Africa: German lighting firm aims to build solar power hubs

May 8, 2008 - IPS/GIN

Lighting industry entrepreneurs are hoping that alternative devices such as solar-powered LED lights will eventually replace the smoky kerosene lamps that keep the darkness at bay in many of Africa's towns and villages.

Kerosene is a dangerous and increasingly expensive source of light, and about three-quarters of people living on the African continent do not have access to electricity, according to the World Bank.

"Africans spend more than $18 billion a year purchasing kerosene," said Russell Sturm, who heads the sustainable energy team at the International Finance Corporation, a member of the World Bank Group.

"And that estimate was done when oil was $35 a barrel, so there is an enormous market for lighting," he said, adding that the prices of LED devices and solar panels had dropped dramatically over the past three years and are now competitive with kerosene costs. The price of oil passed the $120 per barrel mark for the first time earlier this week.

It was against this backdrop that the World Bank Group launched its Lighting Africa campaign last September. The initiative aims to provide lighting products and other energy services that are not dependent on fossil fuels -- and which are safe, reliable and affordable -- to some 250 million people in sub-Saharan Africa by 2030. Presently, Africans are estimated to spend about $40 billion annually on lighting products powered by fossil fuels.

Under the auspices of the campaign, the Lighting Africa 2008 summit -- dubbed the "first global business conference" for off-grid lighting on the continent -- took place this week in the Ghanaian capital of Accra. The May 5-8 gathering was aimed at attracting investment to the African lighting sector, and drew representatives from governments, industry and nongovernmental organizations.

Few solar-powered LED devices have been designed for Africa, and companies need to conduct market research to find out how such lights could be used. "We do know that they must be rugged, simple and affordable," Strum said.

LEDs or light emitting diodes are illuminated by the movement of electrons in material that is able to conduct electricity, rather than by heated filaments. The devices are more energy efficient and last longer than conventional incandescent bulbs, although the upfront costs of installing them can be higher.

Pilot market research in certain countries to gain a better understanding of what is needed has been sponsored by the International Finance Corporation, which supports the private sector in developing nations. A vast number of businesses "are off the grid in Kenya," Melissa Baker of Research International, a global market research firm, told delegates.

Many of those businesses indicate they would stay open three or four hours longer if they had better lighting, she added.

Families report that they are forced to use buckets in their homes as toilets at night because they do not have a portable light to go to the more sanitary pit latrines.

Lighting industry giant Osram GmbH of Munich, Germany, has also done market research and envisages supplying solar energy to Africans at rates that are competitive thanks to economies of scale.

The company wants to build what it calls "O-HUBs": centers where rural residents can buy solar energy in small, affordable quantities. "People will come to the O-HUB and pay to have their mobile phone charged for example," said Rodd Eddy Senior, the company's director for off-grid global sustainability.

Osram would also lease certain products, including LED lights and the "O-BOX" -- a large battery with electronic components to power lights, radios and other devices. "We manufacture everything and want to be responsible for maintenance and recycling of products at the end of their life cycle," Eddy added.

In addition, the O-HUBs would sell purified drinking water; "We think that will be a good way to bring people in," Eddy said. Originally, Osram had planned to supply the water free of charge but was advised against doing so by NGOs, among others.

The company doesn't plan to operate the O-HUBs; instead, it would like to lease them to local authorities, NGOs or entrepreneurs.

The first pilot O-HUB opened last April in the village of Mibta, Kenya, where night fishing on Lake Victoria is the main source of food and income. "Fisherfolk used kerosene lanterns, and there is hardly anyone who doesn't have kerosene burns," said Eddy, noting that while Mibta had power lines, few people could afford the connection fee of approximately $460.

Three more O-HUBs are planned for Kenya. Osram plans to take the concept to India, where there are also vast numbers of people without electricity.

Improved energy sources are key to helping countries achieve the eight millennium development goals agreed on by global leaders in 2000. The goals seek in part to halve the number of people living on less than $1 a day.

"Proper lighting is key to improving livelihoods of the poor," said Christine Peterson, executive director of the Freeplay Foundation, an NGO based in South Africa and the United States that is best known for distributing hundreds of thousands of wind-up radios in East and Southern Africa.

The foundation was set up a decade ago by the Freeplay Energy Group, a London-based firm that designs, manufactures and markets a range of portable products -- including flashlights and mobile phone chargers -- that make use of solar and other clean energy sources.

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