Cleaner, safer energy services for communities
The cost of energy in South Africa has increased rapidly and this trend shows no sign of abating. In 2013, the National Electricity Regulator of South Africa (NERSA) announced that the price of electricity will increase by at least 8% a year for the next five years until 2018, while the cost of paraffin [kerosene] – an energy source commonly used amongst low-income communities across South Africa – has more than quadrupled since the year 2000.
While the South African government has made great strides in delivering access to basic services for previously disadvantaged populations since the onset of democracy in 1994, there remains much to be done. More than 3,4 million people do not have a grid connection, and even among those that do, many continue to use multiple sources of energy (e.g. paraffin, candles) as a coping strategy for dealing with rising energy prices. Power cuts also occur quite regularly, particularly in low-income communities (townships). Dangerous and polluting energy products (such as braziers, paraffin stoves and candles) are widely used and devastating shack fires are commonplace, affecting thousands of people every year. One solution to this problem is the implementation of privately led, market-driven initiatives that aim to not only deliver clean, safe and reliable energy products to low-income communities, but also provide entrepreneurial opportunities to residents. EnerGcare is attempting to do just this.
Established as a for-profit social business in 2010, EnerGcare was created with three key objectives in mind:
- Firstly, to reduce energy poverty through increasing access to affordable renewable and efficient energy solutions at the "Base of the Pyramid (BoP)";
- Secondly, to reduce unemployment and poverty by providing opportunities to start EnerGcare franchises and/or selling EnerGcare products through existing township-based retailers;
- Finally, to reduce pollution and environmental degradation through replacing fossil-fuel based energy appliances and practices with EnerGcare products.
EnerGcare was developed and implemented as a partnership between PlaNet Finance, Restio Energy and The Business Place Philippi. Says Frances Fraser, Regional Director of PlaNet Finance Southern Africa: "developing a model for sustainable access to clean and renewable energy options, requires a strong partnership between different stakeholders committed to resolving these issues."
So, how does it work? EnerGcare is built around a network of Independent Distributors (see interview with Independent Distributor Ncediwe Singiswa) – currently operational in Cape Town, Johannesburg and Potchefstroom – who reside in the townships themselves. The Independent Distributors market and sell a range of renewable and efficient energy technologies for cell phone charging, cooking, heating and lighting. All products sold by EnerGcare need to carry manufacturers' warranties, be affordable, user-friendly, robust and meet the quality standards of the Global Alliance for Clean Cookstoves and the World Bank's Lighting Africa initiative. Independent Distributors buy goods at wholesale prices, enabling them to earn a commission on each product they sell. Explains Thabo Tsobane, EnerGcare Project Manager: "townships have limited awareness of these products. That is why we are using a direct sales approach where people can actually touch the products and see how they work". EnerGcare further provides after-sales support as well as induction training, sales training, an EnerGcare starter kit and on-going marketing support.
EnerGcare is a proud flagship project of the Western Cape government's '110% Green' Initiative that aims to connect environmental preservation with economic growth through creating a green economy. It is also registered on other renewable and clean energy platforms and databases including the Cape Town Green Map, Enviropaedia and the REEGLE Clean Energy Information Gateway.
2014 will see EnerGcare rapidly expand its operations into South Africa's rural and peri-urban areas, working with established retailers and local authorities. The initiative is also set to grow its network of distributors through cooperation with organisations such as the SEDA Atlantis Renewable Energy Business Incubator (SAREBI), and has a number of exciting new products being added to its catalogue.