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Sept / Oct 2016 · No. 3 www.Aspire-Africa.com

Committed To Promoting African Synergy

PROJECT FOCUS SHEIKH ZAYED SOLAR POWER PLANT MAURITANIA

MAKING LIFE EASIER

+

CUSTOMS ALUMINIUM TAKAFUL AFRICA

Sacha Poignonnec, co-CEO, Africa Internet Group

ROY TRANSMOTORS

The Ongoing Success Story Establishing Itself as Africa’s Leading Internet Group

ZAYED FUTURE ENERGY PRIZE


GAMECHANGER How do you want to convey your success? What is behind African entrepreneurship? Who are the continent’s movers and shakers? What are the challenges they have successfully overcome? How are they making positive contributions towards collective growth and sustainability of the richest continent on Earth? What is the source of inspiration that drives them? These are some of the questions, successes and stories that we are aiming to showcase to our audience!

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Contents ARTICLES

COVER STORY

18

COVER

ENERGY

FEATURE

Biogas Power in Africa - An Under-utilised Resource

By: Alexander Marshall

22

ENERGY

Africa Utility Week Pres. Power Africa Interview

By: African Utility Week

38

76 EVENT

African Utilty Week: Post Event Statistics

Sacha Poignonnec

By: Nicholas P. Griffin

co- CEO, Africa Internet Group

17 - 19 May 2016, CTICC, Cape Town, South Africa

REGULAR FEATURES Editorial Note

6

Artists Corner Instagram Meet: Kenya

7

News in Brief

8

Appointments

14

Upcoming Events

78

4 Contents

PROJECT FOCUS

44

SHEIKH ZAYED SOLAR , POWER PLANT Nouakchott Mauritania


Contents ENERGY

LOGISTICS

28

52

An exclusive with Prize Director, Dr Nawal Al-Hosany, on driving global sustainability and celebrating outstanding achievements in Renewable Energy.

Kenyan regional logistic provider specialist, handling the transportation of bulk petroleum products, containerized cargo, perishable goods and hazardous products.

MANUFACTURING

FINANCE

60

68

One stop aluminium solution. An exclusive with Managing Director, Bobby Mughal.

Ethical insurance. An exclusive with CEO, Hassan Bashir.

ZAYED FUTURE ENERGY PRIZE

CUSTOMS ALUMINIUM

ROY TRANSMOTORS

TAKAFUL AFRICA

Aspire Africa · July/Aug 2016

5


Editor’s Note

Publisher Sam Khan

S

o, summer is here again, and with it comes the third edition of Aspire Africa. We are delighted to be able to continue bringing you the most important news from the world’s up-and-coming continent. This edition’s cover story focuses on the incredible work done in e-commerce throughout the continent by the Africa Internet Group.

Media Director Tabrez Khokhar

Associate Editor Sales Director Nicholas Paul Griffin Yasser Khokhar Editorial Publication Layout Contributors Zahir Malik Alexander Marshall African Utility Week Web Production Raizwan Butt

We spoke with co-CEO Sacha Poignonnec to find out how the group is endeavouring to connect customers to businesses right across Africa.

UK Office 145-157 St. John Street, London, EC1V 4PW, United Kingdom. Tel: +44 (0)20 7193 9001

Elsewhere in this edition, we turn our focus towards innovations being made in the UAE in sustainability and renewable energy, in the shape of the Sheik Zayed Power Plant, as well as taking a closer look at the prestigious award celebrating such work, the Zayed Future Energy Prize.

Kenya Office Office C7, Elite View, Githunguri Road, Kileleshwa, Nairobi. Tel: +254 (0) 704 927 737

Within these pages you will, as always, find the most up-to-date information on what is happening around the continent, as we shine a light once more on the movers and shakers, the innovators, and those companies striving to make a positive difference in the lives of everyday Africans.

Subscription: www.aspire-africa.com Feedback: communications@aspire-africa.com Our Digital Presence >

Towards the back of the edition, you will find details of upcoming events, ranging from Africa’s Digital Education Show to the 19th Medexpo in Tanzania. If you would like Aspire Africa to promote a forthcoming event, please don’t hesitate to contact the team via email at events@aspire-africa.com. The publication will now return in the colder months, but for the time being we hope the summer is a good one, wherever you spend it, and that you enjoy reading this latest edition. In the meantime, we will continue to scour the continent to bring you the African success stories that matter. Nicholas Paul Griffin Associate Editor

6 Editor’s Note

© Aspire Africa 2015. All rights reserved. Reproduction in whole or in part is strictly prohibited without written permission. Opinions expressed in the Aspire Africa publication are not necessarily those of the editor or publisher. All reasonable care is taken to ensure truth and accuracy, but the editor and publishers cannot be held responsible for errors or omissions in articles, advertising, photographs or illustrations. Unsolicited manuscripts are welcome but cannot be returned without a stamped, self-addressed envelope. The editor is not responsible for material submitted for consideration.


Worldwide Instameet : Kenya

‘My Muse’ Nairobi CBD

@petersize10

@namuks

@the_mentalyst

@samdave69

Worldwide Instameet 13: Kenya The Kenyan instameet was held on the 23rd April 2016 and hosted by the @igkenya team: Asif @asayf, Brian @urbanskript and Samir @samdave69. The theme of this year’s meet was #LifeOnEarth, to raise awareness of the environment we live in and how best to conserve it. The meet was held at Karura Forest, Nairobi, the biggest forest in a capital city in the world. It has a strong history of environmentalism, with people such as Wangari Mathai fighting for its conservation. The meet was designed to tell the story of its conservation and to show the community and public the activities that are open to them like picnics, bike riding, jogging, hiking and much more. Aspire Africa · July/Aug 2016

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#Fact China is Africa’s top trade partner, with Sino-African trade volumes now nearing $200 billion per year.

News

Solarcentury to deliver the largest solar roof project in Kenya and grid energy will significantly cut London Distillers’ energy spend, and offset 335 tonnes of CO₂ every year. The cost of the system will be paid for in six years; London Distillers will then enjoy free solar electricity for the lifetime of the system. London Distillers’ building in Athi River, Kenya, will soon be powered by the sun. International solar company Solarcentury is to install an almost 1MWp roof solar system that will generate enough solar electricity to power the whole building during daylight hours. By offsetting the need for grid energy, the system will enable London Distillers to save $180K per year for at least the next 25 years, the lifetime of the system. RENEWABLE ENERGY

Solarcentury will design and install a solar hybrid system that will operate in parallel with the grid, or the diesel generator if the grid fails. Reducing its reliance on diesel

Mohan Galot, Chairman of London Distillers, comments: “We are always looking for ways to improve the cost efficiency of our operations and protect the environment, and investing in solar presented us with a solution for both these ambitions. We worked with Solarcentury to review our long-term energy needs, and help us understand the most effective solar solution for our company. Being able to power the whole building using solar electricity during the day is very impressive – we’re saving money and helping the environment. It’s a win win!” Solarcentury’s team of ten, all based locally in the Nairobi office, will be involved in the development and delivery of the project, with support from

the engineering and project management team in the London HQ. Guy Lawrence, Director of Solarcentury in East Africa, comments: “We are excited to be delivering the largest commercial rooftop solar system in East Africa. This solar investment makes London Distillers a pioneer company in the manufacturing sector and also demonstrates a genuine commitment to reducing its environmental impact. The system will be the fourth solar hybrid system Solarcentury has designed and installed in Kenya, which is testament to the skill of our team as well as the relevance of this technology in Kenya, to help reduce reliance on diesel energy. We are seeing increasing uptake of commercial-scale solar projects among industries looking to reduce the environmental impact of their operations and their energy costs.”

Jetex wins license for five FBOs in Morocco Jetex is the winner of the Moroccan National Airports Authority (ONDA) FBO tender, and will launch five new fixed base operator (FBO) facilities in Casablanca Mohammed V (CMN/GMMN), Marrakech Menara (RAK/GMMX), RabatSalé (RBA/GMME), Agadir-Al Massira (AGA/GMAD), and SERVICES

8 News in Brief

Dakhla airports (VIL/GMMH). These new Moroccan facilities will be the first FBO operations within the country, ushering in a new era for both business aviation operators and travelers in the area. Swissport Executive Aviation was also awarded an FBO tender by ONDA & will be the only other provider of FBO

services in Morocco. With countrywide coverage, these new Moroccan FBOs offer an intricate network of locations that will be designed to accommodate all types of business aircraft and provide ample parking space at each FBO facility.


#Fact Over 55% of Africa’s labour force work in food production, with vast areas of arable and pastoral lands supporting agricultural economies.

Nestlé and IFDC partner to support farmers in Nigeria Nestlé Nigeria and IFDC have launched a two-year pilot project that aims to help smallholder farmers, of whom 40% are women, in the Sahel and Sudan Savanna areas of the country, to develop farming as a business and improve the quality and yields of millet and sorghum, which are popular staple crop ingredients in West African meals. AGRICULTURE

Each year, Nestlé sources about 7,000 tonnes of sorghum from farmers in northern Nigeria, which it uses, for example, as a substitute malt ingredient to tailor its products such as Milo to match the preferred tastes of the local population. It also uses millet sourced from Nigerian farmers in its family cereals like Golden Morn. Together with IFDC, Nestlé Nigeria looks to further strengthen its work with farmers to provide them with training on good agricultural and storage practices. The training, which will be delivered by using simple, farmerfriendly materials, will teach farmers to manage farming as a business. It will also emphasise crop quality and safety, and in turn, improve their livelihoods. The pilot project, partly

funded by Context Global Development, will run until 2018, with an aim to be scaled up and extended for an additional five years. The new pilot builds on the Nestlé Grains Quality Improvement Project (GQIP), which was launched in 2008 in Nigeria, in collaboration with the Federal Ministry of Agriculture & Rural Development and the International Institute of Tropical Agriculture (IITA). The programme has also been implemented in Ghana. The GQIP aims to improve the quality and safety of grains and the health of rural communities by cutting the high levels of fungalbased mycotoxins, which can cause serious health problems. In addition, it seeks to reduce the impact of global food shortages on cereal grain quality and reduce the dependence on imported raw materials. Nestlé’s work with farmers in Nigeria is part of the company’s way of doing business, which it calls ‘creating shared value’. It aims to provide opportunities and improve livelihoods for the communities in which it operates, while developing its own activities.

News Safaricom and Carrefour Hypermarket strike M-Pesa deal

Image: GT Bank FINANCE Carrefour, the world’s second largest hypermarket chain, has today become the first retailer in Kenya to fully integrate Safaricom’s payments service – Lipa Na M-PESA – paving the way for the retailer to fully adopt M-PESA as a payments channel in Kenya.

With this development, customers shopping at Carrefour will be able to complete payments without having to show evidence of an M-PESA message to retail staff, resulting in a faster and more efficient cashless transaction at the till. At the same time, Carrefour joins more than 44,000 merchants actively using Lipa Na M-PESA in the country. To pay, customers will go to their Lipa Na M-PESA menu, select ‘buy goods and services’, then enter the till number and amount. After verifying the payment with their M-PESA PIN, customers will then immediately receive a receipt. Aspire Africa · July/Aug 2016

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#Fact

News

The African continent has the largest reserves of precious metals, with over 40% of the gold reserves, over 60% of the cobalt, and 90% of the platinum reserves.

Kenya’s Safaricom to launch local rival to Uber its core businesses of offering calls, texts, Internet access and M-PESA, but Collymore said it was seeking new sources of revenue. Image: flydubai

Kenya’s biggest telecoms company, Safaricom, is joining up with a local software firm to launch a ridehailing company to take on Uber as it seeks new sources of revenue, its chief executive said. LOGISTICS

Safaricom, which is 40 percent owned by Britain’s Vodafone, and Nairobi-based software developer Craft Silicon, will launch the app called Littlecabs in the next three weeks, Safaricom CEO Bob Collymore told Reuters.

“It is effectively a rival for Uber,” he said. “It is a local competitor which will be cheaper and better for the local community.” Safaricom will help develop the application, offer the network connectivity, put Wi-Fi in vehicles that will be signed up on Littlecabs, and use its mobile-phone based financial service M-PESA to process payments, Collymore said. Safaricom remains focused on

“The direction of the company is to become a platform,” he said, citing partnerships with local banks that use M-PESA to lend money on mobile phones. “When M-PESA was launched, it wasn’t launched as a big thing. It was just launched as a thing that was right on the edge. Now it is 20 percent of (Safaricom’s) revenue,” he said. “Littlecabs is unlikely to grow to that level, but would offer a new revenue source and develop skills in the local community,” he said.

BMW rolls out new solar carports in South Africa The solar carport rollout is part of the German automaker’s global efforts to expand home and publicly accessible charging infrastructure for electric vehicles.

to the BMW i Wallbox, which is used to charge electric and plug-in hybrid BMW models and which is equipped with a live readout of how much power is being generated by the sun.

German automaker BMW has unveiled its new solar carports in South Africa, which it will begin rolling out in July.

Tim Abbott, CEO of BMW Group South Africa and SubSahara, said the company was the first automaker to offer such a broad-based EV smart charging product to reduce costs for customers. The rollout is part of the company’s global efforts to

RENEWABLE ENERGY

The BMW i solar carport supplies an average of 3.6 kW of solar power straight

10 News in Brief

expand home and publicly accessible charging infrastructure for electric vehicles, Abbott added. In the coming months, BMW Group South Africa will expand the installation of the solar carport in major cities, including Johannesburg, Cape Town and Durban, for public charging. Customers and fleet companies will also be able to order the solar carport for home and office charging.


#Fact There are fewer people with internet connections in Africa than there are in just New York City.

News

Startex provides exploration update on Dalafin gold project, Senegal Stratex International Plc, the AIMquoted exploration and development company focused on gold and base metals in Turkey, East Africa and West Africa, is pleased to provide an exploration update on its 85%-owned Dalafin gold project (“Dalafin” or the “Project”) in eastern Senegal. MINING

Image: Shutterstock

1,250 m NW-trending anomaly (10-60 ppb) identified in Grid 1, to the east of Faré South.

Outcrop sampling at the Baytilaye prospect has returned best results of 1.6 g/t Au from Baytilaye East and 1.37 g/t Au, 1.23 g/t Au, and 0.92 g/t Au from Baytilaye West.

Highlights •

Infill soil sampling at the Faré prospect has extended the Faré South anomaly (>30 ppb) by at least 750 metres to the south-west.

Bob Foster, Stratex CEO, commented: “The ongoing exploration at Dalafin has delivered some encouraging results, most notably the potential south-west extension of the Faré Zone and the newly identified zones of mineralisation in the Baytilaye prospect. These two targets, plus the wide zone of mineralisation previously identified in the Madina Bafé prospect, merit further investigation and ultimately will need to be drill-tested. Not surprisingly, given its location, in the heart of the gold-endowed KédougouKéniéba Inlier.”

GE East Africa, Mara Group and Atlas Merchant Capital partner up to address infrastructure challenges in Africa Three international firms have partnered to help address infrastructure challenges in Africa through investments in equity projects. TELECOMS

The firms, General Electric Africa (GE), Mara Group and Atlas Merchant Capital, will invest in infrastructure projects including energy and rail, among others, in a quest to stimulate the continent’s economic potential through infrastructure development. GE Africa President Jay Ireland said at a press briefing on

the sidelines of the African Development Bank (AfDB) Annual Meetings in Lusaka, Zambia, that adequate infrastructure remains critical in the economic development and integration of the continent. Ireland said GE Africa, which committed US $2 billion three years ago in various investment programmes, wants to effectively contribute in addressing infrastructure gaps. Ireland said the partnership with Mara Group and Atlas

Merchant Capital will solidify efforts to improve rail transport, access to power through reliable energy projects, water and sanitation projects. At the same event, Mara Founder Ashish Thakkar said the initiative will impact positively on the continent, which is grappling with infrastructure challenges. Thakkar said partnerships among stakeholders remain critical in meeting the infrastructure needs of the continent. Aspire Africa · July/Aug 2016 11


#Fact Africa has the most extensive biomass burning in the world, yet only emits about 4% of the world’s total carbon dioxide emissions.

News

Accra becomes latest African city to offer Uber Ghana’s capital city, Accra, was recently named as the next city to join Uber’s booming network in Africa.

with customers, traditional metered taxis in many cities where Uber operates are not happy with this relatively cheaper service.

Uber said Accra, the economically vibrant hub with a thriving urban population of 2.27 million people, was the first city in Ghana to receive the service and number 467th across the globe.

market share of over 4 million people using the streets in the Greater Accra Metropolitan Area (GAMA).

Alon Lits, general manager for Uber sub-Saharan Africa, said Accra was a bustling, connected city that Uber was proud to be launching in.

In a statement, Uber said it was excited to explore the potential of this dynamic city.

Uber has proven popular across the world’s cities for its provision of affordable, safe and reliable transport.

Uber is looking to gain the

But despite its popularity

LOGISTICS / TECH

“We see Accra as a natural fit, because its people are willing to embrace innovation and technology and love products that are cool, exclusive and offer a new experience. We are able to deliver just that, safely, reliably and affordably,” Lits said.

USTDA supports South African Waste-to-Energy project Karl Siegel, during the 2016 Infrastructure Africa Conference in Johannesburg.

The U.S. Trade and Development Agency has awarded a grant to MBHE African Power (Pty) Ltd, a South African renewable energy project developer, to support a waste-to-energy project in the Drakenstein Municipality. ENERGY

The objective is to alleviate the burden of the depleting landfill airspace while also easing constraints on South Africa’s electricity supply. The project has the potential to divert up to 500 tonnes of solid waste per day from the landfill to the plant, which is expected to produce around 12.6 megawatts of electricity. 12 News in Brief

The public-private partnership, including Drakenstein Municipality and Interwaste (Pty) Ltd, a local waste management company — with MBHE as joint developer — will implement the project. The grant was signed by USTDA’s Regional Director for Sub-Saharan Africa, Lida Fitts and MBHE’s Director,

Black & Veatch Corporation (Overland Park, KS) was selected to provide the technical assistance, which will include fuel characterization, front end engineering and design, and tender support for the engineering, procurement, construction and operations and maintenance contracts. MBHE is also conducting additional specialist studies and a full Environmental and Social Impact Assessment in parallel with the technical assistance.


#Fact Tanzania is the world’s second largest producer of sisal, after Brazil.

News

Enel starts production at new solar plant in South Africa

Trellidor acquires Taylor Blinds and NMC for R150M MANUFACTURING This marks the first deal the company has concluded since listing on the JSE at the end of October last year, it says in a recent statement.

Image: Shutterstock

Enel, through its subsidiary Enel Green Power RSA (“EGP RSA”), has completed and connected to the grid at the Tom Burke photovoltaic power plant, which is located in South Africa’s Limpopo province. RENEWABLE ENERGY

With an installed capacity of 66 MW, the Tom Burke photovoltaic power plant is capable of generating up to 122 GWh per year. This output is equivalent to the annual consumption needs of around 38 thousand South African households while avoiding the emission of over 111 thousand tonnes of CO2 into the atmosphere each year. The PV power plant is supported by a 20-year power supply agreement with the South African utility Eskom, as part of the Renewable

Energy Independent Power Producer Procurement Programme (REIPPPP) tender promoted by the South African Government, which awarded the project to the Enel Group. “With the completion of Tom Burke, Enel takes its installed capacity in South Africa to nearly 160 MW. We have more than a gigawatt either recently awarded or already under construction, leveraging on the huge potential offered by this resource-rich country.” “The South African energy market is on the point of a very interesting evolution and we are developing an increasingly integrated presence in the country,” said Lamberto Dai Pra’, Enel’s Country Manager in South Africa.

Trellidor bought the bling manufacturer and NMC, the local distributor for NMC Belgium’s decorative mouldings, from Odyssey House. The deal should be effective at the end of this month and will be paid for in two installments, the company says. CEO Terry Dennison explains a major reason for the listing was to raise capital for growth through acquisitions in the security and home improvements sectors, and for expansion into Africa, where it already enjoys a presence in 17 countries. Dennison says the acquisition would provide Trellidor with additional strong brands, such as Shutterguard security shutters. “These brands are complementary to our own, enabling us to extend our operations into new market segments. We are also gaining an experienced management team as well as a distribution network on which we can build.”

Aspire Africa · July/Aug 2016 13


Appointments Cobalt International Energy announces appointment of Timothy Cutt as CEO Cobalt International Energy Inc. (“Cobalt”) (NYSE:CIE) announced the appointment of Timothy J. Cutt as Chief Executive Officer and as a Class I member of the Board of Directors, each effective July 2, 2016.

Mr. Cutt assumes the CEO role from Joseph H. Bryant, who has resigned as the Company’s Chairman of the Board and Chief Executive Officer, and as a member of the Board of Directors, each effective June 1, 2016.

operations and senior management for 25 years with Mobil Oil Corporation and then ExxonMobil.

Mr. Cutt brings over 30 years of oil and gas experience, most recently as President of Petroleum for BHP Billiton, where he was accountable for its global oil and gas business.

Mr. Cutt, 56, served as President of Petroleum for BHP Billiton from July 2013 until March 2016. Before joining BHP Billiton, Mr. Cutt held positions in engineering,

“I am honored and very excited to join the Cobalt team, who have achieved exceptional exploration success over the years,” said Mr. Cutt.

Photo: smh.com.au

Anglo American appoint Bruce Cleaver as CEO of De Beers Anglo American plc (“Anglo American”) announced the appointment of Bruce Cleaver as CEO of the De Beers Group (“De Beers”) following Philippe Mellier’s decision to step down after five years. Mark Cutifani, Chief Executive of Anglo American and Chairman of De Beers, said: “Together with our partners in De Beers, we congratulate Bruce Cleaver on his appointment as CEO of De Beers following Philippe Mellier’s decision to step down. Bruce’s leadership of De Beers’ strategy and its commercial and government relationships working alongside Philippe and over much of the last decade, combined with his time working with Image: Forbes us to shape the new Anglo American strategy, provide strong continuity at an important stage in the diamond market’s recovery.” Bruce Cleaver commented: “I am honoured to be asked to lead one of the world’s great companies. Diamonds are as relevant to today’s consumers, all over the world, as they were to their parents and their parents before them.” Bruce Cleaver served as De Beers’ executive director responsible for strategy and commercial relationships until 2015, also serving as Co-Acting CEO for a year prior to Philippe Mellier’s appointment in 2011. He was appointed Group Director of Strategy and Business Development for Anglo American in 2015. 14 Appointments


Appointments Jason Goodall appointed new CEO of Dimension Data Group as Brett Dawson steps down Dimension Data has announced the appointment of Jason Goodall as Group Chief Executive Officer, as Brett Dawson, current CEO, steps down after 12 years. Goodall steps into the role from his current position as Group COO, where he has been responsible for the regions and several global functions including sales, marketing, Group Information Services (GIS), HR and commercial finance. Goodall is a veteran of Dimension Data, having served many roles during his 18-year career with the company. Image: BusinessWire

Goodall is appointed with immediate effect.

Academy Award-nominated Actor Djimon Hounsou named Orbis Africa Continental Ambassador Two-time Academy Awardnominated actor Djimon Hounsou was named Africa’s Continental Ambassador by international not-for-profit organization Orbis on June 4. “We are thrilled that Djimon Hounsou, a native son of Benin and spokesperson for the Continent, has joined forces with Orbis Africa,” said Lene Øverland, CEO of Orbis Africa. Orbis Africa works in Sub-Saharan Africa

to reduce preventable and treatable blindness and visual impairment on the continent. “What I appreciate most is the success that Orbis has enjoyed over its distinguished 30-year history and the level of transparency it has demonstrated in converting funding into a direct impact on people’s lives,” Hounsou said. In his role, Hounsou looks to

Image: Courtesy of LinkedIn

draw attention and prompt immediate action towards the inexcusable issue of avoidable blindness in Africa and is passionate about doing what he can to ensure African children can visualize and achieve a brighter future.

LafargeHolcim to appoint Jean-Jacques Gauthier as Country CEO of Algeria Having successfully led the integration, which is now nearing completion, Jean-Jacques Gauthier will be appointed Country CEO in Algeria from September 1, 2016. Algeria is a key country for the group, offering significant growth and development opportunities. With the forthcoming completion of a new cement manufacturing plant of 2.7 million tonnes, LafargeHolcim’s total capacity in the country will reach 11 million tonnes by the end of 2016. The group is also building a country-wide retail franchise network for construction materials. On taking up his new role, Jean-Jacques will relinquish his position on the Executive Committee. Aspire Africa · July/Aug 2016 15


From The Blog

W

hen thinking about renewable energy, it’s common to think of wind power and solar. However, there is massive potential in Africa for the utilisation of renewable gas for power generation. Some naturally occurring microbes are able to break down organic material in the absence of oxygen to produce different

types of biologically created gas – ‘biogas’ - that consists primarily of methane and carbon dioxide. Renewable energy from biogas has the added benefit of being able to produce a consistent source of power, ‘base-load’, rather than just when the sun shines or wind blows. It can also be utilised for high efficiency combined heat and power generation – giving a useful source of renewable heating or cooling.

18 Biogas Power in Africa - An Under-Utilised Resource by A. Marshall


Biogas is a gas that is formed by a variety of anaerobic microorganisms. These microbes feed off carbohydrates and fats, producing methane and carbon dioxides as metabolic waste products.

Energy

The organic material that is required to produce biogas is available in a wide range of forms on the African continent – some uniquely so. This includes biogas from dumpsites – landfill gas, biogas from human waste – sewage gas, biogas from food wastes or agricultural materials and finally naturally occurring biogas, such as that found in lakes in Rwanda and Cameroon, or some mine sites in South Africa. Biogas is a gas that is formed by a variety of anaerobic microorganisms. These microbes feed off carbohydrates and fats, producing methane and carbon dioxides as metabolic waste products. This gas can be harnessed by man as a source of sustainable energy. Biogas is considered to be a renewable fuel, as it originates from organic material that has been created from atmospheric carbon by plants grown within recent growing seasons. Biogas creation is also called biomethanation. Biologically derived gases are produced as metabolic products of two groups of microorganisms, called bacteria and Archaea. These microorganisms feed off carbohydrates, fats and proteins, then through a complex series of reactions, including hydrolysis, acetogenesis, acidogenesis and methanogenesis, produce biogas comprising of carbon dioxide and methane. The organic component of household waste consists mainly of food waste and paper. When this is sent to a landfill (an engineered dumpsite) and waste reaches a depth of ~10 metres, it is compacted and becomes anaerobic. Under anaerobic conditions the microorganisms which create biogas thrive. If the landfill site is correctly designed and managed the resulting landfill gas can be

extracted, captured and utilised for power generation. At Bisassar Road in Durban, the gas from the landfill site is extracted and utilised to generate 6.4MW of renewable electricity supplied to the local power grid. In a geographically small country like the UK, Clarke Energy has supplied almost 500MW of landfill gas-fuelled power generation equipment. Food waste from factories or households can be separately collected from other waste streams. The fat and carbohydrate in the waste is a valuable potential source of food for the anaerobic microbes to utilise. Ananaerobic digester or biogas plant is a manmade treatment facility for organic material. It typically consists of a reception area, a pretreatment area to remove contaminants such as paper or plastic, shredders and a series of tanks for the creation of biogas under controlled conditions. As a rule of thumb, 20,000 tonnes of food waste per year gives ~1MW of electricity. Elgin Fruit in South Africa utilises the fruit pulp left over in the juice production process as a feedstock for anaerobic digestion with a facility that produces 500kW of renewable electricity. Waste materials from the farming Aspire Africa · July/Aug 2016 19


Africa has vast, untapped potential for the utilisation of various different organic and inorganic materials for the production of renewable, decentralised power.

Fez in Morocco there are a number of sewage treatment works that process human waste for 5.4MW of renewable electricity. The African continent also has highly unusual, naturally occurring sources of biogas, such as that which occurs in the depths of Lake Kivu in Rwanda and the Democratic Republic of the Congo. This lake produces biogas from the combined actions of anaerobic microorganisms at depth feeding off decaying organic matter, alongside processes associated with geothermal activity. In addition, other forms of naturally occurring biogas are present in mine sites in South Africa. Archaea are one group of microorganisms that are able to feed off inorganic compounds in the rocks in mine sites to produce high-quality biogas. industry can also be used in this manner. Tropical Power’s biogas plant near Lake Naivasha in Kenya is able to produce 2.6MW of power from agricultural materials for local utilisation. In the case of human waste, its utilisation for the creation of sewage gas typically relies on the centralised collection of the material through a sewerage system. As human waste has already been digested by a person, a large amount of the carbohydrates and fats have already been utilised.

This gas is typically extracted by ventilation systems, but has also been flared to help ensure worker safety. It can also be used as a valuable source of fuel for power generation. In summary, Africa has vast, untapped potential for the utilisation of various different organic and inorganic materials for the production of renewable, decentralised power. In the coming years, biogas will be a significant component in the continent’s power generation mix. ASPIRE

There is also a high water content. This means you need a large amount of human waste to create biogas. Centralised collection and treatment of human waste has the added benefits of improved sanitation and reduced pollution. If the waste water treatment plant includes anaerobic digesters, the biogas formation processes can be artificially harnessed in order to capture and utilise the gas for power generation. In Marrakesh and 20 Biogas Power in Africa - An Under-Utilised Resource by A. Marshall

Alexander Marshall Alex has the lead international role for marketing and compliance for Clarke Energy. Clarke Energy specializes in the supply, engineering, delivery and maintenance of enginebased power plants.


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Q&A: Energy & Renewables African Utility Week Presents

POWER AFRICA INTERVIEW President Obama tripled our “ goals, from 10,000 MW to 30,000 MW, and 20 million connections to 60 million new home and business connections Andrew Herscowitz

E

xclusive interview with Andrew Herscowitz, coordinator for Power Africa, US President Barack Obama’s initiative to improve access to power in sub-Saharan Africa, and the official country partner of the recently concluded African Utility Week conference and expo at the CTICC in Cape Town.

22 African Utility Week - Power Africa Interview


Q&A: Energy & Renewables AH: Well, to reach the big megawatt goals, you are going to have to do a lot of big gas projects and other types of projects like that. But one of the smaller megawatt successes is, for example, our project in Rwanda.

Andrew Herscowitz, Coordinator for Power Africa at U.S. Government Patricia Adams, USAID

African Utility Week: What do you think the main achievements have been so far of the Power Africa programme? Andrew Herscowitz: Power Africa has achieved a lot in the first year and a half. We set an original goal of 10,000MW and 20-million connections, which have helped more than 4,000MW power deals in the six focus countries to reach financial close, representing roughly 40% of the original 10000MW goal. Now that we have really opened up the gate to the entire continent, I think we can expect to see a lot more projects advance really quickly. The other thing is, because we are reaching our goals quicker than expected, the model has been embraced even better than we could have hoped, President Obama tripled our goals last summer after one year, from 10,000MW to 30,000MW, and 20 million connections to 60 million new home and business connections.

AUW: Any particular success story you are proud of?

The US government’s Overseas Private Investment Corporation, OPIC, gave a grant to a company called Gigawatt Global, and they just commissioned an 8.5MW solar project, which is going to benefit rural communities, and it is one of the first projects that since President Obama announced Power Africa, have now actually flipped the switch. So, that is one that I really, really like. The other one is in Liberia. When the ebola outbreak was at its height, we saw that Power Africa activities, for obvious reasons, were getting stalled, because of people having to leave the country, and everyone was focusing on the humanitarian and medical issues. We made a decision to reprogramme about USD2-million of Power Africa funds to buy generators which would power the ebola treatment units in Liberia. Within two weeks of having this idea, we got a picture sent to us from one of the ebola treatment units showing us the lights on. The fact that we were able to do this allowed a lot of health workers to sterilise their clothes, which reduced the spread. It allowed people to get treatment 24 hours a day. It allowed people to charge their cellphones so that they could speak to loved ones that they were going through treatment and in worse cases facing death. While that was not a huge amount of power, it showed Power Africa’s capability, because we reached out to our private sector partners to mobilise quickly and have an impact.

AUW: Apart from Ebola, what other challenges have you had to face so far? Aspire Africa · July/Aug 2016 23


There is plenty of investor interest in the continent and there are plenty of people with great ideas and potential to execute power projects.” Andrew Herscowitz

AH: There are quite a few challenges but some of the challenges are actually opportunities as well. For example, we’ve seen that there is plenty of investor interest in the continent and there are plenty of people with great ideas and potential to execute power projects, but the problem that we see is getting those deals to the point of bankability. I really see that Power Africa will have this sweet spot, working with all of our partners including the World Bank, which committed USD5-billion, the African Development Bank which committed USD3-billion, the government of Sweden that committed a USD1-billion, and our private sectors partners that committed over USD20-billion. I think we have this opportunity to align our efforts to figure out what role we can play to bring those projects to bankability so that investors will find a place to put their money. The people on the ground will benefit from those 24 African Utility Week - Power Africa Interview

investments, so there is more power quickier. Another constraint that we see is a lack of gas supply. It is one thing if you are trying to build big gas generation projects, but if you can’t get the gas to the generation point, then it does not do anybody any good. We have been working closely with our private sector and governmental partners to come up with more creative ideas to bridge this gap, so that power can come online while you wait for the domestic gas resources to come out of the ground and make it to the generation plant.

AUW: Let’s talk about the goals for 2020 – how will these impact people’s lives? AH: We expect that businesses will have a steady supply of electricity, so that they can stay open for more hours and increase productivity, which will create more jobs and improve people’s lives.


Q&A: Energy & Renewables Obviously, children will have electricity so they can read at night. Drugs can last longer if they are refrigerated, but even more importantly, healthcare will improve because people won’t have to worry when they are at the hospital whether or not the equipment will go out or whether or not the fluids are being refrigerated at the right temperature. We’ve heard that in Liberia one of the key issues with the treatment of ebola patients is that medicine has to be kept at the right temperature, so electricity really has a massive impact on everything that people do. I often think about the story that I experienced when I was a volunteer in Nicaragua. I went there just before law school. The small community had been hit by a tidal wave and we were doing tidal wave reconstruction. This was the time before cell phones really existed and there was only one phone in town that was down for a few days. We had about 80 people from that town sit around for three days, waiting for materials to arrive from the capital! That was three days lost of 80 people’s productivity that could have been solved with one phone call. Countries who don’t have basic electricity are being passed by other countries at an exponential rate in terms of economic growth. Hence, it is really critical that energy touches every part of people’s lives.

AUW: What has surprised you about this project so far? AH: I got a bunch of surprises, lots of positive surprises. One, the way that the donors and other partners have quickly aligned themselves around key issues. There is a lot of agreement around what the key constraints are to particular projects and particular deals. The one project that I really love is the

500MW Corbetti geothermal project in Ethiopia. Reykjavik Geothermal, a US company, has the right to generate up to 1,000 MW of geothermal power in Ethiopia and East Africa has between 15 and 20-thousand MW in potential geothermal power, which is a really great, clean renewable energy source. In East Africa, this is a relatively new resource to be pursued and exploited, so there is more risk associated with it. The fact that the Ethiopian government, which has never done an independent power project, is moving towards a power purchasing agreement for Corbetti, is going to completely open up the market in Ethiopia for private sector investment. It also shows that the government of Ethiopia is committed to making sure that the markets open and that they are looking at sources beyond hydro. Most importantly, it shows the rest of the world, investors and developers, that East Africa has incredibly rich geothermal resources that can be profitable. Other surprises: we’ve seen a lot of companies on the African continent increasingly looking to partner with US companies and other international companies to access different tools that Power Africa offers. This has been a very positive development. We have seen partnerships with the African continent and the rest of the world rather than just a US or French company coming in or just a local African company. We’re seeing a lot more partnerships between countries that opens up access to a lot more tools.

AUW: Why did Power Africa decide to partner with African Utility Week? AH: These kinds of conferences are important in terms of keeping momentum going for pending deals, because key decision makers from all the relevant sides attend these types of conferences. It is an opportunity for us to get together with everyone to brainstorm new ideas. Aspire Africa · July/Aug 2016 25


www.usaid.gov/powerafrica

The way that Power Africa works, and what we have found most effective, is that when we sit down with the private sector and ask them “what’s the problem with your deal?” or “what is the specific issue in the sector that needs to be changed?” The distinction between other development efforts and Power Africa is, traditionally, in the past, an analysis of the sector would be done and then the private sector would be brought in and you would hope that the private sector could solve those problems. Instead, we try to identify specific obstacles to specific deals and then try to overcome that obstacle. By removing that obstacle, other deals will move forward as well and that is our motto, the way that you learn is by talking to partners at these types of conferences.

that television going and it’s the same thing with electricity in sub-Saharan Africa. The poorest of the poor people will often find a way. People have cell phones and they will walk for miles and miles to charge them to use them. Power Africa is helping the individual control his or her own destiny in choosing when they are going to charge that cell phone. Even if the access to power is two hours a day – then we can play a role in helping them manage their lives. Just like that community in Nicaragua. It will open up access to the rest of the world for people in the most remote places. ASPIRE

AUW: What was your message at the event this year? AH: We were there to listen and to respond. Power Africa is working all over sub-Saharan Africa to increase access to electricity. Momentum has continued to build and it has also started to show more results, results are what are getting us more interest. When we work together we can have a massive impact and that is how we are going to double access, together.

AUW: Anything you would like to add? AH: People often ask “how are you going to increase access to electricity for poor people?” I always say whenever I travel in developing countries, I have been living overseas for 14 years now, I visit the poorest communities and always see that plastic sheeting around the houses, but they might even have a satellite dish. The point is, people are running that satellite dish every single day and when that important soccer game comes on they’ll somehow pool their resources together to get 26 African Utility Week - Power Africa Interview

About African Utility Week and Clean Power Africa The recenty concluded 16th annual African Utility Week and Clean Power Africa is the only global meeting place, conference and trade exhibition for African power and water utility professionals and offers a unique networking opportunity for engineers, stakeholders and solution providers alike.

Find out more:


2 – 3 November 2016 Cape Town, South Africa

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Hear from industry in the investor-led 2 day conference. International investors will be able to review a showcase of existing assets, new commercial real estate and planned city developments whilst comparing projected capital returns and rental yields

The African Real Estate Summit is the only meeting place for commercial real estate in Africa. To discuss your company’s participation or to secure your seat please, contact our team below: Cape Town Stephan Herman, +27 21 700 3598 stephan.herman@spintelligent.com Invited Host City:

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Aspire Africa · July/Aug 2016 27


Zayed Future Energy Prize

DRIVING GLOBAL SUSTAINABILITY An exclusive with Zayed Future Energy Prize Director, Dr Nawal Al-Hosany By: Nicholas Paul Griffin

28 Zayed Future Energy Prize


Energy

Aspire Africa · July/Aug 2016 29


The Zayed Future Energy Prize celebrates outstanding achievements in renewable energy and sustainability

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he Zayed Future Energy Prize is the UAE’s international award for pioneers of renewable energy and sustainability. The prize was established by the UAE leadership in 2008 to honour the legacy of economic, social and environmental sustainability advocated by the nation’s founding father, Sheikh Zayed bin Sultan Al Nahyan. The US$4 million annual award invites innovators from around the world to be involved in a growing community committed to discovering solutions to the rising challenges of energy security, climate change and the environment. The prize celebrates outstanding achievements in renewable energy and sustainability, rewarding some of the most visionary and innovative leaders in these fields. Aspire Africa spoke recently with the prize’s director, Dr Nawal AlHosany, to discuss its growing influence in renewable energy and sustainability.

Masdar The Zayed Future Energy Prize is managed by Masdar, Abu Dhabi’s leading renewable energy company, under the leadership of His Excellency Dr Sultan Al Jaber in his capacity as Director General. Dr Al-Hosany currently holds the title of Director of Sustainability for Masdar, a role which has helped fulfil her position at the head of the Zayed Future Energy Prize and advance the prestige of the prize. “I oversee implementation of the objectives, mandate and strategic direction of the prize as director,” Dr Al-Hosany explains, “and I am 30 Zayed Future Energy Prize

supported by a small team of hard-working and enthusiastic staff, most of whom are young Emirati women.” The prestigious jury is chaired by His Excellency Ólafur Ragnar Grímsson, President of the Republic of Iceland, and Vice-Chaired by Dr Han Seung-Soo, former Prime Minister of the Republic of Korea and the UN SecretaryGeneral’s Special Envoy for Disaster Risk Reduction and Water. “It also includes Kenyan national Adnan Amin, Director General of the International Renewable Energy Agency. Her Excellency Elizabeth Dipuo Peters, the Minister of Transport of the Republic of South Africa, was formerly a member.”

Encouraging Collaboration To enter into the prize, candidates from across the world are invited to submit in three of the five categories: Small and Medium Enterprise (SME), Non-Profit Organisation (NPO) and Global High Schools. Nominations are sought for both the remaining category of Large Corporation and the Lifetime Achievement Award. Entries are currently open for the 9th Zayed Future Energy Prize, with nominations and submissions set to close on Monday the 27th June 2016. Following a rigorous evaluation process, winners are chosen by a jury of influential leaders, voices and advocates committed to the global effort of accelerating the adoption of renewable energy and sustainability. Each category is evaluated on four criteria: impact, innovation, leadership and long-term vision. The 8th Zayed Future Energy Prize attracted a record number of entries, boasting 1,437 submissions and nominations from 97 countries.


The prize reflects the vision of the UAE’s founding father, Sheikh Zayed bin Sultan al Nahyan, who championed environmental stewardship

Energy

Dr Nawal Al-Hosany Director Zayed Future Energy Prize “This underlines the truly global reach of the prize and the farsighted vision shown by the UAE government in sustainability and renewable energy. Nine winners collected the prize at an awards ceremony held during Abu Dhabi sustainability week in January this year.” The prize reflects the vision of the UAE’s founding father, Sheikh Zayed bin Sultan al Nahyan, who championed environmental stewardship. In 8 years, more than $25m in funding has been awarded to 48 organisations, individuals and high schools

from across the world. “The benefits of competing for the prize do not stop at funding,” Dr Al-Hosany adds. “We are fostering a community that encourages sustainable energy innovation among current and future generations.” The prize therefore encourages collaboration between past winners across all categories, the aim being to offer fresh solutions to the interconnected energy, water and sustainability challenges of the future. Aspire Africa · July/Aug 2016 31


More than 202 million people around the world are benefitting from the sustainable actions taken by our winners and finalists.� Dr Nawal Al-Hosany

ZFEP Jury selection committee Seven large corporations have been awarded the prize for accelerating the transition to a low-carbon economy, generating renewable energy and advancing sustainable development. There have been four SME winners and one runner-up, rewarded for increasing access to affordable modern energy, creating jobs and boosting economic growth. Five NPO winners and two runners-up are reducing carbon pollution, advocating cleaner business and improving health. Six individual winners and four runners-up are pioneering sustainable solutions, empowering women and driving government policy. Lastly, but perhaps most importantly, there have been nineteen winning high schools that are responsible for enhancing education, inspiring young minds and supporting local communities. “More than 202 million people around the world are benefitting from the sustainable actions taken by our winners and finalists. The 32 Zayed Future Energy Prize

combined accomplishments include enabling modern energy access for 21 million people across Africa and Asia, more than half of whom are children, [and] displacing 887 million tonnes of carbon dioxide emissions.� Other achievements include providing safe drinking water for 7 million people, improving environmental conditions for at least 4 million people by promoting clean energy investment and policy by national governments, and increasing energy efficiency to save 65 million megawatt hours of electricity through energy saving products and services.

Prestigious Winners Since the announcement of the first prize by His Highness Sheikh Mohammed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces at the World Future Energy Summit in 2008, there have been many prestigious winners that have gone on to take great strides in the renewable energy sector.


African winners of the award include M-Kopa Solar (Kenya), Off Grid Electric (Tanzania) and Nkhata Bay School Authority (Malawi)

Energy

Kenya’s M-Kopa was awarded the 2015 Zayed Future Energy Prize in the Small and Medium Enterprise category for its innovative approach to deploying solar energy to customers living off the grid in rural Africa. M-Kopa is the first company headquartered in Sub-Saharan Africa to have won the prize. The company combines mobile payments with GSM sensor technology in order to lease solar power systems. The firm invested the US$1.5 million award in the launch of a new internal training and development programme, run from its Nairobi headquarters to provide technical and business skills development to employees, sales agents and partners. The training facility has been named The Zayed Centre in honour of the prize’s namesake and in recognition of the impact the prize has had and continues to have on the company and the region.

Jesse Moore CEO & Co-Founder of M-Kopa receives award from His Highness Sheikh Mohamed bin Zayed Al Nahyan Since October 2012, M-Kopa has connected over 300,000 homes to solar power across Kenya, Tanzania and Uganda, continuing to reach 500 new homes each day, and is now the market leader in ‘pay-as-you-go’ energy services for off-grid customers in East Africa. Another success story is that of Tanzanian energy access business, Off Grid Electric, winner of the Zayed Future Energy Prize in the Small and Medium Enterprise category earlier in 2016. The social enterprise provides 45,000 offgrid homes in Tanzania with access to clean electricity, cheaper than kerosene or diesel alternatives. Around 225,000 people benefit from Off Grid Electric’s solar home systems, which customers pay for using mobile money.

Xavier Helgesen, CEO & Co-Founder, Off Grid Electric

After installation, a household can save up to US$15.50 per month on lighting and mobile phone-charging bills and reduce household carbon emissions by 0.019 tonnes of CO2 and 0.2 kg of black carbon. Aspire Africa · July/Aug 2016 33


More than 202 million people around the world are benefitting from the sustainable actions taken by our winners and finalists.” Dr Nawal Al-Hosany

Zayed Solar Academy under construction in Malawi In February 2015, Off Grid Electric furthered its cause to reduce household carbon emissions by announcing its ‘Million Solar Homes’ initiative, implemented in partnership with the President of Tanzania. One of the most notable winners of the prize so far has come from the education sector, in the shape of the Nkhata Bay School Authority in Malawi. Situated in one of the poorest rural areas of Malawi, with no access to a municipal electricity grid, the two local Secondary Community Day Schools conduct classes in poorly-lit and poorly-ventilated conditions. In 2014, Nkhata Bay School Authority won in the Global High Schools category for the Africa region, receiving US$100,000 to fund a vocational training program, instructing young people in the design, installation and maintenance of solar photovoltaic (PV) systems. 34 Zayed Future Energy Prize

The Zayed Solar Academy was established to administer the nine-month programme, where students are trained to adapt solar PV technology to the local conditions and conceive ways to make solar-generated electricity more affordable and accessible. Women are greatly encouraged to join the programme. Dikirani Thaulo was the first student from outside the Nkhata Bay area to enrol at the academy, joining the Solar Teacher Training Program, accredited by a national education body, in the hope of establishing a second Zayed Solar Academy in Malawi’s central region. Since beginning the teacher training course, Dikirani has represented the Zayed Solar Academy by speaking about the opportunities offered by the Zayed Future Energy Prize at the 2nd Sustainable Energy for All forum in New York and at a meeting of the International


Now more than ever, producing energy from zero-emission sources makes business sense.” Dr Nawal Al-Hosany

Renewable Energy Agency on the side-lines of the Paris Climate Negotiations.

A Sustainable Energy Future “Now more than ever,” Dr Al-Hosany explains, “producing energy from zero-emission sources makes business sense, largely due to the falling cost in the technology involved. And, this is true across the entire spectrum, from utility-scale projects to small-scale distributed generation and off-grid micro solutions.” The price of PV panels has fallen 95% since 2008, while the rate of sunlight to electricity conversion continues to rise. At the beginning of March, Panasonic, winner of the Zayed Future Energy Prize in the Large Corporation category in 2015, announced the world’s highest-ever energy conversion

Energy

efficiency rate of 23.8% for a PV module. Panasonic plans to donate 100,000 solar lanterns by 2018 to non-profit, nongovernmental and international organisations operating in Southeast Asia, South Asia and Sub-Saharan Africa to improve and enhance the quality of life in communities without electricity. “There is a trend of small-scale rooftop solar installations gathering pace,” Dr Al-Hosany adds. “In some areas, these installations will be connected to the grid, offering a distributed electricity generation solution.” In areas with unreliable grids, the systems can be self-contained and combined with mobile payment, like those developed by prizewinners Off Grid Electric and M-Kopa, and used to rapidly expand energy access in parts of Africa.

Dikirani Thaulo speaking at the SEE4ALL forum at the UN

Aspire Africa · July/Aug 2016 35


The world is in need of innovative solutions to create a new, sustainable energy future.” Dr Nawal Al-Hosany

Energy

Vice-President and Prime Minister of the UAE and Ruler of Dubai His Highness Sheikh Mohamed bin Rashid Al Maktoum and His Highness Sheikh Mohammed Bin Zayed Honour Nine Sustainability Pioneers Wind power will also come down in cost, with Bloomberg New Energy Finance (BNEF) predicting a 32% drop in project costs by 2040. Both these sources of energy, solar and wind, are however ‘variable’. “That is, they are affected by location, weather and time of day,” Dr Al-Hosany explains. “For renewables to be truly competitive with fossil fuels as sources of energy, they will need to deliver reliable and steady energy.” “This is where current developments in battery storage may have a significant effect, balancing supply and demand. Battery technology, like that being developed by Zayed Future Energy Prize winner, BYD, may be a game-changer in the future but it is currently hindered by high costs and shortfalls in performance.” In the meantime, increasing energy efficiency will lower demand and cut waste. Two past 36

prize-winners in the Large Corporation category, ABB and Schneider Electric, are advancing technologies in this area. ABB, the power and automation company, is enhancing infrastructure performance while lowering environmental impact. The company delivers solutions that are modernising the grid. On the other hand, Schneider Electric offers many technologies that enable end-users to better manage energy and achieve higher efficiency. “The world is in need of innovative solutions to create a new, sustainable energy future,” Dr Al-Hosany concludes. “The Zayed Future Energy Prize is ready to recognise and reward these leaders. Visit our website - www. zayedfutureenergyprize.com - for more information on how to submit for the 9th awards.” ASPIRE


www.zayedfutureenergyprize.com

HH Sheikh Mohamed bin Rashid Al Maktoum, President of Mexico, Enrique Peña Nieto and HH Sheikh Mohammed Bin Zayed at Awards Ceremony

Ban Ki Moon speaking at Abu Dhabi Sustainability Week 2016

Aspire Africa · July/Aug 2016 37


Cover Feature

Africa Internet Group

MAKING LIFE EASIER Africa Internet Group (AIG) is a leading African internet company, operating online and mobile marketplaces and classifieds companies. AIG is an ongoing success story, already establishing itself as the leading internet group on the continent. Aspire Africa recently interviewed Sacha Poignonnec, the group’s co-CEO, to discuss the business’ ongoing success. By: Nicholas Paul Griffin


Sacha Poignonnec co-CEO Africa Internet Group


AIG currently operates in 26 countries and has created 71 companies in 8 different verticals.

Smart Solutions Founded in 2012, AIG currently operates in 26 countries. By providing technology to connect customers to businesses, the group aims to simplify life with easy-to-use applications and smart solutions across the continent’s internet sector. Since its inception, AIG has created 71 companies in 8 different verticals: online retail, food ordering platform, online marketplace, real estate marketplace, vehicle marketplace, taxi hailing, online travel agency and P2P lending marketplace. AIG has strived to create an ecosystem of successful and fast growing companies, including Jumia, Kaymu, Jovago, Hellofood, Lamudi and Everjobs. AIG is currently owned by MTN, Rocket Internet and Millicom. AIG continues to address the dynamic needs of businesses and consumers through the provision of internet-enabled solutions ensuring accessible services. Digitalization and e-commerce is developing rapidly in Africa, and AIG is taking a leading role. According to www.statista.com, Africa accounted for 2.1% of global B2C e-commerce sales, representing a 31% growth in global share since 2011. The African market is therefore far from being saturated. Collaborating with major universities, AIG develops young African talents in an exciting and rapidly growing digital economy. Employees have the chance to work across the continent, accumulating knowledge and expertise to become the next generation of entrepreneurs. 40 Sacha Poignonnec ¡ co-CEO, Africa Internet Group


Our aim is to make life easier for every single person in the countries that we are active in.” Sacha Poignonnec

Cover Feature “Our aim is to make life easier for every single person in the countries that we are active in,” Mr Poignonnec says. “That is why we provide a wide range of services, from online shopping to food delivery.” In its professional dealings, AIG strives to meet as many individual needs as possible, developing businesses that will ultimately facilitate the lives of its customers and enhance the communities they belong to. The group’s ecosystem of companies and technology-enabled services have been carefully cultivated, with a focus on longterm value creation, by addressing the specific challenges of operating e-commerce marketplaces: logistics, internet access, payments and talent.

Jeremy Hodara & Sacha Poignonnec co-CEO’s, Africa Internet Group

This approach enables AIG to observe and implement trends before they are recognised elsewhere, allowing the group to continue to provide African companies with services that are in high demand and ahead of the game.

Addressing Needs AIG has grasped the importance of growing with the evolving needs of each unique market and presenting solutions to address unmet requirements. Mr Poignonnec recognizes the need for the group to tailor its service for each country it operates in. “For example,” he tells us, “on the last Black Friday, the busiest shopping day, which we imported [as a concept] from the US, we drew in more than 2.8 millions unique visitors to jumia.com.” Mobile traffic accounted for 67% of total traffic, amounting to a total of 235k orders, making Black Friday 2015 the largest shopping event in Africa. In addition, through its network of companies, the group employs and trains over 3,000 people. Aspire Africa · July/Aug 2016 41


We have expanded our online businesses across more than 20 countries in Africa in less than 4 years,” Sacha Poignonnec

Cover Feature

Jumia warehouse “We have countless examples of alumni of our companies setting up their own ventures. The experience that they get with us undoubtedly sets them on their way to running their own successful companies.”

“At AIG, we invest and prioritise sustainable growth over short-term profitability,” Mr Poignonnec says, indicating that as a group, AIG is committed to the long term growth of e-commerce in Africa.

The democratization of the internet in Africa offers unprecedented opportunities for e-commerce businesses.

Expansion

Many companies currently face limitations in technology investment and skills development, preventing them from meeting current e-commerce standards. Companies are required to have the capacity to process cash-on-delivery transactions and track packages electronically, as well as employing mobile equipment to communicate effectively with vendors and customers. 42 Sacha Poignonnec · co-CEO, Africa Internet Group

“We have expanded our online businesses across more than 20 countries in Africa in less than 4 years,” Mr Poignonnec explains. The company’s mission is to simplify C2C business by providing an easy to use, local and safe classifieds portal in frontier markets. Jumia, the No.1 online shopping platform in Africa, has a presence in 11 countries on the continent and has recorded exponential


www.africainternetgroup.com

Jumia delivery driver growth in Nigeria and Kenya, with 900% growth in orders in the Kenyan market in 2015. Another prime example is Jovago, the No.1 online booking platform in Africa, which has grown to host more than 20,000 African hotels in just two years of trading. Last year, AIG also launched Vendito.com, a brand new classified ads platform for Africa. In addition, the company has created Everjobs, an online job portal to the African market. Everjobs aims to become the leading job portal in fast growing economies by finding the right match for both employers and candidates. Africa’s leading cellular telecommunications group, MTN, announced in 2014 that it would

Jumia sales force invest around EUR 168 million into AIG in the following two to four years, having acquired 33.3% of the joint venture between Rocket Internet and Millicom. The future certainly looks bright for AIG, a company with big plans to keep expanding, and it will continue to look to provide the best technology options for Africans, as well as identifying new markets where demands can be met. “First of all,” Mr Poignonnec says, “we are constantly striving to improve our services for our customers to enable them to have the best online experience. On top of that, our next steps include the establishment of already successful business models in other markets.” ASPIRE Aspire Africa · July/Aug 2016 43


SHIEKH

SOLAR POW

MAURI 44


H ZAYED

WER PLANT

ITANIA By: Nicholas Paul Griffin


F

or more than 40 years, the United Arab Emirates (UAE) has provided considerable assistance to infrastructure and welfare projects in developing countries around the world. For these nations, a lack of access to energy represents a serious barrier to sustained social and economic development. Under the guidance of the UAE government, Abu Dhabi’s renewable energy company, Masdar, is leading the way in helping developing countries improve access to clean and sustainable sources of energy.

Renewable Energy Investment in sustainable energy can serve as a key tool in kick-starting growth, trade and infrastructure development. In order to make smart development choices, countries must look beyond responses to cyclical fluctuations in commodity prices and deliver projects that support sustainable, long-term prosperity. From its Abu Dhabi base, Masdar has demonstrated continued support for countries across the continent committed to improving the living standards of their citizens through increased economic opportunity. In 2013, Masdar delivered the Sheikh Zayed Solar Power Plant in Mauritania’s capital city, Nouakchott. At the time of its inauguration, the plant was the largest of its kind in Africa, with the potential to significantly contribute to Mauritania’s energy capacity.

to reinvesting its hydrocarbon wealth to aid countries in their efforts to develop their economies and alleviate poverty. In recent years, the UAE has invested heavily in renewable energy projects, a commitment that represents just one small part of the nation’s significant efforts in helping the developing world. As renewable energy technologies have become more commercially viable, an increasing number of countries are exploring solar and wind power options as a means of improving energy security and protecting themselves from fluctuations in fuel prices. With ready access to solar and wind energy resources, Mauritania has the potential to derive a significant portion of its electricity capacity from clean, sustainable and reliable sources of energy. Through this project, and others like it, Masdar is committed to improving energy access and demonstrating that renewable energy can serve as a foundation for economic development and social opportunity.

Electricity Shortfalls Mauritania’s electricity grid, which is powered mostly by expensive diesel generators, currently has an installed capacity of only 144 megawatts, meaning it has so far experienced severe energy shortages.

This 15MW solar photovoltaic (PV) power plant is the first utility-scale solar power installation in the Islamic Republic of Mauritania, and accounts for 10% of Mauritania’s grid capacity.

With the country’s energy demand increasing by 12% annually, the addition of solar power will help to meet future electricity shortfalls and supply the energy demands of approximately 10,000 homes.

The Sheikh Zayed Solar Power Plant stands as a testament to the UAE’s steady commitment

The plant has actually produced more energy than was originally estimated, accounting

46 Sheikh Zayed Solar Power Plant · Mauritania


Sheikh Zayed Power Plant was the largest solar PV plant in Africa when connected to the grid in March 2013

Renewable Energy

Sheikh Zayed Solar Power Plant for an annual increase in demand, resulting in additional savings being made. Producing more than 44 gigawatt-hours since April 2013, the plant has reduced generator load during peak sun hours, resulting in reduced powerfailure rates. The plant, which consists of 29,826 micromorph thin-film panels, was built using innovative and sustainable construction practices, and promises to displace approximately 21,225 tonnes of carbon dioxide every year.

The project engineers designed the support structure for the PV modules to be piled into the ground instead of using a concrete foundation, which further reduced the project’s carbon footprint and overall cost. The plant will ensure further beneficial environmental impacts by saving 7 million litres of diesel fuel each year. The overall result will be a significant reduction of Mauritania’s carbon footprint through the use of reliable and cost-effective renewables. Aspire Africa · July/Aug 2016 47


The 15 MW solar plant accounts for 10 per cent of Mauritania’s grid capacity

Displaces approximately 21,225 tons of carbon dioxide annually

The Project consists of 29,826 micromorph thin-film panels manufactured by Masdar PV

48 Sheikh Zayed Solar Power Plant ¡ Mauritania


The project covers a land area of 300,000 square meters

In addition to these impressive environmental features, wood from the project’s construction was donated to a local NGO called AIDE, helping to support its operations within Mauritania. Masdar has collaborated closely with the Mauritanian Electricity Company (SOMELEC) to successfully realize the project, with Mauritania keen to promote better energy access in order to accelerate economic and social development. Better electrification networks powered by sustainable energy will increase opportunity for the country’s population to access basic services. Cheaper and more reliable energy supplies will also aid infrastructure

Renewable Energy development and economic growth potential. The Sheikh Zayed Solar Power plant has significantly diversified Mauritania’s energy resources and has the potential to ensure greater energy resilience. All of this has been achieved through the deployment of advanced and commercially viable technology. In the years to come, renewable energy will increasingly contribute to the energy mix in developing countries where access to conventional energy is limited. With energy demand expected to nearly double by 2030, renewable energy will play an increasingly important role, especially in countries where demand is rapidly outstripping supply.

Inauguration ceremony attended by HE Mohamed Ould Abdel Aziz, President of Mauritania

Aspire Africa · July/Aug 2016 49


Supplies the demand of nearly 10,000 homes in Nouakchott

Renewable Energy

Dr. Sultan Al Jaber, Chairman, Masdar, speaking at the inauguration of the Project

Masdar The success of the Sheikh Zayed Solar Power plant underscores the important role renewable energy can play in driving comprehensive sustainable development in Africa, and brings to light Masdar’s position as a major player in the process. The Mubadala Development Company, which is owned by the Abu Dhabi government, established Masdar as a wholly owned subsidiary in 2006, with the intention of advancing the clean energy industry in Abu Dhabi and around the world. The company is guided by The Abu Dhabi 50 Sheikh Zayed Solar Power Plant ¡ Mauritania

Economic Vision 2030, a program designed to drive new sources of income for the emirate, as well as strengthening its knowledge-based economic sectors. Masdar continues to develop numerous other renewable energy projects with the aim of helping improve energy access in the developing world. Notable projects include eleven innovative small-scale projects in the Pacific region. These small-scale projects added a total renewable energy capacity of 6.5-megawatts to the island states and replaced 3.2 million litres of imported diesel fuel, the result being the displacement of 8,447 tonnes of CO2 emission annually.


Www.masdar.ae

Sheikh Zayed Solar Power Plant at dusk In addition to direct project assistance across Africa, Masdar has also helped to spur the development of renewable energy through the Zayed Future Energy Prize, which recognized and empowered innovators in renewable energy and sustainability. One incredible success story from this project is the work of the Kenyan firm M-KOPA, winner of the SME category of the Zayed Future Energy Prize in 2015, delivering off-grid solutions to communities in Africa. The prize is an excellent example of the levels of innovation being employed to find solutions to Africa’s energy needs, and goes into its 9th cycle this year, with submissions closing on 27th June 2016. ASPIRE Aspire Africa ¡ July/Aug 2016 51


Roy Transmotors

52 Roy Transmotors ¡ Kenya


Logistics

Safe and Secure Deliveries

ROY TRANSMOTORS An exclusive with Executive Chairman, Mukhtar Rahemtulla Omar By: Nicholas Paul Griffin

Aspire Africa · July/Aug 2016 53


Mukhtar Omar, Executive Chairman, Roy Transmotors receiving ‘Best Transporter of The Year’ Award

K

enyan regional logistics provider specialist, Roy Transmotors Limited, has been handling the transportation of bulk petroleum products, containerized cargo, perishable goods and hazardous products since it was incorporated as a limited liability company within the Republic of Kenya under the Companies Act in 1977. Under the guidance of Executive Chairman Mr Mukhtar Rahemtulla Omar, the company has grown to be one of the largest players in the transport industry in the Eastern Africa region.

Regional Player Having begun life with just a small fleet of trucks, the company takes great pride in its participation in the development of the Eastern Province of Kenya, with particular 54 Roy Transmotors · Kenya

emphasis on the Meru district, where the company’s original head office was located. Throughout the years the company has grown from a local player to a national player, and is now a significant regional player in the field of road transport. Since its inception, the company has adhered to the philosophy that ‘people are the heart of any organisation’. The company’s mission is to hire and retain top-quality and professional employees, providing them with the finest working tools and technology available, and challenging them to meet and exceed the highest performance standards. The company solicits and receives quality input from its employees based on their years of industry experience, a philosophy that helps ensure Roy Transmotors’ driver retention rate consistently surpasses industry norms.


Roy Transmotors has grown to be one of the largest players in the transport industry in the Eastern Africa region

Logistics

Roy Canter fleet Success originates from a clear vision, experience and skills gained over thirty-six years’ experience in Kenya’s transport sector, as well as partnerships with internationally recognised organisations and brands. This puts the company in the unique position of being able to offer advice and assistance to all seeking transport and logistic services in the region. Roy Transmotors’ investment in the Kenyan economy provides direct and indirect employment for over 600 people. The company’s impressive success is aided by a sound business philosophy, skills and professional management, all drawn from years of conducting business and managing transport and logistics in the region. This work incorporates the transportation of a variety of goods, including hydrocarbons in bulk, black oil, bulk and packaged milk

products, food and non-food relief cargo, import and export containers and abnormal loads. In addition, Roy Transmotors Limited handles the transportation and distribution of bulk and packaged Liquefied Petroleum Gas (LPG) and the transportation and distribution of lubricants. Other coordinated services for all practical purposes include road safety, product handling and customer care training, emergency response, vehicle selection, vehicle maintenance, road patrol and 24 hour GPS tracking. The company’s fully-serviced compound, featuring an all-inclusive workshop, fuelling station, parking yard, spacious office space and storage facilities, makes its suitable and organised cargo warehousing and cargo fleet rental services incredibly easy to access. Aspire Africa · July/Aug 2016 55


LPG bulk carrier Roy Transmotors offers various warehouse options for secure depot handling and storage space, catering to the varied cargo types handled by the company. Practical, expert logistical assistance is offered on how to easily transport bulky or ‘nonstandard’ cargo, large loose construction material, perishable cargo and risky cargo.

Strong Foundations The company goal is to provide efficient, reliable and safe transport solutions to its customers in an optimised and cost-effective environment. The company values the safety of its staff, offering an adequate fleet and adhering to environmental standards in the transport sector. Roy Transmotors’ growth is founded on the basic principles of retaining a lean 56 Roy Transmotors · Kenya

customer base, hiring and retaining a highly qualified and motivated workforce, allocating an account manager for each client and maintaining a customer-oriented strategy. This strategy has seen the company reach many impressive milestones over the years, each helping it retain its position as a leading road transport company within the East and Central Africa region. In addition, the company was recently recertified as an ISO 9001:2008 company, and in 2015 achieved the impressive status of making the list of Kenya’s top 100 middle size companies. In 2012, Roy’s Transmotors beat out 10 other companies to achieve the ‘Best Transporter of the Year’ award at the 13th annual road safety dinner held at the Laico Regency hotel, the second year in a row the company had received the award.


Roy Transmotors was the first company in Africa to be ISO certified, as such it has been able to exert significant influence in East Africa

As the first company in Africa to be ISO certified, Roy Transmotors has been able to exert significant influence in the East African logistics sector by sharing best practice with upcoming industry players. Similarly, the company has supported the TOTAL/World Bank ‘Safe Way Right Way’ initiative as a corporate member, helping to champion road safety programmes, as well as supporting the Kenya Transporters association as a member. These impressive milestones have helped Roy Transmotors deliver exceptional service throughout East and Central Africa, having spent many years delivering local, regional and national distribution across the continent.

Logistics

The company’s African operations have included being appointed by Chevron Uganda as its sole transporter delivering Jet A-1 to Uganda, as well as being contracted by several other high profile petroleum companies to be their transport service provider. These operations are boosted by further contracts with Kenolkobil, as petroleum transport service provider to Uganda and Rwanda, and Unilever EA, delivering finished products to Kampala. Two major contracts with Brookside Dairy have also seen the company tasked with transporting raw and processed milk to and from Kampala, and the same to Dar es Salaam and Tanga in Tanzania.

Aspire Africa · July/Aug 2016 57


www.roy.co.ke

Truck transporting food and drink items

Further associations have yielded contracts with ICRC to deliver relief cargo to Kampala and Juba in South Sudan, and Hashi Energy for the company to deliver white oil to Nyamongo in Tanzania.

Respect For Safety Roy Transmotors is committed to providing the very best environment for its staff and customers, ensuring that a thorough schedule is adhered to in the training of commercial motor cycle riders. The company’s all-inclusive training academy offers to all staff defensive driver training and refresher courses, first aid training and refresher courses, firefighting skills and product knowledge and handling. Likewise, the company is heavily invested in its Corporate Social Responsibility, giving 58 Roy Transmotors · Kenya

great focus to environmental conservation, support of the disadvantaged through donation of relief food and the donation of computers to destitute homes. In addition, the company keeps up to date with certifications for its environment, health, safety and security policy, driver training and certification policy, seatbelt policy, fleet safety policy and fleet maintenance policy. The future of the company looks bright, with Roy’s Transmotors Limited pledging to grow within the East Africa region by continuing to offer world class services rooted in the utmost respect for safety. Roy’s will continue to work under the three key principles of safety, security and swiftness in delivery which make up the company mantra, a goal achieved by embracing teamwork, continuous training, effective maintenance and able human resource. ASPIRE


Customs Aluminium

ONE STOP

ALUMINIUM SOLUTION

An Exclusive With Customs Aluminium Director, Bobby Mughal By: Nicholas Paul Griffin

60 Customs Aluminium · Kenya


Manufacturing

Ngoro Ngoro Project, Tanzania

Aspire Africa · July/Aug 2016 61


C

ustoms Aluminium is an innovative company founded in Kenya in 2010 under the leadership and vision of Managing Director Bobby Mughal, who felt the region was in need of higher quality aluminium windows and door systems. The company began to design, fabricate and market European-style uPVC and aluminium windows, doors, partition and curtain walling systems, offering a unique design for modern architecture.

International Quality To deliver his vision, Mr Mughal adopted a European branding system, forging partnerships with Belgium’s Sapa Holdings for aluminium systems and Germany’s polymersolutions giant Rehau for uPVC, Relazzo decking and Raupex plumbing systems. “We enable our customers to experience the highest international quality, safe, stylish, attractive, durable and environmentally friendly aluminium and uPVC products through constant innovation, partnerships and investment in latest technology,” Mr Mughal explains. The company works upon a three-point strategy, firstly creating user-friendly applications that are easy to work with, as well as an innovative approach designed to continuously evolve with the newest trends and techniques. The third step is to offer the customer a complete, one-stop solution for their aluminium needs. “We believe in treating our clients with respect,” says Mr Mughal. “In our operations we integrate honesty and business ethics into all our functioning.” 62 Customs Aluminium · Kenya

The vision of Customs Aluminium is to become the leading provider of cutting-edge quality aluminium and uPVC windows, doors, partitions, conservatories and curtain walling in the region and the African continent as a whole. “The demand for our products is widespread in Kenya, which sees us undertaking projects countrywide, from Nairobi to Mombasa. While coping with the demand in Kenya, we are planning on expanding further to east and central Africa.”

Prestigious Work The company’s portfolio includes undertaking impressive work at the Two Rivers Mall in Nairobi, one of the most prestigious malls in the region, as well as the Billionaire Resort in Malindi, which was recently featured in Forbes Magazine. Other key projects include the Villarosa Kempinski Hotel in Nairobi, Nairobi Hospital and work for Brookside Dairy Ltd, as well as several key residential projects at Thigiri Lane, Thigiri Grove and the Loresho Residence in Nairobi. Despite its relatively young age, Customs Aluminium has made great strides in influencing the building industry. The company operates in a cost-conscious region, and finds itself up against many market competitors, which often proves difficult to navigate. “It has been a hurdle convincing developers why they should choose our product,” Mr Mughal says, “as well as getting the market to use German uPVC and aluminium branded engineered system, but we are slowly but steadily educating them.”


Customs Aluminium’s vision is to become the leading provider of cutting-edge quality aluminium and uPVC windows, doors, partitions, conservatories and curtain walling in the East African region

Manufacturing

Staircase railings for residential house

Aspire Africa ¡ July/Aug 2016 63


Customs Aluminium has formed strong partnerships with renowned international companies Sapa Holdings and Rehau.

Strong Partnerships Customs Aluminium has formed strong partnerships with renowned international companies Sapa Holdings and Rehau, and is a sister company to Brass & Allied, a 27-year-old international company and the official subcontractors for LaxManbhai contractors. Brass & Allied International promises to preserve the aesthetic and durability of steel and steel-related products through materials that have undergone effective corrosion prevention techniques.

APEX STEEL EAST AFRICA’S NO. 1 CHOICE

Custom Aluminium’s sister company has been providing the decorative hardware industry with quality stainless-steel products at reasonable prices for years, utilising its vast experience to supply customers with expert stainless steel services to match their needs. Expertise and innovation make Rehau a leading systems and service provider for polymer-based solutions in construction, automotive and industry. By combining strong development capabilities with decentralised sales and service excellence, Rehau has become one of the top providers in the market.

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64 Customs Aluminium · Kenya

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WWW.APEX-STEEL.COM


Brass & Allied is Customs Aluminium’s 27 year old sister company and the official subcontractors for LaxManbhai Contractors.

Manufacturing

Aga Khan Academy, Mombasa - spring board railings

Hemingways Hotel, Nairobi - balcony railings

Aspire Africa ¡ July/Aug 2016 65


www.customsaluminium.com

All styles from inward to outward opening, single windows to multi-light windows, transoms, balcony doors, sliding windows and doors and many other combinations can be constructed with Rehau systems. Sapa is the leading company in its field, with operations in 35 countries and customers in the building, transport, engineering and telecom industries. In 2010 the Sapa Group had combined net sales of 32,995 MSEK and 14,800 employees. Customs Aluminium is also allied with major international glass suppliers including Saint Gobain Glass Company, PFG Glass and C&C

66 Customs Aluminium ¡ Kenya

Manufacturing Safety Glass in South Africa, Rene Turck and Bohle. As of quite recently, Customs Aluminium now processes its own glass, with an in-house laminated glass cutting plant designed, supplied and installed by market-leading Austrian window manufacturer LISEC. The company’s roadmap for the future sees them intending to extend the company into most countries in east and central Africa, as well as plans to acquire 40,000 sq ft of factory units to aid production. ASPIRE


Takaful Insurance of Africa

Takaful Ethical Insurance Insurance of Africa By: Nicholas Paul Griffin

T

akaful Insurance of Africa Ltd (TIA) is a pioneering, dynamic insurance company introducing a new and exciting ethical perspective to the Kenyan insurance market. The company vision is for TIA to be the number one 68 Takaful Insurance of Africa - Kenya

provider of innovative Takaful products and services in Africa, and to provide superior Takaful products and services that offer enduring value to members through quality risk management and exceptional claims settlement.


Finance The Takaful concept of insurance is based on the principles of togetherness, cooperation and mutual solidarity.

Hassan Bashir CEO Takaful Insurance of Africa

Takaful Insurance The term Takaful originates from the Arabic verb ‘kafalah’, meaning ‘to help one another’ or ‘mutual guarantee’. In the context of insurance, Takaful refers to shared responsibility, shared guarantee, collective assurance and mutual undertakings by a group. Takaful bears many similarities to co-operative or mutual insurance, but differs on the model of operation and on the rules governing investments and profit sharing. Takaful, or Islamic insurance, embraces the concepts of

mutual protection and shared responsibility, which was seen in the practice of paying blood money under the Arab tribal custom. The Takaful concept of insurance is based on the principles of togetherness, co-operation and mutual solidarity. Unlike conventional insurance, Takaful is based and operated on the tenets of Shariah and avoids prohibited activities involving riba (interest), maisir (gambling) and gharar (uncertainty). The operational framework can be simply explained as a system where each member contributes a given premium to a general Aspire Africa · July/Aug 2016 69


® ®

Takaful fund managed by Takaful operators like TIA. Through the concept of tabarru (donation), the members allow TIA to pay any losses suffered by the participants contributing to the pool. Any surplus left from the contribution after payment of claims and other expenses is either used to grow the reserves or distributed amongst the members. In the industry, this is referred to as ‘surplus profit’. Despite how some might interpret its commitment to Shariah, Takaful is not only for Muslims, rather a cooperative concept that is equally beneficial to all members of society without any discrimination on the basis of ethnicity, creed or colour. It welcomes all customers who value ethical, fair, just and equitable business.

TIA Ushirika Model TIA was founded in 2008, gained its formal license in 2011, and is now East Africa’s first fully-fledged operator of Takaful. The company boasts incredibly high standards of financial soundness, with a rationale respecting the need to provide risk management and financial security services founded on ethical principles and values. Unlike any other underwriter working out of East Africa, Takaful Insurance of Africa comes to market with a model aimed at revolutionising the concepts of risk management and financial protection. At the centre of the TIA Ushirika model are fundamental Shariah values designed to promote justice, equity and fairness. This model demands the company promote transparency, integrity, and accountability in all actions undertaken during its operations. 70 Takaful Insurance of Africa - Kenya

This is in direct contrast to the conventional insurance model, which is designed on the premise of the risk transfer model, and meant to ultimately maximise shareholder value. The TIA Ushirika model inherently promotes a riskand-profit sharing welfare-based model that balances the interests of both participants and shareholders. TIA operates in accordance with the principles of Shariah, whilst also adhering to Insurance Regulatory regulations. All operational matters, investment dealings, management and marketing of company products are overseen by the Shariah Supervisory Council. This approach ensures that good governance and obligation to participants are met, with the company committed to assisting its customers in an efficient and effective manner, particularly when it involves claims and compensations. TIA believes that building ‘a bond beyond insurance’ is a reality and not just a slogan, and approaches all dealings with its customers with this goal in mind, embracing core values of excellence, customer focus, integrity, innovation, team work and equity in order to deliver.

Shariah Principles Takaful Insurance of Africa has opened up a new market and brought into the formal financial sector Muslims who have traditionally stayed away from insurance due to their religious beliefs. This system offers an alternative to conventional insurance for customers who value ethical, fair, just and equitable insurance business practices. The act of taking measures against possible dangers or consequences does not go against the teachings of Islam.


Takaful is guided by the principles of improved welfare for all, which aims to establish a social order based on universal brotherhood.” Hassan Bashir

Finance

TIA awarding a beneficiary As described in the Qur’an, Prophet Yusuf (Alaihis Salaam) ‘filled the grain silos from the surplus of seven years of good harvest as a protection to ensure the availability of continuous food during the seven lean years.’ Takaful differs from conventional insurance cover in several ways. Firstly, in a conventional insurance scheme, the insured person sells his risk at a price to another party, immediately introducing an element of gharar into the contract. Under Shariah, a contract of uncertainty exists when the two parties involved are ignorant to the nature of the counter-value they are trading. A house may burn down, for example, costing the insurer a large sum of money, or it may not burn down, in which case the insured person has paid a premium and received nothing in return. The second key difference is that conventional insurers seek to invest in ventures that involve

interest or some form of activity, which goes directly against Shariah principles by introducing the concept of riba. A third difference is that conventional insurance is not mutually beneficial, as certain individuals, such as shareholders, benefit at the expense of others. Commercial insurance companies exist to first serve the interest of shareholders, not policyholders. Finally, the guiding principle behind commercial insurance is that it is based largely on commercial factors. Takaful, on the other hand, is guided by the principles of improved welfare for all, which aims to establish a social order based on universal brotherhood. While the conventional insurance contract is one of transferring risk from the insured to the insurer for a premium, the Takaful contract is based on the Islamic principle of tabarru, that is, a contract of self-insurance or selfguaranteeing among members of a group. Aspire Africa · July/Aug 2016 71


TIA has partnered with the International Livestock Research Institute (ILRI) to provide insurance to pastoralist communities in the arid and semi-arid lands in northern and eastern parts of Kenya.

TIA awarding a female beneficiary

Africa Africa holds significant potential for the Takaful model. Sharing, cooperation, and standing for one another is part and parcel of the culture across the African continent, therefore the model fits very well into the social and welfare nature of Africa. Overall, with the exception of South Africa, penetration is very low, on average below 3%, meaning it remains a largely untapped market. The Takaful model has the potential to expand the rate of consumption of risk management products in Africa. As it currently stands, in early 2016, TIA runs operations in Kenya and has recently opened an office in Somalia, with discussions ongoing to move into several interested countries such as Djibouti, Tanzania and Uganda. TIA has also partnered with the International 72 Takaful Insurance of Africa - Kenya

Livestock Research Institute (ILRI) to provide insurance to the pastoralist communities in the arid and semi-arid lands in northern and eastern parts of Kenya. For the first time in Africa, an insurance policy that combines an Islamic-compliant financial instrument with innovative use of satellite imagery is offering insurance to compensate for drought-induced losses. The herds are insured with an Index-Based Livestock Insurance (IBLI) product, branded as Index-Based Livestock Takaful (IBLT). IBLT uses satellite imagery—measuring the conditions of grazing lands—that is fed into an algorithm to predict livestock losses. Predictions beyond the 15% level trigger indemnity payments. The goal of TIA in its partnership with the ILRI is to show pastoralists that they can use a fair and ethical business model to protect their assets from the natural hazards of keeping livestock in East Africa.


TIA was licensed to be the first Shariahcompliant Family Takaful Operator in East and Central Africa in 2013.

Takaful earns a management fee from participants who pay contributions to become members of a fund or risk pool. The pool receives contributions and makes payments when the contract pays out. Any resulting surplus is distributed equitably to those members who are not recipients of the payout. Experts at ILRI say that in semi-arid and arid regions, adequate insurance can make keeping livestock a more effective and sustainable livelihood strategy and can act as a cushion to household assets and income in times of distress. Initial studies from other pastoral regions that have access to the IBLT product showed that droughts were less likely to damage diets in households that had bought insurance. The insurance was also linked to a 50% drop in distress sales of livestock and a 33% drop in reliance on food aid.

Looking to the Future The company’s work in Africa and beyond has seen it reach many milestones since its 2008 inception, including being licensed as the first Shariah-compliant TIA Pension Scheme in East and Central Africa in 2012 for Corporate Schemes. TIA was also licensed to be the first Shariahcompliant Family Takaful Operator in East and Central Africa in 2013. Additionally in 2015, TIA received the licence from the Insurance regulator in Kenya to be the first Shariahcompliant medical scheme for corporate organisations in Kenya and the region. TIA also won two awards at the prestigious Marketing Society of Kenya Awards Gala in 2011, for Best Launch and Best New Market Entrant, and gained a nomination for the award for Best New Takaful Operator at the

Finance Islamic Business & Finance Awards held in December 2011 in Dubai. In 2012, the company continued this success by winning the Special Award during the Annual Insurance Awards for introducing a new way of insurance as a mark of true innovation, helping to increase the penetration of insurance services. It was also nominated in two categories at the Islamic Business & Finance Awards 2012, for Best New Islamic Institution and Best Takaful Operator for Africa, before winning Best Takaful Operator for Africa in the 2013 Islamic Business & Finance Awards in Dubai. Other successes include winning the Claims Settlement General Award in 2014 at the Annual Insurance Awards in Kenya. All of these significant recognitions show a true commitment from the company to its brand promise. In addition, the Kenya Reinsurance Corporation (KenyaRe) recently launched a ReTakaful window, marking a significant step in the right direction for Takaful operations, which will now have equally Shariahcompliant ReTakaful. This further reflects the confidence the Kenyan Government has in the Takaful model and its underlying values. Legal elements in Africa are still heavily weighted in favour of conventional insurance. Sudan is the only country in Africa that has legalised its financial sector under Islamic Laws and Regulations, and most other countries largely use conventional insurance laws. In Kenya, for example, the Insurance Regulatory Authority has been supportive by approving the commencement of Takaful operations. The Insurance Act is currently being revised and Takaful Insurance of Africa has submitted its recommendations. Aspire Africa ¡ July/Aug 2016 73


www.takafulafrica.com

TIA with Abubakr Ali, CFO, Gulf Energy The Takaful model will continue to expand across the African continent with the help of some key changes, such as individual countries revising their existing financial sector laws to encourage ‘one stop shop’ complimentary regulations that will motivate clients to get Shariah-compliant banking, Takaful, Pension, Asset Management and Capital Markets Likewise, standardised regulations across regions will promote business opportunities including ReTakaful and offshore investments, and exploitation of existing ICT opportunities will increase penetration, access and affordability of Takaful and ReTakaful, including partnerships with mobile platform companies and social media. 74 Takaful Insurance of Africa - Kenya

The introduction of Exchange Training Programmes between the established markets in Asia and the Middle East and those emerging from Africa will help transfer knowledge and best practices and grow a rich human resource to meet the demands of an ever-increasing customer base. Innovation in terms of unique and affordable products that are relevant to various segments of the market cannot be over-emphasised. The players that will give priority to micro Takaful products with matching pricing to suit the lower end markets will outperform everyone else, reflecting huge numbers in the returns. ASPIRE


17 – 19 May 2016 CTICC, Cape Town, South Africa www.african-utility-week.com

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Aspire Africa | Issue 3.  

Committed to Promoting African Synergy. Featuring Sacha Poignonnec, co-CEO, Jumia Group.