The dream of Smart Villages becomes a reality

In Senegal, Smart Villages, a pilot project of Entrepreneurs for Entrepreneurs, has deployed the first solar panel farm providing electricity and water to 22 villages. "Smart Villages is a concept which we intend to deploy to ten other locations in the near future," says OVO volunteer Philippe Convents.

In the Senegalese village of Syer, there are 75 large solar panels reaping in the sunlight, providing 30KW of energy. The installation provides water and electricity for 22 small villages in the region. "Access to water and electricity are basic conditions for economic development," says Philippe Convents, who, together with fellow volunteers Peter Thevissen and Guy Morre, is the driving force behind the project.

That the installation is up and running is only the start of the story. "This is just the first phase," says Philippe. "In the second phase, the population can submit proposals for projects that also use electricity by installing a mini grid or by using the surplus capacity present on the site. Most of the proposals are likely to be in the context of agricultural development. Think of mills or installations for cooling or irrigation. Power supply to a nearby hospital is also a possibility. We will finance a number of these projects, after screening their feasibility and repayment capacity as is customary with OVO. In a third and final phase, even smaller-scale projects may come to align with us, including electricity supply for families. A close cooperation with Vitalité is under consideration.
 

From beer mat to reality

Smart Villages has come a long way from literally the underside of a beer mat to realization. Convents: "Peter and Guy wanted to work on the access to electricity in Africa in locations which will definitely lack connection to the grid for at least the coming 5 to 10 years. The idea was to link economic activities to the grid, which would in turn provide returns on the investment. This is the basis concept of Smart Villages."

In cooperation with a number of local people, the OVO-trio went looking for suitable locations. This led to a shortlist of ten villages. In order to ascertain the situation on-site, Philippe Convents visited a number of villages himself. "A disappointing experience," he admits. "In those villages we found only very small-scale activities, such as a sewing workshop. These would have never been enough to earn back an investment of 50.000 euros."

Smart Villages actually aims for a double goal: to stimulate local economic activity and to supplement basic social services. "Of course an investment has a social dimension, such as bringing electricity to the community which will provide for example, light for children to do their homework instead of unhealthy oil lamps. But an investment must also make economic sense. This is also a critical starting point for OVO," says Philippe.

Eventually, the three entrepreneurs found the village of Syer. "There was an old diesel engine for pumping water. It cost the surrounding villages between €900 and €1.100 per month. We realized that this could be the key. If we could install a new pump based on solar-energy, then the loan could be repaid without any problems." 
 

Earnings model

Subsequent to a feasibility study in cooperation with Ghent University and a public tender thereafter, the installation in Syer has been realized. This involved an investment of 27.000 euros, financed by a loan from OVO. "The villages are already gaining 400 to 500 euros a month compared to their old diesel engine," Philippe explains.

"The earnings model is quite simple. The cash cow is the supply of electricity and water. In addition, there will be further projects to make effective use of the overcapacity and a series of smaller projects. The resulting income should be more than sufficient to repay the total OVO loan of €50.000 within five years.

It may be surprising that a relatively simple model has not yet found wide acceptance in Senegal or many other places in Africa. Philippe was surprised too, he admits. "Is it the higher interest rates on loans in Africa or is there a lack of interest from investors in rural areas and small villages in Africa?"

There is also a classic fear that expensive installations are not maintained and therefore do not have a long life. However, the team makes the case that the solar installation is well secured and will require minimal maintenance, which is fully regulated. Moreover, it is in the interest of the entire community, as without it, they will not have any power or water.

"The guarantees are also quite high for the investors, because the project simply replaces the existing cost for the diesel engine with lower costs for the solar installation," Philippe confirms. And the ambitions are high. "This is just a pilot project. Next year we aim for ten installations. And why not 100 a year later? The first discussions with potential investors have started, and the interest is there. The demand for energy in Africa is enormous. Those 100 installations are still a distant dream, but I have learned in my career that it is healthy to set ambitious goals."
 

OVO

Philippe Convents was the CEO of Canon, among other things. His companions, Guy Morre, the marketing guru, and Peter Thevissen, a technical prodigy, make up extremely complementary team members. At OVO it is not the norm that a project is initiated by its volunteers. Usually, African entrepreneurs come up with their ideas. "We do work together with local people. It is a project of the local population, supported and financed by them," says the team.

The volunteer, who resides in Ghent, has been with Entrepreneurs for Entrepreneurs for two years now. "I find the economic logic which OVO applies to its investment projects very attractive. I also enjoy the time with all of my colleagues, who have a lot of expertise. Personally, I believe that our business-oriented approach is an innovative addition to classic development cooperation."

Text: Jasper Vekeman