The Mini-Grid Business

How to respond to exacting demands - Challenging relations with mini-grid customers

September 06, 2023 Nico Peterschmidt (INENSUS, host), Anayo Okenwa (Nayo Tropical Technologies, Nigeria), Ahmed Rajab Khamis (JUMEME, Tanzania) Season 1 Episode 3
The Mini-Grid Business
How to respond to exacting demands - Challenging relations with mini-grid customers
Show Notes Transcript Chapter Markers

Uncover the intricacies of managing customer relations in the world of mini-grid operations with our seasoned experts, Anayo Okenwa from Nayo Tropical Technologies, and Ahmed Rajab Khamis from Jumeme Rural Power Supply. Discover how they navigate the choppy waters of customer complaints about high tariffs and the delicate balance of service quality, involving regulators, governments, and the customers themselves. Ahmed shares an insightful journey of tariff quandaries leading to service reduction and the subsequent resolution involving all stakeholders. Meanwhile, Anayo sheds light on the challenges specific to the Nigerian context, placing emphasis on the indispensable role of a strong regulatory framework and a resident operations team.

Venture further as we discuss customer communication strategies, the power of software tools, and the necessity of maintaining an on-site presence. Our guests reveal the benefits of tools like MicroPower Manager and the need for integrating multiple platforms into one cohesive database. Take a deep dive into the world of minigrid operations as you learn about the importance of digital tools for supply quality and customer satisfaction, and much more. Join us on this enlightening journey as we demystify the complex world of minigrid operations and customer relations.

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Speaker 1:

Solar mini-grids have turned from small pilots to an electrification wave. We were there when mini-grid regulation was established, when financial transactions were closed. We saw a new technology thrive and companies fail. This is where we tell the stories. This is where we discuss the future the mini-grid business Powered by Inensis.

Speaker 2:

Hello, my name is Nico Pieterschmidt and I'm the CEO of Inensis. Today, I'm welcoming two people who are at the forefront of customer communication and customer relationship management in mini-grids. I'm Anayu Okenwa from Naio Tropical Technologies, nigeria, and Ahmed Rajab Chhamis from Jumeima Rural Power Supply in Tanzania. Anayu is the CEO of Naio Tropical Technologies, with 10 mini-grids in operation and over 10,500 connections established. He has more than 10 years of experience in mini-grid operations. Ahmed has seven years of experience in mini-grid operations, including many years as cluster manager. He is now overseeing Jumeima's entire customer relationship management team. Jumeima has approximately 10,000 customers connected to its 23 mini-grids. Thank you, anayu. Thank you, ahmed, for joining our session today. The subject of this episode is how to respond to exacting demands, challenging relations with mini-grid customers. Ahmed, how does your customer management work?

Speaker 3:

Thank you, nico, for this opportunity. Here in Jumeima, customer relationship management has a team of four staffs these are customer relationship officers whereby we have set up a call center, this call center having a PBX system for in bonds and out bond calls and also messages. So we receive calls from customers, we receive messages from customers and also we have a platform which is MPM. This is micro power manager, whereby all calls received from customers, the starting point of solving their problem, is the micro power manager. So in general, I can say that all calls from customers are received here in any call center and all customers complaints start to be solved from the CRM team.

Speaker 2:

Thanks, ahmed. Some time back, jumeima went through difficult times. Do you want to tell that story?

Speaker 3:

Oh, yes, yes, yes, when they start Jumeima. We were charging a little bit higher than Tanesco regarding the tariffs. So while we were charging higher on the tariffs, the service we offered were good. But the complaints started to rise from the customers regarding the tariff charges. They were like complaining your charges are so high, why Tanesco charges are lower, and all that.

Speaker 3:

So after these complaints, the government, via Ministry of Energy, gave us directives or ordered us to lower our tariffs to be the same as Tanesco's tariffs. So after the tariff reduction, according to government directives, the service from our side, as Jumeima, started to be a little bit insufficient to our customers as we had to stop buying fuels for generators. So, due to low revenues that we were collecting from customers as the tariff were lowered, so we had also to reduce some service to our customers in order for us to utilize the high cost of operation. This led to poor service to our customers. So it was a little bit a rough time during that time, but in general, the quality of service after the tariff reduction was not good as the way it was earlier, while the tariffs were high.

Speaker 2:

And how did Jumeima resolve the situation after all?

Speaker 3:

We decided to talk to both the customer, the government meaning the Ministry of Energy and the regulatory authorities like Eura. So we had to sit down both of us, and we started collecting ideas and opinions from the customers, like what were their inputs? Like how should we charge the tariff and how should the service be. Also, we also talked to the government, from the Ministry of Energy and the Eura authorities I mean the regulatory At the end. After all these processes then we came into a conclusion and the new tariff was introduced last year.

Speaker 3:

And there is when we started improving the quality of our services to some of our sites, because since the reduction, some of the sites we were not able to operate 24 hours, so most of the sites were running around eight to ten, up to 16 hours per day. So we have started now improving because the tariffs now have changed from the Tanesco's ones up to the ones that were introduced by Eura and now we have at least improved. We have started seeing now the revenues rising and also we are also improving the service to our customers on the sites.

Speaker 2:

Ahmed, if I understand correctly, all the issues in Jumema started off with complaints of electricity customers about high tariffs. I spent some time in Tanzania and I really love the country and I love the people and what I hear and what I see is that people have some kind of habits of complaining. Do you agree?

Speaker 3:

Of course, yes, according to Tanzanian nature. I can say that's our culture. Anything that involves money has a complaint, no matter the discount given. So this has been a habit in most of our customers, of our nature too, as, for example, I can say in our nature as Tanzanian, you may give them something like maybe an offer. When you have stopped giving them that offer, they want it to be as a part of the service. So they end up complaining, not knowing that it was just an offer. So this habit of complaining it's just our nature here.

Speaker 2:

Thank you, Ahmed, for that explanation. I believe that Tanzania is not the only country where a habit of complaining prevails. No-transcript. Have you been confronted with complaints by customers or have you come across customer service challenges of any kind?

Speaker 4:

It's inherent to see customer service challenges. Chief amongst them is tariff pricing. But the good news here is that at the beginning we have a good regulatory framework on-ground that the project was built on. The regulators have been very cooperative and helpful, so we often refer back to the regulator, who play a mediation role rather than a confrontational role. So that has helped us resolve such issues when they arise. Again, we have a kind of structure. We are an operational structure where we have a resident operations team within a cluster of many groups. We have regular town hall meetings with communities at intervals, sometimes around every 60 days, where issues, community issues or concerns that could be resolved within the local agent, the vendor or remote customer service staff from the headquarters. If they can resolve these issues, they are carried over to the town hall meetings where we try to resolve it amicably. So most times it doesn't escalate to the point where we run into shutdown of sites.

Speaker 2:

Has there ever been a situation when you thought that your relationship to customers from a certain village may actually flip over?

Speaker 4:

We've had one situation when a project was shut down, the community refused to accept a new tariff because of rising diesel costs. This project is in the southern part of Nigeria, where we rely up to 30% of energy from diesel because of the low sunshine yield in the southern part of Nigeria. So the cost of diesel jumped by over 300% in early 2022. We reached out to the community. We wrote the regulators and informed them that we need a review of a tariff. The community didn't respond to this positively and it resulted to us also adjusting generator diesel supply to just one or two hours, which is about 10 to 15% of the energy contribution from diesel. So the direct implication of that was that the uptime supply hours dropped from 24 hours to about 18 hours.

Speaker 4:

The community members agitated, went as far as threatening to revoke our land donated to us for the mini-grid. So we had to call in the regulators and the government to speak to the community and at the end of the day, we had an amicable resolution of the situation and all parties agreed to a slight increment, maybe not up to the amount we initially intended to go for, but we got something fair enough. So this is a typical scenario of where these challenges arise. But what matters most is if you have a good regulator that plays kind of a mediation role rather than a confrontational role. The situation my colleague just mentioned in Tanzania that could have been a worse situation for us.

Speaker 2:

First of all, thank you both for talking that openly about your internal processes. When I compare your stories from Tanzania and Nigeria, what strikes me is that the government plays a decisive role in both cases. In Nigeria, the regulator and the state government took a mediating role. Through their good relations with the community, as well as their good relations with the mini-grid company, they somehow found a solution that was acceptable to everyone. In contrast, in Tanzania, the government took the role of supporting the local community against the private sector company. Of course, from a government's perspective, this was probably the right step to take, because, well, they are the representatives of the people. But after all, their relatively strong action and the escalation of the subject led to a disadvantage for both the mini-grid company, which couldn't run profitably anymore, as well as the rural community, which didn't get reliable electricity anymore. Anayo, do you think a good relationship between the community and the government, as well as the mini-grid company and the government, is essential for a long-lasting, successful mini-grid operation?

Speaker 4:

Yes, we believe that is the foundation of a sustainable mini-grid operation.

Speaker 2:

Policy and political will can change with the ruling party. Ahmed, would you agree that the legal and regulatory framework laws and regulation, as well as some strong regulator is a main driving force for customer satisfaction in mini-grids in the long run, right after reliability of electricity supply and affordable tariffs, of course?

Speaker 3:

Yes, I agree. The stability of the company depends on the policies and the frameworks.

Speaker 2:

Let's talk about staff motivation. For some time, mini-grid staff is very much exposed to all these ongoing complaints and the expression of dissatisfaction by mini-grid electricity customers. This must be extremely demotivating. Especially those staff which joined the mini-grid company because they wanted to do something good to underprivileged people must have a very hard time Now. How do you motivate your staff and how do you make sure that they stay on track?

Speaker 4:

Thank you, nico, for that question. We run a very close-loop communication protocol. We have daily reports and we intervene early and also the challenges we know over when the local staff. So with that we manage the pressure and the staff have some time to breathe. But if they manage this without discharging these challenges or someone from the headquarters or intervention coming early from the state government to mediate in these issues, it is sometimes very demoralizing for local staff on ground because they are the people who come face to face with these customers and all the pressure comes to them.

Speaker 4:

So we manage that by trying to resolve issues or get information about developing problems before they escalate to bigger issues. So that close-loop early warning protocol helps us intervene and diffuse such tensions before it becomes a bigger crisis. And again we have senior managers who once in a while called the communities not wait till they raise issues, call them ahead Another committee chiefs and the Committee of Electricity Users Association and try to get a second side of the story whenever they hear it. So this committee field has an open channel of communication, not just with the person they have facing them. So it reduces a lot of pressure and keeps the local staffing a little bit more relieved and excited to continue his job.

Speaker 2:

Ahmed, how did the Jumeimah staff react to these continuous complaints that they were exposed to? How did that affect the team spirit?

Speaker 3:

Yes, at first the reaction was not good for the staffs because they were a little bit worried, thinking that things are going to be bad on their side if we won't be making any profit out of the tariffs that were introduced. So what we did is that, despite that, we were making a huge loss. During that time we had to encourage our staffs and we were sharing all the needed information, that we were talking now with the ERA, which is the government regulatory authority, and also the energy ministry, and we were trying to be close to them and sharing all these information so that they can see the future. They can see I mean, they can have a picture of what is going on between us and the authorities, with government and the customers.

Speaker 3:

Also, we had to use VPCs VPCs, these are village power committees because the pressure was so high from the customers Like we are paying, we are not receiving a good service, these and that, all that complaints and all that. So the number of complaints were so high and by that time also we didn't have much staffs on the CRM side. So we had to use the village power committees and also we had to use the village authorities, the village leaders also. So they were also trying to educate the customers on their end. By doing this also, it was reducing a little bit pressure on the staff side. So it was a little bit challenging during this time, but we had to do what we had to do in order to keep ourselves on the track.

Speaker 2:

Jumeima is being seen as an international company as it has international investors, of course. Nyotropical, in contrast, is a domestic Nigerian company. Nyotropical, in contrast, is a domestic Nigerian company. And do you think there is a difference between a domestic Nigerian company charging tariffs and an international company charging the same tariffs? Would customers react differently?

Speaker 4:

Yes, to an extent. We as a domestic Nigerian company also face such challenges because we operate from the city centre and the capital city of Abuja. So rural folks see Abuja also like foreigners coming to their localities. So what we try to do is that we employ locally, keep the phases on ground as local as possible, unless facing as an international or foreign city company. So the staff in the meet speak the local language, everything seems to be local to them. That gives them that buy-in and acceptance.

Speaker 4:

Also, the people that are paying is a local person within the community. When they are challenging the meeting he has a dashboard, a small display where he shows them everything in the language. He's someone of the people from the community. So they know him, knows his residence and the cash money that is exchanged has been exchanged within the community within the same phase they know.

Speaker 4:

So it reduces that perception that someone, a foreigner or a big company, maybe a Nigerian company sitting in Abuja or Lagos, is making money from the rural end. So that psychology is a bit, you know, tuned down, a bit a bit toned down, because they are engaging 100% the engineering team, the customer service team and everything is done within the localities, sometimes the whole year they hardly see a foreign face coming from Abuja or Lagos to visit them. So we don't advertise ourselves so much as a foreign or a local company but by way of we will structure our offering and our operations who operate like a seamlessly like a local company owned by the community, operating within the community. So that mindset comes down nerves and expectations.

Speaker 2:

Thank you, anaya, for this valuable insight. I fully agree that acting as if you were a community-based company helps communicating with your customers, but especially on a higher political level, you cannot hide that you're from the city or that you're even from abroad, and that may, after all, make things complicated. Ahmed, I understand that in Tanzania, at least for a long time, international companies have had quite a difficult standing. Would you agree?

Speaker 3:

Of course you're very right. You're very right. Of course you're very right, especially here in Tanzania. When a company like this appears to invest here in Tanzania, most of the people think that the company has a lot of money, they think that the company can, they think mostly it's like a fundraising company. I mean it's like a charity most of the time. Most of the international companies, most of the people here think that it's a charity company, but in reality most of the companies like this also. They are here to make business.

Speaker 2:

Yeah, and in fact, just some 10 years ago, most of the mini-grid operators were charities and I wouldn't blame the customers to believe that this is still the case. So now, what can be done to convince the customers that there is a difference now and that the actual, the professional companies handle things differently? From my perspective, this is professional customer communication and that needs software like the Micro Power Manager. Ahmed, you're working with a Micro Power Manager, a fully integrated mini-grid customer management and asset management software, for more than six years. What's your experience?

Speaker 3:

Of course, yes, we are having a ticketing system on MPM whereby it allows us to contact internally regarding the customer complaint or customer query. So we have a platform on MPM whereby it's a channel of communication between the customer relationship officer and the engineers on the ground, between the customer relationship officers and head of departments, and also between customer relationship officers and the technicians. So we have this channel of communication, also on MPM, whereby you find all the customer queries since the problem started, where the solution is and how far have we gone in solving the problem.

Speaker 2:

Yeah, yeah. And the ticketing system is just one feature out of many. In the Micro Power Manager. There is full mobile money integration, smart meter integration, geotagging of customers, an SMS communication, gateway, dashboards and reporting features for revenue monitoring, asset monitoring features, electric appliances sales features to operate deferred payment schemes. By the way, this feature can also be used to sell solar home systems, which is being done by some users of the software Dune Foundation, supported in Nensos, to open source the software. It is out there on micropowermanagercom and we would be happy to see many more mini grid companies using it. There's even a cloud version. If you use that, you do not need to operate your own server. It's free of charge. It's just there. Just go and make use of it. As with every software deployment, mini grid companies need to spend some effort before everything is set up and it works, but after that you benefit from having all features and all data you need for mini grid operation in just one platform, and that is really convenient, believe me. Anayo, what software do you use for your operations?

Speaker 4:

Thank you. We use multiple platforms, but we have one unifying platform for both our metering and hardware. On the other scene, we have different softwares for powerhouse engineering management and also customer service management, but on the background, on the engineering side, we have Sparkmeter, we have SMA cloud monitoring system. So we use a blend of all these tools together, depending on what we're tracking Is it technical performance, operations or customer service issues related to vending and metering.

Speaker 2:

Yeah, anayo, I understand that most of the mini grid companies out there are trying to juggle multiple platforms in their organization. The integration of these platforms into one database is either done through Odyssey Energy, which provides some data merging opportunity, others hire software engineers tailoring the integration to their specific requirements. I recommend using the MicroPower Manager open source building blocks for that. Even though all the software usage makes it easier to communicate with customers, it does not replace on-site presence of mini grid companies. Anayo, how much on-site presence is still required when you have all these digital tools in the background?

Speaker 4:

Okay, we typically have a resident engineer for the first 180 days. Part of his task is to help people inspect wiring, house-suit wiring, new customer machines for productive use machines, issues of loop wiring In communities where you they might have three buildings within the same compound and you power the first house and you assume you've powered the connection, the customer connection, maybe in about the most time they want to loop to the next building within the same family compound. So there's a whole lot of thought and back. That happens within the first six months. By the end of the six months you start seeing some level of stability and saturation in connection. So we'll start pulling out the resident engineer to somewhere else.

Speaker 4:

But those six months are very critical because you see a lot of short circuits hitting the powerhouse, a lot of wrong code entry when people try to enter their tokens, their payment tokens and all that. So there is this hand-holding, getting the local vendor in place and getting him, you know, firmly doing his job, and then again that physical engineer helps to give that comfort to the community. There's also a safety concern issue. We have signboards or small stickers we paste on pause trying to explain to people that this is electricity, it's not joke the safety aspect. So this is part of the regulatory obligations that we need to keep this level of community engagement, especially during the early stages of the projects after commissioning. So it's a transition. We manage and as we get feedback, we evaluate those feedback and adjust accordingly during that transition, moving out from fully embedded engineer to engineer at large and then to manage it from a full remote monitoring and control.

Speaker 2:

That sounds like a reasonable approach. Anayo Ahmed, how does Chumim ago about on-site presence of staff?

Speaker 3:

Here I can say I won't go much far from what just Anayo has shared here in Tanzania on the beginning, when the construction is done, then when the commissioning is done, we need to have representatives on ground, because electricity, by that time it's something that it's new to the community. So the community needs to be well-educated about the use of electricity, regarding the safety issues, on how to use, how to utilize electricity, what to do and what not to do while using electricity. So by this time I mean it's like a two to three month period whereby we need to have these representatives on ground, and these representatives usually are the village power committees, so they are the ones that we use them mostly on giving them this education. So we train them. After training them also, they train the customers, and also we have also representatives from the company, whereby these are the technicians and engineers also, and also the cluster managers also chips in during the June MME days. These are the days whereby we do the meetings with our customers, so we keep giving them information and we keep educating them on how to use electricity.

Speaker 3:

So after that we use now a remote communication because they have started to get used to using the electricity. It's when now we use the digital system. So if it happens that we have a technical issue, the engineer chips in or the technician chips in and solves the technical issues, it may happen that it may be the line issue, the LV, the MV or the transformer issues. We have these issues, like on the meters, and all these technical issues are solved now on ground by the technicians and the engineers. So I can't say that having representatives on the ground is usually. It appears periodically.

Speaker 2:

Thank you both for these insights into how you onboard customers after electrification. Like what you just explained, applies to almost all of the minigrid companies. During the first years of operation, the electricity demand is low, the requirement for customer service is high and therefore, when we work for regulators drafting tariff regulation, we strongly recommend allowing the minigrid companies to activate those costs during the first years. This reduces the tariff spikes and it smoothens the tariff over time. Costs that have been incurred during the first years will then be distributed, with the depreciation of the remaining assets over a longer period of time. Now let's come to our final questions during this session. Anayu, do you want to tell us what your way forward looks like?

Speaker 4:

Yeah, we see ourselves as a pioneer in many great developments in Nigeria. We want to maintain that posture by increasing our leadership position, by increasing our number of connections, quality of service to our customers and also scaling out our operation across many more locations and in a profitable way for our investors to put more money to build more sites, Because we are always looking at the customers, we are not also looking at the funding. Investors have specific asking and expectation. Whenever you don't meet up with that, then your cash flow is doing those, because there is an infrastructure project. You don't make your money overnight, so if that cash flow stops, then you can meet up with your rollout plans as expected. So we have to manage this balance within our social enterprise, which is giving power to rural, low-income people and also meeting expectation of investors and ourselves as a company. We also have expectation To achieve this.

Speaker 4:

we are also looking at building other layers of activities, like the key maker model, productive use, appliance finance, e-mobility and other value-added services around the many grades. This will increase activity, revenue generation and excitement across those projects, Both legacy projects that have been existing and new upcoming projects where we intend to apply lessons learned in the legacy projects that have run for over six and seven years at the moment.

Speaker 2:

Great Anayu sounds like you're growing into all directions, ahmed. What about you? What are your plans for the coming years?

Speaker 3:

I can say that we need to have a very good interaction with our customers. We need to keep them close, we need to fit them with correct information regarding our services and also improving the quality of our service that we are offering.

Speaker 2:

Sounds good, Ahmed. I'm sure you've got the power to make your customers happy. Thank you both, Ahmed and Anayu, for the interesting discussion today. I'm looking forward to seeing you soon and thanks again. Bye-bye.

Speaker 4:

Thank you, everyone, thank you.

Speaker 5:

Hi, I'm Muriel, a minigrid expert from Inensis. We from Inensis recognize that tariffs are always a delicate topic for all stakeholders involved. The community wants good services and supply at lowest cost. The operator must maintain a sustainable business and the regulator is the authority to balance the conflicting interests. It is therefore important for minigrid operators to closely monitor both the supply quality and customer satisfaction. At the same time, during the first months of operation, minigrid customers prefer to talk to people they know and trust. Niotropical hires people from the village, while Chumeme involves village power committees. After six months to three years, when customers have had their questions answered and connections are established, onsite staff can be reduced and communication can happen through phone and SMS.

Speaker 5:

In our opinion, there are two main aspects that must be considered. First, digital tools can help to streamline operations and facilitate communication. This is why Inensis developed the MicroPower Manager, a customer and asset management platform. Free of charge. It covers technical, commercial and administrative features and ultimately reduces uphex and improves minigrid profitability. Second, while working with regulators on the subject of tariff regulation, inensis has a tool set to find the fairest hares for all parties involved. For more information on the MicroPower Manager, visit micropyramanagercom or visit us on inensiscom. Follow us on LinkedIn or send us an email and get in touch.

Speaker 1:

This episode of the minigrid business has been brought to you by Inensis, your one-stop shop for sustainable minigrids. For more information on how to make minigrids work, visit our website, inensiscom, or contact us through the links in the show notes. The minigrid business powered by Inensis.

Navigating Customer Relations in Mini-Grids
Customer Engagement and Operations in Mini Grids
Managing MiniGrids and Improving Customer Satisfaction