Improving affordability through access to finance is a key element in adopting biogas plants and deploying proper and continuous promotion.
Despite this, the access, utilisation, and repayment of loans are still major bottlenecks to market growth in the biogas sector in Ethiopia. A challenge that required the establishment of a sustainable, innovative, and improved biogas credit flow.
Recognising the impact that limited credit access had on the adoption of biogas technology, the Bio-Digester Dissemination Scale-Up Programme (NBPE+) commissioned a study to explore this issue further. The study identified opportunities, challenges, and recommended intervention packages to improve and sustain affordable credit access for end-users and private sectors at a federal and regional level.
The consultancy, Fortune Management Consultancy and Training Service PLC helped to advise on credit product development, financing, demand creation, and stakeholder coordination related intervention packages.
‘Out of the total of 8,429 bio-digesters that were installed in the first three years of NBPE+, only 25% household digesters were installed through credit support,’ said Melkamu Dame, Credit Finance Expert, NBPE+. The NBPE+ project document proposed that only 20% of households would buy biogas with credit at the end of the project period.
A woman standing beside a household bio digester
Constructing a bio digester
He added that this situation motivated the programme to facilitate access for not only households but also for the private sector such as biogas construction enterprises, manufacturers, retailers, and importers. In the NBPE+ case, the private sector is responsible for supplying biogas construction materials, constructing as well as ensuring the functionality of the digesters.
Key federal and regional level implementers and biogas experts agreed to support the microfinance institutions (MFIs) and other financial service providers like Rural Saving and Credit Cooperatives in designing, refining, pilot testing, product marketing, financial literacy and demand creation.