Access Energy starts up in Senegal

Access Energy, a Senegalese start-up is the latest small-scale energy enterprise to be supported under the AREED initiative.  Inspired by the Village Phone Program of Grameen Phone in Bangladesh, Senegalese entrepreneur Alpha Diallo approached AREED in 2005, with the idea of creating a business that would “fill lthe need for real time communication in rural Senegal using GSM technology.” With the assistance of AREED partners E+Co and ENDA Energy of Senegal, Mr. Diallo developed the initial business concept into a bankable business proposal.

AREED approved start-up financing of FCFA 58,736,150 (approximately US$106,793).  This will enable Access Energy acquire 100 GSM phone systems with associated solar power solutions, and will also meet Access Energy's initial working capital requirements.  With this support, Access Energy is poised to roll-out 5,000 phones in about 3,500 villages over the next five years, bringing telecommunication services to over 2.5 million people living Senegal’s rural communities.

One aspect of Access Energy that i really like is the strategic relationship Mr. Diallo managed to  forge with Sentel and Credit Mutuel du Senegal (CMS). As some of you may know, Sentel is a subsidiary of Millicon International Cellular.  It is also the second largest cellular operator in Senegal, serving over 700,000 subscribers as of November 2005.  Credit Mutuel du Senegal (CMS) is a mutualist microfinance institution operating since 1988.  Now, add a social enterprise like Access Energy, and what you get is a mutually reinforcing alliance of value-adding partners in sustainable development.  E+Co's Investment Officer for Africa, Kofi Nketsia Tabiri, explains how the Access Energy-CMS-Sentel partnership is set up to expand access to solar-enabled telephone services in rural Senegal:

A rural phone operator, who is a current CMS customer, will secure a loan from CMS to purchase a GSM telephone from Access Energy and start the business of reselling telephone services within the community. Sentel will provide access to its existing telecommunications infrastructure and will provide airtime at a wholesale rate to the rural phone operators. Individual villagers in rural areas can then visit their local phone operator and make affordable phone calls. With proceeds from the business, the phone operator makes loan repayments and purchases additional airtime. CMS earns money from the loan and also a percentage of the revenue from airtime sales from Sentel. Sentel earns money through volume sales of airtime. Access Energy earns money from sales of phone systems and also a percentage of the revenue from airtime sales.

Comments

[DAA]

I'm curious as to how one makes the leap from the initial 100 phones to the 3500 you mention in your post. Is he getting additional funding or are they purchased when the venture becomes profitable. Just curious. Thanks.

D