Fuelling adoption of renewable energy with access to finance

Access to affordable cooking and lighting solutions poses a significant challenge for both the host community and residents of Kakuma Refugee Camp and Kalobeyei Integrated Settlement in Kenya. However, the uptake of renewable energy solutions is further hindered by limited access to finance.

The Market-Based Energy Access project (MBEA III) employs the market-based approach. It focuses on engaging the private sector in its implementation to foster market development and energy access for households and businesses. The project is funded by EnDev and implemented by SNV.

During the project's second phase, Access to Finance (A2F) was identified as a major hindrance to the uptake of clean cooking and solar technologies by both households and small and medium-sized enterprises. To curb this challenge, SNV introduced the access to finance component in the project. Within this component, the project focuses on creating linkages within the financial mechanisms for access to off-grid solar lighting and clean cooking solutions.  

 During an A2F match-making event held in March, strategic business-to-business (B2B) connections between private sector partners and financial institutions were forged. Additionally, business-to-consumer (B2C) linkages between private sector partners, financial institutions, and end-users, Village Savings and Loans Associations (VSLAs), were created.

 Mr. John Njogu, the MBEA III project manager, elaborated on how the project's access-to-finance component, facilitated through collaboration between SNV, private partners, and local financial institutions, promises to transform energy accessibility in Kakuma and Kalobeyei.

Unlocking financial opportunities

Maryanne Wanjiru, the Access to Finance advisor in SNV, underscored the importance of stimulating end-user A2F to adopt clean cooking and solar technologies. She explained how the project will leverage existing formal and informal financial service providers to provide sensitisation and technical assistance. Some activities to stimulate or enhance the uptake of clean cooking and solar technologies will include financial literacy education, assessment of quality products and suppliers and linkage to solar and stove manufacturers/distributors. Awareness creation will be achieved through technology promotion activities.

Insights from financial institutions

Representatives of financial institutions provided valuable insights into their services and collaborations. KCB prioritises environmental concerns by collaborating with projects with an environmental focus and extends this commitment to their lending practices. Equity Bank boasted of their 90 agents in the camp who provide digital energy loans through the Ecomoto platform.

 Inkomoko provides subsidised loans after capacity-building training for entrepreneurs onboarded in their systems through cohort intakes. Their current cohort 7 is targeting 3,200 individuals from Kakuma. The Kenya Bankers Sacco showcased its Sacco model, which provides loans to individuals or VSLA groups through the guarantor model.

All the financial institutions highlighted the lack of identification cards for persons of concern (PoCs) in Kakuma as a major inhibitor to providing financial services. They appealed to the DRS and UNHCR to explore avenues to facilitate PoCs' obtaining identification cards.

Collaborative efforts for impact

Representatives from DRS and UNHCR underscored collective commitments to refugee support and inclusion. Through initiatives like Shirika by the government of Kenya, innovative approaches for managing refugee camps are adopted, aiming to transform them into integrated settlements. This approach supports the socioeconomic inclusion of persons of concern and host communities while facilitating access to essential government services.

 Moving forward, the financial institutions committed to conducting field visits to individuals and VSLAs within the camps. These visits will increase engagement and service delivery through registrations, the opening of savings accounts, and the facilitation of Sacco membership. Inkomoko is committed to collaborating with other financial institutions to provide financial literacy training, business management, capacity building, and job creation. Additionally, through their PROSEET project, they will champion youth and women entrepreneurship and employability.

Written by Hannah Mwangi, Communications team SNV Kenya. For more information contact: mwanjiru@snv.org