Open Capital Advisors (OCA), a management consulting and financial advisory firm based in Nairobi, is introducing VentureBuilder, a new program aimed at accelerating the growth and adoption of off-grid access across the continent.
Dubbed VentureBuilder, the venture is looking at "combination of deep PAYG expertise and systems development coupled with early-stage investment to African-owned and locally-managed distributors".
"VentureBuilder offers these distributors both capital and bespoke enterprise development advisory services to help them harness their local market knowledge and rapidly scale a PAYG off-grid solar business model."
According to OCA, "Over 120 million households in Africa lack access to adequate electricity." Although there's been a growth in interventions over the past decade, the firm believes that the surface of the problem is yet to be scratched.
"Even though the off-grid solar industry is flourishing, it currently serves less than two percent of the total addressable market, with only a small number of companies operating at scale," wrote OCA.
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With VentureBuilder, they hope to close this gap. "We believe this approach will build a new generation of local solar companies that are rooted in their communities and are capable of reaching populations that cannot be sustainably accessed by the current model of large, vertically-integrated businesses."
In a whitepaper giving a detailed overview of VentureBuilder, OCA points out that "Despite over US$500M in global investment in off-grid solar in 2016–17 alone, there is a striking lack of greenfield activity across much of the rest of Africa, where most markets are virtually untouched by scalable ventures."
VentureBuilder will, therefore, provide enterprise development services (EDS) and
early-stage investment to locally-owned and managed distributors, or operating companies (OpCos), targeting the distribution challenge, resulting primarily from the gap in human capital and systems to work at the local level.
By 2022, the target is to build a portfolio of operating companies that Operate at scale in ten countries across Sub-Saharan Africa, deliver to at least 1 million connections, and directly impact the lives of more than 5 million Africans.