Quick Summary

We were delighted to have a tête-à-tête with Leo Schiefermuller, Co-founder and Director of Jumeme, who shared wisdom on the solar industry. Knowledgeable insights captured below include:

• Jumeme’s objective and achievement
• Fighting covid-19 the Solar way
• Forging ahead – Best strategy for mini-grids
• Regulations
• Covid challenge

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INTERVIEW

RiA (Q1): Hello everybody. So welcome to Renewables in Africa, your African clean energy champion.We are always keen to talk to industry players who are making and shaping this industry. Today we’re talking to a very interesting gentleman. Leo Schiefermuller, the Director of Jumeme, but I’ll ask him to properly introduce himself. So Leo, hello and welcome. Thank you for being with us.

LS (A1): Thank you Tony, thanks for the invitation, it’s a pleasure talking to you. Let me briefly introduce myself. My name is Leo Schiefermuller, I’m one of the Co-founder and Director of Jumeme,we’re a power supply, which is a mini grid company in Tanzania. We started off in 2014 and since then we have been busy in developing, implementing, and operating mini grids across the country.

RiA (Q2): I read about you and we’ve met a couple of times at conferences, and what I know from the company is that it was created with huge ambition, to build mini grid across the continent, which is very great. 300’s that’s what I read. And also the ambition to electrify about a million people, if not more by 2023.So we are three years from this date, what is the record so far?

LS (A2): What we’ve been doing or what kept us busy in Tanzania is, as I mentioned, the development and implementation of the mini grids, and so far we have now put 23 mini grids into operation, which electrify a population of roughly 200,000 people. So the population living in that area is between 150,000 and 200,000 people. So we’re keeping ourselves busy, obviously it’s a very ambitious target, and as you can imagine, it’s not always easy to work in rural Africa. We are exposed to regulatory changes and challenges but we have seen the impact of our mini grids, it really changes the lives of the people. So we are happy and fully motivated to continue pushing.

RiA (Q3): Talking about changing the life of people, so we know the coronavirus crisis has certainly changed the lives of all of us across the globe. And then one thing has shown is actually the vital importance of power supply for healthcare centres around the world. Most importantly, in Africa, in order for them to deliver the service. I was actually wondering how is Jumeme concretely helping those Health Centres in the continent?

LS (A3): Thanks for this question, because this is something we put a lot of emphasis on during the last months, in order to make our own contribution here, seeing the needs in this crisis. So what we have decided as Jumeme is; we have to come up with our own – what we call – COVID-19 Relief Program, where we decided to provide electricity services to Health Centres and hospitals, within our area of operation, free of charge. So in concrete terms, we are currently providing or have connected already 10 Health Centres and hospitals, free of electricity charge. And we’re currently connecting another 10. So there are, in total, 20 such facilities, which we are providing electricity services for the next couple of months, free of charge. In general, there is no national grid infrastructure; we have seen the importance of mini grids, providing electricity, to such facilities. We have started with a mini grid pilot back in 2016. And what we saw in this specific village, on an Island in Lake Victoria, is that this ordinary Health Centre, like you see thousands of those in rural Africa, has already developed into a really proper hospital with all the facilities in place, because of the availability of 20% of electricity. And I think that’s what we have to consider that, reliable, affordable electricity is also really key to the health infrastructure in rural Africa.

RiA (Q4):   that’s so vital, and I know that the industry has responded very well, because I’ve heard of one or two other companies, who have made a similar initiative and it’s so much needed. This is actually a huge sacrifice that you, as a business, is doing, because you mentioned for the next two or three months, you’re going to be providing electricity for free. I was wondering, how do you make up for the shortfall, financially? Because that’s a huge task and you’re also having to look after people working for yourself.

LS (A4):   Well, I agree. I think we are all aware of the financial consequences, but I think in times like this, I think it’s up to everyone including energy supply companies, to make their contributions here. And clearly, we hope that this is a very short term crisis, and that we are all going to recover very quickly from the crisis, and at the same time, go back also quickly to the normal operational mode. But again, I have to repeat myself, energy is an essential service. So we are really fulfilling essential needs of our customers.

RiA (Q5):   On behalf of the whole industry and also those local companies, I wanted to thank you for you doing that. I’m sure they really appreciate it and also being the spouse of a key worker. I know what it means to have supportive energy companies. One thing I’ve noticed on your records, is you already built 23 mini grids, and electrified more than 200,000 people. It seems to me that you seem to have a model that works. I’m not asking you to reveal business secrets here, but mini grids are so important. What would you say is the right approach, business wise, for mini grids to grow across the continent?

LS (A5):   Well, I believe, what is really key for mini grids, is that you focus on the productive use of electricity. We have standards from the very beginning and I think that focus paid off that. but when we talk about productive use of electricity, you’re talking about providing electricity to milling machines or workshops or normal small shops, which you find in rural areas. But I think what we intend or what we are doing goes far beyond that. So we are developing business opportunities, or we are trying to capture opportunities or business opportunities which result from the electrification of rural areas. So with the presence of electricity, there are certain opportunities, which you need to capture in order to make the mini grid business by itself viable. If I can give you an example, we have electrified 10 islands in Lake Victoria. As you can imagine, there’s a lot of fish business going on. At the same time, this local fish businesses have been lacking cooling facilities in the past, and therefore they haven’t been able to capture the full value of the fish they are selling to any business or any trader. Therefore, the value they received, or the amount of money they receive for the fish was very limited. So by bringing electricity to those islands, we are able to actually provide cooling facilities. And therefore we are now able to increase the value of the local fishing significantly because the fish can be now cooled and transported over longer distance, in order to reach markets in a way you can achieve a high value for the fish. And that’s just one example of how you can capture the value of the electrification business. And I think this is something you need to actively look for such opportunities and integrate that in your business model.

RiA (Q6):   That is very smart. You’re talking about not just focusing on your own production, but looking at how you can strengthen the whole value chain, so that all the gain can be maximized. I had a question in mind, but let me slightly modify that in light of what you just said. We know Tanzania is one of the countries with, let’s say a more robust regulatory framework for many of the developments. What would be the two or three key steps, from the regulation perspective, that you, as a developer, would like to see in other regions of Africa, for the industry to grow?

LS (A6):   It needs to be a clearly defined electrification plan for the country; which village, which area, which regions I’m going to electrify; with grid extensions and what is the best means to using mini grid electrification for certain areas. I think that’s the key because there’s nothing worse than an uncertainty in terms of grid extension. The grid extension is commercially, probably the biggest risk for a mini grid or for a mini grid investor. And therefore, I think once this is clear and that will be a very big step forward, in terms of regulation. At the same time, I think it needs to be also very open, or the regulation needs to be clear about the possibility of private companies, being able to operate in the energy space. So there are a number of countries, from where the energy or the power is only regulated or only in the hands of the national utility. I think that we still see in a number of countries, but there need to be a key regulation that, if you want to do mini grids, based on my experiences, can be best done by private companies, but you need to have a regulatory framework for that in place, obviously.

RiA (Q7):   Okay, excellent. So I’m sure many people will be keen to hear that, last question from me. So COVID-19, let me come back to that just for a second for us to wrap up. Do you see this as an obstacle or an accelerator for the industry as a whole?

LS (A7):   I think this question I can only answer after we have gone through the crisis to see, because it largely depends now on how the whole crisis is going to materialize in Africa; because fortunately the numbers in Africa is not as bad as we see them in Europe. So we sincerely hope that this is going to remain like this. Some African countries have been really well prepared and have responded very well to the crisis. Obviously as I mentioned before decentralization and the need for power, not only for the Health Centres, but for the whole communities also. For example, our pilot system, which has been operational now for four years, we have seen the development of a functional water supply system, which is obviously key for reducing your exposure to COVID-19. I think all those aspects made us really aware how important this is. So yes, I sincerely hope that we see this COVID-19 as an accelerator, as we also see emergency funding coming in. Please ask me the same question in three to six months, and then I will probably be able to give you a clear answer.

RiA:   Excellent. So thank you, I know that was a difficult question, to be quite fair, nobody can properly respond with certainty. However, thank you very much Leo, for taking the time to talk to us. It was great to hear about the steps you are making with Jumeme, and how you are supporting in this particular difficult time. Hopefully, we should bump into each other very soon. Thank you.

LS:   Thank you Tony, it was a pleasure being with you.

Listen to the interview Here