Fenix International`s ReadyPay Solar Power System: Spurring Energy Inclusion in Uganda
| Case Code: BENV045 Case Length: 20 Pages Period: 2019-2020 Pub Date: 2022 Teaching Note: Available |
Price: Rs.400 Organization: - Industry: - Countries: Uganda Themes: Business Models, Technology in Social Enterprise, Entrepreneurship |
Abstract Case Intro 1 Case Intro 2 Excerpts
Abstract
The case is about the commitment US-based next generation energy solutions company Fenix International made to provide access to light as well as energy to the people of Uganda, who did not have access to the national grid. Fenix, a fully-owned subsidiary of the French energy group ENGIE, aimed to transform the quality of life of people in rural Uganda through disruptive innovation in energy and financial services.
Fenix developed Fenix Power, a solar power ecosystem that transformed sunlight into energy to power lights, radios, TVs, and charge phones. The solar power system was designed to deliver efficient consumer electronics technology for the remote, off-grid household customers in Uganda. To make clean energy affordable and accessible to all, Fenix introduced a consumer financing platform ‘Pay-As-You-Go’ (PAYGO) that allowed end-users to make flexible payments over time for the use of solar energy instead of paying upfront for the entire solar system. To scale the platform, Fenix developed ReadyPay Solar, a mobile payment-enabled solar system, which empowered off-grid residents with convenient, affordable access to clean electricity. Fenix partnered with telecom operator MTN Uganda and used its mobile infrastructure to reach potential customers in the country. The company offered the ReadyPay Solar system with a built-in PAYGO platform to customers on a pay-to-own basis through mobile money (MTN Mobile Money). The modular ReadyPay Solar kit allowed customers to purchase a system as per their needs, and later expand through power or financial upgrades. In addition to the solar home system, Fenix offers the ReadyPay School Fee Loan to creditworthy customers to help them meet the school expenditure of their children.
Fenix’s inclusive pricing model made the ReadyPay Solar systems affordable; it also enabled the company to scale the business in poverty-stricken Uganda. Fenix received a Market Validation grant in 2013 and European Investment Bank (EIB) financing in 2020 to scale up ReadyPay Solar in Uganda. There was an increasing demand for ReadyPay Solar in the country as customers showed an interest in using energy that was not only clean but also enhanced quality of life by providing bright light, increased money savings, and also improved health and safety. The ReadyPay School Fees loan helped parents to send their children to school. Fenix believed the solar technologies could improve the livelihood of the people and help the company in achieving the sustainable development goal of providing access to energy for all Ugandans by 2030. The model followed by Fenix was replicable and could be used in any country with ample solar energy.
The case highlights the initiatives taken by Fenix to cater to the energy needs of people living in off-grid rural Uganda through an inclusive business model. It offers deep insights into the outcomes of private sector led service delivery to brighten the lives of Ugandans through its ReadyPay Solar and ReadyPay School Fee loan products.
Issues
The case is structured to achieve the following teaching objectives:
- Understand the problems faced by the people living in off-grid rural Uganda.
- Understand how solar home systems provide a promising solution to tackle energy issues in Uganda.
- Examine how Fenix’s PAYGO model allows end-users to digitally pay for energy usage.
- Analyze how the locking technology enables the poor to access credit in Uganda.
- Understand Fenix’s inclusive business model to cater to the energy needs of the rural poor.
Contents
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Introduction
Power System in Uganda
About Fenix International
Fenix Power System
Fenix Power Business Model
Readypay School Fee Loan
Outreach and Impact
Way Forward
Exhibits
Keywords
Access to energy; Off-grid households; Rural electrification; Renewable energy; Solar home system; Solar loan; Plug-and-play solar power system; Digital finance; Mobile ecosystem; PAYGO business model; Lease-to-own model; Lockout technology; Sustainable development; Triple bottom-line approach; Inclusive growth; Energy inclusion
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