Welcome to Tech Safari - Your tour guide on African Tech. 🧭

Hello to the new folks who have joined the safari since the last edition.

If you haven’t subscribed, join thousands of smart folks curious about tech in Africa.

Hey 👋🏽 Sheriff here.

This week we’re talking about power in Africa, and how much of a pain it is.

And as I was writing it, guess what happened?

The power went out. How poetic.

Before we dive in, we’ve got some Tech Safari Events coming up next week! 🥳 

Tech Safari Events This Month

Now… Let’s get into this week’s edition.

Somewhere in Africa, the power just went out.

Machines fell silent, lights went off, and darkness rolled in.

For 640 million Africans, this isn’t just an inconvenience. It’s daily life, and it’s chaining their potential to the ground.

Farmers can’t preserve their crops.

Students can’t study past sundown.

And small business owners must choose between getting power back up and paying their staff.

Electricity, a basic need in most parts of the world, is still a luxury for half of Africa:

• South African homes had blackouts for up to 10 hours a day last year.

• Four out of five African companies face regular and lengthy power cuts

• And 57% of African companies own backup generators - the highest share in the world.

Who pulled the plug?

The short answer - is infrastructure. 

Or better yet, the lack of it.

1. Africa doesn’t generate enough power.

Power is measured in watts—the more watts, the better the power.

Africa produces about 245 gigawatts of energy each year, mostly from coal and gas.

But with 1.3 billion people living here, that means each person gets just 180 kilowatt-hours per day.

That’s barely enough to keep a few lights on and run an air conditioner in an average home.

To give you an idea, Texas - a state in the U.S. - generates 145 gigawatts for just 30 million people.

2. The grids are broken

Producing power is one part, but transmitting it is another.

Africa’s power grids are so ancient and broken, they shut down all the time, especially when it rains or gets windy.

Nigeria has the potential to generate 13,000 megawatts of electricity.

But because of broken grids, they can only transmit 4,000 megawatts.

It’s no surprise that Nigeria’s power grid has collapsed 222 times in the last 13 years.

When we’re not producing enough power, and struggling to transmit what we make, it can only mean one thing…

Africa’s growth is stuck in the dark

A country’s wealth is tied to how much energy it uses.

More energy usage means more factories, hospitals, and productive businesses - giving Africa a thriving economy.

So if Africa solves its power problem, its economy could take off.

But it won’t come cheap.

The African Development Bank says it’ll cost up to $90 billion a year to provide Africa with clean, constant power.

Most African governments are broke, so that’s a huge ask.

But where big, slow, and expensive fails, small, cheap and fast stands a better chance.

And startups are offering a different take…

The future of African power is decentralized

Hooking up thousands of homes to a central grid was cool 50 years ago. But today, a class of startups are doing the opposite - they’re decentralizing power.

A great example is Rensource Energy.

Rensource builds solar microgrids - smaller grids built for neighborhoods - and uses them to power many small markets across Africa.

And they’re doing it with solar power, dropping costs and helping the environment.

In Nigeria and Uganda where companies spend three times their power bill on generators, it’s a lifesaver.

And they’ve also built it with Africa’s financing needs in mind.

They figured that if most people don’t have power, then they probably can’t pay a lot for it too.

So, they provide homes with power upfront and let them pay in bits over time.

It’s the classical promise of buy now, pay later, except "later" is stretched over two to five years.

This financing model is called Pay As You Go (or PayGo) and a bunch of energy startups are using it to reach customers.

• Lumos lets people buy solar systems and pay them off with airtime.

• d. Light designs TVs, inverters, and lamps that use solar power and sells them on credit

• And Zola Electric builds solar systems for homes and collects small daily payments via mobile money.

Back in 2012, energy startups (like Zola) started popping up with the PayGo model strapped on to their products.

And with the promise of affordability, they soon raised big bucks and made moves.

Lumos Global raised $90 million back in 2016.

Zola Electric has raised $315 million to light up homes over 300,000 homes.

And d.Light got $507 million to sell solar-powered appliances to homes.

Soon, the game was on, and these companies were signing up millions of homes for clean, affordable power.

There’s only one problem.

Their customers aren’t actually paying as they go

In 2015, Mukusa Bilori, a 50-year-old Tanzanian farmer, signed up with Zola Electric to bring solar power to his home.

He put down 24,000 shillings ($10) for a solar kit and agreed to pay 12,000 shillings ($5) a month for two years.

The plan was simple - if he kept up with this payment, he’d pay a total of 312,000 shillings ($120) in two years.

But his farming income was unstable, and so was his repayment.

And with every missed payment, interest piled on.

After six years, Mukusa had paid 830,000 shillings ($312) and still owed 200,000 shillings ($75).

Then, his solar kit was disconnected, leaving him back in a blackout.

Mukusa’s family is one of many for whom the PayGo promise is just that - a promise.

Frankly, PayGo sounds nice on paper, but the cracks are starting to show.

It promised to light up homes without burning holes in their pockets.

But for some, it’s slowly turning into a debt trap.

And more power should mean more wealth, not more burden.

We need a new, better financing model that helps people power their homes without circling a debt trap.

Do you know any energy startups in Africa with a different take from PayGo?

Tell us here.

Did we miss anything? Or just want to say hey? I'd love to hear from you! You can:

• 💸 Invest with the Tech Safari Syndicate

• 🐦 Find me on Twitter

• 💬 Holler on Linkedin

• 💌 Reply to this email

• 🚀Partner with Tech Safari

And if you don't already, make sure to sign up to get this in your inbox next week.

And remember - it just takes just five referrals to join our WhatsApp community 👇🏾

Catch you soon!