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Making solar energy affordable through local currency debt financing

In Sierra Leone, only 12% of urban households and 2% of rural households have energy access. In areas without grid access, people use low quality torches, kerosene lanterns or diesel generators. By supporting Easy Solar, Cordaid Investments helps to make clean energy affordable to these communities.

(One of Easy Solar’s clients in Sierra Leone. © Easy Solar)

Easy Solar distributes solar-powered devices on a rent-to-own financing structure. Cordaid Investments played a key role in their growth journey by supporting them with local currency debt financing.

Solar energy without having to pay by mobile

Three young professionals who met at graduate school had something in common: a concern for the hundreds of millions of people worldwide who have huge limitations in their lives due to the lack of energy access. They identified that in East Africa there were many initiatives related to energy access. “Mobile money was one of the main drivers behind the ascension of this industry in East Africa”,  says Alexandre Tourre, CEO of Easy Solar. “We were thinking that there are a lot of countries in Sub Saharan Africa where mobile money has not picked up as well as it has in East Africa. So, we were trying to come up with a model that would allow these countries to access new energy products without necessarily relying on the mobile money infrastructure.”

We are very much exposed to the fluctuation of the local currency versus the dollar. This is where Cordaid has been a lifesaver.

Alexandre Tourre, CEO Easy Solar

With this inspiration, they founded Easy Solar in 2016. This social enterprise makes high quality solar energy affordable and available for all. By doing that, the company says, ‘we aim to transform the way off-grid communities in West Africa live, work and play’.

Bringing more than Coca Cola, beer and sim cards

solar energy

Mr Abdul Sesay (©Easy Solar)

Easy Solar currently has operations in Sierra Leone. They employ 39 people and generate 73 indirect jobs (brand ambassadors and distribution agents who sell the products to rural households). The company recently reached the 10,000th client, Mr. Abdul Sesay. He chose Easy Solar because it provided an affordable product with the option to pay on credit and a warranty that promises to replace the product if there is an issue with it.

Another key attribute of the Easy Solar offering is that they have a far reaching community based agent distribution network. “We bring products to people who haven’t been brought anything other than beer, Coca Cola and some sim cards. Literally the distribution network in Sierra Leone in those rural areas is almost inexistent. We really go the last mile to meet with our customers”, Tourre explains.

Easy Solar’s journey in Sierra Leone has not been easy. “There is no business ecosystem, very few business services exist. We have to do everything: logistics, technology, IT development, etc”, says Tourre. Another barrier to growth is the lack of talent. “We spend a lot of time and money recruiting and training people”.

Why Cordaid’s local currency debt financing was a lifesaver

According to Tourre, access to finance in local currency is also a big challenge. “If you are in imports business, it is important that you are able to raise money in local currency because we are buying our products in dollars and selling them in local currency. We are very much exposed to the fluctuation of the local currency versus the dollar. This is where Cordaid has been a lifesaver. They are the only financial institution that was able to provide us with a source of local currency debt financing. Not only in Sierra Leone but anywhere where we have been looking.

solar energy

The Easy Solar team goes the last mile to meet customers in rural areas (© Easy Solar)

Tourre also highlights that Cordaid Investments is acting as a catalyst. “The fact that we had Cordaid support from the beginning is giving us leverage now in our discussions with much bigger investors, simply because we have demonstrated that we were capable of convincing an investor who supported us with a local currency debt financing scheme, that we have been able to manage this loan, and that we can repay properly.”

Going beyond solar energy

In order to reduce inequality, Easy Solar plans to expand beyond solar products. “We have started distributing fuel efficient cook stoves, phones, smartphones, and also finance over time. We want to be more than just a solar company. Our aim is to be a distribution network of high quality, life improving products with a finance in place. So, we will go beyond purely solar and address other issues that people are facing.”

Another ambition is to extend beyond Sierra Leone. However, before going abroad the founders have –  and always have had – the clear objective of making the company financially sustainable. “We want to make sure that what we are building now will still be around in 20 years”, Tourre concludes. “That the distribution agents we have today will hand over the business to their kids in the future, and the products we are selling today will be able to service tomorrow.”

(Featured image © Easy Solar).