Portfolio Learnings: How ENVenture helps build sustainable energy enterprises
Published on: 14/12/2020
From sanitation to women’s hygiene products, TRANSFORM provides funding and support to various initiatives making an impact in sub-Saharan Africa and South Asia. In the Portfolio Learnings series, we look at ENVenture, an incubator that trains rural Community-Based Organisations (CBOs) to become last-mile distributors for clean energy.
ENVenture leverages existing community structures in Uganda and teaches them business skills to launch their own sustainable enterprises selling high-impact clean energy products. By opening up distribution channels, the initiative allows low-income consumers to access clean energy technologies.
TRANSFORM’s support enabled ENVenture to test the model with 56 CBO partners, who were to become last-mile distributors of products such as solar products, improved cookstoves, briquettes and water filters.
Building markets for clean energy
ENVenture enables CBOs to set up shops in their localities. The organisation provides a dedicated capacity-building curriculum through its Business Development Fellows programme, comprising a series of bootcamps and one-to-one advisory services.
Since the start of the project, ENVenture has helped sell 7,000 clean energy products, reaching more than 40,000 low-income consumers. Through the initiative, 56 small energy enterprises have been created, providing employment for around 300 sales agents and shop attendants, 75% of whom are young women.
The most significant conclusion from the project is that it is unlikely to be financially self-sustainable due to the high cost of necessary capacity building and will continue to rely on grant funding, according to findings from an assessment by advisers Ernst & Young. ENVenture is looking at taking the following steps:
1. CBOs are now encouraged to set up sales agent and distribution networks instead of stores
CBOs are often choosing the familiar way of setting up a shop to sell clean energy products, and so are struggling to break even due to the high upfront cost.
2. ENVenture is now conducting entrepreneur interviews, referrals and partnerships to obtain CBOs instead of performing due diligence
There are high costs involved in vetting and monitoring loan repayments for loans provided to CBOs, particularly the costs of staff time and travel throughout the end-to-end financing process.
3. The organisation will be incorporating detailed selling on instalment trainings during the bootcamp to accommodate selling higher priced goods
Customer research and observation showed that many customers will choose the lowest-cost product, with CBOs meeting this demand by selling low-cost, low-quality products. These products break faster and lead to a loss of trust in the community. Affordable, high-quality products should be accessible to customers at the Bottom-of-the-Pyramid (BoP), with financing options available to them.
4. ENVenture has partnered with the Global Distributors Collective to learn other best practices from its network of clean energy distributors in last-mile clean energy adoption
The challenge with access to clean energy for BoP customers is the human behaviour side of distribution.
5. Intense curriculum, training and using technology for data management must be encouraged
The challenge in data management is that CBOs and small entrepreneurs do not value or understand the importance of collecting data on their business.
With these learnings taken into account, ENVenture is looking to reinvest its loans into 28 new energy businesses across Uganda, anticipating to reach an additional 60,000 rural people by the end of 2018.
Aiming to benefit women and youth, they plan to add around 200 sales jobs in rural communities, while also deepening relationships with partners and increasing earned revenue income. ENVision mobile, an inventory and sales management tool for offline microentrepreneurs, has also been released in the Google Play store and is available for free here.
Initiatives such as ENVenture rely on the support of TRANSFORM to continue their mission of providing clean energy and valuable income to underserved communities in rural Uganda. Read more about ENVenture and other projects in Our Portfolio.