Rwanda has one of the fastest growing and most entrepreneur-friendly economies in Africa. The policies and initiatives put in place by the Rwandan Government have made it increasingly easier to do business in the country. As a result, the Rwandan startup ecosystem is looking exciting for the coming years. With increased funding, a new generation of eager and talented innovators, and increased access to mentorship and technology, there is little to hold back this wave of entrepreneurship and innovation.
A glance at the landscape and one will quickly take note of the many entrepreneur support organizations present in Rwanda i.e. organizations designed exclusively to stimulate entrepreneurship such as accelerators, incubators and co-working spaces. The energy sector in Rwanda has also made great strides. Efforts by the government and private sector have ensured the availability of reliable and affordable energy production that is also environmentally sustainable. It is for this reason that the Aspen Network of Development Entrepreneurs (ANDE), in partnership with Startup | Energy and the African Solar Industry Association (AFSIA) hosted a public pitch event in Kigali, Rwanda for African startups focused on creating decentralized solar technology solutions.
During this public pitch event on October 19, 2022, eight Startup | Energy Fellows gave presentations to numerous investors, companies and foundations. The pitch event marked the end of a multi-day Energy Camp in Kigali during which the Fellows received intensive individual coaching and developed their pitches. Startup | Energy holds these Energy Camps twice a year, but their support for the participants continues year-round.
It is precisely this continued support and the ongoing exchange with other startups that is appreciated by young entrepreneurs. Norah Magero of Drop Access, a Startup | Energy Fellow, said, “the coaches are experienced entrepreneurs who have accompanied me for a long time, and still do. The exchange with the other startups also helps a lot. We have now become a real startup community!” Another Energy Camp participant, Godfrey Katiambo (Inno-Neat) noted, “since we became a Startup | Energy Fellow, we have found new partners thanks to the continued support of the coaches and also an investor. I’m sure we wouldn’t have been mature enough without Startup | Energy.” In 2023, more African startups will join the community of Startup | Energy Fellows thanks to the support of donors including GET.invest, SEZ, and private companies, as well as a network of partners including AFSIA, ANDE, SENDEA and others.
The African solar sector has witnessed an amazing level of creativity, energy and motivation from startups bringing new solutions to the problems affecting the continent. African green energy entrepreneurs are in that respect totally on par with their equivalent in the “developed world”. However, having a good idea is not enough to be a successful entrepreneur. Another key parameter is to be able to finance the early steps of the entrepreneurial venture. This is specifically a topic where African entrepreneurs lag behind. Very often, they don’t have the knowledge they need about the fundamental financing mechanisms and the financing ecosystem. Successful financing is also a question of having a good peer network. As a result, many African entrepreneurs fail in their search for funding because they lack the knowledge and the network. A program such as Startup | Energy, in collaboration with groups such as ANDE and AFSIA, can help provide the missing support African entrepreneurs need.
Another major challenge is that, even when entrepreneurs know who to reach out to for funding, this capital still only reaches a limited number of companies in Africa. As highlighted in GOGLA’s most recent report on funding in the off-grid solar space, the lion’s share of funding repeatedly lands in a handful of “usual suspects”. This is true for equity, debt and even grants. However, most solar energy solution providers are capital intensive and they do require some level of external financing to get started. More efforts need to be made from the financing community to reach and support a broader spectrum of early-stage ventures, even with minimal amounts of locally available funding so that entrepreneurs are able to unlock their full potential.
Despite these problems, it is fair to say that the African solar ecosystem currently holds significantly more promise than challenges. We are at a very exciting moment where solar energy meets mobility and commercial activities, better known as “productive use” applications. A brand new clean energy world is currently being shaped across the continent, thanks to reductions in cost of the equipment (both solar and energy storage) and to the development of digital tools that allow for better control and management of solutions and customer relationships.
Solar power across Africa is no longer limited to light provision, it enables revenue-generating climate smart business activity where it previously was not possible or was cost prohibitive. Investing in solar startups and growing the small business solar solution provider ecosystem will undoubtedly contribute to the continent’s economic growth.