When you look at the supposed “dark” continent, its social and economic problems are abundantly clear. But it seems that Africa’s entrepreneurs are stepping up and trying to find ways to solve some of these challenges.
There is a global energy crisis, and Africa in particular suffers from a shortage of power and alternative clean energy sources. In this first installment of our “Built in Africa” series, we feature one entrepreneur stepping up to the plate to solve the continent’s problems — Patrick Ngowi, the man bringing clean energy to East Africa.
“African innovation should focus on solving social and economic challenges. That is key. Africa has to crawl before it can walk,” Ngowi says when I ask where African innovators should focus their talents.
Ngowi is the founder of the US$8-million solar energy company Helvetic Solar Contractors – and he is only 28. I first came across Ngowi late last year while researching alternative energy sources in Africa for low-income housing. His company, based in Tanzania, supplies, installs and maintains solar systems throughout East Africa.
The clean tech entrepreneur believes that Africa is coming along nicely with regards to alternative energy sources.
“In fact, Africa is skipping ahead with urban and rural clients choosing solar instead of mainline power. Solar prices have dropped worldwide. More people can afford installation. With financing from investors, we hope to introduce leasing for solar. This will be a game changer,” he says.
An entrepreneur from a young age, Ngowi has been building his business repertoire since he was 15, so it is no surprise that he is a millionaire before 30.
Building Helvetic and driving clean energy in Africa
Many Africa nations suffer from irregular power distribution. It’s a problem that alternative energy sources could solve. But have African governments started to factor green energy into their policies in order to solve this issue?
“Yes,” Ngowi tells me, although he admits that a whole “lot more needs to be done” if we are to achieve sustainable power distribution.
When it comes to Africa’s energy crisis, Ngowi is confident that technology is the answer and that it has already proven to be a key driver of change for the continent.
“Technology is proving to solve key social and economical challenges in Africa. Various outstanding records speak for themselves,” he says.
When Ngowi looked at the research on power distribution, availability and stability in Tanzania, the gravity of the power problems in the country dawned on him and a company was born.
“In Tanzania, we stand at 22% coverage, leaving out 78% of both rural and urban potential clients off the national grid,” he explains. “What made it more compelling is that other countries in Africa aren’t much different. This makes solar both a short-term and long-term solution.”
So he built a tech company that would help solve Tanzania’s energy power problems. “I started Helvetic with all this in mind seven years ago and registered as solar contractors so that we could scale up to national and regional level while building our skills and capacity in the region,” he says.
This industry is growing in Africa and the coming years will decide how big it will get.
“Like the cellular telecommunications sector pushing out the landlines in the last 20 years or so, I see solar companies as the solution to the power woes that standard utility companies in their respective African countries continually fail to deliver on.”
A struggle for finance
But a solar energy company isn’t the easiest thing to start and sustain in Africa, Ngowi explains — even for a company that has proven that there is demand for its product, with more than 12 000 solar kits sold at US$99.
“Financing and investment is key. We have a proven track record but find it hard to find investment,” he says. “The challenge is that investment banks and private investors only want ‘big projects’ like solar plants/farms and take the private sector for granted. From our own record we have shown that in five years we managed to build 1st place winner, Helvetic Solar Contractors, as the fastest growing company and brand in Tanzania — a KPMG Award,” he says.
“It’s sad that a multi-million dollar social enterprise like ours can not get any sort of funding and are forced to work with commercial banks only. Their interest rates and terms hamper our goals and expansion plans. We have re-sellers that are upset about the lack of stock. Demand is very high.”
“It is a humbling challenge,” says Ngowi. “I face it every day when demand soars and inventory runs low, making us fail to meet the demand.”
He argues that the local investment banking sector is weak in most of Africa, and thus the focus should be on building this key area.
“African companies have lots of potential and it’s sad that opportunists that have access to finance come down and simply copy and paste our models and they get financing, rendering local companies non-competitive compared to the millions they secure in investment finance,” he says.
“All I seem to hear is a startup with no record getting financing overnight because they have a Western or European connection. Such is doing business in Africa I guess,” he adds. “I read somewhere that those closest to the problems have the best solutions. This seems not to apply in Africa.”
Challenges or not, Ngowi will not be stopped. His company has enjoyed success in East Africa but he is looking for opportunities to move into other parts of the continent.
“In East Africa, demand for our services has skyrocketed into Kenya, Uganda and Rwanda. We are trying to cope but for us to expand to other parts of Africa, we invite strategic partnerships. We are looking for such partners.”
Giving back, lighting up Africa and Helvetic’s success
Making millions and looking impeccable (as Forbes describes him) isn’t all that Ngowi is doing — he is also giving back.
The company’s non-profit Light for Life Foundation is making a big impact in Tanzania. Ngowi says that the initiative has been recognised by the Tanzanian Government and Tanzania Private Sector Foundation for its social economic impact and support of more than 1 000 rural women in Tanzania through provision of the Helvetic solar kits.
The success of Helvetic is remarkable and so is that of its founder.
There is “no secret” to the success, he says — “just hard work and never giving up or giving in”.
We faced hardship with building awareness – we conquered that. We faced hardship in building skill set – we trained our own personal with the little finances we had. Now we are facing the challenge of getting long term investment for expansion and building an assembly line. We are working on this part too. Business is about seeing opportunities and tackling the challenges that come with it.
“It’s not meant to be easy,” he says.
Editor’s Note: This post for appeared in the “Built in Africa” column at Venture Burn on March 25, 2014. Built in Africa focuses on entrepreneurs, startups and technologies that are affecting the continent and empowering the African people.