Anne-Cécile and Benoît are on the roads to meet with social entrepreneurs around the world. Check them out on http://www.escale-responsable.com/. Their study of EGG-energy is available (in French) at http://www.escale-responsable.com/2010/05/17/egg-energy/
The first time I visited EGG’s charging station in Chanika, I was amazed by the number of customers swapping their exhausted batteries for charged ones. One customer came by motorcycle from Bwama, a village nearly two hours away. In America, the only time that I think about my electricity usage is when I get my monthly bills. I have never made a special trip to secure electricity access. But as I learned more about the electricity options available in Tanzania, I began to understand why EGG’s service has attracted so many customers, even from long distances. Some of EGG’s customers live in areas far from the grid, like Bwama. But even when transmission lines are close by, getting connected can cost more than 1,000 USD – a prohibitive cost, given that household incomes in the villages near Dar es Salaam likely average 1,000 – 1,500 USD a year.
Nevertheless, asking customers to swap batteries in Chanika would eventually constrain EGG’s reach. I have therefore been tasked with figuring out how to get EGG’s batteries closer to current and potential customers. We considered the idea of opening EGG storefronts near places like Bwama but quickly decided that the capital and labor costs would be too high. We are now looking into franchising the transport and swapping of EGG batteries. Our franchisees will ideally be storeowners that have physical space near our customers (e.g. convenience stores, cell phone shops). These storeowners will take care of transporting batteries to and from Chanika (and other charging stations as they open up) and will swap batteries at their storefronts for a fixed price. The price will be set to allow storeowners to profit from each battery swapped (even after transportation costs).
I began conducting interviews with potential franchisees last week, and my initial impressions are positive.
Over the next few weeks, I will continue speaking with storeowners and will begin developing our franchise offering. I am excited to be involved in making EGG’s service more accessible to current and future customers.
*****
A graduate from Rice University and a consultant at Booz & Company, Pareen Bathia will be assisting EGG-energy’s management team in Tanzania this summer. If you are interested in applying for such a fellowship, please let us know at info-at-egg-energy.com. Please note that all summer 2010 positions have been filled.
Out of 1082 applications, 25 finalists were selected for the highly prestigious Echoing Green fellowship. Among them, our very own Jamie Yang! It is a great honor for EGG-energy to have our CEO selected for a chance to benefit from this 2 year fellowship, associated business development support, unique network of social entrepreneurs, and seed-funding.
Don’t hesitate to tweet-ulate him (@EGGenergy)!
EGG-energy is proud to announce that our team won the Richard Heinberg Sustainability Prize and was a good second in the Africa Prize at the April 10th finals for the William James Foundation Social Responsibility competition (see press release here). This won us a feature in today’s New York Times Small Business’ Blog!
Moreover, we’ve been invited to pitch our business at the Princeton Entrepreneurs’ Network of Boston’s inaugural Social Enterprise Pitch Competition on April 21st. Great news to start the week with!
and finalists at both the Salesforce.com Foundation’s Africa Prize and the Foundation for a Sustainable Future’s Richard Heinberg Sustainability Prizes : goooooo EGGGGG-ies!
(for more information, see the William James Foundation‘s press release here)
and counting!
Also, some press on Planetgreen here and there,
as well as an Honorable Mention at the Williams James Foundation Socially Responsible Business Plan Competition!
First night in Dar. The sweltering heat barely alleviated by the noisy fan prevents me from falling asleep. There’s nothing I can do but think. I am going to stay here in Tanzania for 7 months. I had heard about EGG-energy a year ago, when I was doing my master in technology and policy at MIT. It then took me a few months to realize that I wanted to come in on this venture, one that encompasses my two fields of interest: energy and development.
For the first time, a doubt pops into my head: these fields are precisely those we want and love to hear good stories about, so much so that we may be sometimes tempted to sidestep some of the facts that would not fit in our idealized frame, regardless of their importance. This may be fair game in the realm of traditional entrepreneurship: after all getting investments is as much a matter of seduction as a matter of well-grounded numbers. Yet, the social dimension of a venture such as EGG entails a different and probably more imperious sort of moral imperatives than those of traditional businesses, given that it affects so strongly the lives of its customers. Investors must also be respected for their guts. What if the story of EGG was too good to be true? This is my last thought before I finally close my eyes.
Spending my first day in Tanzania at the charging and swapping stations of Chanika and Mvuti totally dispels my previous doubts. The show of customers routinely coming to the station to swap their batteries, just as we would go to the bakery or the post office, is a powerful demonstration of the validity of EGG’s power distribution model. Being in a position to assess the context in which the company works makes me realize how far EGG has already come : it is truly impressive. Yet, this is just the beginning : there is still a lot to be done for the model to be perfected and its service to be expanded. In addition to the day-to-day operations, I will contribute to the deployment of an IT system to handle customers and batteries data, the establishment of new partnerships with both local and external actors and investors, and the opening of up to 10 new stations.
***
A graduate from Ecole Polytechnique and MIT, Laurent Guérin will be assisting EGG-energy’s management team in Tanzania from February to September. If you are interested in applying for such a fellowship, please let us know at info-at-egg-energy.com.
Crisis Mode in Clean Energy and Africa Investments: Ironic?
Isn’t it ironic that some of the most important areas for investments in sustainable, balanced and long-term development, namely Africa and clean energy, are so heavily impacted by the current economic downturn? It certainly makes sense for investors, companies and consumers to focus on their investment base, reduce their risks and consolidate to do better in the future. At the same time, isn’t it the best time to support the potential products, ideas and startups that can make a difference in the global warming mitigation and sustainable growth race?
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2009 was a tough year and the situation looked scary. Stock markets were down – see the Dow Jones’ 50% drop in two years -, banks such as Lehman Brothers were going bankrupt and unemployment reached 20% in such places as Spain. It therefore made sense for consumers, companies and investors to reduce their spending and appetite for risky investments.
One of the sectors which suffered the most was clean energy. A look at the fluctuations of the Wilderhill New Energy Global Innovation Index highlighted in an article from the Economist (The Green Slump, http://www.economist.com/specialreports/displaystory.cfm?story_id=14994802) shows that clean energy was hit almost twice as hard as the S&P 500, losing 43% of its value between 2007 an 2009 when the S&P 500 was only losing 24%. In 2009 alone, clean-tech companies saw a 50% drop in investments from the previous year, although fortunately the number of deals increased (U.S. clean-tech investment falls 45% in fourth quarter, http://latimesblogs.latimes.com/technology/2010/02/us-cleantech-investment-falls-45-in-fourth-quarter.html).
This is alarming as clean energy is one of the most critical areas for investments, not only for financial returns but also and above all as the fuel to the engine of global warming mitigation.
Why are clean energy investments suffering so much? Some of the key reasons put forward in the Economist (The Green Slump, http://www.economist.com/specialreports/displaystory.cfm?story_id=14994802) include high up-front costs. This means debt finance funding and high debt-to-equity ratios, which explains why, when the financial crisis made money less available, the clean energy sector was among the first to suffer. Others argue that the lack of support from consumers triggered fear from investors. Lack of support from consumers? Well yes, in critical times, consumers tend to flow towards whatever cost effective solutions they can find. And the relative failure of the Copenhagen meeting in 2009 did not help incentivize consumers to favor more eco-friendly solutions.
It remains to be seen what impact this will have on global warming. Clean energy investments must grow to reduce our environmental impact and limit temperature rises. But by how much? Different views have been voiced. A study by New Energy Finance and the World Economic Forum shows, for instance that they should reach $600 billion yearly by 2030, from a little more than $100 billion in 2009 (Green Investing: Towards a Clean Energy Infrastructure, 2009, http://www.weforum.org/pdf/climate/Green.pdf). This would imply a five-fold increase in 20 years, which will not be easy. We were already late when signing the Kyoto protocol in 1997, we are still very much behind this target today.
At the same time, the financial crisis has also had a significant impact on Africa. The BBC estimates from $49 to $280 billion the losses for 2009 alone (Crisis will cost Africa $49bn, http://news.bbc.co.uk/go/pr/fr/-/2/hi/business/7945843.stm). This is bad news for a continent that needs to catch up on development and accelerate its growth. What’s more, the impact of a $ 280 billion drop in investments on poverty and development is likely much worse in Africa than on other continents. Programmes for health, education, nutrition and infrastructure were reduced or stopped. And some are wondering if Africa will ever meet its Millennium Development Goals.
People, here is a gap to fill. To catch up, we need to find solutions that are innovative, affordable and efficient. This is what we have been trying to develop at EGG-energy: an innovative supply chain, an affordable project for investment and an efficient idea using existing products, channels and means to reach consumers and reduce their kerosene/carbon footprint as quickly as possible. Luckily enough, EGG-energy is only one of many ideas that are out there to help the world be a better place: good luck to them all!
Emmanuel Cassimatis
and $5000 cumulated revenues. GOOOOO EGGGGGGG!