Lighting up Africa

africa_energy.top.jpgNuru Energy makes low-watt LED lamps that are good at task lighting for doing homework. By Brian Dumaine, assistant managing editor


FORTUNE -- In the Bugesera region of Rwanda -- a land known for its sorghum farming and also its poverty -- an experiment in capitalism is taking place. For lighting, most villagers here use kerosene lamps, which cause air pollution and lung disease and are a severe fire hazard. Annonciata Mukandekwe, a 50-year-old basket weaver, has a better idea. She spends an hour a day pedaling a small generator that charges LED lights. In her first two weeks in business, this widow sold 140 of the $6.58 lamps to her fellow villagers. Mukandekwe earns $3.78 a day in charging fees -- more than triple the daily income in rural Rwanda. Her customers get safe, clean lighting at one-tenth the cost of kerosene.

Sameer Hajee, the co-founder and CEO of London-based startup Nuru Energy, is the man who helped Mukandekwe set up her business. Hajee, who has an Insead MBA, got his inspiration while working at the U.N. and at Freeplay Energy, a successful London business that sells crank-up radios around the world. At the time, Freeplay's foundation was piloting a microbusiness model to provide foot-powered generators to rural Africa. Most new technology used in the poorest parts of the world is donated. Depending on the kindness of strangers makes adoption slow and erratic. The question, says Hajee, is, "How do we get technology into the hands of as many of the people who need it the most?" The answer: Create sustainable businesses run by locals.

Hajee left Freeplay and eventually founded Nuru, an 11-employee for-profit, in 2009 with $200,000 in seed money from the World Bank Lighting Africa initiative. Nuru arranges microloans for entrepreneurs to buy the lamps, plus an additional $200 to buy Nuru's bike-pedal electric charger. It takes the business owner about six months of pedaling to earn enough cash to pay back the loan with interest. After that it's mostly all profit. Nuru, which manufactures the patent-pending LED lights and pedal chargers in China, also provides its entrepreneurs with training in accounting. So far this year Nuru, which is still in the ramp-up stage and has yet to post a profit, has set up 70 businesses in Rwanda, providing lighting to the equivalent of 7,000 families.

Hajee does not want to stop at lighting. He sees Africans using his pedal generators to make a living charging cellphones, radios, and more. Says he: "Our vision is that eventually we'll have hundreds of thousands running recharging stations. We are trying to build an entrepreneurial platform for rural Africa."

The idea works. All that seems to be holding back even more rapid adoption of the technology is fresh capital for those microloans.  To top of page

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Company Price Change % Change
General Electric Co 26.36 0.31 1.19%
Staples Inc 11.32 -0.30 -2.58%
Microsoft Corp 44.95 -0.38 -0.84%
Cisco Systems Inc 24.71 0.07 0.28%
Lowe's Companies Inc... 52.33 0.81 1.57%
Data as of Aug 20
Index Last Change % Change
Dow 16,979.13 59.54 0.35%
Nasdaq 4,526.48 -1.03 -0.02%
S&P 500 1,986.51 4.91 0.25%
Treasuries 2.43 0.00 0.16%
Data as of 9:01am ET

Sections

Russian officials have shut four McDonald's restaurants in Moscow, including the first to open in the city nearly 25 years ago at the end of the Cold War. More

The world is aging rapidly and that's bad news for the global economy, according to a new report by Moody's Investor Service. More

Small business owners say the economy is still their biggest challenge, which keeps them from expanding and hiring, according to a CNNMoney-Manta survey. More

This month, Delaware became the first state to pass a law giving heirs the right to access the online accounts and assets of someone who has passed away. More

Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.