70 cents
Price of the cheapest daily flat-rate
20 minutes
Set-up time
100%
Guatemalan
One out of ten Guatemalans has no access to the national power grid. That means 1.5 million people dependent on candlelight, experiencing the discomfort and insecurity of homes and streets shrouded in darkness every night. Until Kingo came along.

A large share of the population in Central America still has to get along without utility-supplied electricity. While significant progress was made between 1990 and 2010, most notably in Guatemala, Honduras and Nicaragua, the region’s least electrified countries, millions of people are still unconnected to the power grid. In Guatemala, for example, over 300,000 households are dependent for their lighting on candles, kerosene lamps or diesel-powered generators.

But alongside those widespread makeshift arrangements, an innovative alternative has been gaining ground in the country’s most remote areas. Kingo, a battery box that takes just twenty minutes to install and connect to a solar panel, is an offthe- grid power solution, i.e., with no connection to the national power  grid. This makes it fully independent of Guatemala’s centralized electricity infrastructure, which relies heavily on hydropower. “This is the quickest and cheapest way to boost access to electric power among country-dwellers,” explains Juan Fermín Rodríguez, the CEO and co-founder of Kingo Energy, a Guatemalan start-up that designs and markets the orange-coloured battery boxes bearing its name.

This is the quickest and cheapest way to boost access to electric power among country-dwellers.
 

Juan Fermin Rodriguez, CEO and co-founder of Kingo Energy
Projet Kingo Energy,personnes posant des panneaux solaires
Projet Kingo Energy,famille heureuse d'avoir de l'éléctricité
Projet Kingo Energy,mécanisme de la boîte
Projet Kingo Energy,montage de la boîte dans une maison
Projet Kingo Energy,explication du fonctionnement de la boîte

I never dreamt that Kingo would come here. Ours is now one of fifteen families with access to electricity. Everyone wants electricity!”
 

Projet Kingo Energy,femme du Guatemala
Elena Laj Yuja de Gua, an inhabitant of Caserío El Limón
Un bénéficiaire de Kingo
Présentation du kit Kingo
Off-grid power or no power
Cost is obviously a key consideration in a country marked by grinding poverty and high inequality. Half the population lives below the poverty line and 13% lives in extreme poverty – with an even higher proportion among Mayas, who make up 40% of Guatemala’s population and are for the most part farmers in remote areas. As it happens, off-grid solutions have begun to take root in just such areas. Prime examples are Alta Verapaz and Petén, two of the country’s poorest Departments, where conventional power grid coverage is only 44% and 66%, respectively.

“It’s taken us under two years to equip more than 15,000 Guatemalan households,” states Kingo Energy’s CEO. “This has not only given families improved living conditions and greater home security. It also means less time devoted to household chores and more time for children to do school work.” Off-grid lighting systems unquestionably have a lot of upside. Cheaper, more efficient, brighter, they are also safer and produce less pollution than candles and kerosene lamps. Moreover, Kingo requires no cultural adjustment, as users already pay their mobile phone top-ups in the same way.
Installation des panneaux solaires
A solar panel on the roof
How exactly does this environmental friendly offer work? To start with, a solar panel is installed on the rooftop of each user who signs a no-commitment contract that provides for prepayment per unit of time (hour, day, week or month), very much as with a mobile phone top-up. Once the kit has been installed and the prepaid codes have been entered by the customer, they unlock the system for the specified time period. The verification is done independently of GSM coverage, making the service accessible to people in even the remotest areas. With this ‘pay-as-you-go’ system, there is no need to purchase equipment or pay for installation. Each user gets a guarantee and a perpetual service commitment, so that it all takes is a phone call for Kingo teams to step in.

Customers who opt for the basis Kingo 15 kit, which can light three lamps for five hours and recharge one mobile phone per day, pay 60 centavos (€0.70) a day or 110 centavos (€13) a month. Those who sign up for the high-end Kingo 100 offer will have enough power to light up the main room of their homes for five hours, recharge three mobile phones and run two electrical appliances like fans, TVs, computers and radios. Kingo customers will be able in the future to prepay on their mobile phones, for example by going through the financing department of a financial intermediary. But given the current size of Guatemala’s unbanked population, for the time being users have to purchase their top-up cards either at local grocery shops or at directly from Kingo representatives, who pocket a 6% commission.
Des enfants travaillent grâce à l'électricité de Kingo
“It’s been a game-changer for me”
Elena Laj Yuja de Gua and her husband Jorge moved two years ago to a village called Caserío El Limón located two hours away from Flores, the capital of Petén Department. A mother of four children, she claims that the arrival of Kingo was a game-changer for her. “We used to get up at 4 or 5 in the morning to prepare meals for the whole day by candlelight. We don’t have to do that anymore. I can get up later, spend more time with the family and do my part for the village women’s association. Above all, the children can devote an hour a day to their homework. I never dreamt that Kingo would come here. Ours is now one of fifteen families with access to electricity. Everybody wants electricity!” With her Kingo 15 plan, Elena can have indoor lighting for over five hours a day, recharge her phone, organize her children’s school work and keep her home safe, while saving 25% on monthly expenses. “I used to buy candles and go through three or four of them a day,” she says. “There was always a risk of setting fire to the house, not to mention the danger that snakes would slither inside after nightfall while the children were still playing. With electric light, animals no longer approach and the children can play or do school work whenever they need to.”

This is obviously the kind of feedback that motivates Kingo Energy staff to increase the availability of their offer in remote parts of the country. In fact, the aim is to equip two million households by 2020 and extend the company’s business to other countries. As Kingo’s leaders see it, Petén is only part of a much larger potential market. After receiving $5m plus a $4m loan convertible into shares from FMO, they plan to raise another $8m to be able to branch out across the region and provide service in Colombia, Honduras, Nicaragua and even Mexico.
Le boitier Kingo
Altruism and profitability
According to the International Energy Agency’s projections for sub-Saharan Africa, “Two-thirds of the mini-grid and off-grid systems in rural areas in 2040 will be powered by solar voltaics, small hydropower or wind”. For several years now, a large number of start-ups have risen to the challenge of providing electricity to Africa. Some have turned to off-grid solar power and their investments are starting to pay off.

Juan Fermín Rodríguez, who left a career at Procter & Gamble to “bet the farm” on his start-up, considers it a vital necessity for Kingo to both meet its commitments and turn a profit. “I strongly believe that we’ve taken the right approach and that we can make a profit while serving the public interest,” he states. When asked whether that outlook reflects the altruistic upbringing he received from a father already engaged in cooperation programmes in rural Guatemala, he comments: “The most important thing in our eyes is to have increasingly high-quality offerings, software and raw materials in our equipment so that we can deliver better service to our users. With new components coming out in the market, we should be able to develop smaller, longer-lasting batteries, which means that we can reach even more remote regions and offer an accessible alternative to more and more people.”
Installation d'ampoules électriques
No progress without private capital
Have these progresses made us closer to make to make clean energy available across the region? A decade after the first pioneering solutions in this area emerged, no business model – whether pay-as-you-go, rent-to-own or perpetual leases of the kind offered by Kingo – has achieved global dominance so far, even though the alternative energy market has followed much the same trajectory as mobile telephony, according the International Energy Agency. On the basis of this outlook, Kingo anticipates a return on investment in short order. “Due to our knowledge of the market and our adaptability, we can profitably invest while narrowing the poverty gap. But with the financing requirements we face, it’s essential to enlist support from financial partners like Proparco and FMO who are willing to take on risks that may seem like too much for local banks,” Kingo’s CEO stresses.

In any case, only massive investment can make a difference in Guatemala. In a country where 57% of GDP – that is, $30bn – accrued to just 260 citizens in 2014, there will be no progress without private capital. Nor can financial institutions be expected to step in, given the commitment to keeping government debt under control. Yet, private investment and help from financial institutions could make it possible to reduce the gap in both energy supply and economic opportunities between rural communities and the urban population.
THE ART OF BOUNCING BACK

For Juan Fermín Rodríguez, it all started in 2010 when he left Procter & Gamble to become the co-founder of a first, pay-as-you-go business called Quetsol. With backing from local microfinance institutions, the company set out to supply cheap electric power to Guatemala’s poorest households, many of them dependent on candlelight and diesel generators. This laudable  initiative failed, however. The need to repay the initial loan, combined with customer insolvency and high unit costs for solar panels and batteries, made this an unsustainable business model.

But Juan Fermín is one of those responsive, agile entrepreneurs who can reinvent their business at the drop of a hat. He bounced back, and fast. With his partner Juan José Estrada – alias “J. J.” – he crafted a telecomstyle approach and came out with a solar power service offering that had his new company, Kingo Energy, bear the cost of installation.

Two key factors rendered their solution workable. For one thing, Kingo raised funds from several investors including FMO and Proparco. For another, solar installation costs have declined by 80% since 2008, making the  technology cost-competitive with fossil fuels.
 

Projet Kingo Energy,boîte qui permet l'accès à l'éléctricité
Kingo – a kit that can change your life
This little box gives Guatemala’s poorest inhabitants access to electricity. For a few euros a month to be paid up front on flexible terms, customers can have indoor lighting in the evening, keep animals out and give their children better conditions for doing their school work.