Quick Info

Business Description

Magiro Hydro Electricity Limited (MHEL) uses modified bicycle parts and simple motors to generate hydropower from a local waterfall, supplying inexpensive, renewable energy to rural households who otherwise would use kerosene and firewood.

Problem/Solution

High costs of electricity connection together with increasing rates of poverty have made it impossible for many people of Murang’a County to have access to electricity. Only 14% use of electricity as the main source of lighting out of a population of 942,581. Magiro Power offers off grid hydro-electric power which is supplied at lower rates in comparison to the national provider and supplier.

Products/Service

MHEL’s main product offering is hydro-electric power which is supplied at lower rates in comparison to Kenya Power. The product not only provides a cheaper but also clean source of lighting which cannot be said for common sources such as kerosene and fuelwood.

Market

Murang’a County has an approximate total population of 942, 581 out of which only 14% use electricity as their main source of lighting. A further 40% use lanterns, and 43% use tin lamps. Less than 1% use fuel wood. Tin lamps are the most common lighting source by gender; 46% in female and 41% in male headed households. In view of these statistics, the lantern and tin lamp users coupled with the under grid cottage industries/small businesses form an ideal target market for Magiro Hydro Electric Power.

Competitive Landscape

MHEL faces competition from the giant power generating and distributing companies in the country. These include: KenGen, Geothermal Development Company (GDC), and Kenya Power. Additional competition emanates from other institutions licensed to generate power. However, the uniqueness of MHEL’s electricity is in its price offering. For most people in the rural areas, electricity is an expensive convenience that many cannot afford. MHEL will bridge this gap to ensure that the masses get access to electricity for their lighting needs at a price they can afford

Business Model and Distribution Channels

Magiro’s main product offering is hydro-electric power which is supplied at lower rates in comparison to competitors. The cost of installation is KES. 15, 000 anda flat rate of KES. 200 per month for the electricity. Kenya power charges KES. 35,000 for installation and charges per unit (average KES. 21). The pricing of electricity supply is pegged on the direct cost of production and overheads both fixed and variable.This also puts into consideration the desired profit margin to ensure it is attained. In doing all these, the attention is focused on the consumers.

Traction to Date

Magiro Hydro Power has managed to connect 350 homes and small businesses in Murang’a County and is targeting 500 households in the next 3 years.