When Henri Nyakarundi shut down his trucking business in the United States, he decided to return home to Rwanda. Back on the continent, his entrepreneurial instincts drove him to a novel business venture – solar-powered mobile phone charging kiosks.
Rwandans that return home with dollars in their pocket usually venture into businesses with a degree of comfort. Others prefer white-collar, eight-to-five jobs that the rapidly expanding Rwandan economy offers the western-educated young professionals.
Despite the pitfalls that start-ups face in Africa, Nyakarundi chose a different path. He is at the forefront of developing an energy business that few of his fellow Rwandans understand.
The light-bulb moment that gave birth to his latest venture occurred at an unlikely place for the 37-year-old metropolitan entrepreneur. In 2011, he noticed the difficulties that people in rural areas faced while trying to charge their mobile phones. The supply of electricity is expensive and often unreliable.
“Not only did it hit me that charging mobile phones in places that were not served by the national electricity grid offered me a unique opportunity to serve our people, I also realized that the lucky ones to be connected to the national grid were finding the power supply to be expensive,” he says.
In Rwanda, electricity consumers are charged $0.22 per kilowatt hour (KWh). This is one of the highest electricity tariffs in the East African region where tariffs are usually between $0.08 and $0.10, according to the World Bank.
Rwanda’s high energy costs are partly attributed to the country’s dependency on expensive thermal resources. Experts say that Rwanda depends on diesel and heavy fuel oils for approximately 40% of the country’s 110MW installed energy capacity. The country imports 14.5MW. Hydropower accounts for 59% and methane gas 1%.
Armed with the statistics of the challenging energy situation in his country, Nyakarundi’s instincts told him that something needed to be done to help rural businesses.
After visiting family in rural areas, he decided to start the green energy company African Renewable Energy Distribution Co Ltd, otherwise known as ARED.
“My company seeks to offer stable and reliable energy solutions, using innovative solutions such as mobile solar cell chargers,” he says while sitting in his office in Kiyovu, a leafy suburb in Kigali.
His belief in his new venture was so strong that he invested more than $120,000 of his hard-earned cash into developing four prototypes of his solar-powered mobile phone charging kiosk.
“My solution serves as a one-stop kiosk for people who want to start a business but are unable to,” he says as he leads FORBES AFRICA to one of ARED’s latest prototypes, recently brought from the company’s contracting manufacturer in China.
To drive sales, ARED developed a cheap franchise model for its clients, who are largely low-income earners.
“The franchise model seeks to empower those languishing at the bottom of the economic pyramid using a technology that is simple, cost effective and has a flexible acquisition plan,” he says.
The mobile kiosk generates its own power, enabling a franchisee to sell airtime as well as provide other telecoms services such as the transfer of mobile money. The charging of phones or other electronic items is done for a minimal fee.
With the success that ARED has had so far, the next prototype will introduce extra features such as internet Wi-Fi technology. ARED charges franchisees $1,000 for the business unit. This includes the mobile kiosk, a point-of-sale system, phone charging accessories and a branded overall.
Franchisees are also given hands-on business training and offered transport. After acquisition of the kiosk, franchisees are expected to pay ARED a $50 monthly fee for after-sales services.
Although breaking into the market was not easy for Nyakarundi, he stuck to his guns. He knew he had something unique and vital to offer Rwandans.
His tenacity is paying off. ARED signed its first commercial deal with pan-African telecom operator Airtel. This will allow ARED to spread across Africa.
Nyakarundi expects to sell more than 500 units of his product over the next three years.
“Though the model has a social component attached to it, the business aspect was designed to be scaled for the entire continent,” he says.
Nyakarundi is part of a growing army of entrepreneurs emerging on the continent.
“Entrepreneurship is gaining momentum in Africa. Innovation is being scaled up and advances in ICT, and what telecoms operators are offering, is testimony that Africa’s enterprise culture is improving.”
He is fortunate that Rwanda is able to offer him a favorable launch pad for his business. Nyakarundi hopes to increase his mobile kiosks from 20 to more than 100 by next year.
Nyakarundi has grand visions for ARED. With the telecom sector booming in Africa, he is set on selling over 50,000 units over the next five years. South Africa, Nigeria, Ethiopia and Kenya are his key target markets.
Like the sun shining over Africa’s plains, Nyakarundi’s future looks bright.