Sumitomo Corporation acquires stake in WindGen Power USA, Inc., engaged in mini-grid business in sub-Saharan Africa

Sumitomo Corporation (Head Office: Chiyoda-ku, Tokyo; Representative Director, President and Chief Executive Officer: Masayuki Hyodo) has acquired a stake (hereinafter, “the Investment”) in WindGen Power USA, Inc. (Head Office: Nairobi, Kenya; hereinafter, “PowerGen”), a company engaged in the mini-grid (Note 1) business in sub-Saharan Africa, to improve living environments in areas without electricity and to make a foray into the new distributed power generation business.

Sub-Saharan Africa is a thinly-populated region where economic logic often argues against the installation of large-scale power stations and power transmission networks. About 600 million people who reside in extensive areas lacking electricity go about their lives using candles and kerosene lamps. Nevertheless, rapid progress has been made in introducing solar home systems (Note 2; hereinafter, “SHS”) thanks to increasingly cheaper solar panels and storage batteries as well as developments in IoT, and distributed private power generation is beginning to make it possible to use televisions, radios and other electrical appliances. It is anticipated that, as consumers gain greater access to electricity, they will seek to use electrical products that consume even more electricity. 

PowerGen is constructing mini-grids that combine solar panels, storage batteries, distribution systems, smart meters and other devices to reliably supply high-quality electricity to villages of a few hundred households lacking electricity. Since its establishment in 2011, the company has expanded its business to eight sub-Saharan countries, primarily Kenya, Tanzania, Nigeria and Sierra Leone. Mini-grid users are able to use electrical products that consume large amounts of electrical power, including refrigerators/freezers and agricultural/industrial machinery, paying only for their actual power use with electronic payments via mobile devices. PowerGen has an industry-leading track record of constructing more than 150 mini-grids for a customer base of about 15,000 households, providing a full range of services from mini-grid development to operation.

Sumitomo Corporation in October 2018 launched Team New Frontier under the Infrastructure Business Unit’s Global Power Infrastructure Business Division to open up new domains in the electric power business. The Investment is its third initiative, following earlier investments in M-KOPA Holdings Limited, engaged in the SHS business in Africa, and LO3 Energy Inc., which constructs/operates electricity trading platforms primarily in developed countries.

Sumitomo Corporation will make use of the knowledge and know-how it has acquired in its worldwide electric power business as well as its robust global network presence to support further growth by PowerGen. Working together with PowerGen to popularize eco-friendly distributed power sources, Sumitomo Corporation will help establish clean recycling-oriented communities.

(Note 1) Mini-grid: an electric power system independent of a utility grid that supplies electric power via a core of kW-size solar panels and storage batteries
(Note 2) Solar Home System: a product that combines small household-use solar panels/storage batteries with household appliances (lighting, televisions, etc.)

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■ Profile of PowerGen

■ Photos
(A mini-grid set up in a village)

(People using a water pump powered via a mini-grid)

Sumitomo Corporation’s Material Issues

Sumitomo Corporation Group positions “Six Material Issues to Achieve Sustainable Growth with Society” as an important factor in developing business strategies and in the decision-making process for individual businesses. Going forward, we will pursue sustainable growth by resolving these issues through our business activities. This project especially contributes to the following material Issues.

Achieving Harmony with the Global Environment

To realize recycling-oriented society and mitigate climate change, we are working to establish frameworks for the efficient use of resources and stable supply of renewable energy. In doing so, we will achieve growth in harmony with the global environment.

Contributing to the Development of Local Communities and Industries

We steadily procure and provide goods and services to meet the needs of people in various countries and regions and contribute to developing industrial platforms. Through these means, we will create a virtuous cycle in which we can grow and develop together with local communities.

Establishing a Foundation for Comfortable and Enriching Lifestyles

We strive to realize more convenient and comfortable lifestyles by providing goods and services for daily use while also responding to needs for high-quality lifestyles in order to support the physical and mental health of people around the world.

Providing Diverse “Accessibility”

We provide diverse accessibility to open up the possibility of creating new value. To this end, we will improve mobility for safe and efficient flow of people and goods, and expand the network connecting information and finance.

Developing Human Resources and Promoting Diversity

In order to create new value and innovation by allowing our diverse personnel to fully exercise their abilities in a variety of fields, we will promote the development and empowerment of human resources, which represent our most important management resources.

Enhancing Governance

We will enhance our ability to draft and implement strategies for achieving sustainable growth and to provide appropriate supervision of these strategies, all while maintaining transparency. In this manner, we will improve management efficiency and maintain sound management.