In the space of ten years Africa’s renewable energy sector has undergone phenomenal change. Managing director of African Energy, Lincoln Dahl, discusses how his company has remained at the centre of a rapidly evolving market.
In a world where looking to the future is the norm, it can be difficult to comprehend how much can happen in a decade. It is hard to imagine that it was ten years ago that the Euro currency first entered circulation; George W. Bush was one year into his second term in office and Pete Sampras was still dominating the world of tennis with victory at the US Open. Yet if a decade feels like a long time ago for us, it is virtually a lifetime ago for certain industry sectors in Africa. One such sector that has been built up from nothing in that time is renewable energy.
The year 2012 marks the tenth anniversary for African Energy. Serving the continent’s leading renewable energy companies, African Energy supplies solar, wind and power backup equipment on a wholesale basis to more than three hundred partners. Direct distributors for the likes of Xantrex/Trace, Morningstar, Suntech Power, Magnum Energy and others, the company specialises in creating reliable distribution channels that enable its dealers to expand their markets for renewable energy.
“One of the things I noticed in my years of working in Africa as both a diplomat and within the solar industry,” explains managing director Lincoln Dahl, “was that there was a distinct lack of distribution as it relates to renewable technology. This also meant that very few people had any knowledge of what to do with the technology should it ever become available and this meant that there was a huge gap in the market that needed filling.”
The company began life as a small operation, working out of the backroom of Dahl’s home, catering for a handful of customers. What it soon discovered was that once people were provided with access to the necessary equipment they soon found it easy to develop a market and find customers for themselves.
“A decade ago,” Dahl continues, “solar energy was very much a drag and drop business in Africa. The fact that system design, and in some cases even installation, was done by people outside the continent meant that local knowledge was always in short supply. What we did early on was commence with a pretty aggressive training programme that we invited manufacturers to become a part of. To date we have conducted in excess of 25 of these programmes and this has not only helped us find customers, but also helped them to develop.”
Focused solely on the African market, African Energy is perhaps better placed than any other to express just how much potential the continent possesses for renewable energy business. “The first thing Africa has going for it,” Dahl states, “is that it is not Europe. Many of the major European markets’ renewable energy programmes and projects are increasingly being scaled back or mothballed altogether. What Africa represents is a new opportunity for international companies to expand their operations. Africa is also one of those rare parts of the world that hasn’t finished growing yet and as such infrastructure build-out continues to increase with each passing year.”
Increased stability and the emergence of representative governments have also helped the business considerably in the last decade, however it is inevitable that when developing a young industry, difficult challenges arise. Needless to say, African Energy has had to negotiate several such hurdles in its lifetime.
“Operating within a young, growing market,” Dahl says, “you tend to spend much of your time educating people and businesses. This process begins with our own employees, educating them not only about the customers and the marketplace, but the technology as well. The customers themselves also require the same degree of training and support, as do the manufacturers. This often begins by opening their eyes to the potential that this continent has and ends with us pretty much physically hauling people over to Africa where they invariably fall in love with what the market has to offer.”
Attaining finance in order to carry out work in Africa is another challenge that Dahl is all too aware exists. “As a company, we are entirely self-financed. The reason for this is simply because of how difficult it is to secure financing in this part of the world. What this does mean however is that our growth to date has been 100 percent organic. While in some regards that may have slowed us down a little, it has also led to the forming of extremely tight relationships between us and our customers, relationships that have gone a long, long way to making African Energy a success.”
Having celebrated ten years in business, the company has recently made an effort to map out a forecast for what it predicts the next decade will hold for not just African Energy, but Africa as a whole. What it anticipates is the emergence of two very different Africas, one consisting of countries with democratically elected, representative governments and the other with countries that have not evolved in the same direction.
For the company itself, continued success relies upon it taking up more active positions in the countries in which it operates. “We have evolved to the point where today we have strong customer networks across Africa,” Dahl enthuses, “and now comes the time where we need to bring the product closer to these customers. In the last six months we have opened a warehouse in Botswana and in the years to come we expect to introduce stock to the majority of countries where we are active.”
On numerous occasions over the years Dahl and his team have taken the time to look back on what they have achieved together and, as he reveals half-jokingly, often ask themselves are they successful because of what they do, or in spite of it? “When we ask our customers why they deal with us,” Dahl concludes, “they all say it is because of our honesty, our belief in establishing healthy, long-lasting relationships and our steadfast commitment to quality. There are a lot of things that have worked for us over the last ten years, but I think the most important is remembering that our customers expect African Energy to be the reliable supplier.”
Written by Will Daynes, research by Jeff Abbott