Indigo Energy, electricifying rural Myanmar

Indigo Energy develops, installs and commercially operates distributed electricity solutions in rural Myanmar. Indigo Energy deploys micro-grids in villages to provide basic lighting and more solar sophisticated solutions which allow for the productive use of electricity. Founder of the business, Allen Himes, talks to us about his vision to light up the villages of Myanmar.

What is the core value proposition of your business? 

We’re providing basic electricity services (lighting and mobile phone charging) through solar powered micro-grids to villages in Myanmar that currently don’t have access to the national grid. We’ve installed 2 pilot projects so far and done the hard ground work which has involved going to villages, talking to the locals and convincing them that what we’re offering will work and is worth paying for. We currently provide four to five hours of power through our micro-grids each day for which people pay a fixed monthly fee of around $3 for lighting and $1-$3 for cell phone charging.

On the operational side, the two main functions of our business are money collection and technical maintenance and we are still perfecting how to do both of these in an inexpensive, sustainable way. Currently, fee collection takes place on a bi-monthly basis, we’ve found that once a month collection is not enough and are still testing if we’ll have to collect on a weekly basis. Members of our team have to physically go into the villages to do the money collection. Once the mobile phone penetration improves in Myanmar, we hope we’ll be able to use mobile money to collect the fees.

We’ve been able to prove that we know how to build grids, we know how to engage with villagers and we know that people will pay for the service from our pilot projects, but to really prove that are model is viable we need to scale up and set up more projects. As we do that we hope to fine-tune our service and processes and eventually make a ‘plug and play’ model that is replicable in villagers across the country.

Tell us a bit about the BoP segment that you reach. Who are they, and what feedback have you had from them?

Most of our customers are farmers and fishermen as our current projects are in the delta region of Myanmar where a large proportion of rice is grown and there are a number of rivers for fishing.

We’ve found that our customers are incredibly sensitive to good service so we hear a lot of complaining whenever they don’t get the service they’ve been promised. But overall, people are happy that they don’t have to squint by candlelight at night anymore. Even people that have diesel generators from before still like and use our system because it’s cheaper than diesel. Before we set up our grids, most people would use candles or torches for light as they are completely off the national electricity grid.

What made an American renewable energy specialist set up a social enterprise in Myanmar?

When a wind farm project I was working on in Hong Kong finished, I was looking around for other opportunities and happened to read in the paper that Aung San Su Kyii had been freed and that the Myanmar economy was opening up. I sensed that there would be huge potential for renewable energy in this country that had been stagnant for decades. So I came to check it out and explored a number of renewable options such as wind, solar home-systems and biomass. But the upfront costs were too high for the limited resources, basically my savings, that I had. I settled on solar micro-grids as the most viable way to service the rural people I wanted to reach.

Myanmar is only just opening up to the outside world, what challenges have you faced in this emerging market?

One problem is the lack of regulatory framework, we are always kind of aware that things could get messy with the government. But the main challenge has been human resources. Finding people who understand what we’re doing and have the capability to pitch in and contribute to the company has been very difficult. The education system here was basically dismantled in the 1980s and hasn’t really been restored so it’s been struggle to get passionate, educated staff. We had to be patient but we have been able to find good people.

What is the one factor that has most enabled your inclusive business to progress this far?

I wouldn’t say there’s been any real windfall on the way, the journey’s been pretty tough going. We’ve found getting investment very difficult. Impact investors are always very interested in what we’re doing but don’t want to take on the risk of an early stage company in an untested market. The break we are waiting for is a grant that will enable us to set up more projects and convince investors that this is a workable business model.

That’s where I hope the Shujog Impact Forum will help. We need that next bit of funding to take things to the next stage.

Where do you see your business five years from now?

Conservatively, we are looking to add one branch office every six months so in five years I expect we’ll have 10-12 branch offices with 150 projects implemented per office. We hope to be operating throughout Myanmar, providing power to the large number of villages that are off the grid.

What role can inclusive businesses like yours play in helping the developing world combat climate change?

Inclusive business is the way to source sustainable solutions for the base of the pyramid. I’ve seen first hand how hand-outs and charity can actually add to problems and not solve them. In a village we visited the other week they had a diesel generator donated by an aid agency or NGO seven or eight years ago that was just taking up space. It had fallen into disrepair with a lack of discipline, business model, and maintenance training. At the end of the day charity is not a sustainable way of helping people or the world.

If you can show people the benefit – monetary or otherwise – of sustainable solutions, that will motivate them to get involved.

What is the one piece of advice you would give to entrepreneurs looking to start an inclusive business?

I would tell them to think long and hard about why they’re doing what they’re doing. A social enterprise is much more challenging than running a regular business. Many doors will shut, the moment you decide to be a ‘social’ business so you need to be sure that this is what you really want to do.