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Lighting up off-grid – An Interview with Nir Marom, Lumos Co-Founder

Banker Africa | August 2016
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By supplying personal solar energy systems through mobile operator partnership, Lumos is striving to
reach tens of thousands of Nigerians this year, says Co-Founder Nir Marom.

In Nigeria, nearly 90 million people live without a connection to the electric grid. It is a market ripe for an affordable service that can remove some of the risk and cost associated with traditional generators—and Lumos is stepping into that gap. The company came onto the scene in 2014 through a partnership with MTN, Nigeria’s largest mobile operator with more than 60 million subscribers, which introduced a type of pay-as-you-go model for personal
solar panels. Now, with a recent partnership with the United States’ Power Africa initiative and $15 million
in financing from the Overseas Private Investment Corporation (OPIC), is in the midst of scaling up its operations to
reach tens of thousands more Nigerians.

Customers buy the Lumos solar kit from nearby MTN retail points. The kit, consisting of an 80 MW solar panel unit
and solar cable, a solar control unit, a USB mobile phone adapter and two LED bulbs, is activated through users’
mobile phone accounts once they set it up and initiate payments Nir Marom, Co-Founder of Lumos, said
that an average usage scenario for a family includes lighting in two or three rooms for six or seven hours every day, as well as power towards cell phones, a television, and fans, also for several hours a day.

Add to this other devices such as laptops and radios, and each Lumos system can bear a fairly substantial amount of power demand—which may be why the system is increasingly being picked up by SMEs and community  organisations. “There is one specific hospital that I know of that’s using three systems to power 20 rooms,” Marom said. “We have small businesses that just use this to extend their business hours, and they can’t afford a generator but they can afford Lumos.”

Price is one key factor in Lumos’ appeal, but safety and sustainability also play an important role, even as fuel prices
fall lower, possibly making generators more of an option for off-grid families. “The driver for distributed solar is the
fact that electricity doesn’t reach most of the people…generators are noisy and very polluting, and people use the generators indoors because they are afraid of them being stolen, and that just makes everything worse,” Marom said, likely referring to the increased fire risk that indoor generators can pose. “They are so much more expensive that even with low fuel prices, we are much more interesting economically,” he added.

From schools and clinics to retail shops and even poultry farms, the Lumos product is being picked up fast
in the off-grid space. Of course, that is part of the plan—the $15 million OPIC loan—its largest investment in off-grid
power in Africa—goes towards planting 70,000 systems in Nigeria by the end of the year, a goal that Marom feels is
more than feasible. “A lot of this is realistic because of the existing MTN infrastructure. When we don’t need to open up new shops, we just need to ship systems to existing shops, it’s very easy,” he said.

GROWING THE BUSINESS
Partnership with mobile operators is an essential part of the Lumos business, so replicating the model outside of
Nigeria, and MTN’s extensive in-country coverage, will be a formidable task. “Of course [we have intentions of
expanding outside of Nigeria]. The Nigerian opportunity is huge, 90 million potential customers to be handled,
but of course we think broader than Nigeria,” Marom said.

“Every new market has its own different specifics, and that’s of course one major challenge to open up
operations in new territories. The good thing about working with an existing mobile operator—and every territory
it’s going to be a different mobile operator—is that [it] has all the on-the-ground infrastructure and we don’t
need to rebuild that,” he continued.

One challenge is integrating into the billing system of the mobile operator. Right now, Lumos bills based on airtime
though mobile money payments are also a possibility. “We can work with mobile money… in any case, that requires integration and a bit of work,” Marom said. As the company is reportedly setting its sights on East Africa—the home region of several successful mobile money companies— this may be the next big hurdle.

Overall some 600 million Sub Saharan Africans, or roughly two thirds of the population, live offgrid.
This number does not account for those technically on the grid who have limited or costly access to service. Globally, Marom says there are more than one billion without access to electricity. But right now, the goal is equipping
people in Nigeria with clean solar power. “It’s by far the largest offgrid market in Africa. The market opportunity is huge,” he said.

 

 

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