The Mini-Grid Business
Welcome to "The Mini-Grid Business," hosted by Nico Peterschmidt, CEO of the consultancy company INENSUS. With nearly two decades of experience working with over 100 mini-grid companies across Africa and Asia, INENSUS created a podcast, which becomes your gateway to the world of rural electrification through mini-grids.
In each episode, Nico and his guests – seasoned experts who have navigated the complexities of the mini-grid sector – offer candid insights based on real-life experiences. Whether they're individuals who have overcome significant challenges, policy makers shaping the sector’s frameworks and funding structures, or visionaries crafting the future of mini-grids, they all have unique perspectives to share.
From exploring successful pathways to profitability, to dissecting the reasons behind a company's struggles, "The Mini-Grid Business" delves deep into both theory and practice. It questions the accepted status quo of the mini-grid sector, aiming to unearth new perspectives or expose misunderstandings that need addressing.
This is a space for thought-provoking discussions, innovative ideas, and invaluable knowledge exchange.
Whether you are an industry veteran, a newcomer, or simply curious about the transformative potential of mini-grids, this podcast invites you to challenge your thinking, learn from others, and engage with a community that’s shaping a brighter, more sustainable future.
So, tune in, and enjoy "The Mini-Grid Business"!
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Twitter: INENSUS (@INENSUSgmbh) / X (twitter.com)
Visit www.inensus.com for more info.
The Mini-Grid Business
Mini-Grid Marketing and Advocacy
In this episode, my guests Penny-Jane Cooke and Brian Kawuma from Power for All, Abraham Mudasia from AMDA, and William Brent from Husk Power, unravel the intricacies of establishing professional campaigns and advocacy to amplify the mini-grid sector's voice among policymakers, funders, financiers, and investors. We explore the synergies between marketing and advocacy, underscore the importance of backing mini-grid proponents within government ministries and regulatory bodies, and deliberate on potential sources of funding for these crucial activities. Finally, we discuss what effective messaging and appropriate communication channels might entail, aiming to craft strategies that resonate deeply with our intended audiences.
LinkedIn: https://www.linkedin.com/company/inensus-gmbh/mycompany/
Twitter: INENSUS (@INENSUSgmbh) / X (twitter.com)
Visit www.inensus.com for more info.
Solar mini-grids have turned from small pilots to an electrification wave. We were there when mini-grid regulation was established, when financial transactions were closed. We saw new technology thrive and companies fail. This is where we tell the stories. This is where we discuss the future the mini-grid business Powered by Ininsis.
Speaker 2:Hey everyone, this is Nico. Welcome to our episode on mini-grid marketing and advocacy. We have a full house today. My guests are Brian Kawuma and Penny Jane Cook from Power4All, Abraham Moudazia from AMDA and William Brent from Husq Power Systems. Penny Jane Cook is the director of partnership campaigns and advocacy at Power4All. She has a master's in environmental management and more than 12 years of experience in the legislative and policy environment governing the renewable energy industry across Africa.
Speaker 2:Brian Kawuma is the powering agriculture director at Power4All. He has 12 years of experience in strategic communications, working with government, private sector, civil society and development partners, and holds a Bachelor of Science degree in computer science and statistics, as well as a master's degree specializing in journalism and communication from Macarena University, Uganda. Abraham Moudazia is the communications director for the Africa Mini-Grid Developers Association, AMDA, where he oversees the development and implementation of external and internal communication strategies. He is a seasoned communications expert with a track record of influencing the global development agenda. William Brent is the chief marketing officer at Husq Power Systems, With over 20 years of experience in scaling climate and energy access solutions. He previously served as the chief campaign officer at Power4All and spent a decade starting and building the clean tech and climate solutions practice at global PR firm Weber-Shandwick. Welcome everyone. Let's start with some definitions. We're talking about marketing and public relationship management and advocacy today, so maybe we should first start by defining what we're actually talking about.
Speaker 3:If you talk about it from a purely what-these-things-are perspective, marketing is really selling your product, so that's how the companies focus on what they're doing and how they're selling it to customers and I guess the broader sector too. But then public relations is really about maintaining that positive company reputation and I think from Power4All's perspective, that's really what we look at a lot. We're a global campaign that looks at accelerating clean distribution, renewable energy, so we really come at it from an advocacy perspective and for us that's really key to be selling the sector in a positive way, so maintaining that positive reputation. But then how you look at that from the different stage of the perspective so whether you're looking at governments or funders or the broader sector and how you're really talking about your positive reputation and making the sector something that governments and funders really want to engage in.
Speaker 2:All right, thank you, penny-jane. Many of our listeners are from mini-grid companies, aram. I think we should take some minutes now to talk about what AMDA actually does in advocacy in the mini-grid space.
Speaker 4:Yeah. So AMDA serves as the consolidated voice of the private sector mini-grid utility companies and it's the role of AMDA to support the scale and sustainability of the mini-grid companies working within the role of Ares in Africa. So we speak on behalf of our members to ensure that, much as they're operating in these hard to reach areas, we have the right kind of regulations and policy framework. We also ensure that we're able to help them access the necessary kind of financing. So we advocate for concession of financing so that our members can be able to access this to be able to scale up their operations. We also take a lead in terms of research, data and standards and twice AMDA has been able to publish the benchmarking Africa Mix report that is able to give guidance to the industry and bring forth these numbers that can be used by both stakeholders to ensure that we're able to scale the sector together.
Speaker 2:Brian, you said that you may have a case study for us on what marketing for mini-grid means. Are there any successful examples of campaigns that you can talk about?
Speaker 5:Yeah, certainly, nico. In most times when you speak about marketing, everyone thinks about above the line. I mean using television, using billboards, using radio, newspapers. But to me the most effective marketing, at least in the Ugandan context, has been experiential marketing. So, on one of the pilots that powerful, all reign in Uganda, dubbed the Utilities 2.0 Project, or Tuake. This was an integrated energy pilot project that sought to unite the strengths of the central utility grid with off-grid mini-grid companies. Now, the approach that was taken there was taking the product directly to the end users or the community. So this evolved customer sensitization or training on the ground, rather than would have been done using above the line, means Having that interface with the end users and giving them that opportunity to learn by seeing and also to listen to either the demonstrations from the mini-grid company officials or even ask their questions directly. Build that trust with the mini-grid, especially for community that was experiencing electricity for the first time. So experiential marketing for me does it best for mini-grids, especially those that are entering Virgin markets, for lack of a better word.
Speaker 2:Great example, Brian. I made very similar experience in Jumeima. We call these Jumeima days, when we go with appliances onto the markets of the villages we're active in and then we present appliances how they work together with electricity, what benefits they can generate for the customers. Yeah, that's indeed from. Also from my experience, Hence on experience by real mini-grid customers is the best marketing possible. Will do you want to add to this?
Speaker 6:Sure, I can talk about one of the campaigns we ran last year. So we've done a lot of work in terms of market segmentation and really trying to identify our customers. We have tens of thousands of connections that we have to service every day and we've segmented that customer base into different types of customers. They could be households, small retail customers, larger load customers that have bigger MSMEs, or even small factories. And last year we developed a gender policy for the first time as a company which really put a goal in front of the company to really try and increase the level of women participation in the company itself internally, but also to focus that on trying to bring more women entrepreneurs into our customer base.
Speaker 6:And so we launched a campaign, initially in India, called Toward Growth, where we essentially came up with a marketing campaign focused exclusively on village level women entrepreneurs, and that was intended to do a couple of things.
Speaker 6:Number one help them to increase their revenue and footfall from customers in the communities that we serve to those businesses that they run, to increase sales and provide them with more income.
Speaker 6:So we actually offered discounts to everybody in the community where those women entrepreneurs were in business and they could go redeem those coupons at the stores run by those women to receive a discount on whatever product they might be purchasing. So an incentive to consumers in those communities to visit those MSMEs and provide more income to the women. We also, as part of that, provided some basic training to those women entrepreneurs on customer retention, budgeting et cetera, to really try and help them to improve their internal operations a bit so that they could actually take advantage of that. So that was the external facing piece. We also added another piece to it where any of the coupons that were redeemed the face value of those coupons could be used to get pus electricity for the value of that coupon at no cost. So it was both intended to incentivize purchase at the women owned businesses but also to give them access to higher levels of clean electricity at no additional cost.
Speaker 2:Great initiative, Will. Is it working? Are women actually buying in?
Speaker 6:Absolutely yeah, I think last I've checked I think we had recruited about 500, 600 women entrepreneurs in those communities and we continue to expand that in program in India and also do probably do some similar types of marketing campaigns in Nigeria.
Speaker 2:All right, abram, we've just heard a case study three case studies basically on marketing for mini-grid and what it means. Can you introduce to us a case study on what advocacy for mini-grid means?
Speaker 4:Yeah, sure, sure. Advocacy for mini-grid basically is the series of programs that raises all issue of mini-grid to appoint, whereby action is taken by both the key stakeholders, be it government, be it donors, philanthropy, a DFI's, and one of them is the PowerUp campaign. This is a campaign by PowerUp Coalition, which is a consortium that's urging global founders to increase investment in climate adaptation and recognize that universal access to clean, affordable energy is essential to prosperity. And in the year 2022, powerup launched the PowerUp campaign in Kenya under being at the center of it all, calling for Kenyan leaders to boost resilience and growth by widening access to clean, affordable energy. The campaign was very successful because we were able to introduce policy recommendations for the government in Kenya focusing on boosting resilience and growth in rural areas through clean energy technologies.
Speaker 4:And this was ahead of the Africa climate a week that was held sometime in September 2022 in Nairobi, and it kind of set the pace for this conversation to take place, ensuring that speakers and participants in that summit were able to recognize the importance, especially for organizations that are playing key roles, ensuring that energy is able to ensure that we have this all sort of clean energy playing its role in reducing emissions and powering up climate adaptations. A while back, if I can also mention, amda and Power4All launched successful mini-grids advocacy campaign to fill the credibility gap for mini-grids and the decentralized renewable energy sector as our. The campaign laid the foundation for a shift in perception and increased legitimacy for the mini-grid sector and it led to an environment more accepting of mini-grids potential and this, I think, will play a very key role in ensuring that this campaign worked out and following that, we are in conversation right now to ensure that we have another campaign just to be able to build on that and increase the brand equity of the whole aspect of mini-grids within Africa and generally the developing countries.
Speaker 6:All right, I mean can I jump in here Because you know so, I've been involved in the mini-grid industry for a long time and I've led several campaigns on behalf of the mini-grid industry. I mean, the honest truth is that the mini-grid industry is still nowhere near where it needs to be. So campaigning, obviously, is a very important piece of that. Advocacy is just a tool within the campaign. A good campaign should have a very clear objective of what it wants to achieve, and I think the mini-grid industry has done a good job of maybe achieving the objective of creating more visibility and more acceptance of the types of solutions that we bring to markets. But aside from that, I don't think that we as an industry have done a great job of campaigning with other, more specific, actionable outcomes.
Speaker 6:Right A campaign, a campaign, think of it as a political campaign. Right, you are campaigning to win, you're winning an election, you're winning something right, and so visibility, credibility, those things could be considered a win, and I think we've definitely done a good job of improving our legitimacy over the years. But you know, there are specific policy actions, actions by investors, outcomes that we still need as an industry, and I don't think that we've collectively done a good job of achieving those types of wins right. So I think what we still need to do as an industry is really identify what those specific actions are and drive a very focused campaign against those actions, because you know it's fine and good to have visibility and credibility, but you know we need specific action from governments, from investors, and that's what's still missing to the degree and at the speed of what we need to scale as an industry. So I think, initial success from a campaigning perspective, but a lot of work that needs to be done to really drive those actions that are going to help us scale.
Speaker 2:Yeah, thank you Will. So now, why are we discussing marketing and campaigning at Vocancy Public Relationship Management all in one podcast? It's because I think and I know that not everyone here in this round is agreeing with me I think they are somehow interlinked. What we have experienced in Tanzania is that electricity tariffs and mini grids were, of course, higher than in the main grid, and customers were complaining about these tariffs with their local parliamentarians. These parliamentarians brought this information back into parliament and to the ministers, especially to the energy minister, who then used that a few months before the elections to enforce national uniform tariffs on the mini grid sector. And what happened was that because everyone in mini grids more or less everyone, like all the residential customers, at least consumed below the lifeline threshold. Everyone just paid lifeline tariffs.
Speaker 2:In Jumeime that at least was the case and that drastically reduced the revenue by some 80% or 70% or so for Jumeime as a company. So now the other way round, we could say good marketing would lead to potentially, of course, good marketing combined with good service would lead potentially to happy electricity customers. That would result in happy parliamentarians and, after all, happy ministers and eventually then more money for the mini grid sector and faster mini grid rollouts. So you can actually work on this kind of causality chain from the marketing angle, but you can also work on that same chain from an advocacy campaigning angle, where you then address the parliamentarians, the ministers, the policymakers directly and try to convince them that mini grids is actually the way to go and that we need to scale the sector in a specific country. What is your take on this? Will I know that you do not fully agree?
Speaker 6:Well, so here's what I think, nico, and I'm, of course, happy to have a debate on this, but my view is that we shouldn't need to do that if we're doing our advocacy and campaigning properly. This was a country that had already adopted a cost-reflective tariff and put in place regulations and policies to govern the mini grid industry. It's what caused us power and others to enter the market. If we had been doing our advocacy and campaigning to the extent that we ought to, that issue would not have arisen. It became politicized. So if, on the front end, we were doing the work necessary to influence government and their decisions and politicians about how they should view the mini grid industry and what's so great about it, that issue would never have arisen.
Speaker 6:Where you would require using that sort of bottom-up approach, where you're trying to influence parliamentarians and central government figures to deliver on the promises that they had already made to the mini grid industry, I don't disagree with you that there's value there.
Speaker 6:I mean, I think you can use the voice of your customer to influence politics and politicians.
Speaker 6:But I guess at the higher level, if we're doing the job properly of campaigning and advocating, that wouldn't be necessary because governments would already see the value of mini grids and not mess with the agreements that they'd already made, which was what happened.
Speaker 6:So I think that it's sort of a reactive type of approach. It could be proactive, but I think in this case it was reactive. We were all of a sudden in crisis mode and we figured oh, how do we mobilize our customers to influence the people that need to be influenced? The point I'm trying to make is that we should have done that work influencing all along so that never became an issue where a minister never took the decision to reduce our tariffs to the level of the national distribution company and essentially put us out of business. So I don't disagree with you in principle or in general, but I think in this specific instance it's a good example of how we're still not doing what we need to be doing to the degree to actually get those decision makers in government to treat us as an industry of the way that we need to be treated.
Speaker 4:I also want to support what we just said.
Speaker 4:I think, however good an intervention program, a development program is and it does not get government buying, chances of its success tend to be very minimal.
Speaker 4:I also think that when you look historically, when the Mingri sector began in Africa, we started at a level where the developers entered the market without any regulations.
Speaker 4:So it gets us to a situation whereby now, when government starts putting in regulations, we start as a point whereby we already disadvantage.
Speaker 4:But right now we are seeing conversations whereby countries like Zambia that are now looking seriously to invest into the sector and are talking to peers all over just to get to know how we can go about it, inviting comments and advice from peers to be able to ensure that these are captured into the regulatory framework of that country. And to me, I think this now gives us a very stable foundation so that, when it comes to even advocacy and campaigns, you are trying to sell something that's already within the regulatory framework. But in case whereby you're trying to have campaigns but the basics are wrong, because if you don't have a regulatory framework remember this you're dealing with a regulator who, at the end of the day, also wants to protect the national utility, so it becomes very difficult. So the first thing is to ensure that we have that regulatory framework within our country. Then, when we even go ahead and do these campaigns trying to raise the visibility of the sector, we know we are doing something that's going to be on what's already stable in terms of the foundations.
Speaker 6:Abraham, I agree with you, but the point I'm making is that getting the regulatory and policy frameworks is just a very first step.
Speaker 6:This is a regulated industry that we're in, so you have to be engaged with government continually.
Speaker 6:I mean there should be people in the ministries of energy and ministries of finance and wherever they need to be on a daily basis. So great that we get the policy and regulatory frameworks in place. But that's just the beginning of when advocacy really begins, because that's where, if you don't do that advocacy work, the industry will get politicized and will end up in a situation where the market gets cut from underneath us. So I'm talking about country level, even county level or local government level. Advocacy has to be an ongoing, persistent thing where they're hearing from us on an ongoing basis and are seeing the progress that we're making as an industry, and I think that's really only now starting to happen in a couple of countries. I don't see any really regular engagement at the government level, at advocacy level that's ongoing, to really try and take it from a policy regulatory framework to we're going to reduce import duties, we're going to give you a tax package that makes sense and incentivizes you, et cetera, et cetera.
Speaker 3:I think, if I could just come in here I mean I'm based on what we were saying too is a lot of the time we might get the policy right, we might get the regulation right, we might even get the import issues correct, but then it's how that's trained out within that country to actually deal with that information and to then be regulating the sector correctly and for people on the ground actually understand what that regulatory framework means, so as remaining, as well as a society and as the sector, involved. Enough that we're then helping governments along the entire value chain and how that training and teaching and evolving of the advocacy is happening, I think is also missing. I mean, I think also to the point around these stories, what Brian shared and what Will shared. There's really great information about impact and about how the industry is doing these really good things on a community level, but how are we then using those good news stories and those impact stories from an advocacy perspective? Are we sharing them enough?
Speaker 3:We know them, we're talking about them now on this podcast, but have we done a really good job of doing that positive face of the sector externally and how we market it? And I mean there are all sorts of ins in terms of advocacy. If we could look at it from a development outcome perspective, where you look at the jobs in the sector, power for all does a bi-annual power in job sensors, where we're like, where are we now as a sector, what are we doing in terms of jobs in this industry and are jobs increasing? And how do we then really advocate around those things to make governments, make financiers really interested in the sector? And how we're really sharing these stories I think is critical too.
Speaker 2:Yeah, I would like to come back to this Tanzanian case once more because I think it's a very interesting case that, if we found a solution to this, could also then be transferred and applied to other countries. So now, what happened in Tanzania? And I'm pretty sure that what I introduced before this linkage between the customers, the parliamentarians, the ministers and the decision after all, that linkage exists. We can use it, as we just said, we can address it and use it as a communication channel, but the channel exists anyway and if we perform well or if we underperform will directly be reported to the decision makers on the policy level. And that doesn't only hold for Tanzania, but it is the same in most countries where really the parliamentarians live in the villages, they are members of the community, they may even be your electricity customers, where they have the direct communication channel to the government of the country.
Speaker 2:So, after all, what went wrong? How could we have prevented this escalation and, after all, the kind of disaster of many great companies exiting the country and really, after all, destroying to a certain extent mini grids because they were simply not profitable anymore? And let me add here quickly under was active. World Bank was active, communicating good things about the mini grid space and how beneficial mini grid electrification could be. Each of our companies had I can just talk from Jumeimah, but I also know that other companies in Tanzania were very active in talking to the ministers directly to up to the president, even through Tarea or others. Yeah, please come in with.
Speaker 6:Yeah, but so this gets to the whole question. I mean, we're playing on an unlevel playing field, Nico.
Speaker 6:We are competing against an inertia that is very, very strong. This is an inertia that heavily subsidizes state grids and infrastructure in place, and the leaders in place, generally speaking, come from a more traditional energy background. They're not thinking about necessarily energy transition, what the energy system of the future looks like that integrates centralized and decentralized solutions. So we're starting at a huge disadvantage already, and Husq Power was involved in that work in Tanzania as well that you mentioned, nico. But to think that a small group of mini-grid companies that maybe had I don't know 25,000 customers, without resources to actually do something significant, is going to ever be successful against that inertia.
Speaker 6:So I guess the point I'm trying to make is that number one, we have to recognize that we're starting from behind and we're playing on an unlevel playing field that favors state distribution, and if we're going to meet that challenge, we have to be resourced to do the actual work that needs to be done, and we were trying to do this on a shoestring. Even if you get to meet the president and if you're competing against a national distribution company or companies as a small group of private sector companies, you're not going to be able to achieve the campaign outcome that you want. So the point here is we're significantly under resourced. I know that Abraham would agree with me here. As an industry representative, we don't have the resources to do that type of work and until we do, especially at the country level, I don't think we're going to see the type of shift that we need to see in action within the timeframe needed.
Speaker 2:Abraham, before you react to this, I consider it extremely interesting, Will, that you're saying that there is an imbalance in political weight here and that it's basically a battle between main grid and mini-grid, if I can understand you correctly.
Speaker 6:No, no, no. I'm saying there should be an understanding that this is an integrated solution. It's not a battle, it's not black or white, it's not binary. What I'm saying is that a lot of governments will provide lip service to that idea, but in practice it's very, very different. Okay.
Speaker 2:Abraham.
Speaker 4:Yeah, sure, I think Will is right this is a point I said before that remember, when dealing with the government, you are dealing with the regulator and the regulator has to protect what is on the national utilities, and you and I know that across Africa all national utilities are struggling. So until we change the mindset that mini-grids are there to complement what the national utilities are doing, we won't be able to achieve the end goals. Because as long as the regulator is seeing mini-grids as a competitor, that's trouble for us. And that's the reason why I say however good an intervention program for development is, without that champion, that political champion, chances of its survival are very minimal. And I think that's the reason why we say advocacy is about soft power and influence. And that's why we say we need to draw a power map the champions within governments who can be had. Sometimes you need only one voice, voice of reason, to be able to change the whole aspect. So I think that's very important.
Speaker 4:As Will said, sometimes when you start from an advantageous position, it becomes very difficult.
Speaker 4:So I think advocacy needs to play more stroll. Try to map the power champions, the people who we can be able to sell these ideas, however few they are, but they are able to carry the vision for a country for them to be able to implement mini-grids. And I think in some African countries we are seeing progress countries like Nigeria, which is the most mature market in the continent. In Kenya we're also seeing it, whereby we're having an integrated energy plan where governments are now trying to implement mini-grids within the national electrification strategies. That way, it becomes very easy for us to know these are the boundaries and governments going to support mini-grids, which is good even for investors. And that's the most important part, let's try to ensure that the government is able to buy in, because even if we push out these success stories of how mini-grids are impacting lives in rural areas, without government buy in and government being able to integrate the whole solutions into the national electrification strategies, it becomes very difficult for us because the regulator will come and hit us with a very strong armor.
Speaker 2:Yeah, actually I agree, addressing government and focusing really on the regulator makes some sense, but we shouldn't put too much focus on the regulators themselves. Well, as you may know, inensos has worked with regulators throughout the African continent a lot, and what we understood is that, well, on the one hand, some of the smartest people in the country usually work with a regulator Like they have really often excellent staff but they work within very, very narrow boundaries that are provided by the electricity act, and the electricity act tells clearly what they can do and what they cannot do and where their limits are. And they can only move within that little wiggling room. And, yeah, well, after all, the political will to implement mini-grids does not come from the regulators, it comes from the higher levels, it comes from the ministries, it comes from the president him or herself, or it comes from the parliament, which is the best case. And that brings me back to my first thesis, where I say well, what we need is we at Inensos we call it national debates, like UNDP has now picked it up and calls it national dialogue, after all to make mini-grids politically acceptable for large scale rollouts.
Speaker 2:What we, from my perspective, need is larger media campaigns and discussions, also on television, on the radio, between electricity customers from urban centers, from rural areas that then discuss about well, how much should we pay for electricity? Should we pay all the same? Urban customers, would you be willing to cross-subsidize electricity for your mother who lives in a rural area? How much would you be willing to cross-subsidize with your electricity tariff to make sure that she pays the same per kilowatt hour as you do? And I guess that each country, each society will come probably to a different answer and solution here that finally could be picked up by the policymakers and then cast into laws and regulation. What is your take on this?
Speaker 4:I just want to add one point for a second. There's something Nico said is very important about, of course, us not focusing on the regulator alone. We need to have a holistic approach and, just to mention, some of these regulations in the country are funded by donors, so that's why we also call upon donors to use their influence to ensure that we have the right ending, that we'll be able to benefit the sector in terms of having favorable regulations that will show that the sector scales and grows. So that's one point that I want to capture.
Speaker 2:Sorry, I need to comment myself again here. I do not agree, sorry, abraham. The donors and again, we work with donors a lot. We sometimes structure grant funding programs for donors, we implement regulation using donor money, with the regulators and the governments as in-insers. But the donors should, after all, not exercise their power. Obviously, they have power to change things, but if donors exercise power, then usually this creates tension, because governments need to be sovereign, they need to be independent and they need to take decisions independently. And donors well, of course they have their own political aims and in many times, donations, bilateral donations, from Europe to Africa, from the US to Africa, from Japan to Africa, wherever they go, they come with some political aims usually, but if you push too hard on that end, you usually achieve the opposite of what you initially wanted to achieve. So therefore, donors can influence, but they shouldn't, from my perspective.
Speaker 4:What I'm saying, nico. Most of these regulations, donors are funding them through consultants. So what you are saying? These consultants work with us so that we can ensure that we are getting the right ending True.
Speaker 2:Of course, I know that many mini-grid companies overestimate the influence that consultants have. Consultants basically listen to government and consultants clearly tell the government that if you decide this, then the result will be that that is what consultants do they calculate, they find the linkages and the causalities between input and output, but they don't take decisions. Of course, they draft the texts, but they draft the texts according to what the government tells them to draft. It's not that they come up with a text and say here this is it, please implement. No, it's not like that. The government must be in control, and I think that is the main principle of any action we are taking in our campaigns. The government must be in control and we must make sure that we deliver very clear messages, but also proven messages and data based on scientific evidence, to the governments for them to take decisions.
Speaker 6:Go ahead, okay. So all of this is moot as far as I'm concerned unless two things are addressed. And, by the way, nico, I don't agree that data is going to win the day. There's plenty of research that shows that data doesn't change the way people behave, and so storytelling and narrative and things like that become much more important in showing that. But none of this stuff is going to happen unless the entities in this podcast and others who aren't here today have the money, to put it bluntly, the money to actually do the work.
Speaker 6:And we are obviously one company. We can't do everything ourselves. We do as much as we can, but there has to be entities there that are well funded, that can actually do the things that we're talking about. And I would argue and this goes back to the whole marketing piece of this conversation we're not going to be able to make a really good case unless we're better at marketing our businesses to our customers.
Speaker 6:The reality is that I think a lot of companies are still quite young and don't yet have the level of sophistication yet to do real marketing efforts and to better understand the customer, unless there are companies in multiple markets who are demonstrating that they're EBITDA positive, that they're making impact, that they're doing the things that the industry says it can do. All of that advocacy work won't lead to anything because there's nothing to stand on, and so marketing plays an essential critical role in making sure that we're viable as an industry, and I don't think that there is nearly enough focus on that as an industry that there needs to be. So there's two things here that are related, but I think that they're also independently important Money. We need money as an industry to advocate, and then we need to show that we make money, which includes marketing efforts as an industry. Please go ahead.
Speaker 5:Brian, I'll just speak, I think, generally for sub-Saharan Africa. For instance, in Uganda, you learn that the government, especially the president, has been intent on promoting job creation through industrialization. Now what happens is there's been a lot of dollars channelled to generation of electricity. Of course, for Uganda, most of it is hydro, and the bulk of this electricity is really targeting industrial zones, large factories, in the hope that they will create jobs, and little attention has been given to rural electrification, for instance, via this power that's currently being generated. Now that is where the mini-grids come in. However, you also know that mini-grids cannot be profitable if they're only being relegated to serving the rural market. So this is where the political will now comes in.
Speaker 5:The government has to bend a bit. You know how do you support an emerging industry like the mini-grid industry? If you look at the mini-grid landscape, those that are trying to make it big in Uganda are really foreign companies. Yet you also need a good balance between local enterprises and those that are domiciled out of Africa. But how do you expect an emerging or a new mini-grid company that is locally best in Uganda to really compete against the big guns if, one, you're not protecting it via a subsidy and, two you're not zoning well enough for each to tap into the profitable markets outside the rural economy. So there has to be a balance and that's, I think, what William is saying. One there has to be money, whether it comes from the donors or from the government through a subsidy that has to support the mini-grid companies. One stay afloat but also develop their marketing well enough for the end users of the customers to buy into electrification via mini-grid. But all this cannot happen without a sound policy backing from the government.
Speaker 6:Yeah, brian, just to be clear. I'm saying we need money to do campaigning, right. We certainly need to have a level playing field with regards to subsidy as well, Like, if the national utility is getting subsidized, why aren't mini-grids? We're providing greater levels of impact, mobilizing private finance so that governments don't have to spend money. So, yes, we need subsidy, but I'm saying that the industry needs money to do the work that we're talking about today, which is advocating for all of the things that we need to scale. We're supposed to electrify 380 million people in Sub-Saharan Africa with 160,000 mini-grids. How many do we have today? How many people do we serve today? It's still a drop in the bucket. So we're talking about a huge scale that we have the potential to achieve. That scale will never be reached if we're not well funded as an industry to do the advocacy work and get what's needed at the national level. Also, what's?
Speaker 3:interesting is there is money in advocacy right, I mean powerful, for example. We exist, we have funding, but then about what is the sustainability of that funding? It can't be that this money is coming in for a specific project or the donors again dictating to an extent. What you're then working on it's how are we ensuring that there's enough sustainable advocacy funding in the entire life cycle to then achieve, as William said, what is that clear ultimate goal?
Speaker 3:I think another thing in the sector is there are a lot of roleplayers. It's pretty crowded in terms of people who are trying to work in advocacy, who are trying to get the regulations right. But how are we coordinating amongst ourselves? Are we discussing enough amongst ourselves? Are we talking to the private sector enough to really understand what the challenges are? And then how are we ensuring that that's then amplified and that we're working together to make sure we're really achieving the right outcome? I think that also needs to come in when we're talking about funding and how we're working together and how we really get this advocacy thing right. Is all we coordinating as a sector to actually get there ultimately?
Speaker 6:No, you don't have enough funding. I want to make that point very clear, right Do you?
Speaker 3:No, absolutely not. I think, that's also my comment about sustainability. It comes in. You've got funding for a time, but then, if it's not sustainable, you can't continue to focus on that key thing Because the funding is not there.
Speaker 6:And amen. On the point around consolidating effort, we're a young industry, right, there should not be five different initiatives trying to advocate for the mini-grid industry. There should be one. It should be consolidated, it should be focused, it should be well-funded and that's what's needed, not like five separate issues. I mean, I'm not going to name names, but there was a program that came, I think, on board last year or the year before several million dollars to try and do some advocacy work at the national level across Sub-Saharan Africa. Why? Why there's no need for one more platform. We already have several, two of whom are on the call today AMDA and Power4All. The idea that we're just starting a program because we can get the money to start that program makes zero sense. There needs to be a rationalization for launching anything new. We have platforms. Use those platforms, in fact, consolidate those platforms into one and make a real impact, instead of talking about five different things that make no impact.
Speaker 4:Let me take this and just before, let me comment on what we said in terms of funding. It's true that we are limited in terms of funding to be able to have very impactful campaigns. That's something that needs to change. Then, what Penny said in terms of, also, coordination in the sector. We have very low coordination and that's why, right now, amda, with AMDA 2.0, amda has been tasked with coordinating the sector to ensure that we are able to speak with one voice and hope that's going to work and change things for better.
Speaker 4:In terms of the message that we need to put outside there to be able to get buy-ins from different stakeholders, I think we need to up our socks and show that we are able to capture all the necessary success stories. Let's learn from what's working well in other markets, be able to share that to markets that are still coming up and emerging. Also, we need to ensure that we come up with data and standardizations. Numbers never lie. With the right data, we can be able to share with peers and build on that. So I think we also need to bring for this message that mini-grids are not there to compete what the national utilities are doing. Mini-grids are there to complement what the national utilities are doing, that is, to ensure that all are able to get access to clean, sustainable energy, and also try to ensure that we capture the whole message of clean energy. It's the moment of clean energy and means that they are to provide clean energy. Let's write this wave and ensure that we are able to raise the visibility and knowledge.
Speaker 2:Still, yeah, I think that's what we all agree on. I would like to motivate you to use this occasion here today, because we have a mini-grid company here with probably one of the greatest marketing and campaigning experts in our sector. We have powerful, all here professionals in campaigning and we have under here the association representing the mini-grids world, so to say, and we have a consultant here which is myself active in the regulation of the regulation and grant funding. And now, as we are sitting here today, what do you think the messages should be? What messages should we deliver to the policy makers out there in Africa and Asia that decide whether they want to go for mini-grids or not? What channels can we use and what kind of methodologies should we use to transport our messages?
Speaker 4:I think that goes back to the basics that audiences are never same. Audience are never homogeneous. We need to ensure that whatever message you are putting out there, let's put it through a channel that the target audience is going to consume. There are audiences that are very savvy with social media. Then it makes sense for us to be able to broadcast our message through social media. There are audiences that are still consuming their news items or messages through the traditional media. Then that will be able to make good use of traditional media. So I think it depends with the audience segmentation and ensure that we are able to put our message through channels that best fit the audience segment that we are targeting.
Speaker 2:Penji. And if you had an unlimited budget, how would you spend it?
Speaker 3:In terms of advocacy.
Speaker 2:Yeah, yeah, in terms of advocacy, of course, yeah.
Speaker 3:So I think one of the things that we're really keen on, and what we think powerful strength is, is that coordination across the sector. So one of our key goals in the many good contexts is how are we understanding everyone's role? I don't think it's case of one organization leading. I think it's case of really understanding what the strengths are, who's doing what and how. We're then making sure that's amplified to reach the ultimate goal. So that's something we really want to focus on and then really keen on making sure the story is getting out there.
Speaker 3:I think the messages that come out of the sector are cross, cutting across all audiences. I mean, there's stuff around the development agenda right, everyone can understand why this is important from a basic human rights perspective. We're trying to promote an entire sector with a vision of obtaining ACG7, and that's around universal energy access. So how are we communicating the mini good sector's role in actually achieving that? And it talks about the environmental perspective, it talks about climate change, it talks to human rights and it talks to rural economic development. So how are we really coordinating across all of that to ensure that those stories are getting to the right places to really make the sector more legitimate and make it recognize for what it is and the role it should be playing in terms of universal energy access.
Speaker 6:Penny, I don't just agree with any of that. What I think is missing is if you go to any company or any entity working in the mini good space and you say what's the messaging that we should be promoting, you're going to get a different answer from everybody and you're also going to get an answer that's not really rooted in the stakeholders we're trying to influence, namely governments and investors and funders Power for all. When I was there and working on a mini good campaign, we did a messaging guide for the industry to try and unify what the messaging ought to be, but that was five years ago now and I don't think that's been updated since then and we need to do that. But we also need to, I think, have much more clarity. Typically, when you develop a messaging framework, you can't have more than three messages right that people will be able to absorb, and all of the things that you mentioned are legitimate and I agree with you. But what are the three things that we as an industry need to be pushing? Is it different for a region? Is it different by country? You could drill down the country level to refine things, but I think overall, as an industry, we're still missing that as an agreed upon slate of messages that we'd be using when we speak to any stakeholder anywhere.
Speaker 6:But messages don't win the day. Messages help. They can reinforce the fact that we're an industry that's here and that will have a lot of impact. You know, at the end of the day, unless we can show success as an industry, those messages don't carry a lot of weight. And this gets again back to the actual job of Running a viable business where marketing plays such an important role. We can have a different conversation about marketing, but I don't want to let it fall by the wayside, because advocacy is only as good as the industry or whatever the topic that you're advocating for, and how that industry is performing. And you know, let's be honest, you know we haven't been able to show that to the extent I fully agree.
Speaker 2:And, penny jane, honestly, when I listen to the list of topics that you just introduced, it seemed to me a little bit like these topics are more interesting for donors than for governments. When I worked with governments in Ethiopia, nigeria and Zambia, mozambique and so on, what I learned is that, of course, they cover everything that you just said, but their main focus is economic development. They want to foster economic development, and unless they can really show that they are successful in this, they will not get reelected. Economic development meaning not just economic development in the centers, where the economy is already very vibrant, but especially also in these rural areas. In Ethiopia, every 10th word or so is equity, if you're pretty equity. They want equity across the country. They want to make sure that everybody gets the same level of services, and I think this is what we need to link into. How do we, as a mini grid sector, promote and foster rural economic development?
Speaker 3:Yeah, I mean, I completely agree and I think, talking back to what both you and will have said, it's really talking to the sector and understanding what the stories on what they look like. And I agree it was me to be honest, conversation because, yes, we've been on the journey, they've been issues in the past, but there is so much achievement in terms of technology, in terms of the impact, in terms of creating those rural economies and in terms of creating jobs and viable jobs and jobs that are giving people dignity and that are really helping people to develop. So where are those stories? Are we making sure we're sharing those stories? And, as you say, it's a messaging guide that is exactly Targeted towards who.
Speaker 3:We're trying to get these messages across to you, but I think it's also about getting those stories. Do we have those stories? Do we know them? Are we sharing them? Companies are doing quite a lot on their level when they're engaging with the government directly, when they're engaging with finance here, to really provide that evidence and to prove themselves on that kind of company one on one scale. But then we're using those stories to really make sure we're getting the message across. We're getting the message about industry out there to show how far the industry has actually come.
Speaker 2:Abram, is there a messaging guide on the level?
Speaker 4:Yeah, sure, right now under we have a messaging guide is still internal, but that's what's doing on under 2.0. But, as I said, we try as much as possible to the audience so that we know who needs to consume what. If it's regulators, we have a plan to ensure that these are the kind of messaging we need it to get to their ears, to their ears. If it's donors and financiers, these are the kind of messaging that we need to get it to their ears. This is what we are building and you know, right now we are about to launch the under 2.0. And that's going to play, fully visible once the document is up and running to ensure that it's able to guide and also according to the sector. But bottom line I repeat, for our message to be very impactful, they have to fall the right year and that means we need to segment the audience so that we speak to the right people with the right kind of messaging for us to have the right kind of results. Can I bring?
Speaker 6:Brian in here for a second, because I think the work that he did in Uganda is an important case study specifically around point that I want to make just briefly, which is that a lot of this is hand to hand combat. We're talking about media channels, this channel, that channel. This is about being on the ground, engaged with different ministries, working with them on a day to day basis and building those relationships, helping them understand what it is we're trying to do, and Brian's work in Uganda has been a great example of that, and I can tell you I well I'd love to hear from Brian, like, do you agree with that? That this is just as much, if not more so, about very high touch engagement with key stakeholders as it is about anything else 100%, william.
Speaker 5:I mean when I spoke about the experiential marketing, this is not far from that.
Speaker 5:You really have got to build that relationship and that will be easier for you to communicate the change that you want to see. So going to social media and doing all these could be helpful, but what's most impactful is really establishing those critical relationships with the policy makers, with the end users, but also the regulators. If you get a buy in from, for instance, the community that a mini grid is just as good as the main grid, they will definitely communicate this to the parliamentarians that represent them. If you go to the Ministry of Energy and sit down with the Department of Renewable Energy and show them the cost effectiveness of using a mini grid in a certain area compared to the grid and they get buy into that, definitely they will push. The policy did offer that for you. So William is very much right about having that high touch relationship with the different audiences. Of course, you cannot reach everyone at the same time, but this is a necessary ingredient if you are going to achieve the change that you seek.
Speaker 2:Brian, do you think this is where the most urgent need is staff who sits in the ministries of energy on the African continent and helps the policy makers get the interpretation of what mini grids can do right and clarify questions on a daily basis? Is that what the mini grid sector needs?
Speaker 5:Well, it's not the only thing it needs, but it is definitely important. William earlier said that the way most of these government agencies are structured, they were built for traditional electrification. So having your blood in there that understands the mini grids, that can really break it down for the other bureaucrats, really helps, and if you can have as many mini grid champions within the ministries and within the regulators, I think it will also help create change.
Speaker 4:Yeah, I just also to add on that, with an example from AMDA, we also have what we call regional coordination, where we have country chapter coordinators and these are able to talk to the right guys within the sector there the decision makers to ensure that we have favorable outcomes in terms of policies, financing, regulations. So it kind of gives us that close attention to be able to understand what's their pain points within their markets and give them local solutions. So I think it's very true that we have to be on the ground as we are talking to these key players within the sector. Let's have people understand what's paying in those markets to be able to have the best end results.
Speaker 6:But again, abraham, you're not property resource to do that the way that you should. Am I correct? I keep making that point.
Speaker 4:That's true. That's true. That's true because you look at even our success markets, like West Africa market that we are making progress, like Zambia, those are markets that we have these countries chapter coordinators. But these are the markets due to a lack of resources. You find that we don't have representation there, so progress there is very slow. But markets where we have representation, the progress is very good. So it's all about the issue of funding. Again, without funding, we are incapacitated in some way.
Speaker 2:Abraham, can you talk a little bit more about how these country coordinators work, how they are linked to the ministries, how close they are to the decision makers in the country specific policy game?
Speaker 4:They are the ones who are the go to person in those countries.
Speaker 4:They have to map up exactly who is the key decision maker in this country, for example, if it's Zambia.
Speaker 4:They have to build this relationship with top guns within the minister of energy.
Speaker 4:The regulators and also other players within the sector were making influence and decision with those countries. So it's for them to go and show that they have this working relationship with these guys so that we are able to come up with very favorable policies and regulations that favor the meaning industry and that's for the benefit of our very own members who are operating those countries. So it's a day to day job to ensure that they build a very good rapport that works for the benefit of the sector. And then they also become a go to especially governments, because you've seen governments trying to come up with regulations with a good relationship with these coordinators. When governments are trying to come up with particular kind of policy and regulations within the sector, they're able to come to them to ensure they capture their input, and this can't happen if we don't have a working relationship with these talk people in government, be it parliamentarians, be it players within the regulatory sector, within the minister of energy, and those are some of the DFI's who are very influential in those markets.
Speaker 2:I see All right. So now, what I have taken away so far from our conversation is that there is a significant underfunding of the campaigning part in our sector. That's, the main ask of the sector would most probably be give us some more money to enable us to put more people, more staff, more mini grid experts into the ministries and kind of advocate from our side and inform policy makers with well founded and well supported and scientifically proven information and tell the stories. And then we may need to coordinate. The third aspect we may need to coordinate more among the stakeholders in the mini grid sector to make sure that we send the right messages to the right people and there shouldn't be more additional entities trying to do that, which increases the coordination effort, and we spend more on coordination, but let's rather quickly coordinate and then deliver. Is that a good summary of what we have discussed so far?
Speaker 4:Yeah, that's fair enough to me. I think it's fair enough.
Speaker 2:And do you think that if we together power for all under other players in the sector mini grid companies and entities that benefit from a growing sector coordinates more closely and develop a program, do you think we would find funding for the implementation of that?
Speaker 4:Yeah, I've no doubt about that because, like I'm the right now, one of our mandate is to ensure that we coordinate the sector, and I think they strengthen collaborations, bearing in mind that we are a sector that we are really underfunded. So let's pull together our strengths so that whatever we are to output there will have that much impact. They strengthen numbers if we speak in one voice. We're about to pull the right donors. We're about to pull the right support from be the donor community, be it from governments and all plus in the energy sector, and that's the only way we can be able to make huge strides.
Speaker 2:All right To close this discussion, I would like to ask you one final question. What would a huge marketing or advocacy success look like from your perspective for the mini grid sector?
Speaker 4:It has fast to capture the realities on the ground, the fact that we still have a lot of people, especially in sub-sahara, rural Africa, who are still suffering from energy poverty. That has to be captured. But for this marketing advocacy campaign to be successful one, we have to speak with one voice. What I've just said let's be able to consolidate our strength so that, whatever we are speaking, we have to give that holistic view and approach from different players so that it becomes some sort of consolidated campaign to. We can't have success without the right funding, and this is a call especially for those companies that have the capacity to be able to fund the campaigns.
Speaker 4:Companies need to set aside budget for their marketing advocacy teams to ensure that they're able to hit the market, for them to be able to realize the right kind of results they need.
Speaker 4:And also, within the sector, we need funding because there are a number of Our donors need philanthropy, who are trying to ensure that this growth and scale within the sector.
Speaker 4:But we also need to find the very element of marketing campaigns communication to ensure that the experts who work in these sectors have the right funding to be able to put the right message there and have the right kind of outcome. And finally, we also have to ensure that whatever campaigns marketing we are doing have to be based on the right kind of data, and this now speaks to the element of research data and standards. We also have to ensure that we have the right to message there, because right now we can't say within the sector that we have a very good kind of repository that you can be able to say what, or perhaps say that this is the kind of a number in terms of costs, operations that you can be able to pull and recite. We also need to invest a lot in research data and standards to be able to have come campaigns that are able to inform and inform the right kind of decision that needs to be taken for the sector to be able to move forward.
Speaker 5:It's important that the mini-grid sector is looked at as the viable alternative to main grid or traditional grid electrification. That it is, but also, on the industry side, intentional improvement in the quality of service, because this has been an issue for most of the end users. You know the quality of service, this or the other, so the industry players making it intentional on their side to be competitive in comparison to the other ways of electrification. The other one is greater awareness at all levels, be it at the customer, the policy and regulator, about the tenured benefits of mini-grid electrification so that we don't have, as used to happen in the rural areas, that comparison between the mini-grid and the traditional grid.
Speaker 3:Yeah, I think. For me it's around Polisca will and that ultimately getting to that point where mini-grids are recognized as a legitimate component. So we're no longer fighting, we're no longer competing with the grid, we're viewed as something that's integral to achieving energy act, as for everyone. So it's how those technologies are working together in a partnership with government to actually achieve the goals of government, and that government is wanting the technology and wanting the industry to play an active role in their country.
Speaker 6:Yeah, thanks, pajae. I would say two things. One is we're often penalized for what are referred to as cost-reflective tariffs. This is a point that I need to make very clear. We charge a higher tariff than the state utilities, right, but those state utilities are highly subsidized. So if you levelize the tariffs that are being charged without subsidy, I don't think we can still answer the question about who's actually charging more, right? If utilities were charging cost-reflective tariffs, would their tariffs be in line with the mini-grid operator? My guess is they'd probably even hire.
Speaker 6:We're much more efficient, we provide better service, we create more impact right, but we're always penalized because we're not on a level playing field. We're not seen in the same way, right, we don't often get subsidy. Sometimes we'll get a CAPEX subsidy in the form of a results-based financing subsidy in some countries, like we do in Nigeria, but we don't have any operational subsidy on an ongoing basis, and all of these state utilities do. So one thing I would say and I have been saying for a long time nobody seems to be listening to me yet is that we need to have a level playing field when it comes to subsidy. Until we have that, none of the things that we're talking about in terms of shifting perception are going to happen at the speed that I would like to see them happen. How do we create that level playing field? I don't know yet, but there has to be a level playing field where we're comparing apples to apples. Right now we're comparing apples to oranges and we're getting penalized for it because, oh, you're charging cost-reflective tariffs and your customer can't afford it. Well, yes, we are, because we're actually taking the burden away from your national finances and putting it on private sector balance sheet and electrifying rural communities much more with better service, higher reliability. We're charging higher tariffs only because we're not subsidized to the degree that the state utility is, so levelizing subsidies in whatever capacity, whether it's taking away the subsidies from everybody and letting everybody compete on an on par basis, or it's equalizing that subsidy so that everybody is actually comparing apples to apples.
Speaker 6:That's number one. The other is we talked about access to funding. For sure, people need to step up and provide the organizations on this call more funding to actually advocate for this industry and allow us to achieve the scale and impact that everybody says that we should be achieving. But, more importantly than that, I think the investment community, dfi's included, need to really embrace the original mandate that they were founded on, which is to provide risk capital, and the risk appetite for DFI's right now is still ridiculously low. They almost are expecting commercial level returns for their investments.
Speaker 6:That's unacceptable, it goes against their original mandate and it's not de-risking the industry to the degree that it needs to be de-risked. And then, specifically, in terms of what type of capital is needed equity there's early stage capital. Equity there's late stage growth equity that's available, but there's a valley of death in the middle and there's no way that private sector companies like Husk and others are going to scale at the speed needed to achieve the impact that the mini-grid industry can have without somebody coming in with risk capital to de-risk that valley of death that exists between early stage and late stage Good statement.
Speaker 2:Thank you, will. Yeah, thanks a lot everyone here in this round. This was very interesting and insightful and I think we even kicked off a little bit of, I think, a thought process here. Hopefully that may bring the sector forward, kind of unify in terms of their statements and then also create one uniform approach to acquiring more funding for the mini-grid marketing and especially advocacy roles that we have to fill. Thanks a lot, everyone.
Speaker 3:Thanks, Nico.
Speaker 4:Thank you, bye everyone. Thank you, cheers.
Speaker 1:This episode of the mini-grid business has been brought to you by Innsys, your one-stop shop for sustainable mini-grids. For more information on how to make mini-grids work, visit our website, innsyscom, or contact us through the links in the show notes. The mini-grid business powered by Innsys.
