Solar Lamps for Poor Countries
Cinemarena and BASE Technologies partner to demonstrate the health benefits of Firefly solar products from Barefoot Power
on May 25, 2011
Nick Sarkisian, Essinova Contributor, attended China Early Stage Investor Forum in Shanghai early March 2011, where he met Barefoot Power's Co-Founder and CEO, Stewart Craine. Below, Nick writes about the company. Click here for his full article about the Forum.
One very unique company that presented at the Forum was a company with a socially responsible mission called Barefoot Power. Launched in 2007, Barefoot Power completed a Series A round of US $5 million and is now soliciting a Series B round of approximately US $5-7 million. Its mission is to “leap frog,” or bypass, conventional fossil-based sources of electrical generation by bringing simple, small-scale (i.e. “barefoot”) solar-powered lighting to peoples in the developing world that today are literally without electricity. Rather than positioning itself as a non-profit, Barefoot Power presented a very compelling for-profit business model while at the same time embracing a mission that was indubitably committed to serving the needs of some of the most impoverished communities in the world.
In between the start-up pitches, I had the opportunity to chat with Barefoot Power co-founder and CEO, Stewart Craine. Stewart informed me that of the 6.7 billion people in the world, 1.5 billion are without electrical power and instead burn kerosene for lighting, further adding to worldwide green house gases. From 250 to 300 million households spend between US $10 and $15 billion annually on kerosene; moreover kerosene based electricity pencils out at approximately US $5 per kWh for the poorest, compared to US $0.10 -- $0.20 per kWh for the richest in the developed world. In contrast all suppliers of solar-powered lighting are currently able to reach less than 1 million households annually in Africa. Just the annual growth rate of households without electricity, again in Africa alone, exceeds that amount by a factor of two. Mr. Craine has stated that demand is doubling every 4-6 months and shipping quantities in mid-2010 are equivalent to annual revenue of AUD $3-4 million.
Barefoot Power has leveraged existing solar light technology to produce some of the most affordable and adaptable lighting units on the market, with solar-generated lighting units ranging from US $15 for a desk lamp to 10W kits capable of lighting a small household (US $150-$200), and is coming out with new products in the US $10-$12 range. In many cases these units make it possible for children to study at night for the first time, even sharing the light among students. It has strong sourcing relationships with China-based manufacturers with whom it has co-developed its lighting kits.
The socially favorable outcomes of the company’s enterprise are that 5-10 million people will use renewable lighting during 2011-13, with 100,000 tonnes in annual GHG reductions, reductions in respiratory illness, reduction in kerosene and overall energy costs, and improved education outcomes as a result of access to light.
Not surprisingly, Barefoot Power has received several notable awards, including not one but four product quality awards at the World Bank Lighting Africa Competition, and Australia’s Anthill awards for Cool Company and Social Capitalist, all in 2010, among others. It also was awarded a grant from the EU of $1 Million Euros.
Perhaps what is most unique about Barefoot Power, even more so than its combined for-profit and socially responsible business model, is the fact that it’s really three companies in one, figuratively speaking. Besides developing the lighting units themselves – essentially acting as a supplier of low-cost solar-powered lighting to the developing world – in order to jumpstart this market, it needed to launch a distribution model that didn’t exist in the developing markets of Africa and Latin America, its initial foci of market development. Thus, it essentially acts as a business development partner for not only local in-country distributors, but also helped launch and train in-country companies that market and sell Barefoot Power’s solar power kits in Uganda and Kenya. Finally, in order to make its innovative and technologically superior products -- as low cost as they are -- affordable to the poorest households in the world, Barefoot Power also created its own microfinance programs in which, for example, a $25 lamp could be paid off over a 6 month period. Barefoot Power generates capital for this program under its Barefoot Power Fund, essentially operating as its own microfinance bank, generating approximately US $1 million or more in loans at any given time. To date it has launched 47 different loans with 37 different investors with terms of 6 months to 3 years and a performance of approximately 10.2% interest with no defaults. All the loans go toward enabling eligible households to purchase lighting kits on micro-credit. When I asked Stewart why he didn’t leverage existing microfinance banks, such as Grameen Bank in India, he stated that to date, remarkably, these banks were not a significant source of available micro credit for Barefoot Power products. It’s interesting to note that at the time of the Forum, a side story was circulating about Nobel Peace Prize recipient and Grameen Bank founder, Muhammad Yunus. Mr. Yunus is embroiled in a power struggle with government interests who charged him with, and arrested him for, working illegally past the age of 60 which, apparently, is against the law in India. Word has it government interests that Mr. Yunus challenged in the past are wrestling for control of Grameen Bank. (AP, Julhas Alam, 5/4/11)
Stewart Craine and Barefoot Power clearly represent a model of impassioned socially conscious leadership and capitalism that are doing a world of good for impoverished peoples without electricity and who otherwise must pay exorbitantly for highly polluting kerosene fuel. It was a treat to meet Stewart.
Tags: Barefoot Power, Firefly, CESIF, solar lamps, Uganda, BASE Technologies, Cinemarena