Caroline Frontigny, upOwa
23 November 2020
In the second instalment in our Talking Points interview series, we talk to Caroline Frontigny, co-founder of Cameroon-based solar home system developer, upOwa.
Caroline, at the time you co-founded upOwa in 2014 you were working as a private sector development analyst for the World Bank Group, where you were helping to identify bottlenecks and good practices in electricity access in Africa, among other places. What prompted you to take the leap into the private sector yourself?
[CF] Coming from the regulatory side of international institutions, I wanted to have a more direct impact on the population and be the one to actually install electricity at people’s places. With the knowledge of emerging new practices for electricity access such as pay-as-you-go (PAYG) solar home systems (SHS), I was eager to try it on the ground and to experience the day-to-day reality of operators.
I was also keen for an adventure, which I’ve had my share of since moving from Washington DC to Bafoussam, a mid-size city in rural Cameroon with intermittent access to water and internet! To connect people’s homes to electricity for the first time and to experience the joy of the community has been life-changing and confirmed for me that I made a good choice.
Cameroon’s SHS sector was in the nascent stages of development in 2014. How has the market developed since then not just in Cameroon but in West and Central Africa as a whole? What do you feel are the key challenges that are still preventing the sector from scaling up?
[CF] The sector has changed enormously since 2014. At the time, we could not identify another PAYG SHS operator in African francophone countries and we struggled to find manufacturers that were happy to sell us small quantities of PAYG SHS to try out the Cameroonian market. The sector has changed tremendously since then, with several operators now distributing in West Africa, though Central Africa seems to lag in terms of PAYG SHS operators.
Indeed, there are still huge challenges remaining to unlock the access to PAYG SHS for off-grid populations. For example, in Cameroon, PAYG SHS operators are not recognised under the national electricity law and there are no quality standards for SHS which leaves room for low-quality products to enter the market, which deteriorates the image of the solar products and distorts competition.
Over the last few months, we have seen VAT exemptions granted for solar equipment in Senegal and Nigeria. What do you think will be the impact of these measures on SHS businesses? What is the situation like in this regard in Cameroon?
[CF] VAT exemption is a great way to support SHS electrification and to level the playing field with other subsidised energy products. Cameroon has had a VAT exemption for solar products since 2012, which has provided a boost to the industry. However, this exemption is not automatically and evenly applied. This creates a high level of uncertainty for the SHS sector development moving forward and highlights the importance of effective implementation, predictability and transparency of policy measures.
It was around this time last year that upOwa completed a €3m capital raise – including €1.3m equity financing from the Renewable Energy Performance Platform (REPP) – in order to support a rapid expansion phase involving the roll out of over 200,000+ solar home systems across Cameroon by the end of 2023. How has the funding helped you progress with these very ambitious plans? And why did you approach REPP specifically for support?
[CF] PAYG SHS distribution is a capital-intensive model which requires companies to raise equity and debt to sustain operations and reach profitability. The equity support from REPP was key in getting the capital to develop our team and increase our reach in Cameroon, as well as to unlock debt to offer PAYG services to our clients.
We chose to work particularly with REPP for the fund’s experience in the energy sector and its knowledge of the African context. Our team also had a great working relationship with REPP’s and has been aligned with REPP in terms of short- and long-term strategy, which is important since early-stage investors are key partners for the development of a company.
Distributing 200,000+ SHS is an ambitious target but is in line with what the country needs. The COVID-19 crisis has hindered timings, but the plan remains unchanged.
You mention COVID-19 – how has the crisis affected upOwa’s business operations, as well as your customers and the communities they live in? What measures has your company taken to address the problems?
[CF] The COVID-19 crisis made travelling to rural communities a lot more complicated for us, and as a result delivered a hard blow to the development of our operations. As for the communities we serve, they faced restriction of markets to sell their crops, which reduced their revenues.
We had to be quick to react and plan the future with a great level of uncertainty. Nonetheless we were lucky that the company had been working with REPP on an environmental and social management system which proved useful to deal with the crisis. For example, the company acted immediately to provide staff with reliable information on the virus and to distribute equipment to protect themselves and clients. Then we worked on adapted processes to assure continuity and quality of operations for staff and clients that needed electricity and access to the news.
You were recently recognised as a leading female entrepreneur in West and Central Africa by Business Financing, which is a notable accolade in its own right, but particularly so given how male-dominated the renewable energy sector is. Why is it that more women are not entering the sector, and what is upOwa’s approach to ensuring gender mainstreaming at both the company and project level?
[CF] A combination of factors: women are generally underrepresented in the regions’ energy and the start-up sectors. Indeed, there are few examples of women entrepreneurs, and women are not socially encouraged to take career risks. I do see some changes in the coming generations, though the gap is still huge and affirmative actions are needed.
It is a challenge to ensure gender mainstreaming. At upOwa, we are working on a gender action plan, first to assess the situation then to roll out measures by early next year to assure gender equity in the company and regarding our target populations.
The main challenge for us in implementing a gender action plan is that it takes resources and time, both of which we lack as a developing business. REPP’s support in this regard has been key to assuring that the plan remains a top priority.
Do you feel that we are witnessing a shift towards gender mainstreaming in the renewable energy sector more broadly? And what could be done to accelerate change?
[CF] Yes, I do feel the shift in awareness regarding the importance of gender in the SHS industry, within companies as well as target populations, which is probably interlinked. To bring about real and lasting change, it will be key to see more knowledge sharing, as Power Africa and GOGLA are doing, as well as more resources support and incentive from institutions and financial partners to monitor and implement gender policy.
Looking back over the last six years, there must be many lessons you have learned that you would have wished to have known when you started. Without giving away all of your secrets, what advice would you give to other SHS developers starting out in West and Central Africa today?
[CF] The main lesson is that it takes much more time than you think! So, my advice would be to take time to understand your market, which is complex and varies within a single country, to build a strong team and find partners that share your vision. Then take time for trial and errors: SHS distribution is compounded and necessitates constant fine tuning to find the right products, the right credit offers, the right configuration of your team to maximise your impact and electricity access across the world.
This article first appeared on ESI Africa.
Read other interviews in the Talking Points series:
Mike Gratwicke, Managing Director of Tanzania-based hydro/wind hybrid distribution network developer and owner, Rift Valley Energy
Karl Boyce, CEO of Rwanda-based mini-grids developer ARC Power
Chris Longbottom, CEO and co-founder of West Africa-based battery rental business, Mobile Power