Momint, a South African startup, recently announced the launch of a blockchain-powered solution -the Suncash initiative- capable of addressing the recent electricity issues that have plunged the country.
To make this work, rooftop solar systems will be installed massively at public institutions like schools and hospitals, which would then purchase the generated electricity.
As reported by News 24, the execution of this blockchain-based solution is already underway, the most recent of which took place at Delmas High School, located in South Africa’s Mpumalanga province.
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The last year has reportedly been a phase of devastating power outages for the South African community. According to reports, nearly 90 per cent of South Africa’s power generation is coal-fueled and controlled by the state-owned company Eskom, whose coal-fired power stations have reportedly been overused and undermaintained for years.
Undermaintaining these coal-fired power stations provoked the present energy crisis; in 2022, the country recorded a record-breaking 205-day power outage. Local authorities are contacting private suppliers to provide light to businesses and households to address this problem.
As further pressure mounted for a solution, South Africa’s President, Cyril Ramaphosa, announced on the 14th of February that he would appoint a minister of electricity.
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Predictions hint that the electricity crisis might cost South Africa 2% of its economic growth this year. Declared a national disaster, the problem could worsen in the coming weeks and years if no adequate solution is provided.
Amid this, Momint believes a solution powered by blockchain technology will go a long way in addressing the problem. The organisation said its Suncash initiative seeks to ease the country’s power generation obstacles.
Why Momint is using blockchain technology
As seen in the report, investors interested in partaking in this project can do so by purchasing non-fungible tokens (NFTs), which are linked to solar cells and are sold for as low as $9. The solar cells are then leased to institutions that agree to purchase the generated electricity through a so-called standard power purchase agreement.
This is what the CEO of Momint, Ahren Posthumus, said about his company’s latest offering amidst the scramble for solutions to South Africa’s power generation crisis:
“We are a technology company that is trying to build for the next 15 years, but what we realized is that we can’t build a technology company in a country that does not have electricity.” He added, “We do not expect to profit from the project, which he describes as not financially sustainable.”
If this succeeds, South Africa might no longer have to depend on its state-owned company, Eskom, for power generation. As a reply to why the startup selected blockchain as the best platform for this generation of power, Posthumus said that choosing blockchain ensures optimal transparency and minimal risks for Momint.
He added, “We take legal contracts that represent ownership of each individual cell, and we put those legal contracts into a file that is typically referred to as “the token” on the blockchain. It is called a smart contract. That smart contract says, “Whoever owns this token has the right to the underlying asset, and they have the right to the revenues that the underlying asset generates.”
Interestingly, Posthumus highlighted the challenges of generating power through blockchain, including the risk of public institutions defaulting.
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