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June 4, 2024

Revolutionizing Nigeria’s energy sector with innovative solar financing solutions – Ukwuoma

Revolutionizing Nigeria’s energy sector with innovative solar financing solutions – Ukwuoma

By Ephraim Oseji

In a nation where businesses and residents face challenges with unreliable power supply, Ifeanyi Ukwuoma, the founder and CEO of Powerfull Technology Limited, is leading a mission to change the narrative.

Through Powerfull, Ifeanyi is introducing innovative finance solutions that enable businesses to acquire solar assets with ease, paving the way for a sustainable energy future in Nigeria and across Africa.

In this interview he discussed his journey and vision to meet Nigeria’s energy demands affordably. Excepts

What inspired you to start Powerfull?

The inspiration behind Powerfull began when I was still working with Amazon UK. My mum runs a cold storage business in Nigeria and spends about 40% of her operating expenses solely on fueling her generator. Given the nature of the cold storage business, a constant power source is essential. We realised the need to switch to solar, and I was directly involved in negotiating with various financiers. What I discovered shocked me: the interest rates were very high, and the payback period was short, making little sense for financing. I then resolved to solve this problem after spending quite some time understanding the reasons behind it.

Can you share a bit about your academic background and how it has influenced your entrepreneurial journey?

I graduated from the Federal University of Technology, Owerri (FUTO) in 2008. Following my undergraduate studies, I was awarded a European Union Scholarship (Erasmus Mundus Scholarship) for my master’s degree. During the first year of my master’s program, I had the opportunity to study in five European countries and universities, taking courses spanning 2–3 months each. Subsequently, I selected two universities, the University of Exeter in the United Kingdom and Delft University of Technology (TU Delft) in the Netherlands, to pursue a joint master’s certification. As a result, I hold a Bachelor of Technology degree and a double Master of Science degree from two leading European universities. Following this, I pursued a master’s in business administration (MBA) from a university in the United States. My academic background, particularly my MBA, has provided me with a solid foundation in strategic management and finance. These skills have been instrumental in shaping my entrepreneurial journey, equipping me to navigate the complexities of running a business, developing innovative financial mechanisms, and driving sustainable growth.

How did your experience at Amazon UK Services Limited contribute to your entrepreneurial endeavours?

Amazon has significantly contributed to my entrepreneurial endeavors. Working in a dynamic and fast-paced environment taught me valuable lessons in efficiency, scalability, and delivering value to customers, which I have applied to Powerfull’s operations and service delivery. If you have ever wanted to understand leadership and management, I would advise you to work for Amazon. If you are unable to work for the company, take a piece of paper and study the Amazon Leadership Principles. They provide the basis to run an effective business. For example, customer obsession is a guiding principle. We must continue to be obsessed with the customer to deliver a superior experience. One of the principles I like a lot is to insist on the highest standards. This is important as the temptation to cut corners and take the shortcut is strong.

What challenges did you face when starting Powerfull, and how did you overcome them?

Starting a business comes with its own challenges, and starting Powerfull was no different. We had to learn and iterate as we progressed. For example, we needed to build a FinTech product that helps streamline the payment collection process from the end customer. This was necessary to mitigate payment defaults. Additionally, we had to find a way to identify and quantify bankable projects based on customer discovery. There was a lot of work that needed to be done, but the key to overcoming these challenges is to always look to the customer and ask, “what does this customer want?” With the customer always in mind, you can build products that will grow and scale effectively.

How does Powerfull’s innovative operating system work, and what impact do you hope it will have on Africa’s energy sector?

What we have built with Powerfull is a “Digital infrastructure” that finances and helps collect repayment for deployed solar energy assets. While we are not the only solar financing company in Nigeria, there are quite a few. However, the innovativeness of our solution is centered around understanding the customer’s relationship with diesel or petrol generators, or sometimes the grid, in the first place. We aim to first understand how much you spend on generators and how much power you use.

With this information, we can then provide custom fit-out and financing based on actual energy usage. Essentially, we try to de-risk the customer by as much as 90% before providing financing. Additionally, we have implemented a simple way to ensure and guarantee repayment for our investors as well. The impact we envision for Powerfull’s innovative operating system in Africa’s energy sector is significant. By streamlining the financing process and tailoring solutions to individual energy needs, we anticipate increased adoption of solar energy solutions among businesses. This will lead to reduced reliance on fossil fuels, lower operational costs, and a more sustainable energy future for the continent. Additionally, by de-risking the financing process and providing a reliable repayment mechanism, we aim to attract more investors to participate in Africa’s renewable energy transition, ultimately driving greater investment and innovation in the sector.

What role do you see solar-driven financing solutions playing in Nigeria’s energy future?

Solar-driven financing solutions can play a pivotal role in Nigeria’s energy future by enabling businesses and households to invest in clean energy infrastructure without upfront capital expenditure. This reduces reliance on fossil fuels, leading to cost savings, energy independence, and reduced carbon emissions.

Additionally, these solutions stimulate economic growth by fostering a thriving solar energy ecosystem, creating opportunities for local businesses and job creation. Overall, they have the potential to transform Nigeria’s energy landscape, driving widespread adoption of clean and sustainable energy sources while promoting economic development and environmental sustainability.

How do you balance the dual focus of addressing Nigeria’s energy deficit and advancing financial technology through Powerfull?

We balance our focus on addressing Nigeria’s energy shortage and advancing financial technology through Powerfull by blending innovative financing with solar energy solutions. We use technology to simplify the financing process, making it easier and cheaper for businesses and homes to switch to solar power. By offering customized financing options and digital payment systems, we help tackle the energy problem while also making financial services more accessible. We constantly improve our solutions to meet the changing needs of both the energy and financial sectors in Nigeria. This way, we contribute to a cleaner energy future and improve financial opportunities for people in the country.

Can you share a specific success story or milestone that Powerfull has achieved?

One specific success story for Powerfull revolves around a residential estate in Ikoyi, Lagos, comprising 12 units. Before our involvement, the estate was spending a cumulative amount of N14M on diesel, with a price per kilowatt of N400. Through our financing solution, we were able to reduce the estate’s energy costs by as much as 30% monthly, resulting in a significant cash impact of a N4M reduction in diesel costs. This success exemplifies how Powerfull effectively reduces energy expenses through cost-efficient solar financing, showcasing our ability to drive tangible benefits for our clients.

What advice would you give to aspiring entrepreneurs in the energy technology sector?

My advice to aspiring entrepreneurs in the energy technology sector is to thoroughly understand the market, focusing on scalability and innovation while prioritizing affordability and accessibility. Building strategic partnerships and assembling a diverse and talented team are essential for success. Stay resilient, stay informed, and keep the customer at the center of everything you do.

How do you see Powerfull evolving in the next 5 to 10 years?

In the next 5 to 10 years, I see Powerfull evolving into a leading force in Africa’s renewable energy landscape; we will expand our reach and impact by scaling our operations across the continent.

Our innovative financing solutions and digital infrastructure will continue to evolve, making solar energy more accessible and affordable for a wider range of customers. As a result, Powerfull will play a pivotal role in shaping Africa’s energy future, driving economic growth and social development across the region.

How do you stay updated with the latest trends and technologies in the energy and financial sectors?

As the driving force behind Powerfull’s growth, I prioritize ongoing development in FinTech and Energy Technology. I actively engage with energy consultants to explore potential strategies for reducing the cost of solar installation, leveraging their expertise to optimize our operations.

Additionally, I continuously seek opportunities to expand our funding sources by building relationships with debt investors who share our vision and are able to provide the necessary financial support to advance our mission. Through these efforts, I am committed to ensuring that Powerfull remains at the forefront of innovation in the renewable energy sector, driving sustainable growth and impact.

What impact do you hope Powerfull will have on sustainable development and socioeconomic progress in Nigeria and Africa?

In secondary school physics, we learn that energy is the ability to do work. This fundamental concept underscores the importance of energy in driving development. For Africa to progress, it requires a clean and affordable means of generating electricity, and solar energy presents a promising opportunity in this regard. Aligning with Millennium Development Goal 7, which aims to ensure universal access to affordable electricity by 2030, investing in clean energy sources like solar is essential. By adopting cost-effective standards for a broader range of technologies, we can significantly reduce global electricity consumption in buildings and industries by up to 14 percent.

This underscores the critical role that renewable energy, particularly solar power, plays in advancing sustainable development and economic growth in Africa. Financing this transition is very important as well as Powerfull hopes to play this role. At Powerfull, we aspire to catalyze sustainable development and socioeconomic progress in Nigeria and Africa through our innovative renewable energy solutions.

By facilitating the widespread adoption of solar energy, we aim to enhance energy access for underserved communities. This not only fosters economic growth by reducing operating costs for businesses, we can also create job opportunities in the renewable energy sector, and improve energy reliability and security.

Additionally, by providing affordable financing options and promoting financial inclusion, we empower individuals and businesses to thrive economically, ultimately driving socioeconomic progress and improving the quality of life across the region. Through these efforts, we envision Powerfull playing a pivotal role in shaping a more sustainable, prosperous, and equitable future for Nigeria, Africa, and beyond.

How do you see the role of government policy in shaping the future of renewable energy adoption in Nigeria?

Government policy is crucial for shaping renewable energy adoption in Nigeria. To reduce business dependency on fossil fuel generators and promote renewable energy like solar, stable interest rates are essential. By providing favorable interest rates or incentives for renewable energy financing, the government can lower the cost of capital for projects like those facilitated by Powerfull. Additionally, reducing inflation is crucial for creating a conducive environment for renewable energy adoption. High inflation rates can increase the cost of equipment and materials needed for renewable energy projects, making them less competitive. The government can implement monetary policies to stabilise inflation rates, thereby ensuring a more predictable and affordable investment environment for renewable energy initiatives.

Furthermore, a stable foreign exchange policy is essential for repatriating funds to investors. Many renewable energy projects, including those financed by Powerfull, rely on foreign investment and equipment imports. A stable foreign exchange policy ensures that investors can confidently repatriate their returns on investment and mitigate currency risks, fostering a more conducive environment for foreign investment in renewable energy projects.