Nuru Energy

Since 2008, Nuru Energy has been uniquely focused on providing clean energy access to the majority of rural Africa - households living below the poverty line of $1.25/day AND who do not have electricity access. Most cannot afford a basic mobile phone and buy little to no kerosene because battery-powered flashlights and candles are much cheaper. Nuru’s solution is to set-up armies of village energy entrepreneurs, mostly women, who supply end-user households with ultra-low cost LED lamps and phones ($1-$3 upfront) and then with Nuru's pay-as-you-go, solar-powered, portable community-level recharging boxes, offer fee-based recharging, more than doubling previous income.

Nuru's vision is that its community-based approach, a shared-energy access approach, rather than individually-owned systems, becomes the normative approach in providing clean energy access to the poorest households. Because there is no dependence on prevailing weather conditions and devices can be recharged anytime, anywhere and by anyone, Nuru hopes that the Octopus Charger becomes the de-facto standard off-grid recharging platform in villages where these households exist, recharging various low power devices including LED lamps, mobile phones, tablets, radios and portable fans.

Harvard Business Review has segmented the 4 billion-person Base-of pyramid market into 3 types of consumers identified by income level: $3-5 per day “Low-income” households (1.4 billion people), $1-3 per day “Subsistence” households (1.6 billion people) and the less than $1 per day “Extreme poverty” households (1 billion people). The energy needs of Low income households ($3-5/day) are different that the energy needs of our target market, which primarily consists of households earning between $0.50 to $1.25 per day. Nuru's solution is uniquely suited for lower Subsistence and Extreme Poverty households, who in total constitute the 1.6 billion or so people in the world who live without electricity.

Nuru's products and approach have an undeniably positive impact on the lives of rural villagers. With over 1000 Village-level entrepreneurs (VLEs) and over 120,000 Nuru Lights distributed to East Africa's poorest households to-date, mostly in Rwanda, the results that Nuru has achieved so far have been extra-ordinary:

  • Jobs created: 1000+ VLEs (mostly women) earning upwards of $1.50 US per hour profit. For example, considering that the majority of the population in our countries of operation earns less than $1.25 per day, $1.50 per hour is a very good income.

  • Increased access to electricity in rural communities of target countries: 600K people gaining access to clean, quality, low-cost lighting and energy.

  • Reduced emissions of CO2: Over 12,000 tonnes displaced annually (UNFCCC carbon credit methodology CDM AMS.1A: 10 Nuru lamps save 1 tonne of CO2 each year. Nuru Energy is one of the only organizations with UN-registered carbon projects in Rwanda, Kenya and Uganda).

  • Improved environment: Over 2.8M disposable batteries per year no longer used and thrown away. These batteries are not safely disposed of given that the infrastructure to recycle them in East Africa does not exist. Assumption is 2 x AA batteries thrown away per month per household.

  • Increase in household savings: About $432K saved per year that previously went to purchasing disposable batteries and candles. This money has stayed within the local communities and has been used to pay for basic necessities, often a 2nd daily meal (most of our beneficiaries eat only 1 meal a day), clothes, school fees, health insurance.

  • Increased access to education: Over 360K children (assuming 3 children per light) will be able to read/study at night (note: A GTZ study tracked rural Rwandan students with increased access to lighting and every child, especially the girls, improved significantly in his/her class ranking - avg. from 16.2 to 8.6).

Two key innovations allow Nuru's solution to work:

  • The first is its business model. To tackle the issue of affordability, they reviewed two successful models. The first from the telecom industry. Given the explosive growth of mobile phones, operators have figured out affordability. Its model is to build infrastructure and generate income through talk-time rather than by high margins on handsets. Nuru also examined models that used collaborative consumption as a means to slash the cost for individual users, such as Netflix and Zipcar. In both cases, you don’t purchase the end product – movies and cars respectively – you just pay when you need it. The result was standalone recharge stations, located centrally and owned/operated by Village-level entrepreneurs (VLEs). These entrepreneurs forego upfront margin on the Nuru LED Lights and mobile phones, but earn a small profit when they recharge them. This model slashes the upfront cost for users, who then pay as and when they choose to recharge their devices.

  • The second innovation is the unique design of the off-grid recharging station itself. At the heart of Nuru's recharging station is the Octopus Charger, an ultraportable, PAYG recharge box, which is recharged by a 60W panel or our patented POWERCycle, a pedal generator that can produce enough energy in 20 minutes to recharge 5 Nuru LED lights simultaneously, with each light providing a full week of light (28 hours) on a full recharge. Nuru loses money on each Nuru light which sells for $1 upfront. It recoups this loss by taking a portion of recharge revenue from every VLE, collected automatically using the local mobile money network (e.g. MTN Money in Rwanda). VLEs purchase “energy credits” ($0.06 per credit), which are automatically generated by Nuru's cloud-based server & sent to the VLE via SMS. Once codes are entered into the Octopus keypad, the Octopus is “unlocked” & will recharge as many devices (lights, mobile phones, other USB devices) as per the “top-up” purchased.

Rwanda, Burundi

Key Facts

Organization: Nuru Energy
Website: www.nuruenergy.com
Contact: Sameer Hajee
Email: shajee@nuruenergy.com
Operating in: Rwanda, Burundi

Category

Energy

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