Sigora Haiti Sheds Light on the Energy Business in Frontier Markets

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This article was originally published at BREAKING ENERGY

 

Sigora Haiti, a subsidiary of Sigora International, is bringing renewable electricity to rural areas of Haiti that were previously left in the dark.  The company has plans to use its micro-utility platform to power the northwest region of the country with solar and wind energy. Currently, a 200-kilowatt solar array is under construction.

As of now, the estimated totaled $10 million Sigora Haiti Northwest electrification project will be able to expand the company’s existing pilot grid network from around 5,000 customers to upwards of 136,000 (an estimated 27,000 accounts) upon completion. The funding for this venture partly comes from ElectriFI, who has provided $2.5 million towards the Northwest Phase 1 expansion, and will have a renewable energy capacity of 3.5MWp.

Sigora Haiti’s business plan focuses on emerging markets that otherwise would have very minimal access to electricity.  Their goal is to bring these regions reliable, clean energy sources that can be used to improve their communities and stimulate their economies.  This is all done by charging fair rates for the energy being provided and employing local residents to assist with projects and utility management in the field.  The company reports that an estimated 1.2 billion people do not have access to electricity worldwide.  Their business model, being employed in Haiti, is aimed to reduce this global lack of electricity in an attempt to bring power to the world.

The benefits of Sigora’s business plan extend beyond electricity.  Areas of Haiti that are making use of the electricity are experiencing business growth and healthcare improvement as well.  Hospitals and clinics that have become customers have a more dependable source of power at a fair cost.  Likewise, businesses are able to flourish with increased technology that was not previously available, such as freezers.  Not only is Sigora Haiti setting up a financially stable company that will be able to profit off of the customers it serves, but also a socially responsible initiative that has the potential to improve the communities in which it serves.

It is important to emphasize that Sigora Haiti’s projects are not meant to be works of community service.  They are servicing Haitian customers with corporate financial goals that can be met, even in this developing market.  To ensure financial success, the company collects extensive data about the region in order to determine potential profitability.  Investors are viewing the company’s micro-utility platform as a good potential investment as well.  2015 showed higher renewable energy investments in frontier markets than in developing nations.  The continuation of this trend shows that Sigora Haiti is onto something, and their industry is expected to expand in the coming years.  Companies are viewing Africa as the next major area for renewable energy investment.

One of the most important factors to pay attention to with Sigora Haiti’s business plan is its versatility.  The fact that this company was able to construct a multi-million dollar project and facilitate electricity in such a rural region proves that this set up could work anywhere in the world. The company has successfully proved their ability to develop and sustain these micro-utility resources and now they can use northwest Haiti as their prime example.

As stated before, the company has received extensive funding for their projects from ElectriFI, which is funded by the European Commission, Power Africa, and is managed by the European Development Finance Institutions (EDFI) Management Company.  Sigora Haiti is the first company to receive this type of funding from the Commission.  According to members of the commission the selection of Sigora Haiti for funding was based on the fact that Sigora Haiti’s business did not only have the potential for financial success, but would also be benefitting upwards of 10,000 people.

This company and its financial supporters are displaying confidence in the frontier energy market.  With 1.2 billion people in the dark, the industry has a growing opportunity to bring renewable energy projects to these undeveloped areas.