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Publication - Accelerating Uptake of Pico PV Systems and High Tier Cookstoves in Kenya through Results-based Financing: Experiences and lessons learnt

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Title
Accelerating Uptake of Pico PV Systems and High Tier Cookstoves in Kenya through Results-based Financing: Experiences and lessons learnt
Publisher
EnDev


Published in
September 2020
Abstract
A report published by SNV and the Energising Development Programme (EnDev) saw that in Kenya, 1.6 million people gained access to cleaner energy solutions and 4,678 new jobs were created following the end of two sustainable energy projects.

The end of project report presents the results and key lessons learned in two sustainable energy Results-Based Financing (RBF) projects implemented in Kenya between 2016 and 2019 namely the High tier Cookstoves (Clean Cookstoves Market Acceleration Project) and (2) Pico PV systems (Building Sustainable and Affordable Credit Lines for Small Solar Systems in Rural Areas project).

These projects supported higher tier cookstoves and off-grid solar systems respectively and were implemented by SNV as part of EnDev's global RBF facility, funded by the Department for International Development (DFID), now Foreign, Commonwealth and Development Office (FCDO).

The RBF model was designed to provide financial incentives to private sector actors selling solar systems and improved cookstoves, as a temporary measure aimed at transforming the markets to an efficient and self-sustaining level. The RBF incentives were provided as an ex-post payment to beneficiaries, distributors, and financial institutions per unit of product sold, upon delivery and verification of pre-agreed results by an external independent verifier.

The RBF projects overshot their targets by 181% and 126% respectively, with 272,128 quality solar systems and 100,796 improved cookstoves deployed. Distributors outperformed financial institutions in both projects as they leveraged their last-mile entrepreneurs’ networks and partnerships with financial institutions to deliver products to end-users. At the time, financial institutions considered both sectors as too high risk and sales in this sector were therefore marginal.

As a result of the 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 the avoidance of about 97,900 tonnes of C02 equivalent. Moreover, the projects supported market transformation through 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.
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