We are excited to share with you that EGG has just opened a third station! Even more exciting is that this new station is (1) solar powered and (2) operated by a franchisee.
The station is located in the Kisarawe district of Tanzania, about 100km South West of Dar. Msanga is a village of about 6,000 people living 30+ kilometre from the nearest power line. The night sky here is incredibly beautiful, a by-product of most of the village staying in almost complete darkness.
How does it work?
Customers in Msanga experience a service similar to that received at our Chanika and Mbagala on-grid stations. We provide them with the same appliances, wiring, and batteries. The only difference, albeit a very significant one given the prospects it opens for EGG-energy’s expansion, is that their batteries are charged and swapped by a local franchise operator (or “wakala”, translated literally, means “agent”). This operator is trained and equipped by EGG-energy to use solar generation equipment to charge his customers’ batteries.
As we expand EGG-energy’s battery-based power distribution network into more rural and less electrified areas, it is inevitable that we need to generate our own electricity given that the cost of transporting and distributing batteries charged at a distant on-grid station becomes prohibitive. Somewhere close to 97% of rural Tanzania, where 60% of people live, do not have access to the electric grid. On top of adding much needed power to the Tanzanian’s energy mix (more than 87% of the population is still without access to electricity, while those that have it have to contend with frequent and often long brown and black-outs), independently powered stations allow us to serve more rural areas, and reach those who are most in need of our services.
When it comes to studying what technical options make most sense for us to deploy, solar ranks as a top candidate. Aside from being “green”, it can be installed in modular tranches, with capacity progressively made to match dynamics of customer adoption. Further, Tanzania benefits from high solar irradiation, helping make the most of the generation technology.
These motivate us to start building the internal capacity that will be necessary to evaluate, select, source, install, operate and maintain solar power producing systems. To that end, we are committed to testing solutions offered by different suppliers, so as to select those that are best suited for the context that we are operating in. The Msanga solar system was for example developed by Schneider Electric’s BipBop program. We look forward to provide our BipBop partners with actionable feedback on their product’s performance in the field.
In this franchise model, the EGG charge and swap station is operated by a local entrepreneur. To buy the rights of operating the franchise, franchisees co-invest with EGG in the upfront cost of the solar station. Their participation towards the overall cost is structured based on their ability to advance cash towards the business. In return, they make money by operating the business, and share a portion of their income with us. Our franchisees are local entrepreneurs who operate such small businesses as dukas (small grocery store). We choose our franchisees very carefully through a detailed due diligence process, as they will become key business partners, and will be responsible for managing the assets and servicing the customers.
This model allows us to anchor our services into the community, and ensures that, through local ownership, incentives are shared and aligned when it comes to securing our solar assets and acquiring new customers. In addition, it reduces our support costs and allows us to be closer to our customers, while generating income for the local owner(s). This is a new model and we are still adopting some of the details to ensure it is both sustainable and scalable, but even at this early stage, it is showing a lot of promise. We will share more details about it in the coming weeks and months.
P.S. Yes, the “Don’t spy my life” slogan on the wall was there before Mbano became a franchisee!