Guatemala has 16 million inhabitants. Among them, 1.6 million people live without access to electricity, especially in rural areas. In certain departments, such as Alta Verapaz, the maximum coverage rate is 44%. The high cost of conventional energy infrastructure and limited return on investment – given the low population density and poverty of families in rural areas (1) – deter sector players (public and private) from financing grid extensions (2). Consequently, the poorest continue to use candles, oil lamps and other diesel generators for lighting, which is not without consequences on their health.
The Guatemalan start-up Kingo Energy has set out to provide a response by developing clean and economical solutions for access to energy. It offers a photovoltaic kit, comprising solar panels and a box with a battery to store the electricity produced during the day. Users purchase their consumption per unit of time (hour, day, week or month), like with a mobile phone top-up. Once they have been entered by the customer, these prepaid codes unlock the system for that unit of time. The verification is done internally within the system, completely independent of GSM coverage, making the service accessible to people in white zones. In the event of an extended period without use, the system will be picked up by a Kingo representative and reinstalled in another home. With this “pay-as-you-go” system, there is no need to purchase equipment or pay for the installation (which is done by Kingo teams), and there is no security deposit. The prepaid credit codes are distributed by small traders (grocery stores, for example), which are trained by the company.
The basic kit (Kingo 15) supplies three light bulbs (5h of lighting) and recharges a mobile phone for a daily cost of GTQ 6 (EUR 0.71) or GTQ 110 a month (EUR 13.03). This is a competitive offer compared with the cost of buying candles every day and recharging phones in dedicated places which are sometimes far from homes. The superior model (Kingo 100) provides enough power to have five hours of lighting, recharge three mobile phones, and supply two electric appliances (ventilator, television, computer, radio, etc.).
Since its launch in 2013, Kingo has equipped over 18,000 households in 1,300 communities. Proparco has allocated a USD 1.7m loan convertible into shares to this socially committed start-up in order to support its development. This financing will be earmarked for the purchase of equipment and for part of the costs related to the installation and maintenance operations. It should allow Kingo Energy to install over 36,000 units by the end of 2016.
Kingo Energy aims to extend its activity in Guatemala and in neighboring countries, starting with Honduras and Nicaragua, then Haiti, before moving into South American markets, including Colombia, Ecuador and Peru. In the long term, the start-up, which is already present under a licensing agreement in South Africa where it operates in KwaZulu-Natal, plans to rely on Proparco’s expertise and network in Africa in order to extend its footprint to this continent.
(1) Over one Guatemalan in two lives below the poverty line.
(2) The World Bank estimates the average investment cost to connect a household to the grid at USD 4,000.