DATABASE

Case study

divi IT UP: Innovative Technologies for Underserved Populations

ongoing



Link
www.elephantenergy.org


Abstract

In 2014, Elephant Energy began implementation of divi IT UP, an innovative take on pay-to-own solar lights/cell phone chargers. The project seeks to impact MDGs and SE4A goals by increasing access to small-scale solar products for last mile customers in Namibia and Zambia, and by testing a sustainable model for global scalability/replicability.


Project Description

In Namibia and Zambia, the need for clean, safe, and affordable energy alternatives is one that is both urgent and growing. In Namibia, while more than 70% of the urban population has access to the electric grid, only 15% of rural households are connected. In Zambia, less than 20% of the population has access to electricity, and less than 3% of rural households are connected. Additionally, from 2007–2011, 31.9% of the population in Namibia and 80% of rural Zambians lived below the international poverty line (below $1.25/day). As a result, daily expenses for candles, kerosene and other dirty fuels add up quickly. Divi IT UP is designed to meet the needs of rural, poor customers by providing a pay-to-own approach to small-scale solar products. The innovative technology increases access to solar lights/cell phone chargers for last mile customers who are traditionally excluded from modern energy purchases. The primary objective is to eradicate reliance on kerosene and candles for household light and to provide cleaner, more affordable alternatives. The innovative divi technology utilizes a cloud-based network to enable payments and payment tracking. Unlike other pay-as-you-go products, divi-enabled lights move the customer towards ownership. That is to say, rather than buying credits to use the light, each payment moves the customer closer to full ownership. Each product has a unique identifier and the light can only be enabled when a customer is up-to-date on payments.


BENEFICIARIES

Beneficiaries include rural, poor customers in Namibia and Zambia who live in last mile, unelectrified communities without access to modern energy.


Results

Pilot testing of divi-enabled products in Namibia has already returned favorable results. According to initial trial results, customers report an average energy cost savings of NAD$8.20/week while paying off their light, and of $29.20/week once the lamp is paid off. Thus, the divi technology is impacting MDG1–the eradication of extreme poverty and hunger. By saving poor customers $8–$29/week, families and individuals are able to spend that money on other household needs or to begin saving money. Since beginning divi IT UP in April 2014, nearly 300 customers who could not previously afford modern energy have purchased a solar light. Elephant Energy has a goal of distributing 4,000 divi-enabled solar lights/cell phone chargers in Namibia and Zambia this year. In addition to economic results, divi IT UP is creating new jobs in Elephant Energy's distribution network, opportunities for training and capacity building, and helping EE refine its business model for last mile distribution.


Business Model

Elephant Energy’s business model is designed to be economically sustainable in the long-term and is based on a multi-faceted distribution network that facilitates the sale of products. Sales Agents purchase products at a slight mark-up from EE and sell them to customers with one more mark-up. The aim is for profits from lamp sales to cover the cost of programing. With over 6 years of experience, EE is constantly refining its model to be scalable and replicable in other last mile contexts.


Lessons Learnt

Elephant Energy and its partners have learned a lot about rural electrification through divi IT UP, including: • The introduction of new, innovative technologies requires increased customer education campaigns, which should begin well before arrival of the new technology; • Small-scale trials of new technologies should not be overlooked; • Capable and reliable sales agents are essential, especially as the value of goods increases; • Online, real time data collection can help an organization make split-second decisions about processes and systems; and • Multichannel buy-in is difficult to attain, but can help at all stages of project implementation.


Key Feature

Divi IT UP represents the pilot and scaling of an innovative new take on pay-to-own solar. By integrating cloud-based technology into a high quality solar light/cell phone charger, EE is presenting customers who lack access to modern energy with an affordable point of entry. Key features include: • Sustainability, scalability and replicability: Technology works with mobile-money or cash-based economies and can be integrated seamlessly into existing supply chains; • Ownership: Sales Agents and customers own the assets and will have increased capacity; • Partnership: Technology was developed in close partnership with engineers, manufacturers and distributors; • Assessment and monitoring: EE has M&E systems in place, is an outcomes driven organization and has already produced some initial data on the distribution/uptake of new tech; • Impact: divi technology has the potential to revolutionize access to modern energy in last mile, poor communities–positively impacting MDGs and SE4A.


Other significant information

In addition to providing financing options that are innovative for customers and safe for sales agents, divi also provides invaluable real-time feedback to distributors through its unique cloud-based platform. The web portal and cell phone app track the progress of each lamp throughout its repayment cycle. Distributors can manage stock, set/change price-points, view progress of each sale and monitor each individual Sales Agent (to name just some of the functionality). This creates an automated inventory management system for divi-enabled products that is extremely beneficial in the context of last mile distribution. Further, divi IT UP represents a unique partnership between public sector (funding source) and the private sector (engineering and manufacturing, and implementation). This balanced partnership represents a multichannel commitment to innovative approaches to last mile distribution and to working towards solving the global rural electrification crisis.


Main Donor

United States Agency for International Development
(Government)

Implementing Actor

Elephant Energy (NGOs)