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BBOXX RDC INVESTMENT FORUM July 2019
BBOXX RDC
INVESTMENT FORUM
July 2019
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CURRENT STATUS ON ACCESS TO ELECTRICITY IN DRC
2
9%Electrification
rate
<1%Rural
electrificationrate
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SOURCES OF ENERGY AND CHALLENGES IN DRC
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GRID
• Lack of distribution infrastructure capable to handle the actual need with the growingdemography
• Investments costs to build / Improve infrastructures and meet actual needs very high
• Costs of connecting a new households not accessible to average population
• Cost of maintenance
GENERATORS
• Pollution
• Dailly runing costs
• Energy efficiency
• Maintenance costs
• Noise
OTHER
• Solar equipment: lack of after sales services / Quality of equipement
• Petrol Lamps/Candles : Risks of fire
• Batteries / rechargable appliances : Dailly costs to the house holds
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THE MAJORITY OF ELECTRIFICATION PROJECTS IN CONGO TODAY FOCUSING ON THE PHYSICAL GRID – BUT SOME MAJOR ISSUES
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9 years average durationof a grid project
Difficult and complex
$2,500 average cost per house connected
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WHILE THE AVERAGE HOUSEHOLD CONSUMES VERY LITTLE POWER …
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SOLAR HOME SYSTEMS CAN ELECTRIFY DRC AN ORDER OF MAGNITUDE CHEAPER AND FASTER THAN THE GRID
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GRID SOLAR HOME SYSTEMS
Typical DRC household usage Lighting, phone charging, smallappliances, small television
Lighting, phone charging, smallappliances, small television
CAPEX per connection* $2,500-5,000 ~$400
Payback time on CAPEX assuming no grant
50-100 years 3 years
Cost to electrify DRC $75 billion* $6 billion
Time to electrify DRC 80 years 10 years**
Other pros/cons n/a More resistant to unstable securityenvironment***
*Ongoing opex is also substantial for both types of electrification: cost of collecting cash, maintaining customers, call centre etc. **Assuming $5K per connection, 15M connections, vs $400 per confection, $15M connections***I.e In the 1998 Congolese war, rebels targeted and captured the Inga hydroelectric dam, cutting off electricity and water to 6 million people in Kinshasa. Decentralized energy systems present less of a target for rebels, and lessen their ability to impact the wellbeing of a city
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ELECTRIFICATION TRHOUGH GRID TENDS TO BE EXPENSIVE
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Based on a study published by the World Bank, only two utilities (Seychelles and Uganda) are fully profitable: fully recovering their operational and capital costs
Many reasons:
• Operational efficiency (distribution costs, billing, collection)• Tariffs too low to provide acceptable return (higher tariff not
affordable)• External factors: currency volatility, rainfall, price of oil
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WITH SOLAR ENERGY, IT IS NOW POSSIBLE TO MEET ALL DOMESTIC NEEDS FOR A FRACTION OF THE COST AND MUCH FASTER
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10%Of the cost of a physical grid to
electrify youraverage household
with solar
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BBOXX HAS ELECTRIFIED MORE THAN 1M PEOPLE ACROSS AFRICA WITH ITS SOLAR SYSTEMS
• To date, BBOXX has electrified more than1M people across Africa
• We are present in 4 African countries: Rwanda, Kenya, Togo and DRC
• Our products are designed in the UK where our HQ is based
• We have a sophisticated platform (Pulse) to track and control our systems acrossthe world
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How does it work?
1. Customer pays an installation fee
2. We install a kit complet with accessories (bulbs, cabling, TV, battery, panel etc.) at their house
3. The customer pays every month for the service using mobile money during 3 years. If they don’t pay we switch off the system from distance using our platform Pulse
4. We give customers a lifetime guarantee. If there are anyproblems we swap the battery or the panel
5. We monitor all systems using our platform to proactively monitor and identify issues
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WE ARE USING TECHNOLOGY TO CREATE A ‘VIRTUAL GRID’ USING SOLAR HOME SYSTEMS
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The BBOXX Pulse platform can be used to remotely monitor consumption and identifyany technical issues to ensure customersalways have power
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OUR BUSINESS MODEL IS PAY-GO; CUSTOMERS PAY A FEE FOR 3 YEARS. AFTER 3 YEARS THEY PAY A SMALL MAINTENANCE FEE
CUSTOMERS PAY FOR THEIR SYSTEM FOR 3 YEARS
• BBOXX fee is split into three pieces:
1. Installation fee: covering cost of installation of equipment
2. Monthly fee for first 3 years: coveringthe CAPEX cost and paying off the costof the equipment
3. Maintenance fee after 3 years: coversongoing maintenance of system. Weoffer a lifetime guarantee in case anything goes wrong
AFTER 3 YEARS WE CHARGE A MAINTENANCE FEE, $2 PER WEEK
• We do not want to have any systems in the market that are not working
• As long as customers want to use product they have to paya small maintenance fee which covers the cost of maintaining all their equipment
• ‘Hakuna Stress’ guarantee: we have a 100% recycling rate of any broken products: if there are any problems we swap the panel, battery or appliance for the customer free of charge
• This avoids old broken batteries and equipment beingdumped into an environment with limited waste facilities
• Solar systems sold without a service is temporaryelectrification
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EQUIPEMENT ACQUISITION OVER THREE YEARS
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• We charge higher price in the first three years to cover the equipement costs and CAPEX return
• This to cover our debts for equipement importation
• The long term contract is a service contract where a customerpays us only for the energy they want to use
• This slows down our expansion hability and speed as we getconfronted to the purchase power of the people (the capacity of our customers to honnor the equipment acquisition agreement)
• After the initial term, the service contract price is equivalent to the grid electricity purchased at $0.25/kwh
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THERE ARE TWO KEY WAYS TO ACCELERATE OFF-GRID SOLAR TAKE OFF THAT HELP REDUCE PRICE TO USERS AND RISK TO THE COMPANY DURING INTITIAL CAPEX PAYBACK PHASE
A Result Based Funding (subsidyscheme):
• A RBF would help us reduce our initial term pricing so we can reach more customers
• With an RBF of aprox $150 - $300 per customer, initial term price can bereduced by $4 - $10
• This would allow scale up ouroperations in the country and reachmore customers in shorter time
Long term Debts:
• To finance our importations
• Speed up our expansion with lessstress on the investment paybackperiod
• Allow more flexibility in our pricind and tenures (we can offer flexible initial term lenght)
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EXAMPLE OF TOGO WITH RBF FROM THE GOVERNMENT
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RHS: Mansoor Hamayun, CEO BBOXX, with the Togolesepresident, Faure Gnassingbé, and former Prime Ministre of the UK, Tony Blair
TOGO EXAMPLE
• Under the Project Cizo BBOXX was invited to launch operations in Togo in partnership withthe government in December 2017
• The Togolese government awarded BBOXX a total exemption on TVA, as well as a total exemption of import duties and a results basedfinanced grant per customer
• To date, BBOXX and the Togolese governmenthave electrified more than 50.000 people
• The multinational EDF invested in the project at the end of 2018
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HOME PRODUCT OVERVIEW
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Item Detail
Pricing With TV: $89 downpayment, $25 per month for 3 years, then $2 per week service fee
Without TV: $44 downpayment, $12 per month for 3 years, then $2 per week service fee
Specifications 50W panel17 ah lead acid battery4-6 lights (low power) Phone chargingRadio and torch (specially adapted) 24 inch TV (specially adapted low power)
Customer target Typical DRC household. Small business owners or salaried workers (nurses, teachers etc.)
Autonomy All day + 5 hours in evening with all appliances, withlighting/phone charging only 24H
Equivalent WH to grid taking intoaccount energyefficient appliances
Equivalent to ~1kwh per day for a grid connectedcustomer with typical appliances
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COMFORT PRODUCT OVERVIEW
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Item Detail
Pricing With fridge and TV: $299 downpayment, $90 per monthfor 3 years, then $8 per week service fee
With 1 appliance only: $249 downpayment, $70 per month for 3 years, then $8 per week service fee
Specifications 300W panel55 ah lithium ion battery10 lightsPhone chargingLaptop chargerDecoder cable40 inch TV 90l fridge
Customer target Wealthier household. Typically salaries worker earningmore than $1K per month
Autonomy All day with 5 hours evening time if watching TV
Equivalent WH to grid takikng intoaccount energyefficient appliances
~5 kwh per day equivalent
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SCALE UP AND EXPANSION PLAN
Where we are today
• Present in Goma & Bukavu
• Kinshasa under Orange Energy project
• 50 000 people electrified in 1.5 Years of operations
• Preparing for expansion accross the country
Our plan for the next Two Years
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• Enforce presence by expanding accross the country
• Expand within the North/South Kivus by launching operations in other cities
• Reach 200K Customers in DRC
