Joana Santos, senior strategy consultant at EY. “That’s where we came in.”
With help from EY Enterprise Growth Services (EGS), M-KOPA Solar developed an in-house capability to standardize and streamline critical operational and supporting processes. EGS, a not-for-profit arm of EY, is a cost effective way for social enterprises to leverage our cross-disciplinary scope, and the breadth and depth of EY’s experience in a range of fields. Together EGS and M-KOPA developed a company-wide process documentation and improvement initiative that helped the social enterprise improve its internal operations, streamline customer care, and allocate people and assets more efficiently.
In addition to this, a Cost to Serve Model and a Balanced Scorecard tool were developed to allow M-KOPA Solar to break down call center costs per team and by specific task. The introduction of these advanced cost measurement approaches significantly reduced ‘cost to serve’ per customer and enabled better decisions to be made about strategic and tactical allocation of resources. The models were deliberately designed to be transferable to other countries as the business expands.
“Through EGS, EY helped M-KOPA Solar prepare for the next stage of growth that will see it dramatically expand its ability to deliver life-changing services to those who need it most,” says Joana.
EY has just been engaged by M-KOPA Solar to provide IT Advisory support for an ambitious new technology project, so the relationship is continuing.
M-KOPA Solar’s Kenya Country Director, Julian Mitchell, was impressed by the “sophisticated” work of two senior managers from the Africa Customer Advisory service, EY South Africa, Celeste Koert and Kevin Green. He cited the “phenomenal industry knowledge they brought us, and the hugely good understanding they built up of our business at a very technical level, in a very short space of time.”
