Access to energy in emerging markets has been a longstanding issue, with over 750 million people lacking access to reliable and affordable energy. To discuss this issue, London Business School’s Social Impact Conference brought together experts Amar Inamdar, Managing Director of Kawisafi Ventures; Nick Hughes, Founder of 4R digital and M-KOPA; and Katherine Owens, Associate Director of Leapfrog Investments, to share their perspectives.
Challenges and opportunities both exist in the emerging market
The panellists discussed the presence of both challenges and opportunities in the emerging market of energy access. Their discussion highlighted that over 600 million people in sub-Saharan Africa currently lack access to reliable and affordable energy and spend $17 billion annually on inefficient energy. Although initiatives like M-KOPA have been successful in improving energy access in the market, there are still obstacles to expanding energy access, including financing issues, and the inability of innovative products to scale and provide affordable energy for all.
Innovation is critical to addressing the demands of emerging markets
During the conference, panellists emphasised the pressing need for innovative solutions in the emerging market of energy access. They acknowledged the significant energy needs in these markets and highlighted that capital is not always efficient as they call for innovative financing solutions that can facilitate radical affordability for emerging market consumers.
The panellists discussed disruptive innovations, such as pay-as-you-go and off-grid solar solutions. With pay-as-you-go, customers are able to make small payments to unlock the system for a day or week of usage at a time; making basic and modern electricity more affordable and accessible. This model eliminates the need for customers to bear the upfront cost of the entire solar system, including solar panels, battery storage, lighting, and other optional appliances. Off-grid solar energy solutions provide immediate access to affordable, clean, and reliable electricity in places where grid or mini-grid connections are not yet economically or technically feasible. These solutions can also reduce household air pollution by removing kerosene lamps, improving health, and reducing accidents.
A more integrated solution is required
The panellists agreed that to fully realise the potential of the emerging market, it is essential to establish a more integrated system that encompasses financial institutions, product innovation and distribution networks. This will pave the way for significant advancements and improvements in emerging markets, ultimately benefiting both the environment and the communities.
In conclusion, the panellists stressed the innovation to expand energy access in emerging markets. There is a large and growing opportunity for increased collaboration between companies in the private sector to create a more equitable and sustainable energy future for the public good. Despite the challenges, the growing focus on renewable energy and the increasing awareness of the importance of energy access in emerging markets provides hope for a brighter future.
About Social Impact Club
The Social Impact Club supports the development of students in becoming socially responsible business leaders by providing educational, experiential, professional, and networking opportunities to the London Business School community. The club focuses on four main areas: impact investing, sustainability, social entrepreneurship, and foundations / non-profit initiatives.
About the Author
Tong Wu (MBA 2024) has nine years of experience in healthcare, thinktank and tech start-ups across different regions – China, East Africa, North Africa and Middle East. She is an experienced researcher, marketer, and entrepreneur. She is passionate about innovative business models to empower SMEs in developing countries and sustainable economic development.