Unlocking Local Private Capital to Finance the Productive Use of Renewable Energy (PURE) Sector – a Look at East African Local Financial Institutions (LFIs)

This research paper examines the role of local financial institutions (LFIs) in Ethiopia, Kenya, Uganda, and Tanzania in scaling up financing for the Productive Use of Renewable Energy (PURE) sector. It identifies significant demand for PURE technologies, particularly in agriculture, but notes that high up-front costs and LFI constraints—such as limited staff capacity and credit risks—hinder adoption. The paper suggests that LFIs can expand lending through green bonds, climate fund accreditation, and by increasing direct lending from their own balance sheets, supported by blended finance and de-risking instruments from development partners.

• Local financial institutions (LFIs) in East Africa show strong interest in expanding lending for the Productive Use of Renewable Energy (PURE) sector, with a specific focus on agriculture. A survey of 17 LFIs identified a total funding requirement of $174 million to expand these lending activities.
• The adoption and scaling of PURE applications in Africa are limited primarily by inadequate financing for end users and small- and medium-sized enterprises (SMEs), as well as high up-front costs.
• LFIs in East Africa face several operational and financial barriers to expanding PURE lending, including insufficient funding sources, credit risks, and limited staff capacity. To address these, they require support from policymakers and development partners in the form of capacity-building, de-risking instruments like loan guarantees, and blended finance.
• To increase capital for PURE projects, LFIs can pursue untapped opportunities such as issuing green bonds and seeking accreditation for dedicated credit lines from climate funds. Additionally, the paper emphasizes the importance of LFIs increasing direct lending from their own balance sheets to reduce reliance on indirect lending from government or development finance institution (DFI) programs.

APA

World Resources Institute (n.d.). Unlocking Local Private Capital to Finance the Productive Use of Renewable Energy (PURE) Sector – a Look at East African Local Financial Institutions (LFIs). https://www.wri.org/research/unlocking-local-private-capital-finance-productive-use-renewable-energy-pure-sector

Chicago

World Resources Institute. Unlocking Local Private Capital to Finance the Productive Use of Renewable Energy (PURE) Sector – a Look at East African Local Financial Institutions (LFIs). n.d. https://www.wri.org/research/unlocking-local-private-capital-finance-productive-use-renewable-energy-pure-sector.

Wikipedia

{{cite report |author=World Resources Institute |title=Unlocking Local Private Capital to Finance the Productive Use of Renewable Energy (PURE) Sector – a Look at East African Local Financial Institutions (LFIs) |url=https://www.wri.org/research/unlocking-local-private-capital-finance-productive-use-renewable-energy-pure-sector |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{worldresourcesinstitutendunlocking, author = {{World Resources Institute}}, title = {{Unlocking Local Private Capital to Finance the Productive Use of Renewable Energy (PURE) Sector – a Look at East African Local Financial Institutions (LFIs)}}, institution = {World Resources Institute}, url = {https://www.wri.org/research/unlocking-local-private-capital-finance-productive-use-renewable-energy-pure-sector}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }