Enabling Environment for Pay-As-You-Go in Ethiopia
A study was carried out by EnDev Ethiopia in cooperation with Financial Systems Development (FSD) component. In Ethiopia, EnDev is supporting the development of an enabling environment for off-grid renewable energy and energy efficiency investments.
Financial instruments, such as Pay-as-you-Go (PAYGO), are key components for accelerating the adoption of off-grid energy technologies, as they can increase end-user’s ability to access them. Considering its encouraging track record in Sub-Saharan Africa, PAYGO has a large potential to facilitate the uptake of off-grid solar systems in Ethiopia as well.
This scoping study provides a comprehensive overview of the PAYGO sector for Energy Access in Ethiopia, including the status-quo of the supply, demand and regulatory environment; map of the main stakeholders; a country comparison with other African countries where PAYGO has been successfully implemented; and areas of intervention for Financial System Development .
PAYGO technology and business models are a key component for the promotion of off-grid energy technologies. The study introduces PAYGO systems for modern energy access in Ethiopia. PAYGO has been enabled by a combination of Information and Communication Technologies (ICT), including embedded remote controls for switch-off and usage monitoring. The lockout technology turns borrowers’ lighting (or lack thereof) into an immediate and tangible reminder to repay their debt, making clean energy a manageable, as-you-go experience, akin to a prepaid mobile phone plan. And this study explores the reasons for PAYGO’s low establishment and uptake in Ethiopia by providing:
- A comprehensive overview of the PAYGO sector, including the status-quo of the supply, demand and regulatory environment;
- Stakeholder mapping;
- A country comparison with Rwanda;
- Recommendations on interventions.
ICT- enabled PAYGO has been one of the main drivers for the scale up of standalone solar systems in the African continent. In General the study did a deep dive into the existing and potential Ethiopian PAYGO sector with a focus on how conducive framework conditions can be developed and implemented with an outlook of initiating a dialogue with local policy makers and other relevant stakeholders in order to explore possible approaches to advance the ecosystem toward the adoption and use of PAYGO in Ethiopia.