And here comes Tanzania’s newest billionaire

Friday January 17 2020

From right are, International Development

From right are, International Development Secretary United Kingdom, Mr Alok Sharma and   Safaricom Plc Chief Executives officer, Michael Joseph displays Pay-As-You-Go clean gas technology during the acquisition of Kopagas proprietary technology to UK Company during an event held in Nairobi Kenya. Looking on is Mr Andron Mendes inventor of Pay-As-You-Go clean gas technology. PHOTO | COURTESY 

By Gadiosa Lamtey

Dar es Salaam. At 35 years, Andron Mendes has become Tanzania’s latest billionaire with a big dream to change the lives of millions of people in Africa.

On Monday, he flew Tanzania’s flag high – landing $25m (Sh57.5 billion) price for his clean energy innovation that is only six years old in the market.  

Mr Mendes and his Mexican partner Dr Sebastian Rodriguez sold KopaGas, a Pay-As-You-Go (PAYG) cooking gas services technology to United Kingdom’s Circle Gas. The deal was touted as the largest ever pure private equity investment in the clean cooking technology sector.    

“I am delighted how far we have come and equally exuberant that our technology is going to be revolutionary and help to protect the environment,” Mr Mendes told The Citizen in an interview yesterday.  

Asked how he felt being a billionaire, he said; “That is a lot of money, I couldn’t believe it but the greatest thing was to see a local technology is trusted by big corporates such as Safaricom which is very special.”

Mr Mendes said his decision to quit his insurance job has been vindicated. “No one understood my decision to quit my blue-collar job but today they are congratulating me. The lesson her is everything is possible if you believe in yourself,” he said.

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According to the agreement, Circle Gas will gain access to the KopaGas proprietary technology and advance its manufacturing ready for expansion in the LPG markets in Africa where up to 900 million targeted consumers could be reached.

The catch for KopaGas was in its deployment of the mobile phone to allow consumers buy and use the amount of gas that their little money could afford. It is more like Tanesco’s LUKU system where electricity consumers can use their mobile phones to buy tokens to access the service. Circle Gas said it will now advance the Tanzanian technology through the Internet of Things (IoT) devices and software to allow users on M-Pesa platforms to access the service while it captures granular usage and pay information.

On Monday, Kenya’s Safaricom entered an agreement with Circle Gas to immediately start distributing the technology in the country with the plan to open other markets in the near future. Reports indicate that Circle Gas will invest up to $300 million in the expansion plan.

Mr Mendes and Rodriguez were in Nairobi to witness the monumental leap in their lives and also the vision for their business. The Tanzanian said he met his colleague a few years ago at several forum where he was promoting his innovation and he readily joined him in looking for sponsors and possible partners in foreign markets, including in the Far East.

Besides the buy-off price, the two KopaGas founders will retain 15 percent share holding in Circle Gas and also remain key executives in the new company, it was revealed. Yesterday Mendes told The Citizen they will re-invest part of the Sh57.5bn in the new venture. “We will also be retaining all our 30 employees in Tanzania to the new company,” he said.

KopaGas started in Tanzania in 2014 and has grown through support by several innovation grants such as UK’s GSMA fund before hitting the latest ‘jackpot’. According to Mr Mendes, he touted several financiers to expand his innovation without much success. He said he was thus open for an opportunity to sell it to companies that would advance the course.   

 “There was no reason to hold on to the technology that would help reduce charcoal use simply because you are the one who developed it. I decided to sell this technology to people who have money so that they can help distribute it throughout Africa and reduce environmental degradation.”

The 2007 bachelor of commerce graduate from the University of Dar es Salaam said Tanzania has a lot of talented youth who only needed to believe in themselves to change their lives and impact on others. 

He said he resigned from his work and started exploring the KopaGas idea in 2012. Through grant support, they had invested some Sh6 billion over the seven years of piloting the technology in Dar es Salaam’s low income households who literally rely on firewood and charcoal for their cooking needs. The company has 1,430 customers in Dar es Salaam who are connected. The target was to reach 200,000 households by 2021 but were slowed down due to lack of capital.

Circle Gas, CEO Volker Schultz said; “by working together with KopaGas and Safaricom, we stand on the verge of creating a game-changing company that brings affordable, modern and convenient cooking fuel to millions of low-income households in Africa and beyond.

For his part, Michael Joseph, CEO of Safaricom said; “This is another unique opportunity for Safaricom to participate in a project that really changes peoples’ lives for the better and to demonstrate how technology, such as M-Pesa, loT and the GSM network can be used to improve the environment in a sustainable way and in the longer term, provide new revenue opportunities for the company.”