In 2012, Mark Zuckerberg declared that it should be a fundamental right to access the Internet. Yet, less than three billion people have Internet access. With a world population of more than seven billion – we have a four billion person Internet gap. If even a billion new people were privy to Zuckerberg’s “fundamental right,” it could drive global economic growth in mom and pop ecommerce alone. But, having Internet access and no electricity won’t connect the next billion people. So, this post is about how to get the power to the people – and empower them.
First, let me note that this year, Zuckerberg amended “Internet access” to mean a “data plan” on a smart phone. As noted, Zuckerberg and his fellow Fortune 500 CEOs have an immediate opportunity: connect a billion people into the global economy and profit in the process.
According to the GSM Association, more than 500 million people have mobile phones with no place to charge them at home. Collectively, they pay in excess of $10B per year to charge their phones. As a result they leave them “turned-off” most of the time, which doesn’t allow them to benefit from Zuckerberg’s vision. Globally, one in five people still can’t plug anything in. Another one in five have plugs that rarely work because of an unreliable grid.
Solar photovoltaic cells, batteries and LED lights are now cheap and durable. Today, a household living beyond the reach of the grid can spend less than the cost of two years of kerosene to produce enough electricity to power lights and charge a cellphone for decades.
Companies already sell proven, economical, “pay-as-you-go” electrification systems in Africa. For example, Azuri Technologies‘ three-watt product powers two lights. Households own it outright paying just $1.50/month over eighteen months.
And M-KOPA Solar has sold over 70,000 slightly larger systems and is adding 1,000 new customers weekly. It could add up to light for every dark home. Here’s how. A cumulative $50 billion loaned over several years would finance quarter billion units at $200 each. This would bring immediate, transformative benefits to the world’s poorest households and substitute renewable energy for fossil fuels – at a handsome profit that could exceed 30 percent returns.
It’s an enormous opportunity. But despite rapidly growing sales by entrepreneurs with leading-edge programs, the market is still nascent. Yes, public projects and nonprofit organizations are gearing up. The U.S. government’s Beyond the Gridinitiative has dozens of partners and plans to invest $1B to get power to 20 million people in Africa in five years. And India’s new Prime Minister Narendra Modi wants to meet a goal missed in 2012, to get electricity to every household by 2019. We have the technology at the right price, but we need private sector capital to actually get this done.
An alignment of factors could finance portable energy systems to bring electricity to everyone, everywhere, far faster. If Zuckerberg really wanted to get this done, he could create a giant working capital fund, move quickly with pilot projects and local partners, then get big fast with savvy international intermediaries.
Right now, U.S. companies are sitting on international profits 200 times greater than the $50B needed for these loans. More importantly, these are the same companies that would make the most money from providing people with access to mobile phones. Companies like Apple’s $138B, Microsoft’s $93B, Google’s $48B, and Facebook all have enough capital to get started. More importantly the success of this program could boost their stock prices by more than enough to pay for the investment – not to mention the actual profits they would make on the loans.
Most of these companies have already started to deploy wind and solar on their own facilities and data centers. In fact, Google has already invested $1.5B into renewable energy projects at a far higher return than Microsoft’s layered bonds making 3 percent. My hope is that Zuckerberg backs up his universal data pledge with the first $1B and pass the hat to see how many of his fellow tech companies are willing to uplift these billions of people into customers.
The investments would be loans, not philanthropy. As a result, lenders would get paid back in just a few years. The countries themselves could provide credit guarantees on most of the money using the $25B in kerosene subsidy savings they would reclaim. Unlike microfinance for individuals, working capital funds would go to companies: experienced manufacturers and vendors that would offer customers pay-as-you-save contracts coupled with mobile payment options.
The world would applaud any company that enabled a billion people in villages and rural areas to get light and connectivity. Further these countries would have an additional $25B+ that they could use for other better social purposes. This would showcase a thoughtful approach on financial inclusion. In fact, MasterCard, Visa and American Express have offices of financial inclusion and may want bring their considerable brainpower to the table to ensure they get their cut of every transaction. Everyone would win, as hundreds of millions of new customers bought ever-more-affordable electronic devices that help them connect, learn, produce, and do business.
And Mark Zuckerberg would cement his place in history – keeping his promise to do well by doing good. And in fact, he would connect a billion people – again. It will be Mark Zuckerberg 2.0.