Supporting local businesses pioneer affordable, reliable and clean energy solutions for all.
Pay-as-you-go solar – one of many innovative clean energy business models expanding across East Africa – has brought affordable, modern electricity to more than 500,000 households in Kenya and Tanzania alone. These companies connect cash-poor communities to basic energy services by renting solar home systems to customers who then use cellphones to make small, regular payments. Families avoid withdrawing expensive loans or waiting years for the grid to reach their remote communities, while service providers lower their risk by leasing equipment to their clients.
But despite early successes, investments in this win-win approach have stalled. Many financial institutions have grown wary of the “hype” in energy access markets as several large investors have struggled to earn returns on their initial ventures. Some are now exiting the sector, leaving more than 71 million East Africans without access to energy.
Diversifying East Africa’s energy market to include the many small companies delivering affordable, reliable, clean energy could help soothe investors’ concerns, and evolving research shows that these entrepreneurs may also provide effective, lasting solutions in their communities. Supporting these local businesses, for example, can widen the renewables market across the region, increasing the number of providers who offer reliable, clean electricity to unserved and underserved households. Stronger connections with their customers also enable local businesses to better understand energy demand and offer more targeted solutions to meet clients’ needs. These same social networks often incentivize companies to support their customers through inevitable economic downturns.
WRI works with local businesses, development finance institutions and impact investors to support clean energy entrepreneurs across East Africa by:
Identifying the barriers that small companies face in accessing capital. We interview impact investors, development finance institutions and fund managers to better understand investment decision-making processes. How do these institutions analyze risk? Why are some backing local clean energy entrepreneurs, while others are not? What challenges do these funders encounter when financing these East African businesses? We then share key insights with local renewable energy companies, and together, we work towards dismantling systemic challenges to increase the flow of capital to entrepreneurs.
Measuring the impacts of local clean energy businesses across East Africa to strengthen the case for financing these companies. We assess the socioeconomic and environmental benefits that these entrepreneurs bring to their communities – research that helps dispel investors’ concerns and encourages major development finance institutions to support these businesses across East Africa.
Connecting small renewables enterprises with global impact investors. With few assets to leverage and limited access to credit, many clean energy entrepreneurs in the region struggle to secure financing. We connect these businesses to funders eager to support their projects, helping local companies power some of the world’s most energy-poor communities.