- In a bid to increase energy access for the poorest, the 20-month pilot will test new approaches for linking cash transfer beneficiaries with off-grid energy solutions.
UNICEF, in collaboration with Kilifi and Garissa counties, have recruited Energy 4 Impact in an institutional advisory capacity to support the implementation of Kenya’s Energy and Cash Plus pilot project.
Designed to integrate into the country’s social protection programme, this 20-month pilot will support the government’s ambition to achieve universal energy access by 2020 for the most vulnerable segment of the population.
Evidence shows that energy access at the household level can help alleviate poverty, improve income and enhance living conditions of the poorest parts of the population. The poorest households mainly rely on fuel-based sources for lighting such as kerosene and candles, which expose people, and especially children, to serious fire and health hazards.
Recent studies also indicate a positive correlation between quality of lighting and time spent on more productive activities, including children increasing their studying time and improving their educational outcomes (Acumen, Energy Impact Report, 2017).
Kenya has one of the most rapidly growing and innovative solar markets in the world, with over one million solar home systems sold in Kenya over the last five years. This growth is driven by private sector companies that operate across different parts of the value chain.
However, there is still a gap of 1.4 million households without energy access. This number is expected to decrease as current providers expand their footprint and new companies enter the market, yet challenges in affordability and access exist at current prices. Affordability and availability is particularly a problem among the most deprived and disadvantaged population of northern and eastern Kenya.
The Government of Kenya has made remarkable strides in building the National Safety Net Programme and expanding government Social Cash Transfer programmes to over 1.3 million households across 47 counties, with KES 4,000 ($40) being transferred to vulnerable households every two months.
In order to ensure that the most vulnerable populations can afford energy access, UNICEF is supporting the Kenyan government in the modelling of the Energy for the Poor providing a cash top-up to the existing cash transfer programme.
This programme aims to enhance access to energy to the most vulnerable segment of the population, develop markets and increase energy penetration of households in the lowest quintile in the pyramid in Garissa and Kilifi county.
Energy 4 Impact, in partnership with implementing NGOs, The Busara Center for Behavioural Economics and Somali Aid, has been contracted to design and support the implementation of a pilot linking cash transfer beneficiaries with off-grid energy solutions (solar lanterns and a solar system), without creating market distortions.
More specifically, the programme intends to determine how social cash transfers can impact a recipient’s sense of ownership, repayment rates and quality of life indicators such as quality of learning for children and the quality of health of recipient households.
Starting in August 2018, the 20-month pilot will test cash transfer approaches in order to determine the most effective way to carry this forward to scale up the project at a national level.
“The pilot is designed to test how a cash top-ups could be used to give access to solar home systems and, to see what effect it has on the sense of ownership, usage and repayment rates of that system,” says Laura Patel, Project Manager, Energy 4 Impact.
“We hope to understand if these solar products will lead to income-generating activities and thus, create a greater sense of ownership, usage and result in higher repayment rates. We will also test the difference in usage and sense of ownership for a solar lantern vs a solar home system.”
Maurice Onzere, Business Development Services Coordinator at Energy 4 Impact, explains: “Through this pilot, we will seek to understand if the top-up scheme for solar products distorts the market or has a market building effect on the wider market for solar products in those regions. In addition, we will investigate how we can limit the potential for product leakage in this project, i.e. the solar products are sold off during or after the programme to generate cash.”
The partnership will leverage the experience of Busara Center for Behavioural Economics in designing and conducting a communications campaign aimed at driving up the sense of ownership, perceived value of the products, product usage and repayment rates—for the duration of the project.
Roberto Figari from Busara Centre explains this further: “Research shows that the person who makes the payment influences how much the end user values a product. We are very excited to see how much these disadvantaged populations in low-income communities value solar panels at the end of the study and are interested to discover whether beneficiaries will use the extra cash transfer toward the solar product payments or not. In the instance where they do not, we will explore how we could nudge them to do so using low-cost high impact interventions.”
Energy 4 Impact will use its extensive network to select the most appropriate distribution partners, who will be contracted to supply products, technical support and maintenance. Energy 4 Impact, with The Beneficiary Welfare Committee, will also work at the village level to train local micro-entrepreneurs to become last mile distributors of solar products, thereby expanding their market for these products.
The programme aims to have several impacts on the target beneficiaries as Susan Momanyi, Social Protection Specialist at UNICEF explains: “UNICEF is particularly interested to assess how this innovative approach can improve the wellbeing of the most deprived and vulnerable children.
“We strongly believe that by providing the poorest households with off-grid energy solutions we will be able to improve their education and health outcomes and break the intergenerational cycle of poverty. The solar lanterns and solar home systems will enable the children to study longer hours in the evening and will also contribute to reducing the indoor pollution created by the use of Kerosene lanterns.”