Appliance Financing 1.0, 2.0 and 3.0

The appliance financing prototypes were funded by the Rockefeller Foundation and Shell Foundation. In addition, the Mini-Grid Innovation Lab worked with 10+ developers across 3 countries to test the prototype.

The goal of the prototype was to test whether offering energy-efficient appliances plus financing to purchase those appliances on mini-grid sites, is a profitable service addition for mini-grid developers. Appliance Financing 1.0 was focused on household appliances e.g., TVs, speakers, etc., while Appliance Financing 2.0 and Appliance Financing 3.0 are focused on income-generating or productive-use appliances.

Study Design:

APPLIANCE FINANCING 1.0

Tests household appliances, such as TVs, fridges, and speakers.

APPLIANCE FINANCING 2.0

Tests productive use appliances, such as grain mills and welders, and introduces Angaza as a payment platform to simplify developers’ tracking of loan repayments.

APPLIANCE FINANCING 3.0

Introduces Asaga Technologies to supply energy-efficient productive use appliances customized to the African mini-grid market.

For Appliance Financing 2.0 and Appliance Financing 3.0, some of the key hypotheses we were testing going into the study were:

Grid economics: ARPU at treatment sites will be 10% higher than at control sites after two years

Load profile: ACPU during daylight hours at treatment sites will be 25% higher than at control sites after two years

Repayment: Historically higher-user customers will exhibit the highest repayment rates at treatment sites Appliance Financing analysis was conducted from data collected from 25 sites and over 12,000 connections. The results outperformed our ongoing hypothesis on ACPU growth. To scale Appliance Financing, the Lab is currently working with ESMAP and others to implement a consortium-driven, nationwide road-show approach, starting in Ethiopia.

Prototype Ideation and Design: Conducted user-centered workshops with developers and end-users to gauge prototype necessity.

Appliance Shortlisting: Agreed upon priority appliances suitable for leasing.

Financing Terms: Determined optimal financing terms, benchmarking against existing Solar Home Systems (SHS) rates.

Approval: Crafted a comprehensive study design, budget, and data collection plan; secured board approval from the funders for implementation.

Data Integration and Collection: Synchronized data from smart meters and inverters onto the Lab Odyssey platform while also gathering survey data and loan repayment metrics.

Launch and Follow-Up: Initiated the prototype with partner developers and monitored data collection and implementation progress.

Analysis and Publication: Examined household and business consumption data, site inverter data, and customer surveys, publishing the results for each prototype iteration.

The engagement succeeded in validating the addition of appliance financing as a value-added service for mini-grids, offering promising directions for scalability and impact.

Read the Mini-Grid Innovation Lab’s Innovation Insight: Appliance Financing 1.0

Read the Mini-Grid Innovation Lab’s Innovation Insight: Appliance Financing 3.0