The company supplies pay-as-you-go solar home systems. Nigeria, which is Africa’s largest market for diesel generators, has the potential to become “the world’s largest off-grid market,” Hamayun says in London. Nearly half of the population has no access to electricity, and many of those who do face an “extremely unreliable” grid, he says.
According to the World Bank, lack of reliable power costs Nigeria $26.2bn (about 2% of GDP), per year. In February, the bank approved $500m to support improvements in electricity distribution, including investment in on- and off-grid renewable energy. The World Bank’s involvement is one factor that led Bboxx to enter the market, Hamayun says. “The starting point is great.”
Solar power is cheaper than diesel or kerosene, so adopting solar means saving money in the context of Nigeria’s high inflation, Hamayun says. The company, which operates in countries, such as Rwanda, Kenya, Togo, the Democratic Republic of Congo (DRC) and Burkina Faso, is used to dealing with “some of the poorest customers in the world. Price is king.”
- Bboxx, which in 2019 attracted investment from Japan’s Mitsubishi Corp, was launched in Nigeria in October. The expansion would have happened more quickly but for Covid-19, Hamayun says.
- The launch is supported by funding from BEAM, an energy-services investment platform set up by a private-equity firm, Bamboo Capital Partners.
- The company will start by targeting individual households. Operations have started in southwest Nigeria, with the first shop opening in Ogun State. Bboxx plans to roll out its services in Lagos, Oyo, Ondo, Osun and Ekiti.
- Customers need to be geographically concentrated to make servicing cost-effective, but the company has “nationwide ambitions,” Hamayun says.
Hiring for growth
Hamayun, who studied electrical engineering at Imperial College London, set up Bboxx with a group of university friends. Their company aims to supply 100,000 homes a year within three years in Nigeria, rising to 20 million people over 10 years.
For now, the company is able to conduct its business in Nigeria in naira, without needing to source dollars, Hamayun says. The risk that the naira may continue to weaken would make it harder for customers to afford solar power, he says. Foreign exchange is “hopefully a short-term issue.” In the long term, the “fundamentals are super-strong.”
In March, Bboxx partnered with the United Nations Capital Development Fund, to offer clean cooking facilities using liquid petroleum gas (LPG) in the DRC. Bboxx aims to expand its clean cooking offer to Nigeria around the end of 2022.
- The immediate priority is to build the operational team. The company needs to recruit in areas, such as accounting, compliance, warehouse management and call-centre operators, Hamayun says.
- “Pre-planned growth doesn’t really work,” he says. “You need to be in touch with what is happening locally. If you get the foundation wrong, everything is wrong.”
Bottom Line
Bboxx is betting that it can lower fuel bills in Nigeria, while reducing carbon emissions.
Understand Africa's tomorrow... today
We believe that Africa is poorly represented, and badly under-estimated. Beyond the vast opportunity manifest in African markets, we highlight people who make a difference; leaders turning the tide, youth driving change, and an indefatigable business community. That is what we believe will change the continent, and that is what we report on. With hard-hitting investigations, innovative analysis and deep dives into countries and sectors, The Africa Report delivers the insight you need.
View subscription options
