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

The briefing argues that scaling PAYG energy access in Kenya and Tanzania requires a shift from exclusive reliance on international capital to the mobilization of local financial institutions. It suggests that DFIs and donors can bridge this gap using credit guarantees, lines of credit, and 'fund of funds' to reduce perceived risks for local banks. The document highlights that approximately 35 million people in Kenya and 36 million in Tanzania lack electricity, and an estimated one billion dollars is needed to scale PAYG services for broader impact. Drawing on the IDCOL program in Bangladesh, the authors recommend that local commercial banks engage through short-term trade finance and that national governments provide clear grid extension plans to encourage private investment.

• PAYG companies in Kenya and Tanzania require approximately one billion dollars to scale their operations and provide energy services beyond basic lighting and mobile charging.
• Local financial institutions in Kenya and Tanzania avoid financing PAYG companies due to perceptions that they are risky, early-stage businesses and a lack of familiarity with the technology and rural consumer creditworthiness.
• The reliance on international investors has led to a market where most successful PAYG companies are foreign-owned and managed, as local companies struggle with initial resources, networks, and foreign currency risk.
• International DFIs and donors can stimulate local finance by providing guarantee schemes, lines of credit to local banks, and channeling investments through 'fund of funds' managed by impact investors.
• The IDCOL program in Bangladesh serves as a successful reference for channeling DFI funds through a government-owned intermediary, having provided US$750 million to support three million solar home systems.

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} }