African Solar Rise: Electrifying Rural Tanzania

by: Sam Aflaki, Andrea Masini

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Description

1st Place Winner – 2014 NextBillion Case Writing Competition. Daniel Uphaus—founder and CEO of African Solar Rise (ASR), a German NGO providing solar energy solutions in Tanzania—is faced with the question of how to scale up his organization’s operations. Doing so requires that he address two fundamental challenges: (i) how to improve supply chain operations and last-mile distribution in underdeveloped rural Tanzania, and (ii) how to solve the financial issues faced by the company and its potential customers. Providing effective and implementable answers to those questions is vital to ASR’s development if not its very survival. Failing to expand operations above a critical scale may prevent ASR from generating badly needed revenue, in which case the organization would remain vulnerable to fluctuating donor contributions.

Teaching Objectives

After reading and discussing the material, students should:

  • Recognize the operational context and operational challenges in developing countries, which are characterized by limited infrastructure, extreme climate events, lack of financial resources, and idiosyncratic consumer behavior.
  • Anticipate the particular characteristics of local customers in developing countries and stress the importance of adapting the design of products, supply chains, and financing mechanisms to those characteristics.
  • Understand the challenges of setting up a new distribution network in such a context by clearly identifying the pros and cons of each alternative examined (e.g., selecting and training resources for a new network versus relying on existing supply chains designed for different purposes).
  • Appreciate the complementarity of top-down and bottom-up distribution models.
  • Identify the role played by microfinancing models in addressing the needs of the lowest-income population segment, and realize the importance of a comprehensive viewpoint to surmount ASR’s three financial challenges.