Decarbonisation and greening public services, Infrastructure and the Built EnvironmentRensource’s solar micro-utilities are providing African SMEs with reliable power.
- Founded in 2015
- Total funding and latest funding round: £20.3 million; Early Stage VC, £2.2 million
- Revenue band: £5-10 million
- Investors include: PROPARCO, CRE Venture Partners, TRINE, Amaya Capital Partners, Omidyar Network
- HQ in Lagos
- FTEs: 50-100
- Key clients/partners: Rural Electrification Agency (Nigeria)
- Key executives: Ademola Adesina, CEO and co-founder: 15+ years of experience in Investment Banking and Impact Investing.
Depending on who you ask, small and medium-sized enterprises (SMEs) are responsible for 67 to 80 percent of employment in sub-Saharan Africa. They have driven growth and created a fledgling middle class. And African SMEs would contribute even more but for binding constraints like unreliable energy supply. Irregular electricity results in increased operational costs, for example, as SMEs resort to diesel generators which are three to six times more expensive than grid power. Ultimately, power outages lower SME productivity and survival rates––hindering African growth.
Rensource Energy aims to ease this pain point for SMEs operating in open air markets. It offers mini grids that produce reliable power through a mix of solar energy and diesel (as a fail safe). Visiting a Rensource-powered market, one would see rooftops lined with solar panels, batteries in alleyways, smart metres in shop stalls, and Rensource agents collecting payments and carrying out maintenance. It currently powers eight markets in Nigeria but has ambitions to scale across Africa.
Rensource was hit hard by the pandemic, which saw prolonged market shutdowns. But it had already been working on a follow-on service for traders. They tend to use manual, unwieldy management methods, and Rensource developed an Enterprise Resource Management system to digitize and improve their workflows. COVID-19 gave Rensource time to flesh out the service, and it has now spun out this arm into another startup, Sabi. It has also begun developing power plants for commercial and industrial (C&I) clients.
plans for 2022
Increase C&I clientele
who should connect with this company
Public energy ministries, agencies and departments, Commercial agricultural and industrial operators
To assist Nigerian SMEs in plugging their energy deficit, the Nigerian government launched the Energizing Economies Initiative (EEI) in 2017. EEI is implemented by the Rural Electrification Agency (REA) and enlists private energy companies in providing off-grid electricity to economic clusters: markets, shopping centers and agricultural/industrial parks.
Rensource Staff operating solar panels in Sabon Gari. Image from REA
As part of EEI, REA partnered with Rensource Energy to power the Sabon Gari market in Kano state. With more than 10,000 traders, Sabon Gari is one of Nigeria’s largest markets.
Prior to the project, traders were spending up to half their incomes fueling generators; they were also exposed to toxic fumes and occasional fire outbreaks.
Rensource provided its decentralised system of panels, batteries and power management systems to Sabon Gari. In the process, it had to educate traders on the benefits of solar to get their buy-in. Rensource’s intervention has reduced traders’ energy costs by more than 30 percent. It has also created more than 200 skilled jobs.
Rensource began as a solar homekit seller, one of many. Its shift to providing energy to economic clusters did more than define an underserved niche for it though. CEO Ademola Adesina notes that “[in] our residential model, deploying systems at a hundred different locations meant we had a hundred different sets of problems. The markets model concentrates all of our problems in one location.”
Rensource’s story also shows the power of a willing public partner to empower innovative startups. When commissioned to power Sabon Gari, the REA gave Rensource access to a power audit that helped it determine optimal price points and understand energy demand. The REA also provided guidance on obtaining different government permits and reduced bureaucratic hurdles, saving precious time.
Rensource makes money by charging traders daily, weekly or monthly fees. Economies of scale derive from the sheer number of traders using its power; in 2019 this number was 10,000. This and cheapening solar panels have enabled it to generate substantial revenue and even be profitable (in 2018 it did $7 million and made a small profit), rare for a Series A stage African startup. Although the pandemic affected its markets business, its C&I segment is picking up the slack––Rensource recently inked a deal to develop and maintain the largest poultry solar project in Nigeria.