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‘Various partnership agreements in place as well as government support"
The Promoter
The promoter is a Mozambican registered company that intends to become one of the top Solar Home System (SHS) providers in Mozambique as well as the lead provider of Solar Home System (SHS) in the Southern provinces of Gaza and Maputo.
Elevator pitch: Electrify off-grid households in rural Mozambique with low-cost SHS using a rent-to-own model over 30 months, and provide clean, sustainable and renewable energy along with significant cost savings to households.
Market Demand: The demand for SHS is very strong in Gaza as most households have have more purchasing power then average because they have members that are either working for mines in South Africa or raising cattle.
Competition: For all intents and purposes, off-grid SHS does not yet exist in Mozambique, therefore the promoter wants to use first-mover advantages in this immature market while competition intensity is still low. Three other entrants are preparing to enter the market within the next 6 months.
Strategy: To dominate the southern region of Mozambique through a strong marketing campaign by word-of-mouth and a partnership with a leading mobile phone network. Also focus on supplying the more populated off-grid areas where buying power is stronger due to cattle farming/remittances.
Financials: The promoter’s projects financial sustainability in year 4, with total expected profit of$193,422.50 by year end. Revenues will surpass $1m from the end of year 2. VAT rebates from year 2 will bolster earnings. Potential import tax rebates have not been factored in.
Requirement: The promoter is seeking $250,000 in debt funding to initiate a 6- month pilot project impacting 600 households in Southern Mozambique to test and refine the business model.
This pilot project will allow the promoters to:
Unique Selling Points
Plug and play system – easy to understand for customers, quick training for salespeople for installation and quick installation after sale.
Flexible payment (PAYG) – understanding that employment is seasonal in rural areas means that customers will find it difficult to pay the monthly subscription in one go. Therefore, it is imperative that they have the option to spread their repayments, albeit with a slight penalty due to higher admin costs from increased frequency of payments.
Flexible funding source – mobile money is the method of payment but the funding source can be airtime voucher or mobile money balance or payment via a local kiosk with a personal account number or even internationally as long as account number is known.
Rent-to-own – customers must be made aware that they will own the SHS after the initial Rental period subject to one final unlock fee, thereby receiving ‘free’ electricity.
5-year full replacement warranty on all parts – replacement available even 30 months after initial rental period.
Quality of products – full confidence in their supplier which has proven track record of SHS supply to Grameen Shakti in Bangladesh and own distribution in Tanzania, Nepal, Bangladesh and Philippines. Also, customers are allowed to use ‘off-the-shelf’ appliances such as TVs, radios and DC fans.
Post-sales service – problems must be dealt with within 24 hours, and systems replaced if necessary.
Flexibility- There is flexibility to move up to next package depending on energy demand.
The Promoter
The promoter is a Mozambican registered company that intends to become one of the top Solar Home System (SHS) providers in Mozambique as well as the lead provider of Solar Home System (SHS) in the Southern provinces of Gaza and Maputo.
Elevator pitch: Electrify off-grid households in rural Mozambique with low-cost SHS using a rent-to-own model over 30 months, and provide clean, sustainable and renewable energy along with significant cost savings to households.
Market Demand: The demand for SHS is very strong in Gaza as most households have have more purchasing power then average because they have members that are either working for mines in South Africa or raising cattle.
Competition: For all intents and purposes, off-grid SHS does not yet exist in Mozambique, therefore the promoter wants to use first-mover advantages in this immature market while competition intensity is still low. Three other entrants are preparing to enter the market within the next 6 months.
Strategy: To dominate the southern region of Mozambique through a strong marketing campaign by word-of-mouth and a partnership with a leading mobile phone network. Also focus on supplying the more populated off-grid areas where buying power is stronger due to cattle farming/remittances.
Financials: The promoter’s projects financial sustainability in year 4, with total expected profit of$193,422.50 by year end. Revenues will surpass $1m from the end of year 2. VAT rebates from year 2 will bolster earnings. Potential import tax rebates have not been factored in.
Requirement: The promoter is seeking $250,000 in debt funding to initiate a 6- month pilot project impacting 600 households in Southern Mozambique to test and refine the business model.
This pilot project will allow the promoters to:
- refine the basic business model
- establish viability of the project through small-scale testing in the field
- assess user demand and willingness to pay
- evaluate initial social outcomes
- thoroughly test the solar home systems in the variable real-world environment
- develop an extensive evaluative criterion to judge future succes
- strengthen partner relationships
- assess viability of scaling up the project and running it as a for-profit business in the long run
Unique Selling Points
Plug and play system – easy to understand for customers, quick training for salespeople for installation and quick installation after sale.
Flexible payment (PAYG) – understanding that employment is seasonal in rural areas means that customers will find it difficult to pay the monthly subscription in one go. Therefore, it is imperative that they have the option to spread their repayments, albeit with a slight penalty due to higher admin costs from increased frequency of payments.
Flexible funding source – mobile money is the method of payment but the funding source can be airtime voucher or mobile money balance or payment via a local kiosk with a personal account number or even internationally as long as account number is known.
Rent-to-own – customers must be made aware that they will own the SHS after the initial Rental period subject to one final unlock fee, thereby receiving ‘free’ electricity.
5-year full replacement warranty on all parts – replacement available even 30 months after initial rental period.
Quality of products – full confidence in their supplier which has proven track record of SHS supply to Grameen Shakti in Bangladesh and own distribution in Tanzania, Nepal, Bangladesh and Philippines. Also, customers are allowed to use ‘off-the-shelf’ appliances such as TVs, radios and DC fans.
Post-sales service – problems must be dealt with within 24 hours, and systems replaced if necessary.
Flexibility- There is flexibility to move up to next package depending on energy demand.