#10YearsOfSolarImpact: Oolu, a West African social enterprise providing clean energy solutions adapted to market needs

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A conversation with Doseke Akporiaye, Managing Director for Oolu Nigeria

Doseke Akporiaye

What is Oolu and how was it created?

Oolu is a social enterprise created by Nilmi Seneratna and Daniel Rosa. Nilmi had previous experience working with a nonprofit in a rural village in Senegal, where she recognized the challenges that the lack of energy presented for children’s education, for example.

Dan and Nilmi – they had decided to pursue a social enterprise model to address this pressing issue –  did some research by travelling through Asia and exploring different energy service models. They launched for the first time in the surrounding villages in which Nilmi had worked back in 2012 with bootstrapped capital.

They had community meetings and spoke with village chiefs in different villages to check if there was interest in the solar home system model and they powered 3 villages on finance, with households paying a monthly fee. Once the surrounding villages saw the results, they became very interested but Dan and Nilmi realized they could not scale this without investment in a sustainable way, and make the model replicable. They succeeded in raising funds from Y Combinator and other angel investors in Silicon Valley.

What markets do you work in?

We started in Senegal and we are present in six countries, all of them francophone except for Nigeria.

Image: Oolu

What is your business approach?

We specialize in the distribution of solar home systems (SHS) but we are vendor-agnostic. Our goal is to understand the needs in a market and respond to them as quickly and as appropriately as possible. That’s why we don’t push specific products.

“Oolu” means “trust” in Wolof, the national language of Senegal. Building trust for us is key. In the past, people had negative experiences with solar products that they bought in the market with no installation or after-sale service. Oolu takes the products to their doorstep and covers installation, after-sale service and repairs. We also hire workers (many unskilled and trained by our teams) from within the communities where we go, and women constitute some of our best salespeople.

How have you weathered the COVID storm?

Well, besides the world situation, there have been security issues in some of the countries where we work, so we have had to pivot and rapidly adapt to the changes we needed to make. One of the keys was understanding the strengths of each of the markets where we work.

Nigeria, for example, on paper, is at the perfect point in time to introduce solar energy kits. Diesel prices have gone up 300% just this year. Petrol has gone up as well, despite still being largely subsidized. Diesel substitution products should be a very attractive alternative. And it is. However, inflation is at 18% so potential customers need to reprioritise their income: they need an alternative to diesel but many times they don’t have the money to afford it.

So, we haven’t had a dip in sales but we also haven’t seen the increase that would be predictable given how expensive diesel and petrol have become.

We do note that if the solar products are used for productive use like farming and microbusinesses (barbers, roadside restaurants, business centres, salons, market sellers who sell at night with poor light and no cooling, sellers of frozen foods like poultry and fish), repayment rates have remained consistent, while others have struggled more.

Image: Oolu

Have you found additional financing challenges during this time?

Financing in the sector was already tough before the global recession, to be honest. Sustainability and profitability have been the key issues on the table. And I would say it has become tougher during the recession.

In our case, as you grow as a business, you start exploring debt, which makes you drive harder for profitability and to measure the portfolio performance. Naturally, portfolio performance has suffered as customers have seen their incomes decrease through inflation and/or a decrease in their business revenues: they can assign less money to paying for their energy systems.

Companies in the space are already very lean in their operations so you have to find creative ways to be more efficient.  What is important to remember is that we are still improving lives, and there are companies working correctly, doing what it takes to close the energy gap.

We believe in being part of an integrated approach to solving energy poverty, not just as an interim solution while the grid arrives everywhere. Last-mile is always a challenge because it’s very expensive to reach and not commercially viable, so we’re filling a gap within energy access.

How are you looking at your impact?

We have a set of KPIs where we collect the number of households that have been connected. We can also calculate the kilowatts generated by looking at the size of the panels and the units used by customers. We look at the number of communities where we’re present and the number of employees in those communities. Additionally, we have individual customer testimonials that really prove the impact we’re having on their lives.

Image: Oolu

How do you think GOGLA has supported you and the sector?

GOGLA is a great resource to provide insights into the industry. It is very useful for us to access funds and demonstrate the work being done.

The Forum allows us to network in person with other players and investors. As much as technology helps, exchanging emails or having a zoom call is just not the same.

It’s also a platform to share our work, which helps attract investors.

We think it’s critical to lend credibility to the sector

What does the future look like for your company?

We want to be able to improve our product-market fit for new customer segments that require services. In general, we strive to be more efficient as a company and respond faster to the needs of the market.

What would you like to see happen in the sector?

We would like barriers removed at scale. Tariffs and taxes make business less profitable than it could be. Working in collaboration with governments would be key to bridging the energy gap through their policies to reach all the underserved.

For every policy that adds costs, there is either a partial transfer of those costs to the customer in order for the business to be sustainable or fewer people gaining access to energy.

We would also like to be featured more prominently in integrated approaches to energy poverty.

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