What happens when a social enterprise and an oil giant join forces?(Read article summary)
Social enterprise d.light has teamed up with French oil and gas company Total to sell solar lights to low-income rural households in Africa and India.
San Francisco-based social enterprise d.light used to produce between 20,000 and 30,000 of its solar-powered lamps a month, selling them to people in rural Africa and India with limited access to electricity.
Today, it makes more than 500,000 per month, thanks to a very big customer: the French oil and gas company Total, which sells d.light's products as part of “Access to Energy Program” throughout Africa on a business-to-consumer basis.
The program brought challenges for both sides, according to Donn Tice, d.light’s chairman and CEO, and Robinson Alazraki, head of products development and purchase at Total's "Access to Energy Program," who discussed their collaboration during a September panel at SOCAP, a conference that aims to increase the flow of capital towards social good.
But the partnership worked because d.light and Total have a shared purpose: to get solar appliances into the hands of customers at an affordable price, Tice said.
To meet Total's standards, the for-profit social enterprise had to increase its production and the quality of its lamps, which charge on their own during the daytime, shine for at least four hours at night, and are designed to last more than five years.
Two years ago the company conducted a significant product recall, one that required a “seven-figure” commitment to make right, Tice said.
“If it goes wrong ... it goes wrong on a large scale,” he said.
Asked for his advice on partnering with a multinational, Tice said: “Fasten your seat belt low and tight around your waist and prepare for turbulence.”
Total's Alazraki said it was a tough task to convince senior management that partnering with d.light to supply its goods to consumers – both as a social benefit and as a business proposition – was worthwhile.
“[Terms like] base of the pyramid, ‘social entrepreneurship’– it was like speaking Chinese to senior management,” Alazraki said.
The standard model d.light lamp costs $30, a significant investment for d.light's core customers. But the company has sold about 3 million lamps in the last five years after it found out that people – even if they only earn a few dollars per day – are willing to pay for a product that improves their lives.
Solar lamps aren’t new but they will have a growing role to play in providing inexpensive and safe evening lights in parts of the world without the money or grid access for electricity, or in places looking for more sustainable sources of light, experts said.
Kerosene lamps, still in use in many parts of the developing world, can cost at least $10 to run, produce toxic fumes, and can cause burns if knocked over.
It was a kerosene lamp accident that gave birth to d.light.
In 2004, when d.light co-founder Sam Goldman was in Benin on a Peace Corps mission, his neighbor’s son was badly burned by an overturned kerosene lamp. This incident, along with the knowledge that 2.3 billion people in the world still do not have access to reliable electricity, inspired him to learn more about affordable design solutions and to develop his first prototype lamp with co-founder Ned Tozun.
• This article originally appeared at Thomson Reuters Foundation, a source of news, information, and connections for action. It provides programs that trigger change, empower people, and offer concrete solutions.