October 29, 2018 / 3:00 PM / 18 days ago

Off-grid firm BBOXX targets two new African markets with EDF-CEO

* Large energy companies diving into Africa’s off-grid market

* EDF took 50 pct stake in BBOXX last week

* BBOXX CEO says corporate money speeding up sector growth

By Joe Bavier

JOHANNESBURG, Oct 29 (Reuters) - UK-based off-grid power company BBOXX is looking to enter two new African markets in partnership with France’s EDF Group next year as it capitalises on growing interest in the sector from large energy companies, its chief executive said on Monday.

The two companies announced last week that the French power utility had taken a 50 percent stake in BBOXX’s operation in Togo, where it won a tender to bring electricity to 300,000 households without access to the national grid.

“We are actively looking to enter two more countries with EDF under the same sort of agreement during the course of 2019,” Mansoor Hamayun told Reuters in an interview. “Togo is the starting point.”

He would not name the countries - both of them new markets for BBOXX - but said one was located in West Africa and the other in Southern Africa.

Big European power utilities are increasingly exploring off-grid technology as a way of expanding their renewables footprint and growing their customer bases beyond stagnating home markets.

Some 1.2 billion people around the world have no access to a power grid, according to the International Energy Agency (IEA). Lighting and phone charging alone costs them about $27 billion a year.

“None of the existing business models and none of the existing technologies are able to reach the over 1 billion people who don’t have electricity,” said Hamayun. “That makes off-grid an important priority of organisations like EDF.”

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EDF’s French rival Engie, oil major Total and power companies Enel of Italy and Germany’s E.ON have all invested in the sector.

“Historically the problem to scale for the entire sector has been capital. We have way more customer availability than we have capital to go and fund them,” he said.

Founded in 2010, BBOXX has sold 150,000 of its solar home systems, which allow customers without access to a reliable grid to power lights and small appliances. It wants to provide electricity to 20 million people by 2020.

The need to provide consumer financing for relatively expensive kits, however, means expansion by companies offering similar solutions requires significant capital.

An influx of money from deep-pocketed corporations will likely make that less of an issue, Hamayun said, allowing off-grid companies to scale up their operations in new markets much more quickly.

After their initial development in East Africa, that corporate backing has already helped fuel a rapid push by off-grid startups into West Africa.

Hamayun said BBOXX, which made an initial investment in Pakistan last year, is already looking beyond the West African boom.

“I think the next big frontier ... is going to become Asia quite soon,” he said. “We’re talking hundreds of millions of people who still don’t have electricity.”

Reporting by Joe Bavier; Editing by Emelia Sithole-Matarise

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