“Making the market” for solar in northern Tanzania

Saturday July 8th, 2017 - Smart Villages

Interview with Mohamedrafik Parpia

Founder, Zara Solar

Location: Mwanza, Tanzania

“I didn’t know anything about solar”

A Dutch woman walks into an electronics store in north-western Tanzania. It sounds like an improbable beginning. Karlijn Arkesteijn is one of the people Mohamedrafik Parpia credits for going from running a family business on the shores of Port Victoria, to founding Zara Solar Ltd. Tanzania’s leading solar company sells PV systems, and has managed over 50,000 installations since it launched in 2005. A few years earlier, Arkesteijn was a technology management student at the University of Eindhoven, interested in boosting a local solar market, which was already starting to boom in Kenya. At the time, she recalls via email, there were only one or two solar companies in Dar es Salaam, focusing on larger systems for NGOs, and so she was looking for stores who sold panels in Mwanza. “She’s my angel,” says Parpia, a civil engineer, who says he did not know anything about solar until he met customers like Arkesteijn. “When I told her I was not in the solar business, she became furious! The short story is that I ended up getting some training in the field, and taught myself online.”

Tanzania has one of the lowest rates of electrification in the world. Over 30 million Tanzanians do not have access to electricity. Arkesteijn introduced Parpia to a wider network of business partners in her native Netherlands, where he imported panels and systems from, and the US. Parpia says early loans, of 150,000 USD. helped him plan ahead. He launched Zara Solar “on the advice of a financial institution”, meaning he could access more funds by selling solar products alone.

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As the company was the first in a new market, it started making a profit “from day one”, and grew fast. “In those days, there were only two such shops in Mwanza. Today there are a couple of hundred, 250 shops selling solar products. Most of them are selling junk.” Although Parpia has always valued selling high quality goods, competition and cheaper solar prices over time has resulted in lower margins, forcing him to lower prices. He also attributes this phenomenon to a 2005 removal of import duties and VAT on products.

Some of the challenges on the road ahead, says Parpia, are the “sub-standard products” which are coming into the market from China and India. “They’re almost half the price of what I sell, which comes from the US, western Europe or even China. There is also a lot of cheating on voltage – some products might be labelled as having more voltage, but once measured, they have a lesser amount.” Parpia says his customers can afford his higher prices, since they work in small scale mining, as fishermen and farmers, and can also access microcredit loans. “People also use our systems for income generation, setting up stationery shops or local media stations. It has benefited so many people. We have also worked with organisations, such as the UK-based Energy for Impact formerly known as GVEP, which helped finance entrepreneurs.”

The sub-standard products on the market have not had too much of a negative effect on Parpia’s business because he enjoys a good reputation with Zara Solar, and for his work in the field. Arkesteijn agrees. “I spent three more years in Tanzania, and I can truly say to you that Mr Parpia made the solar market in (the north of) Tanzania.” The many awards bestowed upon Zara Solar inspired confidence in the locals, says Parpia. After winning the Ashden award in 2007, and a Lighting Africa award which came with 200,000 USD in 2008, Parpia noticed an instant increase in company sales. “We won, just a couple of years after launching our company,” he says. “It was fantastic. It took me to the next level. People in rural areas don’t have television; but they heard me on the radio, being interviewed by the BBC Swahili service.” His reputation ensures he is still making sales, and is trusted in the community.

Two landmark projects financed by the UN and the Swedish government (SIDA) in the region enabled Parpia to further develop his business; Zara Solar . In one, Mwanza was a pilot region for a UNDP project on the ‘transformation of rural PV’. “We were fortunate,” he says. “It did a great job to raise awareness. They even convinced the government to remove taxes; that was positive.” Parpia watched Mwanza develop quickly as a solar region, with lanterns, lighters or small solar home systems. “I travel a lot, and solar has made a big difference. 100 kilometres away from Mwanza, there was a maternity clinic at a small health centre, where you would often see newborns lying next to smoky kerosene lamps. People would have to bring a gallon of kerosene with them when they came. Life is so difficult in rural areas, and they could not afford this, and they were delivering their own children at home. This UNDP project helped us install a system at local hospitals and schools; one doctor I spoke to says this doesn’t happen anymore, and more babies are being born safely.”

In a similar vein, many technicians were trained via the UNDP project, and so Parpia adopted a wider network of freelancers rather than employees. There is a core staff of ten people between Zara Solar’s offices in Mwanza and Dar-es-Salaam. “Someone buys a solar home system from me, and I connect them to a freelance technician in their region to install it,” he says. “They know how to work with the charge controllers, batteries, and in adjusting the voltage to charge the right device.” Parpia estimates that his company has reached 50,000 people. “People were impressed with freelance technicians, but there are very few women,” says Parpia, alluding to the physicalities of a technician climbing roofs and carrying equipment. That’s not to say that there are never any women in training sessions, he says.

Along the way, Parpia jokes that he has educated people on where Tanzania is (“it’s not Tasmania, and no, it is not in Russia”), and jokes again that he has “become richer”. Most of all, he says, he has become really busy. “As a civil engineer I used to do construction. When I started this business, I thought I could do everything still, but at one point I was travelling to almost 15 countries just to do presentations.” Parpia’s younger brother now runs the family business. As for the “Dutch woman”, of the early days, Arkesteijn says she was in Tanzania at the “right moment at the right time. Mr Parpia, as an open-minded entrepreneur, was eager to step into a new business. I was invited into his house and from that moment it felt I had a new family who even after this many years is thinking of me.”

–Nabeelah Shabbir, @lahnabee