Accelerating uptake of pico PV systems and high tier cookstoves in Kenya through results-based financing
The off-grid solar and improved cookstoves (ICS) sectors in Kenya showed initial signs of commercialisation around 2013. The necessity for support became increasingly apparent to boost the sectors towards further market maturity.
However, various challenges were hampering market development that included, but were not limited to, high upfront cost of good quality solar products, slow uptake of solar and ICS entrepreneurship in rural areas, lack of access to finance, distribution challenges, inadequate consumer awareness, and inadequate, or lack of, after sales services.
The rationale for a results-based financing (RBF) mechanism for both off-grid solar and ICS markets was driven by the need to further catalyse these markets towards full commercialisation through fostering private sector investments. To address this need, the Energising Development (EnDev) programme designed two RBF projects to provide financial incentives to off-grid solar and ICS private sector players. The projects were implemented in Kenya between 2016 and 2019 by local fund managers, SNV Kenya and Micro Enterprises Support Programme Trust.
As a result of the two projects, 1.6 million people were able to access cleaner energy solutions and 4,678 new jobs were created along the solar and cookstoves value chains, with at least 40% of these jobs going to women. The projects also facilitated avoidance of 97,900 tonnes of C02 equivalent. Moreover, the projects supported market transformation through enabling the expansion and diversification of quality products, enhanced business operations and credit management, growth and expansion of distribution networks, and provision of end user credits for solar products.
For more details, read the report on experiences and lessons learned from the Pico PV and Cookstoves RBF projects with an overview of the RBF model, activities, results and lessons learnt and key recommendations.