Loans for the African/Asian middle-class#81

A few years ago, most of Trine’s loans was for micro scale solar power in Africa (home setups for low-income households). I’m very glad to see how you’ve expanded to the commercial & industry segment, and also expanded to Asia (at least Vietnam so far).

What I would love to see is loans for the middle/upper class - i.e. the households that use electricity similarly to European/American households but that run largely on fossil fuel electricity.

In the African countries I’ve visited, providers in this segment have largely been missing. Micro solar kits are sold at every street corner, but solar solutions are basically unavailable for the households that use the most electricity. Often, power cuts are also a regular issue that could make urban landlords and house-owners interested in solar, if a market is established.

Is there anything going on in this segment, where Trine could contribute?

Trine’s initial market focus on the borrower side was companies offering Solar Home Systems (SHS). The SHS market, initially intended to reach the energy poor in emerging markets, is very new, with most companies having operated for less than 10 years. The market has now reached a stage where there is more intense competition among SHS companies, which means the pricing of the products has to be competitive with reduced margins.

As a result of the lower margins, some SHS companies are taking longer than expected to reach their profitability phase. This longer path to profitability means that some companies are finding it difficult to attract equity investors. Therefore, market consolidation is going on, with some companies shutting down or being bought by larger players. Trine has not stopped lending to the sector, but is, as a result, more restrictive when deciding what companies we lend to. Instead, most of our loans are to the Commercial and Industrial (C&I) solar sector.