Stimulating Pay-As-You-Go Energy Access in Kenya and Tanzania: The Role of Development Finance

This briefing argues that scaling PAYG energy access in Kenya and Tanzania requires approximately one billion dollars and a shift toward local currency financing. It recommends that international DFIs and donors use credit guarantees and 'fund of funds' to encourage local commercial banks to lend to the sector, thereby reducing the current dominance of foreign-owned companies and lowering barriers for local entrepreneurs.

• PAYG companies in Kenya and Tanzania require approximately one billion dollars to scale their operations for broader impact, as current reach is limited compared to the addressable markets of approximately 35 million people lacking electricity in Kenya and 36 million in Tanzania.
• Access to finance is a primary barrier to entry for new companies, particularly those that are locally owned and managed. Currently, necessary capital (debt, impact equity, and grants) is available almost exclusively from international investors, leading to a market where most successful PAYG companies are foreign owned and managed.
• To stimulate local finance and reduce currency volatility and transaction complexity, international DFIs and donors should provide guarantee schemes, lines of credit to local banks, and channel investments through 'fund of funds' managed by professional impact investors.
• The briefing recommends a coordinated approach involving multiple stakeholders: local commercial banks should explore short-term trade finance and debt service coverage accounts; national governments should release grid extension plans and set clear priorities; and PAYG businesses should adopt standardized accounting standards to facilitate bank transactions.

APA

World Resources Institute (n.d.). Stimulating Pay-As-You-Go Energy Access in Kenya and Tanzania: The Role of Development Finance. https://www.wri.org/research/stimulating-pay-you-go-energy-access-kenya-and-tanzania-role-development-finance

Chicago

World Resources Institute. Stimulating Pay-As-You-Go Energy Access in Kenya and Tanzania: The Role of Development Finance. n.d. https://www.wri.org/research/stimulating-pay-you-go-energy-access-kenya-and-tanzania-role-development-finance.

Wikipedia

{{cite report |author=World Resources Institute |title=Stimulating Pay-As-You-Go Energy Access in Kenya and Tanzania: The Role of Development Finance |url=https://www.wri.org/research/stimulating-pay-you-go-energy-access-kenya-and-tanzania-role-development-finance |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{worldresourcesinstitutendstimulating, author = {{World Resources Institute}}, title = {{Stimulating Pay-As-You-Go Energy Access in Kenya and Tanzania: The Role of Development Finance}}, institution = {World Resources Institute}, url = {https://www.wri.org/research/stimulating-pay-you-go-energy-access-kenya-and-tanzania-role-development-finance}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }