Guatemala | The lights of Kingo


    In Guatemala, one inhabitant in ten does not have access to the national power grid. For nearly four years now, a Guatemalan start-up has been offering them the Kingo kit , an innovative solution to produce off-grid and low-cost solar electricity. Over 15,000 households are already equipped…

    Millions of people are still without electricity in Central America. They use candles, kerosene or a generator for lighting… While these makeshift solutions are in widespread use, an innovation is gaining ground at the heart of the most remote areas in Guatemala: Kingo , a smart box which can be installed in about twenty minutes and supplies electricity by simply connecting it to a solar panel.


    © Sarah Caroline Müller


    This off-grid production “Is the fastest and cheapest way of developing access to electricity for rural communities who are not hooked up to the national grid”, points out Juan Fermin Rodriguez, CEO and co-founder of Kingo Energy , a company set up in 2013 in which Proparco, AFD’s private sector financing arm , became a shareholder in 2016.


    The financial argument really strikes home in a country where half of the 15 million inhabitants are living below the poverty line – with an even higher proportion in the Maya communities, who live in remote regions.

    It is also in two of the poorest departments, Alta Verapaz and Petén, where the coverage rates of the power grid were the lowest, that Kingo started its deployment. “In under two years, we have equipped over 15,000 households”, adds Juan Fermin, “This has improved living conditions for families and safety in their homes, but it has also reduced the time spent on domestic activities and made it easier for children to study.” KIngo is currently the only alternative solution to the conventional power grid on offer in Guatemala.

    How does Kingo work? A solar collector is installed on the roof of the house in return for the signing of a contract with no time commitment and the payment of time units with a prepaid card, a bit like mobile phone recharges. Once the client has entered the codes on the card, access to electricity is unblocked.

    This pay-as-you-go system does not require the client to purchase equipment or pay for the system to be installed. It offers several advantages: it is cheaper, brighter, less dangerous and less polluting than kerosene lamps or candles.

    Kingo also does not require any cultural adaptation by users: the recharge cards can be bought in small grocery stores, or directly from representatives from the company. In the future, it will be possible to pay the fee by mobile phone… and Kingo is planning to equip 2 million Guatemalans by 2020.


    “Everyone wants light”

    Clients currently have a choice between two options:

    • the Kingo 15 kit, which supplies three lightbulbs (five hours of lighting a day) and can recharge a mobile phone for a daily fee of 6 quetzals (70 euro cents) or 110 quetzals a month (13 euros),
    • or Kingo 100, which supplies enough power to light the main room of the house for five hours, recharge three mobile phones, and supply two electrical appliances.

    Elena moved to the Caserio El Limon village in Petén province two years ago and the arrival of Kingo has changed her life. “I used to have to get up earlier, at between 4 and 5 in the morning, and prepare the meals for the day by candlelight. I can now organize myself differently, get up later, spend more time with my family and, most of all, my children can study for an hour every day. We are now fifteen families using electricity. Everyone wants light!”  Elena can now light her home for over five hours a day, recharge her mobile phone, organize the children’s homework and make her home safe, while paying 25% less.


    © Sarah Caroline Müller 

    We have the right approach
    Kingo’s expansion has been made possible thanks to fundraising from several investors, including FMO, the Dutch development finance institution , and Proparco, but also thanks to the 80% reduction in the cost of solar systems since 2008.

    For Juan Fermin, it is, however, essential for Kingo to meet its commitments, while being profitable: “I firmly believe that we have the right approach and that we can be both profitable and serve the public good. What matters to us is for our equipment to be more and more efficient so that we can provide more services to our users.”

    But the young company’s market does not stop at the borders of Petén. Following a fundraising of USD 13.5m, including USD 4m of loans, the company aims to raise a further USD 8m. This would allow it to launch regional operations, in Honduras and Nicaragua, in Mexico and Colombia.

    However, ten years after the launch of the first off-grid solutions, no economic model has yet managed to dominate the market. Could the Kingo solution make the difference? “It is our duty to implement our project regardless of the financial risk in order to close poverty gaps", points out Juan Fermin . "This is why we need financial partners like Proparco to support us.”


    © Sarah Caroline Müller


    ►  Find out more on Kingo's official website


      Watch the video by Proparco 

    Energy seminar bringing together the donors from Europe


    The agency of AFD in Jerusalem, which leads the energy group of the EU delegation, met at the Ambassador Hotel on Monday, 05 of June 2017 with the European donors of the energy sector in Palestine.

    During the seminar, the participants had the opportunity to exchange and coordinate the issues of the sector: the energy crisis in Gaza, the Israeli-Palestinian agreement on the electricity, the renewable energy legislation in Palestine. The main object was to address a joint message to the Palestinian Energy Authority. Donors have confirmed their support for the EU Joint Programming, in particular in the Palestinian energy sector.

    In addition, they expressed their interest in identifying joint projects by 2018, in particular in the energy efficiency and renewable energy sector.

    Private sector at the bedside of health


    Access to healthcare – and to high-quality care – is a challenge for a large section of the population in Sub-Saharan Africa. It is often small private structures which meet needs in rural areas and for the poorest. The Medical Credit Fund foundation works alongside them and demonstrates that in the health sector, it is possible to effectively combine a social purpose with entrepreneurial projects.

    Sub-Saharan Africa has 16% of the world’s population, but only accounts for 2% of global health expenditure. Yet over the years, population growth, the rise in chronic diseases, but also socioeconomic progress, have created an increasingly pressing demand for healthcare. But the African subcontinent suffers from a clear lack of investment.

    In this extremely tense context, some 50% of total healthcare delivery is already provided by the private sector, which plays a key role at all levels, from healthcare provision to retail trade. It even has a predominant place in certain countries, such as Uganda or Ghana, with over 60% of total healthcare provision. “Contrary to common belief, the private sector is sometimes the only healthcare provider in rural areas and deprived urban areas”, explains Aurore Lambert, health project manager at AFD. “It is a far cry from provision just for rich people!”.

    These structures are often small or medium-sized, yet they face two major problems which are intrinsically linked: the poor quality of healthcare and the difficulty of gaining access to financing to allow investments to address this. In reality, the banking sector generally considers that their activities are risky.


    Some 600 health centers financed

    Medical Credit Fund (MCF) is a foundation whose purpose is precisely to facilitate financing for these structures, while helping to improve their quality standards. The foundation is based in the Netherlands and is, for the time being, the only one of its kind. Since it was set up 5 years ago, MCF has financed 586 health centers, mainly in Kenya and Ghana, but also in Nigeria and Tanzania.

    The average loan amount stands at EUR 20,000 and loans are mainly used to renovate buildings or purchase equipment. For example, a few months ago, South B Hospital, a small hospital structure with 45 beds located in a popular neighborhood of Nairobi, benefited from a loan to finance the creation of intensive care, nephrology and hemodialysis units. The hospital teams will follow a healthcare quality improvement program throughout the duration of the loan.


    Photo Dorte Hopmans © Diorte


    MCF is a not-for-profit foundation, but it is also a private actor: MCF does not allocate grants, but aims to grow in order to achieve financial equilibrium. Equilibrium ensures that the project is autonomous and gains in strength. “It is a social business”, explains Selvan Pajaniradja, who develops this sector of operations at AFD, “The aim is indeed to build high-quality health service provision for all at an affordable price. MCF consequently works for development, but at the same time generates the revenue which is essential for the sustainability of the project!”.


    French-speaking Africa for tomorrow?

    The originality of MCF can be seen in its inclusive and partnership-based method. The foundation works with local financial institutions, providing them with its knowledge of the health sector and assisting them in the appraisal and follow-up of files. “The aim is to work with local partners and help them develop their range of loans for the sector”, adds Aurore Lambert, “It involves showing that financing health services in Africa can be a profitable activity.” 

    As the MCF project fits in with its core objectives for health and social business, in December 2016, AFD decided to take part in a funding round, via a EUR 3m concessional loan and EUR 1m grant from its social business facility. It has thereby joined up with the International Finance Corporation (IFC) and Calvert Foundation . AFD’s long-term objective is to help MCF establish itself in French-speaking Africa, in particular in Côte d’Ivoire, Cameroon and Senegal, where there are also considerable needs. “Given its expertise in the health and financial sectors in a number of countries”, points out Arjan Poels, Chief Executive Officer of MCF, “AFD is a key partner in supporting our project to improve the financing capacity of health structures and, more generally, healthcare quality in Africa.”

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