Posted on :Wednesday , 24th April 2019

Japan's solar industry leaders Mitsui & Co had signed an agreement into acquiring a stake in Nairobi based M-KOPA, developer of Solar Home Systems (SHS) last year and is now seeking the link to grow into solar-powered mini-grids, according to local managers.

M-KOPA  mounts solar panels on the rooftops of residential homes and small businesses, creating SHS capable of operating lights, mobile phone chargers, and household appliances such as radios and TVs.M-KOPA is a leading SHS company with cumulative sales of more than 600,000 units in Kenya, Uganda and other markets.

M-Kopa has pioneered the pay-as-you-go model in which customers pay for the use of home solar systems as a service until the full cost of the equipment on which ownership is transferred to the user is recovered. Payments are made through mobile money.

In Kenya's off-grid remote villages, Mitsui's foray into minigrids through M-KOPA will see it join other multinationals operating small solar grids.

The list includes American company Powerhive with an operational footprint in Kisii, while Microsoft co-founder Paul Allen owned Vulcan operates 10 solar mini grids in Kajiado and Samburu.

RVE.SOL, a Portuguese company, is another player in Kenya's mini-grid space with operations in Busia, West Kenya, while PowerGen, based in Nairobi, is building micro-grids in Isiolo in the same way as Talek, a government-owned company.

The acquisition of equity stake in M-KOPA comes as French electric utility company EDF Group recently committed to investing in SunCulture, a Nairobi-based solar irrigation company, through convertible bonds that allow it to become a shareholder freely.

Energy experts estimate that micro and mini grids, especially solar-powered grids, offer Africa the shortest route to off-grid towns where stretching national power grids is not cost-effective.

Mini grids consists of small power plants (between 10KW and 10 megawatts) and a limited number of customers outside the scope of the national power transmission network are connected via distribution lines.

In areas with dense house concentration, small grids operate well because distribution lines cover short distances.