Interview With HelloSolar CEO

Mr. Bart Minsaer is a CEO and one of the Founders of HelloSolar with more than 23 years of leadership and operational experience, living and working across Europe, Africa, and Asia. Before Hello Solar, he had experience working in Ethio Telecom as a deputy chief residential sales & marketing officer and BelCash Technology Solutions PLC as Chief Commercial Officer. Since his first role at Radio Donna as a promoter in Belgium in 1993, he has undertaken several positions of increasing responsibility in different business domains such as sales, marketing, strategy, and developing a comprehensive set of leadership competencies.

Currently, he is the CEO of HelloSolar, the first PAYGO Solar Home System brand in Ethiopia to provide access to energy for the rural population and connectivity that allows people to connect to the world. People can pay over time, and upon full repayment, the client owns the system and can enjoy free access to energy. HelloSolar has impacted 50,000 lives by providing access to light for people who could otherwise not afford it, and they are set out to impact 600,000 lives within two years.

Bart is passionate about helping companies and individuals excel and realize their ambitions by allowing them to transform to be future-proof and able to respond efficiently and effectively to the growing challenges of today’s world. Bart holds an INSEAD Master’s Degree in Consulting and Coaching for Change.

Pragma Energies: Tell us a little about yourself and when you began having an interest in the renewable energy industry?

Bart Minsaer: I came to Ethiopia in 2010 to work with France Telecom/Orange, which had a management contract to transform ETC into Ethio Telecom and manage the company for a couple of years. My mission was to significantly boost the indirect distribution, as this was not very developed, and reorganize the direct sales channel- the shops owned and managed by Ethio Telecom. To achieve the steep growth customer acquisition objectives, we completely reorganized the sales and distribution. After that, I also got involved in marketing, where I was busy remodeling and rebranding the shops. 

After that, I went to Singapore for four years and completed my master’s in INSEAD in organizational change and leadership development. In 2017 I came back to Ethiopia and started consulting for telecom distribution players like Hidasse. In that period, Nova Lumos, an international solar home system company, tried to hire me to set up their PAY AS YOU GO solar home system business in Ethiopia. Since I had a telecom distribution and marketing background, including GSM handsets and other equipment, they thought it could be a fit. I studied the solar system market in Ethiopia and the neighboring East African countries to learn how this business works. I learned about the strategy of the different big brands, how they operated, and how they raised capital to finance their business and market penetration. In the end, I did not end up working for this company but instead started advising to BelCash Technology Solutions PLC on market penetration and organizational structure. 

One day, Shell Foundation came to BelCash to ask to use the Hello Cash mobile money as part of a pilot project to set up a PAY AS YOU GO solar home system company to prove that this business model could also work in Ethiopia. Since I already knew most things and the Belcash founder Vince Mountaga had also looked into PAYGO solar prior, we told them that we could handle the whole project by ourselves in collaboration with Shell Foundation. Our pilot proved that the business model worked in Ethiopia and, from there and then grew into Hello Solar, first as a brand and later as a Direct Foreign investment in assembly. I am also a board member of the Ethiopian Solar Energy Development Association (ESEDA).

Regulatory gaps and inconsistency are often cited as problems that hamper the industry’s growth. What are some of your thoughts on current regulations or tariffs that you believe could use more clarification to streamline processes? 

Being compliant with regulations is essential for businesses in every country globally. Regulation in Ethiopia is very clear in most cases and has, over time, been evolving to gain efficiency in supporting market working. Regulatory changes are an issue of the state of development of any society. They are a gradual process that needs careful consideration of the interests of all stakeholders, such as the society in general, consumers, business owners, and the government. For our business, several regulations are necessary: investment proclamation, tax regulations, banking regulation from National Bank of Ethiopia (NBE) for Forex, etc. In Ethiopia, we are not there yet in being digital, but the government has some exciting moves to digitalize the country by 2025. The second thing is the regulation of mobile money in the past restricted this business exclusively to the banks, resulting in slow growth, especially in the regions. It’s not just my opinion, it didn’t work optimally as the penetration and product adoption is very low. The policy change by the NBE to open up this business to the telecom companies will be a game-changer. We only have to see how fast telebirr is moving ahead to see the change.

Some of the issues the mobile money penetration in Ethiopia has been are the following. First, technology product development based on software is in Ethiopia often seen as a project for the IT department only. Still, it’s not a just a technology project, it’s also a marketing development project to solve a pain point for a customer which needs to resolve in product adoption by that same user. Those were some of the things I saw when I was involved, thinking this would be difficult if done like that. Second, look at the footprint and presence all over Ethiopia. Ethio telecom is everywhere; you can get the recharge vouchers in proximity, within an arm’s reach of desire, as in Robert Woodruff’s famous Coca-Cola quote.

We’ll see a very different situation when we look at financial services. There is a significant presence in the cities, and the Commercial Bank of Ethiopia (CBE) is in a lot of places, but Ethiopia is a 1 million square kilometers country, and it is expensive to open bank branches in less populated areas. So because now it’s in mobile and they already have this wide reach, the fact that they know how to handle large countrywide distribution networks, independent agents’ and commission’s structures makes them the best candidate for me. E.g., Ethio telecom has 55 million customers. Which bank has that? No one. Will it take some time? Yes, and do they know everything already? They don’t, but they will figure it out fast and get there. Ethio telecom already has the entire infrastructure to flourish in the mobile money sector. The trend is set, and the competition is coming. We have now integrated with telebirr even though HelloSolar is a sister company of hello cash. We started integrating with telebirr some months ago, and I think it will be officially announced in the coming weeks. If you go to the telebirr app and look at energy, you will see two names: Ethiopian Electric Power (EEPCO) and HelloSolar. Everything now is on mobile money and suits us and hopes other people will follow. If there is one thing that I would say on regulation: it is going in the right direction. On energy specifically, I don’t see many problems with regulation, to be honest. Ethiopian companies can import under the license solar systems, bring them to the market, and sell them, so I don’t see a big issue. There was an issue with mini-grids on how much one can resell since mini-grids are subsidized. There was a discussion regarding this, but that has been as good as solved.

Ethiopia is considered one of the most untapped markets for solar irrigation pumps. What are your thoughts on the opportunities and challenges in market penetration, and how do you see your company playing a role in filling that gap? 

There are two opportunities here. If you look at the NEP 2.0, the plan aims to reach 100% access to electricity by 2025 through off-grid (35%) and on-grid facilities (65%). The program targets to enable additional 8.2 million new grid connections and 6 million off-grid connections through stand-alone solar solutions and mini-grid technologies by 2025. To help achieve this goal, there will be a World Bank (WB)/Ministry of Water, Irrigation, and Energy (MOWIE) renewable energy fund of $500 million to help finance renewable energy systems for Ethiopia. This will partially resolve the Forex issue for the government and the private sector. Though the budget may not be enough for the whole program, it will make a huge difference to take off, and there are more such internationally supported funding mechanisms coming soon. 

The market opportunity is enormous. If you look at the worldwide market, Ethiopia situates before four years ago, it was number 4 or 5 in the world on energy needs somewhere shared with Pakistan or Indonesia. Ethiopia is the second biggest market for energy opportunities in Africa after Nigeria. 

Now imagine how many people would be in farming, around 85%? In many places, this renewable energy access development will allow massive access to clean, productive use solutions for the smallholder farmers who are the backbone of the Ethiopian agriculture, solutions like solar pumps, solar milling, solar incubation, and solar cooling, etc. The need to buy gasoline can become a saving for the farmers on top of the extra yield. There will be government projects which will come in quick capacity. You can bet on it that it’s a gigantic market.

What were some of the insights your company gained as they operated with the Pay as you Go, model? Are there any peculiarities or similarities with other markets that the Ethiopian market brings?

There are similarities and no similarities. Let’s start by asking, how do you define PAYGO? What does it mean? When you look at PAYGO in Kenya, they’ll say that the bank doesn’t necessarily do financing. The main thing is that numbers are low when compared to neighboring countries. Many of the players in Ethiopia are not interested in doing pay-as-you-go as they prefer to sell for cash because there is enough market. The dollars are short, right, so they say why we should be busy with this extra complication and risk? It’s mostly cash business today, and then if they can find the microfinance that wants to go to the program, they can go in collaboration. Overall compared to Kenya and the rest of East Africa, it’s very small. 

The current forex crunch has been impacting various corners of the economy, including major commodity importers. How is the solar industry navigating its recent challenges, especially from an inventory angle? Do you anticipate a significant slowdown or implementation lag of the NEP 2.0 because of it? 

There is a struggle in every sector regarding forex; it’s a countrywide problem. The raw materials we use are imported. When you are in a particular ecosystem for industry and assume that, e.g. take an electrical cable, they might say that there are companies that make this electric cable here, so it’ll be taxed. Then the question should be are they making a diameter and length of cable that suits my system? Are they going to sell me 50m of this cable which I can’t use on that system? That’s nice because somebody makes it, but that’s not how you do these things. Do you have the suitable connectors on the cables that fit the other components or for charging the phone, etc.? The ecosystem part of these is the key thing that must be broken to make this work. 

So for Ethiopia, the challenges are how do you create an efficient industrial ecosystem if you want to build that and what’s the price? When we import components in Semi Knocked Down (skd), we know the quality of these components will be good as we buy them from famous brands that have specialized in system design and component sourcing for their products which they bring to the market in huge volumes. They buy that specific component from factories that are specialized in making just those specific components at a large scale for multiple sectors, so they are qualitative and cost-effective due to scale. The risk on the market for bad quality is significantly reduced by working in that manner. That’s very important for investors and us. If you attract investors in the solar sector and they sort of know what you work with, they’ll be more comfortable because they know what it is, and they are assured of the quality level. Then there is the price issue, which is very important for the Ethiopian context. Prices in Ethiopia tend to be high due to relatively high-margin business take due to dollar shortages, any business. If somebody is going to make an electrical cable, it could cost us double that when we buy from China. Imagine the plastic box in which we mount the system and other components costs double, or even 50% more. That would result in the fact that people in rural areas would have to pay more than before. That would also mean that anybody who imports the same system from china with similar components will be cheaper. Those are important things specifically for that part of the business. 

The NEP 2.0 in itself is an ambitious plan that is nicely done. But where we need some more work is the exact rollout date and conditions to access the financing mechanisms that are put in place to help the plan; budgets which are from the WB & African Development Bank (AfDB) money. For ESEDA, I have a weekly call with WB, MoWIE, and other stakeholders about payment infrastructure in the country, especially the off-grid and deep off-grid areas. It was a very interesting discussion. The infrastructure issue was simple for me, I told them that now that Telebirr starts, and then M-Pesa comes, the availability will evolve, and then it will become more efficient to operate in deep off-grid areas. So we have the financing mechanisms that are going to come probably next year. After that, I am expecting it to start rolling. 

Regarding the slowdown, everybody is waiting to get some political solution because it’s linked to politics.   

Is there a human capital shortage in the industry? If so, how serious is the issue, and what are some of the solutions that the private sector has devised to fix the problem? Any specific interventions that the public sector is or has the potential to implement? 

Not as far as I know. There are a lot of issues to tackle to make human capital development efficient and useful for all stakeholders. For example, in the solar sector, I have had similar discussions with development organizations involved in capacity building. What are they doing capacity building for, for whom, and where? There needs to be a clear needs assessment in collaboration with the respective sectors as they are the only ones who will be providing the jobs for the trained people. A lot of money goes into capacity development, and when people are motivated to get the training, they also expect to get a job opportunity. Giving a capacity-building program and not giving them the job is a problem. There’s an issue in aligning those two things, like how you place people into jobs.    

What are the tailwinds that you observe in the market? If so, why are you optimistic about them?

The first one can be the Forex issue. There will be funds that will be available for everybody in the sector. One of the other improvements I saw in the last three years is that it’s easier to talk to the ministries when compared to 2010. I saw that with the Ministry of Environment, Forest, and Climate Change (MEFCC) and MoWIE. We are now having discussions on the issues and how to solve them. This can still take some time, but having a discussion is the most important thing. This sort of alignment between the private sector and the gov’t has improved a lot from my experience. Those are the two very big trends I see that are important.   

What do you think is the biggest lesson you’ve learned in leadership so far? 

I can say I have learned a lot in my leadership so far. First is the importance of organizational culture. As Peter Drucker said, “Culture eats strategy for breakfast.” Leaders tend to underestimate this to focus on the hard side of business, finance, sales, and marketing. They forget that organizations are run by people and that what people do makes the difference. 

Second, I love this speech that Steve Jobs gave at Stanford University in 2005. “Your time is limited, so don’t waste it living someone else’s life. Don’t be trapped by dogma — which is living with the results of other people’s thinking. Don’t let the noise of others’ opinions drown out your inner voice. And most important, dare to follow your heart and intuition.” This quote by Steve has helped me to fulfill my potential in various fields.