Energy poverty in Sub-Saharan Africa is especially acute for the millions of people who are not connected to a central electricity grid. In Nigeria, nearly 90 million people live without a connection to the electric grid, leading to dependence on kerosene lamps and diesel generators to power their homes and small businesses. These solutions are often costly, noisy, time-consuming to set up and can contribute to indoor air pollution, while typically providing power for only a small portion of the day.
But thanks to Power Africa’s newest partner, Nova-Lumos, and financing from the Overseas Private Investment Corporation (OPIC), the U.S. Government’s Development Finance Institution, renewable and reliable power will soon be available to Nigerians who live and work beyond the grid.
Nova-Lumos (Lumos) is an off-grid electricity provider that specializes in providing solar power solutions to homes and small business. Lumos’ technology includes a home solar panel linked to an indoor storage and connection unit that allows customers to access significant amounts of power on-demand, day or night.
Lumos makes home solar stations are small enough to be carried by foot or bicycle, and are simple to install. The yellow Lumos boxes, about the size of a small suitcase, can be used to power lights, fans, cellphone chargers and other small appliances so that children can do homework after dark, small businesses can stay open longer and people are better able to live in the comfort that lighting, cooling from an electric fan or access to a computer provide.
Lumos is a business that sits at the intersection of energy and technology. The affordable Lumos service allows customers to utilize a “pay-as-you-go” model, to buy solar-powered electricity in small amounts, by text message. In Nigeria, Lumos has partnered with MTN, Nigeria’s largest telecommunications company, which has over 60 million subscribers. Because customers are able to pay in small installments, the technology is cheaper than kerosene.
In October, during Sec. John Kerry’s Climate and Clean Energy Investment Forum, OPIC signed an agreement to provide $15 million in financing to Lumos, to help it scale the business and significantly improve access to electricity for some of the millions of Nigerians who live off the grid.
This month, Nova-Lumos also joined Power Africa’s growing roster of more than 100 private sector partners, which includes many of the world’s top companies that are committed to increasing electricity access in sub-Saharan Africa.
“We are very excited about this major financing milestone in partnership with OPIC, which will enable us to accelerate our growth in Nigeria,” said David Vortman, CEO and Co-Founder at Lumos.
“Lumos brings vision, innovation, and sound business sense to address the power access challenge in Africa,” said Elizabeth Littlefield, OPIC’s President and CEO. “With a dedication to those who live off-grid or have unreliable power access, Lumos’ creative business model will positively impact millions with new affordable electricity access in homes, businesses, medical facilities, and schools.”
Lumos’ business model is highly scalable in large part due to the company’s partnerships with incumbent mobile operators.
As a key part of Power Africa, OPIC financing and political risk insurance mobilizes private capital to help address critical development challenges. Because OPIC works with the U.S. private sector, it helps U.S. businesses gain footholds in emerging markets, catalyzing revenues, jobs and growth opportunities both at home and abroad.
Since Power Africa’s launch in the summer of 2013, OPIC has committed over $1.6 billion in financing and insurance to support private sector-led African power development. These commitments are expected to lead to 1,500 new megawatts of electricity.
The financing to Lumos is the largest OPIC investment to the off-grid power sector in Africa, a key component of increasing energy access in a region where people are not grid-connected and the need for reliable power is especially acute.
Power Africa’s Beyond the Grid sub-initiative is focused specifically on unlocking investment and growth for off-grid and small-scale energy solutions in Africa. The number often cited to express Sub-Saharan Africa’s energy poverty is that 600 million people, about two-thirds of the population, live without access to power. That number, while staggering, fails to capture the shortages in some remote regions where fewer than ten percent of the population have electricity. Although bringing energy to these populations presents a significant challenge, it has also led to the introduction of innovative new technologies and business models, like Lumos, that offer new approaches to finding African energy solutions.
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