RVB's latest trip to Malawi and Tanzania
Dear Friends, Family and Compatriots:
I am wrapping up my latest trip to Africa. This trip lasted about two months and we got quite a bit done. Here is a list of seven major accomplishments from mid-September to mid-October.
(1) Container w/LTO batteries arrives: Our latest container shipment (finally) arrived and was cleared through customs in September. With this container, we now have a decent stock of super-long-lasting Lithium Titanate batteries (which last ten times as long as regular Lithium Ion batteries). We will use these batteries for lights, solar vehicles and solar electric cooking applications (i.e. allowing cooking at night).
(2) Improved, insulated DC electric pressure cooker is found: We successfully tested a professionally manufactured insulated cooker that can be run when directly connected to solar panels (i.e. without batteries!). The cooker includes a pressure-cooking option so that it can cook dishes like beans fast and efficiently.
(3) TZ/MW Collaboration Started on Solar Electric Technology: Conducted a solar electric cooking technology workshop with the Maasai Stoves and Solar project in Northern Tanzania. Hopefully this will blossom into a long-term partnership where we can co-distribute highly affordable solar panels and the products that run off them in Northern Tanzania.
(4) Solar Pumps for Women's Empowerment: We expanded and refined our model of distributing solar electric pumps to rural women's collectives in rural villages, adding two more groups in the Mgubo village area and sending four pumping systems to two groups of 25 women each in the Machinga area.
(5) Village Solar Technicians Trained: We trained five new technicians from the villages (four women and one one man) in the assembly of solar electric cookers and forever lights.
(6) Prototype LTO Cooker Battery is Built: We built prototypes of a 28 Volt, 250 watt-hour LTO cooker battery that can very easily deliver its energy in 30 minutes or less, thus being able power a 500 watt cooker at night. This battery costs less than $100 to make, and should theoretically last 10 years or more.
(7) Solar Electric Taxi Pilot Test Started: Last but not least, we started a pilot test of AFRICA'S FIRST SOLAR-ELECTRIC TAXI SERVICE in Mgubo village with a prototype solar-electric cargo tricycle which we outfitted with solar panels and Lithium Titanate (LTO) batteries.
All of this is super-duper cool and is the product of the hard work and support given to this work by many people: including first and foremost my Malawian colleagues, and the people in the villages who collaborate with us. The container that we just received with the really wonderful LTO batteries was paid for with donations from Eric and Paul Selvin: getting LTO batteries to Malawi has been a HUGE advance. And our cooker work would not have been possible without the support from the "MECS: Modern Energy Cooking Services" program of Loughborough University which is supported by UKAid AND without the earlier collaboration of Prof. Pete Schwartz and his students at Cal Poly State University at San Luis Obispo.
And of course, most impactful of all are the monthly donations given by many of you which provides us the means and motivation for our "forever lights" work. I personally love the forever lights because they provide the greatest humanitarian impact per dollar of any of the things that we do. It will take some time to measure and confirm this with scientific accuracy, but we hope that the latest version of the forever light will provide more than $20 of household cost savings for every donated $1 of charity subsidy invested. And 20 to 1 is a really great benefit/cost ratio.
In the rest of this very long letter, I will go through these accomplishments one-by-one and then conclude with a description of how it is possible to scale-up our work by more than a factor of 10X next year if we can get the right type of rather unconventional impact investor financing. I will also describe approximately what a 10X scale-up might look like next year just in case we are lucky enough to get such expansion financing.
Success #1: Container arrives and is cleared through customs
Boy! the container that held our first supplies of LTO batteries was a long time coming!
Our little mistake in this order was trying to save a few hundred bucks by shipping the container through Nacala, Mozambique instead of the much bigger port of Beira, Mozambique. What I think happened is that when the ship came by the east coast of Africa the first time, it probably did not have enough goods to make its first port call at Nacala. So the ship didn't stop! It wound up dropping off the container at the island of Reunion, where it was picked up by another ship plying the Singapore/Africa shipping routes. When it got on the next ship, it traveled all the way back to Singapore again before being dropped off a month late at Nacala, Mozambique.
Anyways, batteries, small solar panels, glue for cookers, more electric vehicles and LITHIUM TITANATE (LTO) batteries arrived safe and sound to Blantyre in September.
The LTO batteries appear to work as advertised, so we immediately began making our new and improved versions of forever lights, and we used different versions of the LTO batteries to start making prototype batteries for cookers and solar vehicles. Yeah!
Success #2: Manufactured Insulated Electric Multi-cooker is tested with battery-free operation.
Well, I have to admit that high quality electric cooker manufacturing in a low-budget workshop in a low-income country is hard. So when the MECS program (i.e. mecs.org.uk) arranged for a manufacturer to produce a high quality 24 volt electric multi-cooker that can work well with solar panels, we jumped at the opportunity of getting a sample.
We, of course, tested the new cooker in battery-free operation. And basically it works great when the sun is shining. I wrote a blog about it at:https://mecs.org.uk/blog/an-off-grid-solar-photovoltaic-electric-pressure-cooker-system-that-costs-only-200-in-malawi/
This means that essentially our solar cooker manufacturing problem is solved if we have to distribute many thousands per year. Now all we have to do is order them.
Success #3: Solar electric cooking technology workshop in Northern Tanzania.
Note that our current grant from MECS/UKAid/Loughborough University is about using off grid solar cooking systems to empower women.
Before this grant, we were so busy developing the technology, that we did not have time to explore Malawian women's empowerment processes in depth. But this grant gave us the resources to do so.
So we set up a solar shop with a women's cooperative and started working with women's groups in other villages. But we wanted to also learn from other people's experience in women's empowerment organizing.
A good buddy of mine that I have known for almost 40 years, Professor Robert V. Lange (Bob), has been working deeply with organizing empowerment activities with the Maasai in Northern Tanzania as part of his Maasai Stoves and Solar project:https://internationalcollaborative.org/our-work/empowerment/
So I wrote into the grant, resources for the Malawi folks to share their technology with the Maasai, and for them to also see how Bob's vision of empowerment has been manifested in his work with the Maasai.
It was a great exchange. Everyone had a good time and learned a lot. The Malawi folks even got to go on a one-day safari in Tarangire National Park. To see pictures and videos from the safari, go to: https://m.facebook.com/story.php?story_fbid=1049883482425184&id=100022106264934
I also wrote a blog article comparing and contrasting the Maasai and Malawian women's empowerment approaches. When that is posted, I'll send the link.
Success #4: Solar electric pumps to rural women's farming collectives
There has been one huge result of the Malawi women's empowerment exploration that we have been doing over the last few months. We have discovered that the most-demanded solar technology by rural women's groups is actually solar electric pumping.
We found this out when we asked one of the more active women' groups that we work with the question: "What do you think is empowering" and they emphatically answered "business: because we need to make money." As we went to more villages, we found that it was common for local village women to work together in groups during the dry season growing vegetables to sell in the market for making a little extra money to support themselves and their families. AND because they typically had very little money and could not afford to rent a diesel pump (or even a treadle pump sometimes), they often carried the water by hand to irrigate their garden.
Solar pumps not only allow grassroots village women's groups to save labor, but they also allow them to expand their acreage, grow more crops, and make more money. Exactly how much for one pump? That we don't quite know yet. But as we get more solar pumps to more women's groups over the next year, we will take measurements find out. We are pretty sure that one pump can help generate thousands of dollars worth of increased vegetable harvest in 2 to 4 months. But exactly how much of this potential is actually harnessed by the groups, we don't know yet.
Success #5: Training five rural village technicians in electric cooker and forever light assembly.
As you can see from this letter, the pace of activities for our Malawi work is picking up. And as such, it needs more workers. So in early October we had our village distributors send a total of 5 technicians (one man and five women) to the Blantyre workshop for training. They were trained up for two weeks, then the main staff went to Tanzania while the trainees continued work on making forever lights and cookers. They made about 350 forever lights and 40 solar electric cookers over the course of four weeks.
Ideally, it would be great if we could just send parts to the villages and have the villages assemble lights and cookers for local customers. This has been an ideal of ours for quite a while now. Now that we are establishing permanent shops in three village areas, maybe we can make more progress on this ideal model next year.
Success #6: LTO batteries for solar electric cooking.
A huge benefit of LTO batteries is that they can discharge their energy at a very high rate. Theoretically they can discharge all of their energy in just 6 minutes, or even less. This allows a relatively small battery to deliver large amounts of peak power. Specifically, it takes roughly 200 watt-hours of energy to cook 1 kilogram of food, and with LTO batteries, this amount of energy storage can cost less than $100. And the beauty of it is that the battery can cycle more than 10,000 times. So if the battery is fully utilized (i.e. cycled three times per day over ten years), the battery cost per cycle is only $0.01! This is incredibly cheap, which is what low-income Malawians need.
In reality the battery will not be utilized to its full capacity, so the battery cost will be two to several cents per kilogram of food cooked, but that is still a very reasonable cost considering that the value of the cooked food is in the range of $0.10 to $0.50 per kilogram.
So does the battery work? Well, I did assemble one, and used it to cook several meals in a solar electric frying pan. It cooked a kilogram or less of food rather well. But most cooks will want to cook several kilograms of food in one cooking event, so an upgraded system with 500 to 800 watt-hours of storage would be a better demonstration of the full potential of LTO batteries. We will probably work on such an upgraded system on my next trip in late January 2022.
Success #7: Village solar electric vehicle taxi service pilot test!
I love the progress that we have made on creating a workable solar electric vehicle for rural Africa.
Previously, we demonstrated that solar panels could power an electric cargo tricycle. Then we made a roof frame and mounted the panels. And now, we demonstrated that with a few hundred dollars of LTO batteries (which should be able to last 10 years) the vehicle can run all day when the sun is shining and not have to stop for a recharge (if lightly loaded) because the solar panels provide enough energy to continuously recharge the battery while operating.
That is so so so cool!
AND THE VEHICLE COSTS LESS THAN $2000 AT THE FACTORY DOOR.
This is so huge. But I have to be patient. The next step is to verify durability and practicality and to figure out which business models and arrangements can get these vehicles to operate at high utilization in low-income communities in a financially feasible way.
This will take another year or two to figure out. But still this is so totally cool. Especially considering how outrageously expensive most electric vehicles are, how almost no electrical vehicles are fully powered by the solar panels on their roof, and how everyone has pretty much given up on the idea of solar-electrifying African transport over the next decade or two.
In fact to get this started, I will start a gofundme fundraiser in the next few weeks to raise money for the first container of 20 solar-electric vehicles. If the fundraiser is wildly successful, there really will be no limit to the number of solar electric vehicles that we can send. Hopefully the fundraiser will go viral.
Why isn't someone else doing this?? Seems to me that everyone in the electric vehicle space is just trying to see what work will make the most bucks. This is especially true now that Elon Musk is the most famous EV entrepreneur. With Elon being the richest man in the world with almost 300 billion in wealth, mostly from his business of selling electric vehicles to rich people, the message is clear: the reason to make and sell EVs is so that you can be rich!
Given the Elon Musk example, who would actually be so stupid to create cheap solar electric vehicles for the poorest people on the planet to use at almost no profit to the seller? You can't get rich doing that! And what is the point of any business or activity if you can't make a little bit of money off of it?
THAT is why there are no EVs for low-income Africa: because selling EVs to poor people won't make the seller rich.
But I am going to do it anyway.
What can I say? I have chosen to pursue this particular brand of unprofitable humanitarian stupidity. It is my prerogative.
Meanwhile, I guess that Elon will be spending his trillions in profits building his condo's on Mars. As for me, I'll be hanging out in Africa instead. Even though it is a lot more low tech, at least the people are lot nicer than Martians. (LOL!)
So now that we have reviewed progress in these seven areas, let's now discuss where these Africa projects could go if they got significant amounts of the right type of supportive financing. And for that we must first ask the question: what type of financing is needed?
What funding could create the fastest expansion of this Africa solar work?
Now that we have four super-great solar products (lights, cookers, pumps and vehicles) in the bag (or pretty close to it), what type of funding could create the fastest and greatest expansion of our good works?
When we talk about "type of funding" we must ask two questions: (A) What would the funding be used for, and (B) What would the terms of the funding be?
In our case there are some fairly clear answers to these two questions.
First, what would expansion funding be used for in our work?
Well, if it is expansion funding, we would want to use it for financing those things that could have the biggest impact on growth. For us, the biggest financial barrier to growth is financing for bringing more and larger containers of solar parts and accessories to Africa. The added benefit to bringing more and larger containers to Africa is that our cost per unit (and the customer price!) goes down as a result of the economies of scale of large-scale purchasing and distribution.
Most of the cost of the products that we bring and assemble is the solar panels, and perhaps also LTO batteries. It is pretty simple: the more panels and LTO batteries that we have in stock, the faster we can get solar systems to customers. And the more solar systems that we get to customers, the more sales revenue that we can get from those customers, and the more charity donations that we can collect for actually delivering high quality and highly beneficial solar systems to very-low-income Africans.
What financing terms might be best for expansion financing in our case?
An efficient expansion financing arrangement will have financing terms that are a good match to the realities of the activity that is being expanded.
What are the realities of bringing containers of solar supplies to Malawi?
First, solar sales are highly seasonal: people buy solar from April to November in Malawi. From December to March they are working in their agricultural fields and are investing all of their time and money in growing a good harvest in April to June. From April to June, people start selling parts of their harvest and start having a little extra cash that they can invest in solar.
So typically containers would be shipped once per year in a seasonal cycle (though the seasonal cycle would be different in different countries). In Malawi, orders would be placed from November to January, the containers would be shipped and would arrive in Malawi from January to April, and the contents of the containers would be assembled into solar systems and sold from April to November.
As the systems get installed, charity donations and sales get collected, and in November to January the cycle repeats with the next purchase of the next round of container orders.
If a container costs $50k to $100k, then every time another $50k to $100k can be borrowed another additional container can be shipped every year. And if the cost plus the loan payment can be collected from donations and sales, then additional containers can continue arriving to Africa indefinitely.
To make it possible to pay the material costs plus loan, we want the annual loan payments to be as low as possible. This means that we want a relatively low interest and a long repayment period. For example, with a six year repayment period and interest less than 7%/year, annual loan payments are only 20% of the container cost. A 20% total financing cost for a container per year of shipping capacity is a nice, reasonably low financing overhead for container-scale purchases and keeps the solar products highly affordable. The low prices that result from low distribution costs facilitate more rapid sales of solar products to low-income customers while keeping charity subsidies reasonably low.
Our final position on financing terms.
Given the considerations above, low interest loan financing, with a one-year grace period, six year repayment period, and interest rate of less than 7%, is the type of financing that could allow extremely rapid expansion of the number and value of solar products and parts that we ship to Africa. This would keep the parts shipment financing overhead rate at 20% or below which allows for very affordable solar panels and LTO batteries. And in rural Africa, affordability is the key to a large volume of sales.
These financing terms are not unreasonable. Let's hope that we can find an impact investor/donor who can can provide financing on such terms!
How fast could we potentially expand and grow if we had such financing?
Suppose we can find as much loan financing as we might want and need, what is the fastest pace at which the whole operation could expand? Could we cover much of Africa in less than a decade?
Well, ordering containers is pretty straightforward. It takes one to two weeks of work per container. And there are lots of suppliers that want to sell containers of goods. So if the money is there, there is no barrier to getting containers shipped to Africa.
The second question is whether there are barriers to getting the goods to the villages. And since you can buy a used container that does not have to be returned, once the container gets to the village, the container itself is the storage facility. So as long as you have a good receiving and customs clearance partner locally and a secure place to keep the container, delivery to the village and low-cost storage is also not a problem.
The third question and real barrier is the retail distribution and sales partner that manages the distribution, sales and money collection at the village. That partner has to be reliable and trustworthy, and therefore they have to be cultivated and tested over time. This means that developing those partners takes time, and even with help, they can effectively grow at only a limited rate. So retail distribution partner growth is the limiting factor.
In aggregate, the total growth of the total distribution network is roughly a product of the growth-rate of the size-weighted number of partners and the geometric average growth rate per partner (GRPP). In other words: Growth Rate of the Number of Partners (GRNP) times Growth Rate Per Partner (GRPP) is total growth.
Written as an equation this is:
TOTGROWTH = GRNP x GRPP
Given my experience, I think it is possible to get TOTGROWTH up to about 10X per year if the finance is there. This happens if you can get the number of partners to grow at about 3X to 4X per year, and if you can get the number of villages that each partner is distributing in to grow at 3X to 4X per year.
Admittedly 2X per year on both types of growth are much easier than 4X per year. But if loan financing is not really limited, then some of the lending can be invested in laying the groundwork for future, rapid growth.
What might 10X growth look like for us in 2022?
If we got financing for 10X growth in 2022, this would translate to somewhere between 10 to 20 containers shipped with 70% going to Malawi 20% to 25% going to a trusted partner in Tanzania, and 5% to 10% of shipments (which would be pallet-scale) being used to test out new partners in other parts of Africa. About 65% of the shipments by value would be solar panels, we would ship more than 1000 pumps, more than 1000 electric pressure cookers, more than 20 solar electric vehicles and parts for tens of thousands of forever lights.
AND assuming that we did not make any egregious mistakes, we would make preparations for a further 10X expansion in 2023. We would do this by both building new partnerships that would allow us to expand to several more countries, and by expanding our geographic presence and reach to additional regions and local partners in Malawi and Tanzania.
Note that if we don't get any expansion financing, that is OK too. It certainly would be less work for me (which really I wouldn't mind).
You see, I realize that I am just a regular volunteer worker. I have skills and knowledge, but no real political or economic power. This means that I have no real say in how people invest their money when they own thousands of times more wealth than I do. Hopefully I can meet some such folks who appreciate and want to support my particular strategy for creating a clean energy transition in Africa. But my approach is rather peculiar, and might not really appeal to any folks of that particular economic class. Most people have their own, rather different, ideas on how to make the world a better place. And whoever owns the wealth gets to decide how their wealth gets invested. So, we will see what happens.
But even with our current way of doing business, we can still probably figure out how to grow by 2X. This means that all of the numbers for 2022 mentioned above would be smaller by a factor of five. This is still a very significant positive impact on the world for a very small project like ours. We would still be helping thousands of people per year with an annual budget of less than $200k/year. That's pretty damn good!
Well, I think this letter is certainly long enough for now. I hope you didn't mind the length too much. A lot has been going on, and we keep making good progress. I had to get it all written down for the record ... and just in case the right type of impact investor actually does show up!
Wish us luck on getting the right type of financing for rapidly scaling up the rural solar electrification of Africa. Never know! It just might happen!
In love and struggle,