The search for better ideas
Access2Innovation offers your company the opportunity to enter an African growth market: Uganda.
The Ugandan economy is among the fastest growing these years, with annual growth rates of more than 6 percent, a stark contrast to Denmark, which is dangerously close to having no growth at all.
If you think this is interesting then you probably want to keep reading this concept note.
You might be asking yourself: Why is this called a concept note? The answer is quite simple: Access2Innovation has already been to Uganda and identified multiple interesting business opportunities in coordination with NGOs and university communities. The business opportunity is summarized in this concept note. The reason that we are involved with NGOs and universities is that it enables us to create new markets, based on innovative commercial ideas that have the benefit of creating a social impact as well.
We are looking for companies that are searching for better ways to do things, that want to embrace new ideas from people that they do not typically work with in countries and markets where they are not already represented.
In the access2innovation network we offer access to a range of talented partners; experts within their fields, that are ready to assist in developing and maturing business ideas. We also offer a very strong local network in Uganda; a network that spreads across sectors, from civil society organizations and high level political institutions to the different business communities.
All we need to get going is you.

Market opportunities
The current use of kerosene however, shows the ability and willingness to pay for energy for lightning.
This concept note is an invitation for businesses with interests in develop and commercialise solutions for Energy Hubs in Uganda, through the established partnership between World Wildlife Foundation (WWF) and access2innovation that provides the innovation platform to develop, test and demonstrate that access to clean energy is not only possible, its also good business. In short, an Energy Hub may be the best way to obtain large scale access to off-grid users.
This concept note outlines the possibility of developing community based energy hubs that ensures the local community can access clean affordable energy from hubs at schools, hospitals or at trading centres.
Energy Hubs that are using PV panels or small wind mills, installed at existing physical structures to charge batteries, lamps etc. at an affordable prize for the local population.

Market opportunities
In 2002 the Uganda census reported that only 7,7 percent of the country’s households used electricity for lighting. 74,8 percent of the Ugandan households were using a form of paraffin candle called tadooba for their lighting needs.
Based on the knowledge obtained by the established partnership between WWF and access2innovation the suggestion is to develop business driven community based
Energy Hubs that meet the existing needs for access to energy, by setting up PV offgrid infrastructure to provide energy for the local community.
However, Uganda has plenty of sunshine; an average solar radiation of about 4-5 kWh/m2/day and the usage of PV panels is gaining increased focus. A number of projects have been tested, focusing mainly on household level and less on institutional access to energy (JEEP, EGG Energy and EnergiMidt).
The government of Uganda has both in regulatory (Uganda’s 2002 governmental Energy Policy) and in practise expanded and diversified its energy supplies by endorsing solar photovoltaic systems in homes and commercial enterprises in order to reduce the evening peak load demand for grid electricity.
Adding to this, the government is presently implementing a solar PV financing mechanism that makes it possible for both PV consumers and vendors to obtain credit from banks for solar rural electrification.
This should be done within the framework of WWF Kasese Green Energy Champion
District that in partnership with access2innovation provides a unique platform for:
• Accessing and understanding current consumer patterns.
• Testing and developing potential solutions in partnership with end users and
NGOs.
• Local commitment and technology adoption.
• Access to funding.
Access2innovation network holds access to funding, competencies and a large network within business development in Africa.
Despite the evident needs, existing technologies and regulatory policy framework, the use of PV systems for charging, cooling, lighting, telecommunications, vaccine and blood refrigeration, as well as media consumption is still modest.
For many people, the simple task of charging a cell phone requires a lengthy trip to a town with a recharging booth. The lack of use of PV panels is due to the facts that:
• Up-front costs for consumers are too high (most retailers sell on a cash basis
only).
• Excessive margins.
• Lack of credit.
• Inconsistent quality (including imitation solar products).

Community based Energy Hubs as a potential business case
For the rural population in Uganda to gain access to power, the preliminary analysis conducted by access2innovation and WWF suggests setting up energy hubs within the local communities to increase access to sustainable energy and minimise use of expensive and hazardous kerosene.
The energy Hubs should be set up at strategically located positions such as schools, hospitals, trading centres, churches or other public places where the local population often gather or have easy access to. The existing institutions can be potential customers as well as providing the physical premises for installing the needed technologies.
The energy hubs should be seen as purely commercial, where ownership of the energy hub is held by a private company with local investment with access to existing physical structures, training and awareness raising within the community, access to
VSLA groups etc.
The company must hold the initial investment. Income will be generated through sales to individual consumers substituting the existing use of kerosene, as well as local institutions (schools, health clinics, trading centres etc.) and potentially combined with CDM credits or other financial partners.
Payment from the users from the local community should not exceed the current cost for use of kerosene.
1258 schools with an average of 300 students in the Kasese District could be potential sites of Energy Hubs for charging batteries, cell phones or lamps where the payment is done via cell phone to minimise corruption. This could give locals better access to reliable electricity, and not least ensure lightning for households and increased educational activities at the school during evenings. For instance, students could bring a small portable battery pack [lithium ion type] to school which would then allow the household light for 1-2 lights and charge a phone.
The benefits for the customer would be:
• A low-cost source of energy, because of the community based payment.
• A reliable source of energy.
• Environmental friendly energy source and safe house holds.
• Hours saved from having to walk from place to place to charge phones.
• Located in accordance with the community’s logistics.
• Students get to study some extra hours in the evening.
• Increased productivity – small businesses have more light in evenings.
For the company, a community based energy hub would open the opportunity for:
• Safe environment for installed equipment.
• Multiple costumers (individual households).
• Strong regulatory frame work and support mechanisms.
• Build up strong partnerships with local community and NGOs creating a competitive advantage.
• Untapped market for access to sustainable energy.

Framework
A number of requirements need to be in place before an Energy Hub can be developed.
First of all, it is essential that there is a certain level of security for the installed technologies as well as future maintenance possibilities. In addition to this, the technology should be fairly easy to use - or an adequate level of user training is necessary in order to ensure that the community has proper use of the energy hub.
To develop the needed solution, a range of different companies is needed within PV systems, system integration, mobile payment and CDM accreditation to meet the following requirements:
• Installation and maintenance of PV panels.
• Setting up charging and storage facility.
• Separating physical infrastructure for the Energy Hub Kiosk since schools and health clinics would not support commercial activities within their premises.
• Provision of battery charged lamps, batteries etc. to be rented to households.
Recharging of a lamp should not exceed 2500 UgX / 6 DKK equivalent to the prize of kerosene / tadooba lightning.
• Installation and maintenance of lightning at the building where PV panels are located.
• Easy to use or a certain level of training of the users is necessary in order to ensure that the community can have proper use of the energy hub.
• Protected from theft.
• Delivering a small-grid or micro-grid or off-grid solution is highly dependent upon the customers’ ability to pay for it.
• Most, if not all, potential customers do not have available funds outright to pay for a PV solution.
Interested companies should also consider the following:
• Partnership with local government and NGOs could ensure essential contact to knowledge and credibility in the community.
• Researchers can be involved to secure state-of-the-art knowledge.
It is suggested that upcoming initiatives should be based on a comprehensive business strategy to ensure the competitive advantage that could include the following components:
• Use of programmatic CDM credit in potential collaboration with Uganda Carbon
Bureau or other relevant stakeholders to lower the cost and financial risk.
• Integration of micro credit schemes / Village Saving Loans Groups to allow the house holds to invest in batteries and lamps to be charged at the Energy Hubs.
• Non-cash payment to avoid and minimise corruption (Mpesa).
• Awareness raising and capacity building together with local NGOs and community organisations.
• Wiring to nearby buildings paying for the electricity.
• Cold storage if installed at health clinics / hospitals.
• Providing internet connection if installed at schools.

Customer segments Potential partners
According to the Uganda Bureau of Statistics, the estimated population of the Kasese
District is around 750.000, but the project could potentially scale up and involve other districts in Uganda.
In this way the energy hubs in Kasese is also a pilot project for other districts in
Uganda to access the following costumer segments:
• Individual households.
• Community organisations.
• Local government institutions.
• State owned institutions (health clinics, hospitals).
• NGOs and UN organisations.
• Kilembe Invest - Kasese, Uganda - providing semi-urban electrification
• NEMA
• JEEP (Local NGO focusing on community / capacity building)
• Ministry of Education
• Ministry of Health
• Ministry of Energy
• Electricity Regulatory Authority
• Ministry of Health
• Rural Electrification Agency (REA)
Next step
The costs of the energy hubs should correspond to the population of Kasese’s current expenses related to the activities that will be replaced with energy hubs (kerosene for lamps etc.).
The solutions should be designed to replace the current costs, e.g. the cost of operating on paraffin / tadooba that is about 500 Ugandan Shillings per day (6 DKK.).
For further information of how to proceed from here, contact head of secretariat
Jacob Ravn: jr@access2innovation.com
Access2innovation will be hosting seminars in October 2012 to open the dialogue with interested companies and researchers to further outline the upcoming business opportunities.
Sign up for the coming field visit to Uganda on December 4th -12th 2012
To apply for access2innovation funding, please visit the website www.access2innovation.com

www.access2innovation.com
for video documentation, please visit our YouTube channel: www.youtube.com/access2innovation