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Harald Schützeichel

Four french off-grid musketeers (part 3): Schneider Electric

In its efforts to offer off-grid regions access to clean, renewable energy, the electrical engineering group Schneider Electric is pursuing a dual strategy - and thus differs substantially from the two "energy musketeers" EDF and ENGIE presented so far: also Schneider is investing in companies in the energy access sector, but is also involved in the development, production and distribution of off-grid products for households, municipalities and companies. The background for the second pillar naturally lies in the company's own profile: control and automation technology, energy distribution in low and medium voltage technology and installation technology are at the core of Schneider's product portfolio. It makes sense to also use this competence in the off-grid area.

 

A. Products for off-grid regions

Schneider is extremely seriously involved in product development - and differs positively from many other manufacturers in this respect. For example, the German company SMA Solar, one of the world's leading specialists for photovoltaic system technology, still sees off-grid technology merely as a nice by-product - and is missing out on this market.

Schneider, on the other hand, began developing its own product portfolio for off-grid regions in 2010 as part of its corporate strategy. Existing subsidiaries were also integrated into this strategy:

Take Conlog in South Africa, for example, one of the world's leading companies for prepaid power supply solutions. Conlog's prepayment meters in South Africa are connected to the national grid; they work with a reloading system similar to the prepaid mobile phone system. The customer buys a prepaid card with his energy credits from a retailer. After entering the code indicated in the meter, the electricity is ready for operation. In line with the wishes of its main shareholder Schneider Electric, the company undertook to extend its technical solutions to low-income population groups and later to deploy them in Sudan, Rwanda, Kenya, Nigeria and Swaziland.

Schneider Electric now offers a wide range of product solutions: 

Homes and Micro-businesses

  • Mobiya solar lanterns
  • Homaya SHS (Solar Home System)
  • Homaya SHyS (Solar Hybrid System)
  • Homaya USB charging station

Essential public services: education, healthcare…

  • Villaya microgrids
  • Villaya solar streetlights
  • Homaya SHyS (Solar Hybrid System)
  • Homaya USB charging stations
  • Mobiya solar lanterns

Micro-entreprises, agriculture, villages and communities

  • Villaya microgrids
  • Villaya solar water pumping system
  • Villaya solar streetlights
  • Mobiya solar lanterns

Emergency relief

  • Villaya Emergency microgrids

 

B. Investments

Schneider has divided its financial involvement in companies in the off-grid sector into two different investment funds: 

  1. Schneider Electric Energy Access Fund (SEEA)

    Founded in 2009, the fund invests equity primarily in small and young companies with innovative ideas for supplying energy to off-grid regions. The fund, which is endowed with 4.2 million euros, allows investments between 100k and 400k euros with an expected return of 5-10%.

    Since its foundation, SEEA has been involved in these companies in the off-grid sector:

    2010

    • Simpa Networks, India: Pay-as-you-go solar systems for households and small businesses.

    2011

    • Kayer, Senegal: Solar irrigation and products for rural population.
    • NICE International, Gambia: NICE International builds a network of franchises providing access to energy services in Gambia and soon in Eastern Africa.

    2013

    • Fenix, US: Pay-as-you-go solar energy solution for households and small businesses distributed through mobile operators. At this time mainly active in Uganda.
      Exit: Shares of SEEA in this company were sold to ENGIE in 2017.
    • One Degree Solar, Kenya: Plug-and-play solar systems for households and small businesses.
    • Lumos Global, Netherlands: Pay-as-you-go solar home systems for households and small businesses. At this time mainly active in Nigeria and Cote d'Ivoire.
      Exit: Shares of SEEA in this company were sold to its majority shareholder during 2015.

    2014

    • SunFunder, US: financing company that specializes in companies seeking to increase energy access in emerging countries. 
      SEEA is involved here in an unusual way, as the fund explicitly points out: This was an investment of EUR1,900,000 as part of the SEEA international portfolio, or about 80% of the allocation. SEEA is not planning any further investment in this portfolio.

    2017

    • Amped Innovation, US: Design of affordable and scalable products addressing energy needs.

    2018

    • Okra Solar, Australia: Okra offers the Okra Pod — a system controller that creates modular microgrids by networking and balancing rooftop solar PV and battery energy storage with electricity loads. The Okra Pod serves households, businesses and community facilities.


  2. Energy Access Ventures Fund (EAV)

    In 2015, Schneider added another fund to SEEA, which the company no longer set up alone, but with potent partners: CDC Group, DFID, European Investment Bank, FISEA - PROPARCO, OFID and AFD-FFEM. With EUR 54.5 million, the fund, which has a much stronger capital base than SEEA, is intended to serve smaller companies in the off-grid sector in Africa. In addition to solar companies, it also includes companies in the hydropower, biomass, wind power and geothermal energy sectors.

    The fund's previous investments in companies relevant to the off-grid sector are as follows:

    2015

    • Off-Grid-Electric (Zola), US: Designs, manufactures, deploys, finances and serves solar home systems on a fee-for-service business model in Tanzania and Rwanda.

    2016

    • PEGAfrica, Ghana: Finance and distribution company specialising in solar home systems on a lease to own model.
    • d.light, US: Manufacturer of solar lighting and home systems. Worldwide active.

    2017    (+ 2018)

    • Inspirafarms UK: Designs, manufactures, supplies and finances solar powered cold storage solutions and food processing technology to growing agribusinesses throughout East Africa and Central America. EAV also joined another investment round in 2018.
    • Sunculture, Kenya: Designs, manufactures, finances and distributes solar-powered irrigation systems and provides agronomy support services.
    • PayGo Energy, Kenya: Technology and distribution service company that uses pay-as-you-go-technology to unlock clean energy.

    2018

    • Solarise Africa, Kenya: Pan African energy leasing company for solar and other energy assets focusing on Commercial and Industrial (C&I) clients.
    • Zonful Energy, Zimbabwe: Founded by William Ponela, Zonful Energy (Zonful) promotes energy access in Zimbabwe by distributing PAYG-Solar-Home-Systems.
    • Port It Global, US: FinTech platform providing Point of Sale Installment Services through a mobile application for smartphones and a USSD solution for smartphones.

     

     

 

Next: Africa's largest oil producer uses its filling station network to sell solar products - The activities of Total.